For: Independent repair owners and dealers building a service department.
The decision: Which service accounts and maintenance contracts the business can support profitably.
60-second answer: Price the whole route day, including travel, diagnosis, documentation and collection time. Confirm parts access before promising repairs. Add accounts that improve usable capacity and cash flow; account count alone is not a service business plan.
A route day is the useful unit
Group proposed customers by location, access hours and equipment platform. Estimate scheduled maintenance time from actual task lists and observed work, then add realistic travel, parking, access delays, administration and contingency. Keep enough capacity for the reactive work the contract includes. A day sold twice—once to maintenance and again to emergencies—will disappoint someone.
Pull completed tickets, dispatch logs, drive times, parts invoices, credits, timesheets and receivables. For a new route, label estimates and test them on early visits. Customer interest is not a signed service commitment, and a former employer’s accounts or confidential records are not automatically available to a new business.
| Line | Use in the calculation |
|---|---|
| Earned revenue | Scheduled visits, approved repairs, travel charges and parts sold; exclude unapproved work |
| Direct cost | Loaded field labor for all assigned hours, parts consumed, vehicle cost and subcontract work |
| Route contribution | Revenue less direct cost; this still must cover office overhead and owner return |
| Cash gap | Dates parts and payroll are paid compared with deposits and actual customer collections |
Give every maintenance promise a boundary
State the equipment list, tasks, visit count, documentation, access requirements and exclusions. Identify whether consumables, breakdown calls and after-hours response are included. Price additions separately. A visit fee without an agreed asset list expands quietly when a customer adds another room.
Confirm access to model-specific manuals, diagnostic tools, genuine or manufacturer-approved compatible parts, training and warranty authorization where required. Do not solve a parts shortage with an unverified substitute or a salvaged safety component. Where support is uncertain, qualify the offer or decline that scope until the risk is resolved.
Questions to settle before the first visit
- Who approves extra work and what purchase-order information makes an invoice payable?
- What service window is actually promised, and who covers a technician’s absence?
- What stock is worth holding for this route’s installed base?
- Which customer access, induction and insurance requirements apply to the work?
Ask the broker to assess the actual activities, vehicles, property in your care and contractual insurance requirements. One generic policy label is not proof that every job is covered. Coordinate safety procedures with the site and preserve fault, repair and return-to-use records.
Watch for free diagnostic calls that consume the whole sales margin, remote accounts priced like neighboring buildings, and quarterly billing that hides a growing cash deficit. Set parts deposits and approval rules to suit the customer and contract. Do not prescribe a universal markup or travel percentage as an industry benchmark.
Prove one route before expanding
- Cost a representative week with planned visits, realistic travel and reactive capacity.
- Quote defined maintenance scope and agree extra-work approval and invoice requirements.
- Review actual contribution, overdue invoices and repeat visits after the first operating cycle; revise pricing or coverage where the evidence warrants it.
Continue with FEX
FEX editorial guidance: the decision tools and operating recommendations in this guide are FEX analysis. They are not manufacturer specifications, contractual entitlements or industry benchmarks.
Editorial update, October 7, 2026: Removed unsupported startup timelines, customer-conversion and travel thresholds, wage-floor claims and universal insurance prescriptions. Replaced casual salvage advice with verified parts compatibility and safety boundaries.
