The Financial Numbers Every Home-Service Business Owner Should Actually Watch
Revenue gets a lot of attention in the home-service industry. Owners talk about how many trucks they have, how much revenue they generated, and how quickly the business is growing.
But according to Paul Maskill, revenue by itself doesn’t tell you whether the business is healthy.
In this episode of Surge Ahead, Paul breaks down the financial metrics and operating KPIs that home-service owners should understand before trying to scale.
Revenue Isn’t the Same as Profit
Paul’s first major point is that more revenue won’t necessarily solve a profitability problem.
If a business is already generating millions in revenue but isn’t producing enough money at the end of the day, adding more revenue can simply make the underlying problem larger.
His focus starts with gross profit margin and understanding whether the business has enough money left after the direct costs of delivering its services.
Understanding Gross Profit
Paul discusses a general target of 50–60% gross profit, depending on the business model and mix of service, installation, construction, and remodeling work.
He also explains that businesses need to accurately account for the true cost of delivering their work.
That can include:
- Field labor
- Payroll taxes
- Workers’ compensation
- PTO
- Benefits
- Materials
- Financing charges
- Permits
- Certain tools and equipment
- Sales commissions
The key is consistency and accurately capturing the costs associated with producing the work.
Pricing Should Start With Your Actual Costs
One of the biggest financial blind spots Paul sees is pricing.
Many owners set prices based on competitors, an old price book, or a simple markup without calculating what their own business actually needs to charge.
Paul argues that pricing needs to account for the real cost of delivering the service and the gross-profit target required to support the business.
That becomes especially important when an owner moves from being a one-person operation to having employees, office staff, vehicles, marketing expenses, and other infrastructure.
The Hidden Cost of Non-Billable Time
One of the most important concepts discussed is the difference between billable and non-billable time.
A technician isn’t producing billable revenue every minute of the day. Time is spent driving, getting fuel, stocking the vehicle, eating lunch, visiting a supply house, and handling other necessary tasks.
Paul gives an example of roughly 50% billable efficiency, meaning a substantial portion of a technician’s working time isn’t directly billable.
That cost still needs to be recovered through pricing.
Three Numbers to Watch
For businesses in the $1M–$2M range, Paul identifies three major areas to watch:
- Gross profit
- Call booking rate
- Field closing rate
He gives an 85% call booking rate as a benchmark he would like to see, while repair and replacement closing rates can vary based on the type of work.
The broader point is that financial results are often driven by operational KPIs.
Profit Doesn’t Equal Cash
A business can show a profit and still have cash-flow problems.
Paul explains that debt payments, accounts receivable, accounts payable, owner’s draws, taxes, and other balance-sheet activity can affect cash without appearing in the same way on the P&L.
That’s why looking only at a P&L or checking-account balance can provide an incomplete picture.
Paul recommends thinking in terms of how many months of expenses the business has available, with 3–6 months of expenses in the bank as a basic financial-health benchmark.
Scaling Eats Cash
Growth requires investment.
Hiring employees before they’re fully needed, adding vehicles, stocking vans, increasing marketing, and building infrastructure can all consume cash before the additional revenue catches up.
Paul’s broader message is that businesses should fix foundational profitability problems before trying to scale aggressively.
When Does a Business Need a CFO?
Paul says he often starts working with companies around the $3 million revenue mark, although the appropriate timing can vary.
A CFO isn’t only there to fix financial problems. For healthy companies, the role can also involve strategic decisions such as hiring, expansion, financing, acquisitions, and determining how to allocate cash.
The First Step: Track the Bottleneck
Paul’s final recommendation is simple: start with the KPIs.
If the call booking rate isn’t where it needs to be, fix that before simply buying more leads.
He points out that if a company moves from a 60% call booking rate to 85%, it creates significantly more opportunities from the same number of incoming calls.
He also highlights how AI can now analyze calls and identify where CSRs are losing potential bookings.
Conclusion
The financial health of a home-service business isn’t determined by revenue alone.
Owners need to understand gross profit, pricing, cash flow, operational KPIs, debt, and the cost of scaling.
The central takeaway from Paul’s discussion is to understand the numbers first — then use them to determine what the business should do next.
