Stuart Trier has run nearly 1,800 coaching calls since 2019. The pattern he sees most often isn't a broken business — it's a well-run one bleeding quietly through its own financial architecture. The operation is tight. The margins are real. And the owner is still losing.
This article is based on a real coaching call with the founder of a construction management staffing company — we'll call him Nick — and his company, Northgate Project Services. Northgate places specialized field personnel on large-scale civil and mining projects. Fat margins, long-term contracts, a genuine moat. By every operational measure, the business was performing.
The problems weren't in the field. They were in the structure around it — the holding company setup, the accountant who treated the books as a compliance exercise, the commission framework that hadn't been stress-tested against a new service line, and a co-founder whose scar tissue from a low-margin trucking business was quietly vetoing investments that made obvious mathematical sense.
If you run an HVAC, electrical, plumbing, or roofing company, the trade details are different. The pattern is identical.
Nick didn't say that casually. He'd been running through the math out loud — the holding company structure, the way the small business tax deduction gets split across multiple corporate entities, the years of paying himself through dividends — and somewhere in the middle of it, the accumulated cost of all those structural decisions landed on him at once.
"I feel like we've paid obscene amounts of tax unnecessarily, probably across the board. Running a holding company, paying myself through that — it's just been atrocious as far as taxes go." — Nick, Northgate Project Services
This is not a story about a bad business. Northgate's primary service — placing senior construction managers on civil projects at 50% gross margins — is genuinely lucrative. The kind of margin most home service contractors spend years chasing. The problem was that years of structural decisions, made without anyone looking at the full picture, had quietly redirected a meaningful portion of those margins away from Nick and toward tax authorities.
The holding company setup, originally designed to give each of the three partners equity ownership through their own entities, had an unintended consequence: the small business tax deduction — a fixed annual threshold — had to be divided among all four related corporations instead of falling cleanly to one. The result was that profits exceeding each entity's share of the deduction were taxed at the higher corporate rate, rather than the preferential small-business rate the founders assumed they were getting.
Stuart's response was direct. "You definitely want to look at that structure because you definitely don't want to overpay."
The fix isn't exotic. It's an introductory conversation with a fractional CFO who has actually looked inside a business like Northgate's — not an accountant filing compliance documents, but someone who understands how ownership structure, compensation design, and tax efficiency interact. That conversation, for most founders at this revenue stage, pays for itself in the first year.
For a roofing company with two partners and a holding company each, the same problem shows up differently but resolves the same way. The structure made sense on the day it was set up. Nobody revisited it when revenue tripled.
The dividend decision had a second consequence Nick hadn't anticipated.
He'd been paying himself through dividends rather than salary — a common choice among founders trying to minimize personal income tax. On paper, it worked. In practice, it cost him.
"Then I go to get a mortgage and — you don't qualify for the best rate because you're self-employed. Overall, that whole structure cost me more money than if we'd just taken a salary from the get-go, even at 53%." — Nick, Northgate Project Services
Banks assess borrowing capacity based on provable, consistent income. Dividends, even substantial ones, read as self-employment income — variable, unguaranteed, and subject to lender skepticism. The mortgage penalty Nick paid wasn't large in isolation. But added to years of unnecessary corporate tax, it completed the picture of a founder who had built a genuinely profitable business and then systematically extracted less personal wealth from it than he'd earned.
Stuart's recommendation was simple: pay yourself a salary. Set a payroll cadence. The bank sees consistent income, the borrowing power follows, and the tax rate differential — while real — is often smaller than the cumulative cost of financing disadvantages and structural inefficiency.
An HVAC owner paying himself entirely through year-end distributions faces the same wall. The business might have grossed $2.8M. His personal income on paper might look like $180K. The bank does not care about the gross.
There's a version of growth that looks impressive on a top-line spreadsheet and quietly destroys margin at the bottom. It happens when a business takes on work where most of the revenue passes straight through to subcontractors or third-party labor — and the company earns only a small markup on the difference.
Stuart put it plainly during the call: "In one model, you could afford to pay 3% for sure, but if you're only making 10%, then all of a sudden, it's like 30%." And then: "You can have $20 million in revenue, but really, it's a $2.5 million business because so much of it is flow-through."
The math works like this. Northgate's primary construction management work bills at rates that generate roughly 50% gross margins — they place their people, charge the client, and keep half. If Nick adds a general contracting line in which he manages third-party labor and equipment with a 10–15% markup, the revenue number grows. The real business doesn't, proportionally. A $4M GC job at 12% margin produces $480K in gross profit. A $960K construction management engagement at 50% produces the same.
The danger is applying a compensation structure designed for the high-margin model to the low-margin one. A 3% revenue commission on a 50% margin job costs the company 6% of its gross profit. The same 3% on a 10% margin job costs 30%. Same percentage, very different business outcome.
For an HVAC contractor: the service technician dispatching calls at a $400 average ticket and 60% margin is your construction management line. The commercial changeout subcontracted to another crew at 15% margin is your GC line. The moment you apply the same commission structure to both, one of them starts costing you money.
Nick had a co-founder — we'll call him Dale — who had spent years running a trucking company at 5% margins. Every spending decision, every growth investment, every proposal to spend $10,000 on a relationship-building dinner with a client whose project might be worth $15M got filtered through that experience.
Stuart didn't diagnose this as a personality conflict. He called it what it is: a Direction failure.
