Benchmark 1 of 6
Where the money actually lands — before overhead
| Vertical | Median Gross Margin | Top Quartile |
|---|---|---|
| Electrical (residential service) | 62–67% | 70%+ |
| Plumbing (residential service) | 55–65% | 68%+ |
| Fire / Life Safety | 50–60% | 65%+ |
| HVAC (service) | 48–58% | 62%+ |
| HVAC (install/replacement) | 38–45% | 50% |
| Pest Control | 45–55% | 60%+ |
| Landscaping | 35–45% | 52%+ |
PE Buyer Threshold
Gross margins above 30% and EBITDA above 15% are considered "premium market positioning" by PKF O'Connor Davies (Summer 2025 HVAC M&A Update). Most PE roll-ups are buying companies operating below this benchmark — and paying below-market multiples because of it.
Sources: Profitability Partners (200+ P&L reviews), PKF O'Connor Davies HVAC M&A Update Summer 2025, The Deal Sheet Plumbing M&A Deep Dive, Fairgrove Partners Fire Safety Report, Breakwater M&A Pest Control Guide 2026
Benchmark 2 of 6
The number that separates platforms from operators
| Trade | Median Rev/Tech | Top Quartile | Key Driver |
|---|---|---|---|
| HVAC | $280K–$350K | $450K+ | System replacements + maintenance agreements |
| Electrical | $260K–$320K | $420K+ | Panel upgrades, EV charger installs, generator work |
| Plumbing | $220K–$290K | $380K+ | Avg ticket $315; emergency premium; route density |
| Fire / Life Safety | $200K–$260K | $340K+ | Inspection cadence; parts revenue on deficiency calls |
| Pest Control | $180K–$240K | $320K+ | Route efficiency; upsell to mosquito/termite coverage |
| Landscaping | $120K–$180K | $240K+ | Crew-based model limits per-tech benchmarking utility |
7×
jobs/day for high performers vs. 3–5× industry avg (ServiceTitan 2026)
The 14% Rule
Well-run HVAC businesses pay techs 14–20% of the revenue they generate. If your RPT is $300K and your tech earns $60K, you're at 20% — at the ceiling. If your RPT is $200K at the same wage, you have a pricing problem.
Sources: SBE Odyssey (HVAC Revenue 2024), ServiceTitan Field Service Metrics 2026, FieldEdge HVAC/Plumbing Industry Outlook 2026
Benchmark 3 of 6
The callback tax — and who's paying it
| Performance Tier | FTFR Range | What It Means |
|---|---|---|
| High performer (top 20%) | 88–92% | Requires parts preloading + skills-based dispatch |
| Industry average | ~80% | 1 in 5 jobs requires a return visit |
| Below average | 65–75% | Every callback destroys a profitable job; net-negative ticket |
| Bottom 20% of techs | ~59% | Source: Aquant 2022 (6M+ work orders) |
Cost Impact
A 10-point FTFR improvement on a 50-tech platform running $300K/tech means ~500 fewer callbacks/year. At $150 avg callback cost, that's $75K in recovered margin — before customer satisfaction lift.
PE Insight
First-time-fix rate is the leading indicator most PE operating partners ignore at acquisition. It doesn't show up in the CIM. It shows up 18 months later as elevated labor cost and churning customer reviews.
Sources: Aquant 2022 Service Intelligence Benchmark (6M+ work orders), CompareSOft FTFR Industry Analysis, LLumin FTFR Benchmark, Totalmobile FTFR Guide
Benchmark 4 of 6
How fast are you actually getting paid?
