2025 Financial Baseline
$1M–$5M Residential Home Services Businesses

Operating Expenses % of Revenue • Balance Sheet Allocation • Cash-Flow Impact
The exact numbers used by ServiceTitan, Jobber, ACCA, and private equity buyers

1. Operating Expenses – % of Revenue (Typical Allocation)

Category	Typical % of Revenue	Impact on Operating Cash Flow	Efficiency Opportunities
Field Personnel (techs + burden)	40–55%	Highest OCF drain – paid before job is billed	Route optimization → 15–20% labor savings
Management / Supervisors	5–10%	Fixed overhead – hurts in slow months	Promote from within, KPI-based pay
Customer Service / Dispatch	5–8%	Poor service = lost repeats (20–30% revenue)	Automate scheduling → cut staff 20%
Sales (commissions + travel)	8–12%	High variable – bad leads waste cash	Digital leads + CRM → close rate ↑ 20%
Marketing	6–12%	High ROI if tracked – broad spend kills cash	Focus on referrals & LSA → cap at 8%
Supplies / Materials (COGS)	15–25%	Paid upfront – ties up 10–15% OCF	Bulk + just-in-time → 10–15% savings
Vehicle / Fleet (fuel, maint, depr)	8–12%	Idle vans = $5–10k/yr each lost	Telematics → fuel savings 15–20%
Facilities (rent + utilities)	3–6%	Fixed – spikes in peak seasons	Co-locate office/warehouse
Admin / Insurance / Accounting	4–7%	Rising workers’ comp hurts	Safety training → insurance ↓ 15%
Technology / Software	1–3%	Poor adoption = wasted licenses	One all-in-one platform
Other (training, misc)	2–5%	Under-investment = rework	Cap at 3% with high-ROI skills
Total OpEx	85–95%	Direct OCF erosion	Target 80–85% via automation

2. Typical Balance Sheet Allocation (% of Total Assets)

Section	Typical %	Cash / Capital Focus	Efficiency Opportunities
Current Assets (Cash + A/R + Inventory)	25–40%	Cash 10–20% • A/R 10–20% • Inventory 5–10%	Digital invoicing → free 5–10% cash
Fixed Assets (Vehicles + Equipment)	50–65%	Vehicles alone = 40–50% of fixed	Lease vs buy • sell underused trucks
Other Assets	5–10%	Deposits, prepaids	Minimize via vendor terms
Current Liabilities	15–25%	Payables + accrued payroll	Extend vendor terms to 45–60 days
Long-Term Debt (vehicle loans)	10–20%	Vehicle loans dominate	Refinance <6% • cap debt service at 10% OCF
Equity (owner + retained)	40–60%	Grows with 10%+ margins	Reinvest 20–30% into efficiency

Key Takeaways for Efficiency Hunting

Labor + Materials = 55–80% of revenue → biggest OCF levers
Cash is only 10–20% of assets → most owners are 30–60 days from crisis
Vehicles eat 40–50% of fixed assets → depreciation drag = 5–8% annual loss
Average OCF margin = 8–12% → every 1% OpEx cut = 8–12% profit jump
Ideal targets: Gross 45%+, EBITDA 18%+, Cash = 60–90 days OpEx