Fence and deck CFO services: pricing a season you cannot see the lumber price for

Quote to a margin, and defend it against the lumber market

The quote you give in March is a bet on what lumber will cost in June. Pressure-treated and cedar prices have moved sharply within single seasons in recent years, and a fixed-price quote with no protection turns every increase into your loss. The defences are contractual and operational. Quotes carry a short validity window. Contracts include a material-escalation clause where the customer will accept one. And when the deposit lands, the lumber is bought or price-locked with the yard, so the margin you quoted is the margin you build.

Ontario's consumer protection rules add a constraint most builders learn the hard way: when you give a consumer an estimate, as at the time of writing you generally cannot charge more than 10 percent above it unless the customer agrees to a change. That makes a documented change order the only safe way to pass a cost increase through mid-job, and it makes the price-lock at signing worth more than it looks. We also fix the markup-versus-margin confusion that sinks quotes: a 30 percent markup on cost is a 23 percent margin on price, and a season priced on the wrong one comes up short by the difference.

Crew-days are what you actually sell

You do not sell decks; you sell the days a crew can build them. A two-crew company with a May-to-October season has a fixed number of crew-days, and every quote, callback, rain day, and drive across the GTA spends them. We track revenue and gross margin per crew-day by job, which turns instinct into decisions. Composite decks carry a higher ticket and a higher material cost; whether they beat a wood deck per crew-day depends on your install speed, and the report answers that instead of the salesperson. Fence lines with long drives between them cost crew-days in the truck. Warranty callbacks are crew-days with no revenue attached, so we report them by crew and by product.

The same number tells you when to hire. A third crew only pays if the backlog will keep it busy at a margin that covers its truck, its tools, and its WSIB. The gross margin you need is not a rule of thumb; it is the figure that, multiplied by your crew-days, clears the overhead of a twelve-month business.

The backlog is your forecast, as long as deposits back it

Signed jobs with deposits are the most reliable forecast a builder has. We keep a backlog schedule listing each job's contract value, deposit held, expected build week, and expected final payment, and roll it into a 13-week cash flow that shows when balances will arrive and when lumber bills will hit. Then we apply a slip factor, because permits, inspections, and two weeks of rain move builds more often than not. A backlog that looks like six weeks of work is often eight weeks of calendar, and the cash flow has to reflect the calendar.

Winter: how much cash to carry and where the rest goes

The off-season question is arithmetic: monthly fixed costs — truck payments, insurance, shop rent, the owner's draw, software — multiplied by the months until the first spring final invoices, plus the tax, HST, and WSIB payments that fall in that window. That total is the cash the business needs in the account when the last fall job closes. Anything above it is available for equipment, debt paydown, or profit, and anything below it is a line-of-credit conversation to have in September rather than January.

We also put a number on the winter options. Snow removal keeps a truck and a person earning but adds insurance and its own risk. Prefabricating gates and panels in a shop over winter turns idle weeks into spring capacity, at the cost of carrying the material. Shutting down completely is the cheapest to run and the hardest on crew retention. None of these is right for every company; the cash model shows which is right for yours.

Buy, rent, or finance: equipment decisions with a short season

A skid steer, a dedicated auger, or a second trailer earns its keep only on the weeks it works, and a fence business has fewer of those than a year-round trade. We compare a season's rental invoices, pulled from the job costing, against the ownership cost including financing, insurance, storage, and maintenance, and we model financing that fits the season rather than a flat twelve payments. Fleet and material decisions cross the border more often than you would expect: composite decking, railing systems, and some equipment come from US manufacturers, and our cross-border guide for fence and deck builders covers what that does to landed cost. For how we work as a fractional finance lead across industries, see advisory and CFO services.