{
  "slug": "contractor",
  "label": "Contractor financial & operating benchmarks",
  "publisher": "Level",
  "publisher_url": "https://levelcfo.com",
  "dataset": "The Level Index, contractor financial & operating benchmarks",
  "attribution": "The Level founding team's analysis of 2,200+ contractors representing $13.25B in job revenue and 2.5M invoices, built across operating, private-equity, and CFO roles (financial reviews, operator interviews, and PE due-diligence), spanning HVAC, plumbing, electrical, mechanical, refrigeration, and fire protection, and layered with named public sources.",
  "methodology": "Figures are aggregated and anonymized. Distributions are reported as percentiles (p10/p25/median/p75/p90). No individual company is identified or identifiable. Per-metric sample sizes and definitions are attached to each metric.",
  "segments": [
    "HVAC",
    "plumbing",
    "electrical",
    "mechanical",
    "refrigeration",
    "fire protection"
  ],
  "last_updated": "2026-Q3",
  "date_range": "2022/2026",
  "license": "Free to cite with attribution to Level (levelcfo.com).",
  "metrics": [
    {
      "key": "service_agreement_gross_margin",
      "pillar": "Earnings",
      "label": "Service agreement gross margin",
      "unit": "percent",
      "n": 259,
      "definition": "Gross margin on recurring service-agreement (maintenance) revenue. n=259 companies with at least $10K in SA revenue.",
      "median": 37.9,
      "top_quartile": 53,
      "note": "Contractors below 25% are typically underpricing SAs or not capturing maintenance pull-through.",
      "basis": "contractors analyzed",
      "source": "The Level Index (contractor benchmark research)"
    },
    {
      "key": "collection_rate",
      "pillar": "Cash",
      "label": "Collection rate",
      "unit": "percent",
      "n": 464,
      "definition": "Cash collected as a share of billed revenue.",
      "p10": 38.8,
      "p25": 70.7,
      "median": 85.1,
      "p75": 92.7,
      "p90": 96,
      "target_range": [
        92,
        96
      ],
      "note": "The gap between 85% and 96% is real cash: on $5M of billings, ~$550K sitting uncollected.",
      "basis": "464 contractors analyzed",
      "source": "The Level Index (contractor benchmark research)",
      "external_corroboration": "Directionally consistent with CFMA 2024 Construction Financial Benchmarker (56.6 days in accounts receivable, n=1,290) and Levelset 2022 Construction Cash Flow Report (fewer than 40% of contractors paid within 30 days)."
    },
    {
      "key": "billing_speed_days",
      "pillar": "Cash",
      "label": "Billing speed (days from work complete to invoice)",
      "unit": "days",
      "n": 733,
      "definition": "Days from job completion to invoice issued. Median is 1 day when progress billing is included (~25% of companies); among post-completion invoicers the adjusted median is 7 days.",
      "median": 1,
      "median_post_completion": 7,
      "bottom_decile": 30,
      "lower_is_better": true,
      "source": "The Level Index (contractor benchmark research)"
    },
    {
      "key": "quote_conversion_decided",
      "pillar": "Accounts",
      "label": "Quote conversion rate (on decided quotes)",
      "unit": "percent",
      "n": 794,
      "definition": "Won divided by (won + lost); excludes still-pending quotes. n=794 companies with at least 20 decided quotes. Distinct from all-quote conversion below.",
      "median": 73.9,
      "top_decile": 92,
      "note": "Quotes that sit >7 days convert at roughly half the rate of quotes sent within 24 hours.",
      "source": "The Level Index (contractor benchmark research)"
    },
    {
      "key": "quote_conversion_all",
      "pillar": "Accounts",
      "label": "Quote conversion rate (all quotes issued)",
      "unit": "percent",
      "n": 794,
      "definition": "Won divided by all quotes issued, including quotes that never reach a decision.",
      "p25": 28,
      "median": 38.1,
      "p75": 47.7,
      "note": "Roughly 62% of total quoting effort produces zero revenue.",
      "basis": "companies with 20+ quotes",
      "source": "The Level Index (contractor benchmark research)"
    },
    {
      "key": "days_to_convert",
      "pillar": "Accounts",
      "label": "Days to convert (winning quotes)",
      "unit": "days",
      "n": 794,
      "definition": "Days from quote sent to accepted, for quotes that convert.",
      "median": 2,
      "lower_is_better": true,
      "note": "Winning quotes close fast; speed-to-decision is the strongest leading indicator.",
      "source": "The Level Index (contractor benchmark research)"
    },
    {
      "key": "days_to_loss",
      "pillar": "Accounts",
      "label": "Days to loss (lost quotes)",
      "unit": "days",
      "n": 794,
      "definition": "Days from quote sent to marked lost, for quotes that do not convert.",
      "median": 29,
      "p90": 165,
      "note": "Half of lost quotes linger past 30 days before anyone marks them dead.",
      "source": "The Level Index (contractor benchmark research)"
    },
    {
      "key": "customer_concentration_top1",
      "pillar": "Risk",
      "label": "Revenue from largest single customer",
