Restoration Profitability KPIs: The Numbers That Tell You if Your Business Is Truly Making Money
In the restoration industry, profitability isn’t just about revenue—it’s about what’s left after the chaos. You can bill $5 million a year and still feel broke if your cash flow, job margins, or labor costs are out of balance. That’s why tracking the right Key Performance Indicators (KPIs) is critical for every water, fire, or mold restoration contractor who wants to grow sustainably.
Below are the profitability KPIs that top-performing restoration companies use to stay in control of their numbers—and how to use them to make smarter business decisions.
1. Gross Profit Margin (GPM)
What it measures:
How much profit you make after covering direct job costs like materials, subcontractors, and labor.
Formula:
(Gross Profit ÷ Total Revenue) × 100
Why it matters:
Healthy restoration companies typically maintain a 45–55% GPM on mitigation and 30–40% on rebuild. If you’re below those benchmarks, your estimates, labor productivity, or job costing setup may need a closer look.
2. Labor Percentage
What it measures:
The true cost of employing your field team—including wages, payroll taxes, benefits, workers comp, and bonuses—relative to revenue.
Formula:
(Total Labor Burden ÷ Revenue) × 100
Why it matters:
Many owners understate labor costs by excluding payroll taxes or PTO. When you account for the full burden, you’ll see how labor efficiency directly affects margins. Tracking labor percentage by service line—mitigation, contents, and rebuild—shows where efficiency gains are possible.
3. Net Profit Margin
What it measures:
The percentage of revenue left after all expenses—overhead, vehicles, insurance, admin, and financing.
Formula:
(Net Profit ÷ Revenue) × 100
Why it matters:
The industry average for healthy restoration companies is 10–20%. If you’re below that, it’s not just your revenue—it’s your cost control, pricing, and workflow discipline. A strong CFO-level review each month identifies where profit leaks are happening before they drain your cash.
4. Revenue per Technician (or per Truck)
What it measures:
How much each technician or crew generates for the company.
Formula:
Total Revenue ÷ Number of Field Technicians (or Trucks)
Why it matters:
This KPI exposes operational bottlenecks. If you’re doing $250K per tech annually and another company does $400K, it’s not that they work harder—they work more efficiently, schedule smarter, and track time better.
5. Cash Conversion Cycle (CCC)
What it measures:
How long it takes to turn job costs into cash in the bank—from the day work starts until payment clears.
Formula:
Days in Accounts Receivable + Days in WIP – Days in Accounts Payable
Why it matters:
Insurance billing delays, missing documentation, and slow collections can tie up hundreds of thousands in working capital. Reducing your CCC by just 10 days can free up tens of thousands of dollars in cash flow without adding any new revenue.
6. Overhead Ratio
What it measures:
How much of your total revenue goes toward administrative, marketing, and facility costs.
Formula:
Total Overhead ÷ Total Revenue
Why it matters:
As restoration companies grow, overhead tends to creep up—more office staff, more software subscriptions, more leased vehicles. Keep overhead under 25–30% of revenue to protect your profit margin.
Turning KPIs Into Action
The most profitable restoration contractors don’t just look at KPIs—they use them to make strategic decisions:
Adjust pricing when job costs or labor burden rise.
Optimize staffing based on revenue per tech or job backlog.
Tighten collections to shorten the cash cycle.
Compare service line margins to identify where your next hire or marketing push will bring the best ROI.
Monthly financial reviews through services like Kiwi Cash Flow help restoration owners see these numbers clearly—without needing to become accountants.
Ready to See How Profitable You Really Are?
At Kiwi Cash Flow, we specialize in helping restoration contractors understand their numbers, fix hidden profit leaks, and scale confidently.
👉 Schedule a free call here to see how your KPIs stack up to industry benchmarks.