Engagements

Six files from the cabinet.

Names changed, numbers rounded, details softened where needed. Every one of these was a three-week engagement and a written plan. What they did with it after is on them.

File 24-03

Mechanical contractor · plan & spec, light industrial service

$11.4M revenue · 38 employees · two branches

The estimator was the owner, and the estimator was the bottleneck.

What came in: Backlog up 40% year over year, gross margin down four points, owner doing every bid over $250k and working Saturdays to catch up. Service division treated as an afterthought, billed flat-rate from a 2019 price book.

What I found: Three of the top five jobs in the prior year had come in under 14% gross margin — against a bid target of 22%. The pattern was clear in the job cost: every one of them had a mechanical-room coordination scope the estimator had waved off as "we'll figure it out." The service division was running 58% gross but was priced as if it were 42%. The office manager was functioning as a de facto controller without the title, the pay, or the backup.

What the plan said: Hire a second estimator (senior, from a competitor if necessary) before hiring the next field foreman. Reprice service T&M rates with a 9% blanket increase and a $285 minimum dispatch fee. Promote the office manager to controller, hire a bookkeeper underneath. Drop the plan-and-spec public-bid work below $500k — the margin isn't there. Hold service headcount flat and let it carry the company through the next soft cycle.

What happened: Senior estimator hired in eleven weeks. Service rates went in April 1. The owner took his first week off in three years in August. I have not spoken with him since October and that is the correct outcome.

File 23-11

Industrial electrical · motor & controls, food processing

$6.2M revenue · 22 employees · one location

A successful shop that couldn't tell you which customer was profitable.

What came in: Owner in his late fifties, talking about a five-year exit. Bonding agent had asked for a three-year projection and the owner couldn't produce one he believed in. Books were clean but cost codes hadn't been touched since 2016.

What I found: Two customers were 61% of revenue. One of those two was, on a fully-loaded basis, running a 3% gross margin — the owner believed it was north of 25%. The job costing rolled all travel time into a single "field labor" bucket, which hid a standing two-hour round trip on every call to the farther plant. The controls side of the business was genuinely excellent and badly under-marketed.

What the plan said: Rebuild cost codes before the next fiscal year. Raise rates on the loss-making customer by 14% and accept that they may walk; have a replacement pipeline queued. Put a named controls-division lead on the org chart within six months. Begin the succession conversation now, not in year four — pick between an internal sale, an ESOP, and a strategic buyer and start the pre-work for whichever.

What happened: The big customer did not walk. They paid the increase and signed a three-year agreement. The controls lead was promoted from within. Succession track: internal sale to two key employees, papered and on a five-year note.

File 23-07

Structural steel fabricator · miscellaneous metals

$18.8M revenue · 64 employees · one plant

Growing fast and losing money on exactly the work they were best at.

What came in: Three years of 20%+ top-line growth. Net had gone sideways. Shop was on six-day weeks, detailers were a quarter behind, and the owner was quoting everything at list and winning too much of it.

What I found: The stair-and-rail work they were locally known for was running at 31% gross. Everything else — embeds, miscellaneous metals packages, the bigger structural packages they'd been chasing — was at 14% to 19%. They were using growth to paper over a mix problem. Detailer backlog was driving overtime in the shop and overtime in the shop was eating the margin on the good work. The paint booth was the real constraint and nobody had said so out loud.

What the plan said: Walk away from structural packages over 80 tons. Hire a second detailer and a detailing lead, in that order. Raise stair-and-rail pricing 6% — the market would bear it and they were the preferred shop. Outsource blast-and-prime on surge weeks rather than build a second booth. Put a hard ceiling on shop overtime at 8 hours per man per week, enforced by the GM, not the owner.

What happened: Revenue was flat the following year by design. Net doubled. The paint booth still runs hot but it no longer runs the company.

File 22-14

HVAC service & replacement · commercial, light industrial

$4.7M revenue · 19 employees · one branch

Two brothers, one company, and no written agreement about who decided what.

What came in: Technically a growth engagement; practically, a governance engagement. Owners wanted to open a second branch two hours north. Neither could articulate which of them would run it. Service agreements were healthy, replacement work was thin, and dispatch was a three-ring binder and a whiteboard.

What I found: Service division was a well-run business wearing the skin of a family company. Replacement side was underpowered because the service techs were not being paid to flip leads. Dispatch was one bad flu season away from collapse. The second-branch question was premature — the first branch had not been systemized.

What the plan said: Hold on the second branch for eighteen months. Hire a dispatcher, move to a real scheduling tool, retire the whiteboard. Put a 4% lead-flip spiff on the service-to-replacement handoff. Write down the roles — one brother runs operations, the other runs sales and customer, both sign on capital above a threshold. Revisit the branch question with a real pro-forma in Q3 of the following year.

What happened: Dispatcher hired, whiteboard retired, spiff program live. Second branch opened on schedule eighteen months later, staffed by a service lead who was ready. The brothers still argue about the trucks. That is not in scope.

File 22-05

Industrial insulation & fireproofing

$9.1M revenue · 41 employees · one shop, road crews

Cash was fine until the day it wasn't.

What came in: Owner had taken a call from the bank. The line of credit had been drawn down four months running and the covenant ratio was inside warning range. Backlog was strong. He didn't understand how both things could be true.

What I found: Classic over-billed / under-billed schedule problem. Three large jobs had been front-loaded on billing and the costs were now coming due. Retainage receivable was $640k and aged; nobody was chasing it. Payroll was Thursday and the bank was Friday and that was, in fact, the problem.

What the plan said: Convert the line-of-credit draw pattern to a term note for the equipment it had actually bought. Put retainage collection on one named person's desk with a weekly aging report. Restructure billing milestones on the next three contracts to track costs, not sequence. Build a 13-week cash flow and run it every Monday. Don't bid the oil-&-gas turnaround work until the working capital is set.

What happened: Term note closed in six weeks. Retainage collected down to $180k inside the year. The 13-week still runs every Monday morning — the controller sends it to the owner by 9 a.m. The oil-&-gas work is on the plan for next year.

File 21-09

Vacuum-truck & industrial cleaning · refinery, power

$13.6M revenue · 52 employees · three yards

Three yards, three P&Ls, and only one that actually made money.

What came in: Owner suspected the middle yard was dragging the company, but nothing in the consolidated reporting let him prove it. Two of three yards had been acquired, not built.

What I found: At the yard level, Yard A was a 23% EBITDA business, Yard B was 6%, and Yard C was breakeven in a good quarter. The acquired yards were still running the seller's rate cards. Truck utilization at Yard C was 44%; industry healthy is 70%+. The yard managers were compensated on revenue, not profit, which is a great way to guarantee the thing you got.

What the plan said: Consolidate Yard C into Yard B within six months; keep the customer list, release the lease, redeploy four of the seven trucks. Repaper customer contracts at Yard B to the corporate rate card on renewal — no exceptions. Change yard-manager comp to a gross-profit number with a utilization kicker. Revisit Yard B in twelve months; if it hasn't moved, it becomes a divestiture question.

What happened: Yard C closed in five months. Yard B moved to 13% EBITDA within the year. The fleet runs smaller and hotter and the owner stopped waking up on Sunday night thinking about Yard C.

A note on these

What you're not seeing here.

You're not seeing the engagements that didn't go well. They exist — a handful of them — and in every case the pattern was the same: the owner wanted a document that told them the thing they already believed, and they got a document that told them something else. A written plan only works if the owner is willing to act on it. If you aren't, save your money and mine.

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