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.
KPI Threshold FAQs
What is a good gross margin for a home services business?
Margin One's operating threshold for HVAC, plumbing, and electrical businesses is a 50–60% gross margin, with 42% as the warning floor. Below 42% the cause is almost always pricing, estimating, or uncharged callbacks. The right target for a specific shop varies by trade, market, and job mix.
What KPIs should a home-services contractor benchmark?
The core set is gross margin, loaded labor cost, cost per lead, CAC and LTV:CAC, estimate close rate, technician billable utilization, and callback/rework rate. Together they show whether the business is priced right, marketing efficiently, closing work, and delivering profitably.
What is a healthy technician billable utilization rate?
Margin One's operating threshold is 60–75% or higher — the share of paid hours techs spend on billable work after drive time, shop time, and downtime. Low utilization is why loaded labor costs far more than the wage suggests.
Where do these numbers come from?
They are the operating thresholds in Margin One's Home Services Metrics Scorecard — the targets M1COS dashboards score contractors against in coaching engagements. They are practitioner targets, not the results of an industry survey or an aggregated customer dataset.
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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