Crew-based businesses live and die on utilization. Model billable hours, labor multiplier, crew-level EBITDA, and the breakeven utilization you need to survive before you buy.
Field services businesses — HVAC, electrical, plumbing, landscaping, commercial cleaning, IT field support — are labor arbitrage machines. You pay a crew a loaded hourly cost and bill their time out at a multiple of that cost. The two numbers that decide whether the business makes money are utilization (what share of paid hours are actually billable) and the labor multiplier (how much more you charge than you pay). Everything else is overhead drag.
The critical trap for buyers: you pay your crew for every available hour whether or not it's billed. Idle time is a pure loss. A business at 55% utilization is leaving nearly half its labor cost uncovered, and small swings in utilization move EBITDA dramatically because the labor cost is effectively fixed in the short run.
| Metric | What it means | Benchmark range |
|---|---|---|
| Utilization | Billable hours ÷ available hours | >70% strong; 60–70% average; <60% weak |
| Labor Multiplier | Billing rate ÷ fully-loaded labor cost | 2.5–3.5x healthy; <2x too thin |
| Gross Margin | Revenue after labor and materials | 30–50% for trade services |
| EBITDA Margin | Operating profit after overhead | 10–20% for well-run services |
| Revenue / Crew | Annual billings per billable tech | $120k–$220k depending on rate |
| EV / EBITDA | Acquisition multiple | 3–5x for independent services firms |
The breakeven utilization figure above is the utilization rate at which EBITDA hits zero — where billings exactly cover labor, materials, and overhead. The gap between your actual utilization and breakeven is your cushion. A business running at 65% utilization with a 58% breakeven has only 7 points of safety; lose two technicians' worth of billable work to a slow season and you're underwater. Look for a cushion of at least 10 points.
Get the job-costing and timesheet data, not just the P&L — utilization is easy to overstate and the only way to verify it is hour-by-hour records. Understand customer concentration and whether revenue is recurring (service contracts) or project-based; recurring maintenance agreements are worth a premium because they smooth utilization. Check the technician roster for licenses, tenure, and any non-competes — in trade businesses the crew is the asset, and a master electrician or lead tech walking out the door can take the revenue with them. Finally, review the fleet and equipment condition and any deferred maintenance you'll inherit.
Use the LBO Model to layer acquisition debt on top of these crew economics and size the equity check.
An editable Excel workbook — 5-year income statement, balance sheet, cash flow, DCF + exit-multiple valuation, and a deal tab with debt schedule, IRR & MOIC. Pre-filled with the inputs above; every assumption recalculates.