"He's just so jaded by it, and it's held me back from doing things I know are the right call." — Nick, Northgate Project Services
When a leadership team can't align on a strategic bet — not because the math is unclear, but because one partner is emotionally anchored to a different business in a different decade — the company is operating without a shared Direction. It has revenue targets. It doesn't have a unified theory of growth.
The installed version of this is a documented 3-year vision and a 90-day priority plan that both partners have actually built together, with the math visible. A $10,000 dinner to cultivate a $15M project relationship isn't a luxury spend when the customer acquisition cost is modeled properly. At Northgate's margins, landing one project from that dinner pays for roughly 750 more dinners. Dale's 5% trucking math doesn't apply — but without a shared framework that makes this explicit, the decision never gets made.
A roofing company where one partner grew up doing $400 retail jobs, and the other wants to pursue $2M commercial contracts, runs the same dynamic. Until there's a written Direction signed by both partners, the conservative partner wins every spending argument by default.
Nick mentioned, almost in passing, that he'd been paying external recruiters 10% of first-year salary to place senior hires. At the compensation levels Northgate operates — some field personnel packages exceeding $300K annually — that's a $30,000 placement fee per hire. And it was sitting in a general overhead bucket, untracked.
Stuart reframed it immediately: "Talent is your inventory of what you're selling. And so you not having it costs you the revenue."
If Northgate's primary service is placing specialized construction managers, then those managers are the product. The cost to acquire them is a cost of goods, not a line item to absorb into overhead and forget. Once that reframing lands, the math changes. A $30,000 placement fee for a hire who generates $411K in annual revenue at a 50% margin is a 14.6% customer acquisition cost for a product with a 50% gross margin. That's a reasonable number. It just needs to be visible.
The alternative Stuart proposed: model the lifetime value of each position, then offer a signing bonus directly to the candidate rather than paying the recruiter. Same cash-out, better outcome — the candidate gets the money instead of the intermediary, and Northgate builds goodwill with the hire before they even start.
An electrical contractor paying a staffing agency $8,000 to place a journeyman is making the same structural error. The fee isn't the problem. The invisibility of it is.
Nick's description of his accounting relationship was precise: "It's more, they're just plugging numbers, and that's it. It's basically just compliance for the CRA."
Stuart's response was equally precise. "You don't want to pay for a Ferrari to deliver a pizza." The compliance work — the annual filing, the basic bookkeeping — has its place and its cost. What Northgate needed, on top of that, was someone who had looked at the whole structure, understood the holding company problem, had relationships with lenders, and could model the compensation decision before Nick made it, rather than after.
That's a fractional CFO role, not an accountant role. And the distinction matters enormously at this revenue stage. A fractional CFO with exposure to the mining or construction industry arrives with context. They know what these margins look like, what the common structural mistakes are, and which bankers understand the business model. Stuart had watched this dynamic enough times to know: "You need somebody on your accounting team who has relationships with bankers where they're going to put their name behind you."
For a $5M plumbing company whose bookkeeper does the QuickBooks entries and whose CPA files the return and nothing else, the parallel is direct. The books are accurate. The strategy is absent.
Each of the symptoms above maps to a system failure and a specific fix.
The clearest signal is a gap between what your business earns and what you actually keep — not explained by operating costs or reinvestment. If your company is profitable but your personal financial position isn't improving proportionally, the structure is worth reviewing. Specifically, if you have multiple related entities and you're not sure how the small business tax deduction is being applied across them, that's the first question to put to a fractional CFO or tax advisor with ownership structure experience. The fix is rarely dramatic — it's usually a consolidation or a compensation redesign — but it requires someone who understands the interaction between entity structure and owner pay, not just someone filing the annual return.
Read more: Why Your P&L Is Lying to You
The dividend approach reduces personal income tax in the year you take the money. The salary approach creates provable, consistent income that lenders recognize. Most founders find out the hard way that the tax savings on dividends are partially or fully offset by worse borrowing terms, higher personal financing costs, and mortgage penalties over time. Stuart's recommendation is a regular salary cadence — enough to demonstrate stable personal income — with distributions taken as a secondary layer when the business has excess cash. The salary amount doesn't need to be large. It needs to be consistent and on a payroll schedule a lender can verify.
Start by separating your service lines by gross margin band. Any line above 40% margin can support a revenue-based commission. Anything below 25% should be commissioned on gross profit dollars rather than revenue — otherwise the commission rate consumes a disproportionate share of what the job actually makes. The practical implementation is a commission matrix: rep earns X% of gross profit on jobs above Y margin, drops to Z% on jobs below. It takes one spreadsheet to model and one conversation to implement. The hard part is usually explaining to the rep why the structure changed — which is much easier if you show them the math on a low-margin job under the old system.
Read more: The Commission Trap
An accountant — specifically a CPA or bookkeeper — handles compliance: accurate records, filed returns, tax documents. That work is necessary and has a defined scope. A fractional CFO looks at the business from the owner's perspective: what is the right corporate structure, how should the founder compensate themselves, what does the cash flow look like 60 days out, and what are the financial risks of the next strategic decision. At the $3M–$10M revenue stage, most businesses need both — and most only have the first. The fractional CFO engagement is typically a few hours a month and pays for itself quickly when the first structural issue gets caught before it compounds another year.
Read more: The Weekly Scorecard
Stuart Trier has built, bought, and sold multiple companies, scaling his first from $0 to $8M in revenue in just three years. He then grew his second company to 28 locations in 12 months before a successful exit to a publicly traded company. Drawing on nearly 1,800 coaching calls since 2023, he helps home service business owners achieve double and triple-digit growth by implementing the systems, strategies, and accountability that drive scalable results.
