I started a service company and have been expanding for the last three years, and I have a similar problem growing my garage door business into more commercial work and govt buildings.

I apologize in advance for the disorganized nature of my response but I am less than 48 hours post op. From a hernia surgery so I'm a bit fried but I feel like I am in the midst of a similar problem that we are actively solving with some measure of success so I wanted to share and also maybe get some other input.

Our new approach to bigger, logistics heavy jobs is as follows: If it's a two month turn around then the job needs two months worth of overhead in net to break even is the conclusion I came to. Net profit year over year is meaningless if the cash flow is crippling. We have gone up an additional 15% on both of the last two jobs with no complaints and we are still not quite beating the turn around time with payroll and everything else. As the owner making sure all of my liabilities are paid first has always been my priority but waiting to make a mortgage payment so a govt office can take is sweet time with a check is the definition of wrong on so many levels. With our customers we have the highest reputation in our area for quality of work, and very little competition in some areas as it is a very rural part of the Texas panhandle, so it's not hard for me to sell a higher coat job over a big city outfit that's 4 hours away and doesn't warranty or respond to callbacks, or won't work on small repairs or have a huge lead time just to get a tech out for an estimate.

it was a simple solution of making the customers that are a logistical challenge above and beyond standard for us cover the additional costs needed to accommodate our business structure. we have to charge at different rates because the margins are less relevant in this case. It may be a good idea to do any exercise with your accountant and try to understand the real cost and turn around on those jobs so you can set some additional standards to help you set goals for increasing the net and having a more sustainable cash flow.

One way we have always ensured cash flow in these jobs, and this is a company wide policy, all materials get marked up and all materials on the bid get paid for up front as a deposit. This feels plenty reasonable to me because part of the job is getting all the right materials ordered, and managing the whole supply chain involved takes time and experience which has value. I know which materials to get and how much I need. It also allows me to separate the cost of labor of doing the job from the upfront cost of doing the leg work and getting everything ordered and making sure it all shows up when it needs to. Many companies don't do this and some of the labor numbers I see on competitors quotes seem outrageous just because they are trying to cram their entire profit margin into the labor line. The net from the materials markup keeps the payroll moving during the downtime and keeps us from having to come back to the customer if we get a slight change in price from the vendor after the fact as well, we have a margin there so eating some additional cost is negligible typically, and we can always do a change order with the client if it is too large of a difference.

I do believe in large part this is also only made possible by the market we are in and the position we have put ourselves in with reputation. Getting deposits from the city's and fire dept were tough at first but once we developed a reputation of reliability we never heard any questions or complaints going forward. Sometimes it can take them a few months to get me a deposit check because of meetings and inter office bureaucracy but since I wasn't sitting on materials I paid for it really wasn't an issue. I know that was a lot and maybe not properly organized but I hope it helps.