Know your numbers: the KPIs that actually run an electrical business

Plenty of busy electrical shops aren’t profitable, and plenty of owners don’t find out until the accountant tells them at year-end. Revenue is a vanity number. You can run a million-dollar shop and take home less than your best journeyman. The handful of KPIs below are the ones that actually tell you whether the business is healthy and where the money is leaking. You don’t need a finance degree. You need to know these numbers, roughly where they should land, and what to do when one is off. This is the dashboard. (It ties together the specific playbooks: pricing service work, growing ticket size on panel upgrades, an EV-charger revenue line, and hiring and keeping the hands who produce the work.)

The numbers, with 2026 benchmark ranges

KPI	What it is	Typical range / target	Red flag
Gross margin	Revenue − direct job cost (labor + material), ÷ revenue	Blended 35-50%	Under ~30% blended
by work type		Service/repair highest; new-construction lowest (see below)	Service margin near your commodity work
Net profit	What’s left after all costs incl. owner pay	Healthy 8-12%; strong 15%+; new-construction runs thin (low single digits)	Under ~5%
Revenue per electrician	Annual revenue ÷ revenue-producing field electrician	Several × fully-burdened cost (aim ~4-5×)	Under ~3× burdened cost
Applied-hour efficiency	% of paid field hours that land on a billable job	50%+ is strong for service	Under ~35%
T&M vs flat-rate mix	Share of service revenue billed flat-rate vs. time-and-material	Trending toward flat-rate on repeatable service	Mostly T&M with no cost tracking
Close rate	Quotes accepted ÷ quotes given	Track and trend it up	Unknown / untracked
Overhead	Non-job operating cost ÷ revenue	Roughly 20-30% depending on work mix	Creeping past ~30%
Marketing spend	Marketing ÷ revenue, tracked to booked jobs	Low single digits for service-heavy shops	Spending untracked

Treat these as directional ranges, not gospel. They vary widely by market, shop size, and especially work mix, and the electrical trade spans everything from same-day service to multi-year commercial contracts. Your own trend matters more than the absolute number. Track them quarterly (monthly for fast movers like close rate and applied hours). Two definitional notes: “per electrician” means field electricians who produce billable work, not the office; and margins below are residential/light-commercial service framing unless stated. Heavy commercial and new-construction behave very differently, which is the whole point of splitting them.

The formulas (so you can actually calculate these)

• Gross margin = (Revenue − direct job costs [labor + material]) ÷ Revenue
• Fully-burdened electrician cost = wages + payroll taxes + benefits + truck + insurance + tools + license/CE + non-billable time
• Revenue-per-electrician target = roughly 4-5 × fully-burdened cost
• Break-even revenue = (fixed overhead + burdened labor) ÷ gross-margin %
• Applied-hour efficiency = billable field hours ÷ total paid field hours
• Close rate = quotes accepted ÷ quotes given
• CAC (per channel) = channel marketing spend ÷ new customers won from it

Gross margin: split it by work type or it lies to you

Gross margin is the first gate. If the work isn’t profitable before overhead, nothing downstream saves you. And in electrical work, a blended margin hides more than it reveals, because the four main lines behave completely differently:

• Service / repair: the highest-margin work you do. Short jobs, flat-rate pricing, low material intensity, and you control the price. This is where a well-run shop makes its real money.
• Remodel / renovation: middle of the pack. More material and coordination, more chance of surprises behind the walls, but you still price the job.
• New construction: the thinnest, most competitive margins in the trade. You’re bidding against everyone, on GC timelines, carrying material and payroll while waiting on draws. Volume can work, but a small estimating error erases the job.
• Commercial: varies enormously. Negotiated service and tenant-improvement work can be strong; hard-bid competitive commercial can be as thin as new-construction, with retainage and slow pay on top.

If you only know your blended margin, you can’t tell whether a fat service business is quietly subsidizing money-losing bids. Calculate margin for each bucket separately. When service margin is weak, the cause is almost always pricing: your flat rate doesn’t cover fully-burdened labor plus the true landed cost of material (see pricing electrical service work). When new-construction or commercial bids come back thin, the fix is estimating discipline and walking away from work priced below your cost, not shaving your own pay to win it.

Net profit: the number that’s actually yours

Net is what survives after overhead, and here’s the trap: you can run a healthy 45% gross margin and still net 4% if overhead is bloated. Multiple vans, a service coordinator, a shop lease, van stock, software, insurance, and license/CE renewals eat a good gross margin alive. If gross margin is fine but net is thin, your problem is overhead, not pricing. Audit it line by line.

The owner-comp trap: pay yourself a market-rate salary and pull it out as an expense before you calculate net. If your own labor and management time are “free” (you’re just taking whatever’s left in the account), your net profit is a fiction. You’re hiding a real cost and can’t tell whether the business is profitable independent of you doing three jobs at once. This is the single most common way owner-operator shops fool themselves, and it’s especially easy in electrical because the owner is usually still the best hand and the top estimator.

