Mike AndesFounder, Augusta Lawn Care and Homeworks · Founder of Homeworks and Augusta Lawn Care

How to Calculate Efficiency Score for Maximum Profit in Home Service Businesses

22 Jun 2024 · 1 min

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0:33

A short excerpt from a YouTube video by Mike Andes describing an "efficiency score" for field labor in home service businesses. The efficiency score = budgeted hours ÷ clocked hours. Andes states that scores under 50% typically make a business unprofitable, ~70% is a practical benchmark/goal, and scores above 90% indicate very high profitability.

Questions this video answers

Efficiency score = budgeted hours divided by clocked hours.

Less than 50%.

70%.

Above 90%.

Chapters

There's an easy ratio that you can calculate to be able to know exactly how efficient your team is. I call it the efficiency score. For laborers out in the field, it's budgeted hours divided by clocked hours. And if that percentage is less than 50% usually, that business will never make any profit. Very unprofitable, probably won't be able to scale. 70% is sort of the benchmark and the goal. If you can get above 90% efficiency score, where more than 90% of your labor's day is actually producing revenue, those are the most profitable home service businesses I've ever seen.