The metrics every home service owner should know

The three numbers that decide everything

Most owners track revenue and cash in the bank. Those tell you what already happened. If you want to know whether the business can afford to grow, you need three numbers: what a customer is worth over their life with you (LTV), what it costs to get one (CAC), and how long it takes to get that money back (payback period). Everything else is downstream of those three.

You do not need a finance background to run them. You need honest inputs and the discipline to look at them monthly.

Lifetime value (LTV)

LTV is what an average customer is worth to you in gross profit across the whole relationship, not the ticket on one job.

The working version: average ticket × jobs per year × average years retained × gross margin. A customer with a $420 average ticket, 1.4 jobs a year, retained 4 years at a 45 percent gross margin is worth about $1,058 in gross profit. That is the number you are allowed to spend against.

Two things move LTV more than price increases: retention and recurring work. A maintenance membership that adds one visit a year and stretches retention from three years to five can nearly double LTV without changing a single price.

Customer acquisition cost (CAC)

CAC is total sales and marketing spend divided by new customers acquired in the same period. Include the parts owners usually leave out: ad spend, lead fees from Thumbtack or Angi, the share of a salary for whoever answers the phone and chases leads, and any software you bought specifically to generate work.

Track it by channel, not just in total. Google Local Services, paid search, marketplace leads, and referrals rarely cost the same and rarely convert the same. A blended CAC hides the channel that is quietly losing you money.

The LTV:CAC ratio and payback period

Divide LTV by CAC. Below 3:1 usually means you are buying growth you cannot afford. Well above 5:1 usually means you are underspending and leaving market share on the table. The ratio is a steering wheel, not a grade.

Payback period matters more than the ratio when cash is tight: how many months until a new customer has repaid what you spent to get them. If your first job covers CAC, you can spend aggressively. If it takes four jobs over two years, growth has to be funded out of the balance sheet.

Tech performance: what to watch by trade

Owner-level metrics tell you if the business works. Tech-level metrics tell you why. Four hold up across every trade:

• Average ticket per tech. The spread between your best and worst tech is usually 40 to 60 percent, and it is almost never skill alone. It is whether they present options.
• Close rate on presented estimates. Track presented, not sent. A tech who closes 30 percent of what they present but only presents on half their calls is a bigger problem than one closing 25 percent on everything.
• Callback rate. Return visits inside 30 days on the same issue. Every point of callback rate is margin you already earned and gave back.
• Revenue per truck per day. The cleanest read on whether dispatch is doing its job. Trucks, not techs, are your capacity constraint.

Then the trade-specific ones:

• HVAC. Membership attach rate on maintenance calls, and replacement close rate on aging systems. A tech who never has the replacement conversation on a 15-year-old unit is costing you the biggest ticket in the business.
• Plumbing. First-time fix rate and truck stock accuracy. A second trip on a drain call erases the job's profit.
• Roofing. Inspection-to-estimate rate and estimate age. Roofing quotes go cold in days, not weeks; time-to-estimate is the metric that predicts close rate.
• Garage door. Parts-on-truck completion rate and opener attach rate. Most missed revenue is a spring job that could have been a spring plus opener.

The metrics that quietly eat your margin

Three numbers rarely make it onto a dashboard and rarely fail to matter:

• Unbooked call rate. Of the calls that came in, how many became a job. Owners assume it is 80 percent; measured, it is often closer to 55. The gap is usually missed calls after hours, not bad selling.
• Days to invoice. The lag between job completion and invoice sent. Every day added is a day added to collection, and old invoices get disputed more.
• Labor burden per billable hour. Not the wage. The wage plus taxes, insurance, vehicle, phone, and unbilled time. Shops that price off the wage are usually 30 to 40 percent under their real cost.

Gross margin, EBITDA, and what a buyer pays for

LTV and CAC tell you whether growth is affordable. Margin tells you whether the growth is worth having, and it is the number anyone valuing your business will start from.

Work down the P&L in this order:

• Revenue. What you invoiced and collected, not what you quoted.
• Cost of goods sold. Materials, equipment, subcontractors, and the fully burdened labor that touched the job.
• Gross profit and gross margin. Revenue minus COGS, then that number as a percent of revenue. Healthy residential service shops generally run 45 to 55 percent gross margin; replacement and install work sits lower, service and maintenance higher.
• Operating expenses. Office salaries, rent, software, marketing, insurance, vehicles that are not charged to jobs.
• EBITDA. Gross profit minus operating expenses, before interest, taxes, depreciation, and amortization. It is the closest simple read on what the business itself earns.

Adjusted EBITDA is the version a buyer actually uses. Add back the things that are yours rather than the business’s: an owner salary above market rate, the truck your spouse drives, one-time legal fees, personal travel run through the company. Subtract anything you have been avoiding, like a real market salary for the role you fill yourself.

Two ratios sit alongside it. EBITDA margin is EBITDA divided by revenue; owner-operated shops often land at 8 to 12 percent, well-run ones at 15 to 20. Revenue per employee is the cleanest test of whether adding people is adding profit: if headcount grows faster than it does, you are buying revenue with overhead.

Why it matters even if you are not selling: home service businesses trade on a multiple of adjusted EBITDA. Every point of margin you add is multiplied when someone writes the check, and it is also the cash that funds the next truck without a loan.

How often to look at each one

Weekly: revenue per truck per day, unbooked call rate, days to invoice. Monthly: CAC by channel, close rate and average ticket by tech, callback rate, gross margin. Quarterly: LTV, LTV:CAC, payback period, labor burden, EBITDA and EBITDA margin.

Pick the three you are worst at, review them at the same time every week, and share the tech-level ones with the techs. A number nobody sees does not change behavior. Lakehouse reports on most of these out of the box, and your lead attribution and team views are where the tech-level numbers live.

Key takeaways

• LTV, CAC, and payback period tell you whether you can afford to grow. Revenue does not.
• Track CAC by channel. A blended number hides the channel losing you money.
• Average ticket and close rate by tech explain most of the gap between good and great months.
• Unbooked call rate, days to invoice, and true labor burden are the quiet margin killers.
• Adjusted EBITDA is what the business earns and what a buyer pays a multiple of. Track it quarterly.