Margin One
Home Services KPI Operating Thresholds
The KPI targets Margin One scores contracting businesses against — with warning thresholds, how to calculate each, and where the numbers come from.
Margin One's operating thresholds for a healthy home-services contractor: a 50–60% gross margin, a 60–75% technician billable rate, a 50%-or-better estimate close rate, a $50–150 cost per lead, under 5% callbacks, and an LTV:CAC above 3:1. Below is each threshold, its warning level, and how it is calculated — from the Home Services Metrics Scorecard that M1COS dashboards run on.
| Metric | Healthy Range | Warning | How It's Calculated |
|---|---|---|---|
| Financial | |||
| Gross Margin | 50–60% | Below 42% | (Revenue − COGS) ÷ Revenue |
| Loaded Labor Cost | Burden 25–35%, utilization 55–65% | — | Wage × (1 + burden %) ÷ billable utilization % |
| Markup to Hit Target Margin | 2× (100% markup) for a 50% margin | — | Price = true cost ÷ (1 − target margin) |
| Marketing | |||
| Cost Per Lead (CPL) | $50–150 | — | Marketing spend ÷ number of leads |
| CAC & LTV:CAC Ratio | CAC $200–350; LTV:CAC above 3:1 | LTV:CAC below 3:1 | CAC = (sales + marketing spend) ÷ new customers |
| Sales | |||
| Estimate Close Rate | 50% or higher | Below 50% | Booked jobs ÷ estimates written |
| Operations | |||
| Technician Billable Utilization | 60–75% or higher | Below 60% | Billable hours ÷ paid hours |
| Callback & Rework Rate | Under 5% of jobs | 5% or more | Jobs redone for free ÷ total jobs |
Methodology & Sources
- Formulas are standard metric definitions — how each number is calculated from a contractor's own books and field-service records.
- Healthy ranges and warning levels are Margin One operating thresholds: the default red/amber/green targets in our Home Services Metrics Scorecard, the KPI catalog M1COS dashboards score against. They come from operating experience running and coaching home-services businesses — they are not the results of an industry survey, a published third-party benchmark, or an aggregated customer dataset, and we don't claim otherwise.
- The right target for a specific business varies by trade, market, revenue mix, and business model — treat these as starting thresholds to score against your own books, not universal facts.
- Thresholds last reviewed 2026-08-15.
Want these thresholds scored against your actual books, not estimates? One conversation maps them to your real financials — no rip-and-replace.
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