Revenue per electrician: the single most diagnostic KPI

If you track one number, track this. Each revenue-producing field electrician should generate several times their fully-burdened cost in annual revenue. Aim in the neighborhood of 4-5×. When it’s low, the cause is almost always one of two things, and the fix differs:

• Applied-hour efficiency: how much of the hours you pay for actually land on a billable job. Service shops leak here badly: windshield time, the supply-house run for the part that should’ve been on the van, waiting on a permit or an inspector, idle time between calls. Under ~35% applied is a scheduling-and-stocking problem. Tighten dispatch, stock the vans, and cluster calls geographically.
• Average ticket: revenue per completed job. Low ticket usually means missed legitimate work: the panel that’s a hazard, the missing AFCI/GFCI protection, the surge protection, the EV-charger circuit the customer’s been meaning to add. Growing ticket ethically is a sales-process fix (see upselling panel upgrades without the sleaze and building out an EV-charger line).

Low revenue per electrician can also simply mean you’re short-handed and turning down work, which loops back to hiring and keeping journeymen and apprentices. You can’t out-schedule a two-man crew that needs to be four.

T&M vs flat-rate mix and close rate: the pricing levers

Two service-side numbers quietly decide your margin:

• T&M vs flat-rate mix. Time-and-material feels safe, but it caps your upside (you can only bill the hours you burn) and punishes you for being fast and skilled. Repeatable service work (panel swaps, device replacements, common troubleshooting) belongs on flat rate built from your real burdened costs, so an efficient electrician earns the shop more, not less. Keep T&M for genuinely unknowable scopes. If most of your service is still T&M and you’re not tracking job cost against it, you have no idea which work makes money.
• Close rate (quotes accepted ÷ quotes given). Most shops don’t track it at all, which means they can’t tell the difference between a pricing problem and a sales problem. A very high close rate can mean you’re underpriced (everyone says yes because you’re cheap); a very low one means your presentation, options, or follow-up are weak. You want it tracked and trending, with good-better-best options on larger quotes so the customer chooses a level, not just yes/no.

Overhead and marketing: the cost of keeping the lights on

• Overhead: non-job operating cost as a share of revenue, roughly 20-30% depending on how much office, fleet, and management your work mix requires. A service shop with tight dispatch runs leaner; a shop carrying estimators and PMs for commercial work runs heavier. Whatever it is, know it, and watch it creep. Every recurring subscription and half-used van adds up.
• Marketing spend: for a service-heavy shop this is usually low single digits of revenue; a shop that runs on repeat customers and referrals may spend almost nothing, while one growing a new service line spends more. The number that matters isn’t the percentage, it’s whether you track spend to booked jobs so you know your cost per acquired customer by channel. Untracked marketing spend is the easiest money in the business to waste.

Build the habit

• One dashboard, reviewed on a schedule. Pull these into a single sheet (or your field-service software’s reporting) and look at them quarterly (monthly for close rate, applied hours, and revenue per electrician).
• Know your break-even cold. How much revenue must the shop do each month to cover fully-burdened labor + overhead? If you don’t know this number, you’re guessing.
• Trend, don’t obsess over one reading. A single quarter is noise; the direction over three or four is the signal.
• Act on the diagnosis, in order. Each red flag points to a specific fix: blended margin low → split by work type and fix pricing/estimating; net thin but gross fine → cut overhead; revenue per electrician low → applied hours (dispatch/stocking) then ticket (sales); mostly-T&M → move repeatable service to flat rate. Sequence it: fix pricing before you chase volume, and cut overhead before you shave your own pay.

Checklist

• Calculate gross margin overall AND by work type (service, remodel, new-construction, commercial) and stop letting service subsidize thin bids.
• Track net profit after a market-rate owner salary; if gross is fine but net is thin, audit overhead line by line.
• Track revenue per electrician (aim ~4-5× burdened cost); diagnose low readings via applied-hour efficiency and average ticket.
• Track your T&M vs flat-rate mix and move repeatable service work onto cost-based flat rate.
• Track close rate so you can tell a pricing problem from a sales problem.
• Watch overhead (~20-30%) and marketing spend (tracked to booked jobs + CAC by channel).
• Know your monthly break-even cold, and put it all on one dashboard reviewed quarterly (monthly for the fast movers).

The bottom line

Busy isn’t the same as profitable, and revenue tells you almost nothing on its own. The electrical shops that make money know a small set of numbers (margin by work type, net after real owner pay, revenue per electrician, applied hours, T&M-vs-flat mix, close rate, overhead) and they review them on a schedule instead of hoping at year-end. Each one, when it’s off, points straight at the lever to pull. Learn these, watch the trend, and you stop running the business by feel and start running it by the numbers.

General information for electrical contracting business owners, not financial advice. Benchmark figures are directional 2026 industry ranges that vary by market, size, and work mix. Track your own numbers and trends, and work with an accountant on the financials. Licensing, tax, and payroll rules differ by state and province (US and Canada); confirm specifics for your jurisdiction.