      "unit": "percent",
      "n": 959,
      "definition": "Share of total revenue from the top 1 customer. n=959 companies with at least $100K in annual revenue.",
      "p25": 18.5,
      "median": 31,
      "p75": 54.6,
      "p90": 82.4,
      "basis": "companies with >$100K revenue",
      "source": "The Level Index (contractor benchmark research)"
    },
    {
      "key": "job_gross_margin",
      "pillar": "Earnings",
      "label": "Job-level gross margin",
      "unit": "percent",
      "n": 430,
      "definition": "Gross margin per completed job (revenue minus actual cost), across all job types.",
      "p10": 10.8,
      "p25": 28.4,
      "median": 44.3,
      "p75": 60.2,
      "p90": 75.1,
      "pct_negative_margin": 6.2,
      "pct_under_20pct_margin": 16,
      "basis": "completed jobs with revenue >$100 and actual cost >$0",
      "source": "The Level Index (contractor benchmark research)"
    },
    {
      "key": "labor_hours_actual_vs_budget",
      "pillar": "Labor",
      "label": "Labor hours: actual as % of budgeted",
      "unit": "percent",
      "n": 430,
      "definition": "Actual labor hours ÷ budgeted labor hours per job. 100% = on budget; >100% = over.",
      "p25": 70.1,
      "median": 99.4,
      "mean": 119,
      "p75": 131.1,
      "pct_over_budget": 40,
      "pct_over_150pct": 18.3,
      "note": "Median job lands on budget (99.4%) but the mean is 119%, dragged up by the ~18% of jobs that exceed 150% of budget. Labor-hour overruns are the single largest margin killer; 40% of jobs exceed their hour budget.",
      "basis": "jobs with both budgeted and actual hours",
      "source": "The Level Index (contractor benchmark research)"
    },
    {
      "key": "revenue_mix_labor_share",
      "pillar": "Labor",
      "label": "Labor share of quoted revenue",
      "unit": "percent",
      "n": 430,
      "definition": "Labor as a share of quoted revenue (vs materials, equipment, subs). Median contractor is ~29% labor / ~33% materials, but variance is extreme.",
      "p25": 16.7,
      "median": 29.1,
      "p75": 42.2,
      "note": "Labor-heavy contractors run higher margins but hit capacity limits; materials-heavy run lower margins but scale better.",
      "basis": "companies with >$100K quoted",
      "source": "The Level Index (contractor benchmark research)"
    },
    {
      "key": "job_closeout_days",
      "pillar": "Cash",
      "label": "Job closeout lag (days)",
      "unit": "days",
      "n": 555,
      "definition": "Days from work complete to job financially closed out. Cash sits on the table while closeout lags.",
      "median": 1.7,
      "p75": 9.6,
      "p90": 35.8,
      "lower_is_better": true,
      "basis": "completed jobs",
      "source": "The Level Index (contractor benchmark research)"
    },
    {
      "key": "seasonality_top3_months",
      "pillar": "Risk",
      "label": "Revenue concentration in top 3 months",
      "unit": "percent",
      "n": 217,
      "definition": "Share of annual revenue earned in the three strongest months.",
      "p25": 38.3,
      "median": 47.4,
      "p75": 66.1,
      "p90": 91.1,
      "note": "The median contractor earns ~47% of annual revenue in just 3 months; Q4 (Dec/Oct) dominates peaks.",
      "basis": "companies with >$500K revenue",
      "source": "The Level Index (contractor benchmark research)"
    },
    {
      "key": "quote_line_margin_by_cost_type",
      "pillar": "Earnings",
      "label": "Quote-line gross margin by cost type",
      "unit": "percent",
      "n": 2200000,
      "definition": "Gross margin on quoted work, split by cost type (labor, materials, equipment, subcontractor), measured across 2.2M+ quote line items. Labor is the highest-margin cost type; subcontractor pass-through is the thinnest.",
      "by_cost_type": {
        "labor": 47.7,
        "materials": 31.5,
        "equipment": 25.5,
        "subcontractor": 23.6
      },
      "note": "Labor carries ~47.7% margin vs ~30% on materials, 25.5% on equipment, and 23.6% on subcontracted work. Revenue mix toward labor (service, maintenance) drives higher blended margin than equipment- or sub-heavy work.",
      "basis": "2.2M+ quote line items",
      "source": "The Level Index (contractor benchmark research)"
    },
    {
      "key": "bill_rate_by_role",
      "pillar": "Labor",
      "label": "Bill rate by role (rate-card field)",
      "unit": "usd_per_hour",
      "n": 18000,
      "definition": "Median rate-card rate by field role across 18,000+ tracked employees. The rate-card field is used inconsistently (some enter customer billing rates, others loaded cost or base wage), so read the spread between roles rather than the absolute level. Company-level avg bill rate median is $79/hr (n=1,770).",
      "by_role": {
        "helper": 34,
        "apprentice": 39,
        "technician": 54,
        "journeyman": 76,
        "mechanic": 75
      },
      "note": "The apprentice-to-journeyman jump (about $39 to $76) is the sharpest step in the ladder; journeymen carry the widest spread over loaded wage.",
      "basis": "18,000+ field employees with tracked rate-card data",
      "source": "The Level Index (contractor benchmark research)"
    }
  ]
}