Run the business on a dashboard, not a hunch
Your P&L is a rear-view mirror — accurate, but always about the past. KPIs are the windshield. A handful of operating numbers, tracked weekly, tell you the business is drifting before it shows up in the financials, while you can still steer. You don't need twenty metrics. You need these.
The core five
Gross margin — 50–60%. Revenue minus direct labor and materials, as a percent of revenue. This is the single most important number in the shop. Below 45% is a pricing problem, not a volume problem — fix the price book before you spend a dollar on more leads.
Revenue per truck per year — $250K+. The cleanest measure of whether each crew is productive. Healthy residential service runs around $250K per truck annually; top performers clear $350K+. If you add a truck and this number falls, you've added cost faster than capacity.
Callback rate — under 3%. The percent of jobs you have to return to fix on your own dime. Callbacks are pure margin-killers: unbillable time, materials, and a dented reputation. Under 3% is healthy. Over 5% means you have a training problem, not a marketing problem — and no amount of new leads fixes it.
Close rate (in-home) — 60–75%. Of the quotes you give, the percent that become jobs. Below 55%, your team needs help presenting and selling. Above 80%, you're almost certainly priced too low and leaving margin on the table. This one number reveals both a training gap and a pricing gap.
Average ticket. The average revenue per job (around $350+ for HVAC residential, lower for small plumbing/electrical calls). Watch the trend — rising average ticket from good diagnosis and honest add-on work is healthy growth; a falling one signals discounting or scope creep.
Two more worth watching
- A/R days outstanding — under 30. How fast you collect. Covered in the cash-flow guide; it belongs on the dashboard because slow collections sink profitable shops.
- Service-agreement rate — 20–30%. The share of service customers on a maintenance plan. It's a leading indicator of recurring revenue and, ultimately, your valuation.
Make it a habit
Pick a number for each KPI you're aiming at, review them every week, and ask one question: which one is off, and why? You don't manage all five at once — you find the one that's drifting and fix that. Benchmarks here reflect residential-service shops running 1–20 trucks (ACCA, PHCC, and SGI industry data); your trade and market will shift the exact targets, but the discipline is universal. Run the business on the dashboard, and the P&L takes care of itself.