Quick answer
Service margin is revenue minus direct labor, materials, and allocated overhead, divided by revenue. Use consistent allocation rules across branches for meaningful comparisons.
Overview
Profitability problems often hide in overhead allocation and parts pricing—not technician speed alone.
Use this for cohort reviews before repricing or changing dispatch policy.
How to use this tool
Enter revenue for the cohort and your best estimates for labor, materials, and overhead attributed to that cohort.
Calculator
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Gross-style margin
30.6%
Limitations
Does not allocate shared costs perfectly; finance should validate allocation methodology.
FAQ
- Should overhead include sales and marketing?
- Depends on your internal definition—pick a standard and stick to it for trending.
Model this in Equipify
Connect assets, PM schedules, work orders, and billing so these metrics become live—not spreadsheet snapshots.