Most owners of a electrical business know roughly how busy they are. Far fewer know whether they are actually making money on each job, where profit is leaking, or which part of the business is growing. Key performance indicators, or KPIs, answer those questions in a few numbers you can check every month.
This guide covers the 7 KPIs that matter most for a electrical business, how to calculate each one, and what to do when a number moves the wrong way.
Why KPIs matter more than turnover
Turnover tells you how much came in. It does not tell you whether prices cover costs, whether staff time is being used well, or whether cash will be there next month. A electrical business can grow turnover and still make less profit if costs grow faster. KPIs show you the drivers behind the result, early enough to act.
The 7 KPIs for a electrical business
1. Average job value
How to calculate it: Total revenue ÷ number of jobs
Shows your job mix: rewires and EV installs raise it, fault-finding lowers it.
2. Labour hours sold
How to calculate it: Billable hours in the month
Your capacity and the base of every other figure.
3. Effective hourly rate
How to calculate it: Labour revenue ÷ labour hours sold
Reveals fixed-price jobs that overran.
4. Materials billed
How to calculate it: Materials charged to customers
Compare with materials bought to spot unbilled stock.
5. Labour margin
How to calculate it: (Labour revenue − labour cost) ÷ labour revenue
Whether your rate covers wages and your time.
6. Inspections due in the next 30 days
How to calculate it: Count of properties with a next-inspection date due soon
Your pipeline of repeat work.
7. Certificates issued on time
How to calculate it: Certificates issued within a day of completion ÷ jobs completed
Late certificates mean late invoices and scheme problems.
Interpreting these measures in practice
Separate emergency call-outs, planned installations and inspection work because travel, materials and paperwork differ. Compare billed hours with total working hours, including diagnosis, travel, certification and quoting. Track materials charged against materials purchased, and record return visits against the original job to identify estimating or quality issues. A higher average invoice may come from costly materials rather than stronger labour margin, so review contribution by job type before changing rates or taking on more work.
Start with the profit basics
Alongside the industry KPIs above, every owner should check four headline figures each month:
- Total income for the month and year to date
- Total costs, split into direct costs and overheads
- Net profit and operating margin
- Lowest cash balance in the next 12 weeks, from a cash flow forecast
If net profit is falling while turnover rises, look at the cost KPIs first. If cash is tight while profit looks fine, look at unpaid invoices and debtor days.
An example month (illustrative figures)
Say a electrical business takes £7,000 in a month and spends £2,600 on the direct costs of delivering the work. Gross profit is £4,400, a gross margin of 63%. If last month the margin was several points higher on similar turnover, something has changed in prices, costs or the mix of work, and the KPIs above show where to look. These figures are illustrations only: use your own.
What to do when the numbers slip
- Fixed-price landlord inspections with a next-inspection reminder for every property
- EV charger installs and consumer unit upgrades at clear fixed prices
- Stage payments on rewires so you never fund materials
- Commercial testing contracts that recur
Pick one action at a time, so you can see what made the difference. If you are asking what the business could pay you, read how much an electrician earns in the UK.
How to review your KPIs every month
1. Update your records for the month: jobs, sales, costs and invoices. 2. Compare each KPI with last month and the same month last year, so seasonal swings do not mislead you. 3. Pick the one number that moved most in the wrong direction and find out why. 4. Decide one action for next month, such as a price change, a rota change or chasing a debtor. 5. Check the result at the next review.
Fifteen minutes a month on this routine is enough to catch most problems while they are still small.
Common mistakes with KPIs
Tracking too many numbers. Pick the handful that drive your profit and review them consistently.
Looking at one month in isolation. Trends matter more than single results.
Not acting on what you find. A KPI that never changes a decision is just a number.
Keeping figures in your head. Write them down, or let a spreadsheet calculate them, so nothing is guessed.
Run the numbers on your own business
The **Electrician Business Management System** tracks every job, cost, invoice and VAT return, and works out your profit, margin and key figures automatically on a one-page dashboard. It costs £15 once, with no subscription. Before you open, work out your start-up costs with our free electrician start-up calculator. For the full start-up walkthrough, read our guide on how to start a electrical business.
Frequently asked questions
What is the most important KPI for a electrical business? Gross margin, because it shows whether your prices cover the direct cost of each job. If it is wrong, growth only makes things worse.
Which KPIs should a new electrical business track first? Start with average job value, labour hours sold and effective hourly rate. They are quick to work out and show straight away whether your pricing and capacity are right.
Can KPIs help me set prices? Yes. If your margin or rate per job is below target, your prices are too low for your costs, however busy you are.
How often should I check my KPIs? Monthly for most figures, and weekly for cash and unpaid invoices.
Do I need software to track KPIs? No. A spreadsheet that calculates the figures from your records works well for most small businesses and avoids monthly fees.
What should I do if a KPI gets worse? Find the cause, decide one action, and check the effect next month. Price, volume and cost are almost always the levers.