Excellent (<30 days)
Average (35–45 days)
Needs Improvement (45+)
— Excellent target (30 days)
| Vertical | Average DSO | Excellent (<30) | Flag if > |
|---|---|---|---|
| Plumbing | ~40 days | ✅ Achievable | 50 days → invoicing delay |
| HVAC | ~45 days | Harder (commercial) | 55 days → collections problem |
| Electrical | ~50 days | Achievable (residential) | 60 days → billing workflow issue |
| Fire / Life Safety | ~42 days | Service achievable; install longer | 60 days → contract structure issue |
| Landscaping | ~38 days | Contract-based; depends on terms | 45+ = terms problem |
The Free Gift
Industry average: contractors wait 7–10 days post-job completion to invoice. That's a free gift to your DSO that disappears the moment you adopt same-day digital invoicing. (ClearReceivables 2026)
Portfolio Working Capital Math
Across a portfolio of 10 companies each doing $10M revenue, a 10-day reduction in average DSO frees approximately $2.7M in working capital — without a single new revenue dollar.
Sources: ClearReceivables DSO Industry Benchmarks 2026, CRF Q4 2024 AR & DSO Industry Report (36.8 day domestic avg), Quickbooks DSO Guide 2026
Benchmark 5 of 6
Materials cost is your hidden margin leak
| Category | Materials as % Revenue | Primary Input |
|---|---|---|
| HVAC (install) | 35–45% | Equipment ($3K–$5K per job) |
| Landscaping | 20–30% | Plants, mulch, fuel, equipment |
| HVAC (service) | 15–25% | Parts + refrigerant |
| Plumbing (service) | 12–20% | Lower equipment cost; emergency pricing power |
| Electrical (service) | 10–18% | Wire + fixtures vs. complete systems |
| Pest Control | 8–12% | Chemical cost; route efficiency primary |
| Specialty trades avg | ~25% | 2023 Construction Benchmark (1,624 orgs) |
Tariff Alert
The US imports ~$25B in HVAC equipment annually. ~70% from tariff-affected countries (China, Mexico, Canada). A 10% tariff pass-through adds 3–5 COGS points directly to HVAC install margins. Platforms without centralized procurement are absorbing this individually. (Lion Business Advisors Q1-2025)
Procurement Leverage
A 10-company portfolio buying $5M/year in materials individually pays retail. Centralized vendor contracts on 15–20% volume discounts are achievable — that's $750K–$1M in annual COGS savings without touching operations.
Sources: 2023 Mahoney Group Construction Benchmark Report, ServiceChannel Facilities Spend Index Q4 2024, Lion Business Advisors HVAC Q1-2025
Benchmark 6 of 6
The integration clock — when the value actually materializes
| Stage | Timeframe | EBITDA Change | Primary Driver |
|---|---|---|---|
| Acquisition baseline | Month 0 | 0 | Deal close; typically 10–15% EBITDA at acquisition |
| Disruption dip | Month 1–3 | –1 to –2 pts | Deal distraction; management transition |
| Quick-win recovery | Month 3–6 | +2 to +3 pts | Pricing optimization; DSO improvement; tech normalization |
| Structural improvement | Month 6–18 | +3 to +5 pts | Overhead centralization; vendor consolidation; WC improvement |
| Full integration | Month 18–24 | +5 to +8 pts | Revenue growth; systems integration; cross-portco benchmarking |
| Mature platform | Month 24–36 | +8 to +12 pts | Operational leverage; brand equity; organic + add-on compounding |
Case Study: 500bps in 15 Months
TBM Consulting documented 500 basis points of EBITDA improvement in 12–15 months for a PE-backed HVAC manufacturer ($13M improvement / $90M in value creation). Sequencing: data consolidation first, pricing second, overhead centralization third.
EY Research Finding
Roughly 50% of all operational value created post-acquisition comes from sales and revenue growth — not cost reduction. PE firms that lead with cost-cutting underperform firms that lead with revenue optimization. (EY Global PE Report)
The Fragmented Platform Trap
Roll-ups running 10+ subsidiaries on separate FSM platforms cannot benchmark cross-portco, cannot centralize vendor spend, cannot run KPI dashboards. The EBITDA lift that should happen in months 3–18 gets deferred to year 3 — if it happens at all.
Sources: TBM Consulting 500bps Case Study, Forbes Post-Acquisition EBITDA Uplift 2026, EY Global PE Report, Verdad Capital LBO Performance Analysis
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