Resources
Financial insights for service businesses. Margins, cash flow, benchmarks, and profitability data for contractors, healthcare practices, restaurants, and more.
The between-meetings test
The value of a fractional CFO is not what gets said in the meeting. It is what changes before the next one.
If nothing changes between CFO meetings, you may be paying for commentary. Use this practical test for ownership, action, and measurable progress.
The honest CFO readiness test
A CFO can help you make a hard decision. They cannot make your inputs trustworthy or carry the decision through the business by giving you another slide deck.
A fractional CFO cannot fix unreliable books, broken finance workflows, or decisions an owner will not make. Here is what must come first.
Benchmarks
Everyone assumes an older building costs more to service. We measured it and the assumption is half wrong: routine service does not move at all with age, while replacement work roughly doubles. Testing total revenue hides both.
Older buildings do not spend more on mechanical service. They spend more on replacement. Split the revenue and a 1.85x effect appears where total revenue shows nothing, measured across 25,912 buildings.
Published multiples from named M&A advisors, plus our own operating data
Two HVAC companies, both at $5M of EBITDA. One is worth $35M and the other $55M. Neither number is wrong, and the difference is not size. It is what share of that EBITDA renews without anyone selling it again.
HVAC tuck-ins price at 4x to 8x EBITDA, regional platforms at 7x to 11x (Capstone Partners). The bands overlap, and that is the whole point.
From Level's proprietary contractor research
Your field software says the job made 38%. Your P&L says 24%. Is it timing, a different cost definition, or missing records? Reconcile the same jobs before choosing which number to trust.
Reconcile field hours, invoices, recognized revenue, and job costs. Billing capture: 97.1% median, 66.9% bottom decile (963 companies).
Benchmarks
Every review benchmark you have read is national. Review volume is mostly a function of metro density, so a national percentile tells most contractors something false about their own market.
The median HVAC shop has 26 reviews in California and 4 in Arkansas. Ranked nationally, 36.7% of HVAC contractors land more than 10 percentile points from where they actually sit in their own market.
From Level's proprietary contractor research
The median contractor collects 85.1% of what it bills. Not 100%, and not after 90 days. 85.1% is where it stops. The other 14.9% is the difference between the profit on your P&L and the balance in your bank.
The median contractor collects 85.1% of what it bills (n=464) and invoices 97.1% of logged hours (n=963). Four measurable gaps, none on your P&L.
Benchmarks
Published dollars-per-square-foot figures for commercial mechanical service span 14x, from $0.15 to $2.15. That is not a range. That is what a number looks like when nobody holds the data behind it.
The industry prices buildings per square foot across a 14x range. We measured it: floor area explains 9% of the variance, and dividing by area adds 19% more variance than it removes.
Benchmarks
A useful working range is 45-55% of revenue. The useful answer is where YOUR number sits by account, because in cleaning one underpriced contract can drag the whole book, and the benchmark taped to the wall will not tell you which one.
Level's 45-55% cleaning-labor Operating Diagnostic Range, with a low-40s account scenario. What drives the gap by account, and how to read your own number before it eats your margin.
Construction Accounting
Every one of these systems can hold your general ledger. The question that actually separates them is narrower: does it produce a WIP schedule and a certified payroll report without a workaround. That is where contractors get surprised after they have already migrated.
A finance-first comparison of 12 contractor accounting and ERP systems on the two features that actually break: native WIP / percentage-of-completion and certified payroll. Which do it natively, which need a workaround.
Business Growth
Two electrical contractors at the same revenue can sell 4x apart. The one wired into data-center and mission-critical power is being bid up. The one doing general commercial resi is a tuck-in. Revenue mix now moves the multiple as much as size does.
Electrical contractors sell for 5.5-8x EBITDA in the lower-middle market, but data-center and mission-critical specialists pull 8-12x+. Why revenue mix now matters as much as size.
Business Growth
Two HVAC shops with identical revenue can sell 4x apart. The gap is almost never size. It is how much of your revenue is locked-in service agreements, and whether a buyer's accountant can trust your numbers without a six-month cleanup.
HVAC companies sell for ~9.5x EBITDA on average, 4-8x for tuck-ins up to 15-18.5x for service-dense platforms. What moves you up the range, and how to find where you sit.
From the founding team's contractor analysis
Most contractors track revenue and jobs booked. Neither tells you if you are making money. These are the 8 numbers that do, ranked by how much they actually move the bottom line.
The 8 financial KPIs that actually move a contractor's bottom line, ranked by profit impact, each with its median and top-quartile benchmark.
From the founding team's contractor analysis
The margin on your bid sheet is not the margin you earn. The gap is labor burden you didn't fully load, callbacks nobody charged to the job, material that drifted after you quoted, and receivables you're financing for free.
A contractor job bid at 45% gross margin usually earns closer to 24% once labor is fully burdened, callbacks counted, material drifts, and AR is financed.
From the founding team's operator analysis
A route estimate is only comparable with actual margin when both include the same labor burden, drive time, equipment cost, and seasonal capacity.
Rebuild landscaping route margin using loaded labor, drive time, equipment per crew-hour, and seasonal capacity. Includes Level job-data context.
From the founding team's operator analysis
A full schedule is not the same as a collected schedule. No-shows leave fixed-cost slots empty, denials force rework and partial write-offs, and undercoding gives away revenue you already earned. The practice looks 20% profitable and takes home closer to 10%.
A practice that looks 20% profitable often earns closer to 10% once no-shows, claim denials, and undercoding are counted. The leakage waterfall, sourced.
From the founding team's contractor analysis
Most bookkeeping is the same across industries. Contractor bookkeeping is not. Job costing, WIP, retainage, and certified payroll create a level of complexity a generalist will learn on your books, at your expense.
A generalist bookkeeper who doesn't grasp job costing, WIP, and retainage quietly costs you margin. The 5 questions that reveal a trades specialist.
From the founding team's contractor analysis
A good generalist CFO can read a P&L. A contractor CFO can tell you which jobs made money, why the profitable month left you short on cash, and which service agreements are quietly underwater. Those are different skills.
A fractional CFO who has never run trades finance gives generic advice. The 5 questions that reveal whether one actually understands how contractors make money.
Drop your info and we’ll show your real margin after callbacks and rework, which crews and jobs are worth the time, and how much cash is sitting in work you have already finished.
No commitment. Real numbers, not generic advice.