Feasibility Study for a Maintenance and Technical Services Company in Egypt

How a maintenance company makes money, and where it loses it

A maintenance company serving companies, buildings and homes (air conditioning, electrical, plumbing and equipment) sells its technicians' hours in three ways: an annual maintenance contract (AMC) for a fixed monthly fee that covers scheduled visits and a response to breakdowns within an agreed time; a call-out that the customer pays for on the day; and spare parts sold at a margin. The contracts cover salaries, the call-outs fill empty hours, and the parts add margin.

So a maintenance company feasibility study does not start with the number of customers. It starts with five figures: how many technician hours each contract actually uses against its price, how much of a technician's day is lost on the road, how much you earn on parts and how much cash they lock up, what the response time you promised in the contract costs you, and when companies pay their invoices. The most dangerous of these is a large contract priced below its visits.

A technician's hour is what you sell: capacity, travel and response time

A technician working 26 days of 8 hours has 208 hours a month, but part of that goes on collecting parts from the store, training and going back to faults under warranty. We assume only 85% is available for customers, or 176.8 hours. Travel comes out of those hours: in the example below a trip between two customers takes an hour on average, so a call-out (an hour and a half of work) uses 2.5 hours, 40% of them on the road.

Response time turns into reserved hours. If you promise contract customers that you will arrive within 4 hours of a fault report, one technician a day has to stay off the schedule waiting for breakdowns. In the example, contract breakdowns use 96 hours a month out of 176.8 reserved hours, so 80.8 hours are paid for and not sold. That is not waste; it is the price of the promise, and it has to be in the contract price.

Illustrative example: 6 technicians across annual contracts and call-outs

An illustrative example with assumed figures to explain the method, not market prices. All amounts are before VAT:

• Team: 6 technicians at EGP 11,000; two helpers at EGP 7,500, above the private-sector minimum wage of EGP 7,000 from 1 March 2025¹; a supervising engineer at EGP 20,000; a dispatcher at 8,500; and a storekeeper and buyer at 8,000. Salaries EGP 117,500. The employer's social-insurance share is 18.75% against 11% paid by the employee², and the insurable wage has a ceiling of EGP 16,700 from 1 January 2026³, so the engineer's share is calculated on EGP 16,700, not 20,000. The total share is EGP 21,412.5.
• Other expenses: rent for 3 small pickup vans EGP 39,000 (each van serves two technicians on one route), workshop and store 15,000, phones and a scheduling app 4,000, accountant 4,000, marketing 10,000, tool upkeep and miscellaneous 6,000. Total fixed cost EGP 216,912.5 a month.
• Fuel: a litre of 92-octane petrol at EGP 22.25, after the automatic pricing committee decided on 15 October 2026 to keep prices unchanged⁴. At 15 km a trip and 11 litres per 100 km, a trip costs EGP 36.71. We count fuel for every visit as a separate trip, which is a cautious assumption.
• Start-up costs: EGP 534,000: tools, gauges and refrigerant charging equipment 240,000, an initial spare-parts stock 150,000, van rental deposits 39,000, workshop fit-out and rental deposit 60,000, incorporation 25,000, uniforms, phones and app set-up 20,000.
• Contracts: one large contract (A) with a company that has 6 branches at EGP 45,000 a month, 14 office and clinic contracts (B) at EGP 7,500, and 16 residential building contracts (C) at EGP 3,000. Consumables (filters, cleaning chemicals, small gas top-ups) are included in the price, and any other part is invoiced at cost plus 20%.
• Hours and parts: a scheduled visit takes 4.5 hours of work at companies and offices and 3 hours at a building, a breakdown 2 hours, and each visit adds an hour on the road. Monthly consumables are EGP 5,000 for contract A, 800 for B, 250 for C and EGP 20 per call-out, and invoiced parts cost EGP 8,000, 1,200 and 300 respectively.
• Call-out: EGP 450 for inspection and repair labour; 60% of call-outs need a part that sells for EGP 1,000 on average and costs 750.
• Collection: companies (A and B) pay 60 days after the month-end invoice, building owners' associations (C) pay within the month, and call-outs are paid in cash. Stock used is replaced in the same month.

What is left from each contract and each call-out

A call-out looks profitable on its own, but it earns less than half as much per hour as an office or building contract, because 40% of its time is on the road. The large contract earns the least per hour of the three contracts, and if its clause allowed unlimited breakdowns and they doubled to 20 a month, it would fall to EGP 333.53 an hour, even with the parts for the extra breakdowns invoiced. If you charge the contracts with the unused reserved hours (80.8 hours), contracts together earn EGP 391.69 an hour, still above a call-out.

Break-even: without call-outs you need 216,912.5 ÷ 6,829.86 = about 31.76, so 32 type-B contracts. With 200 call-outs a month contributing EGP 108,657.5, 16 contracts are enough. Call-outs alone would need 400 a month, or 1,000 hours, 94% of the whole team's capacity with no slack. With the full book, monthly profit is EGP 72,234, using 83% of the team's hours and 88.7% of the hours of the five technicians who work to the schedule.

Cash month by month

The company starts with the large contract, 4 contracts each of B and C and 80 call-outs, and adds two contracts each of B and C and 24 call-outs a month until the book is full:

(The balance starts at minus the EGP 534,000 start-up costs; months 9 to 11 are the same as month 8; the table excludes VAT and withholding tax.)

Profit for the year is EGP 350,625 before depreciation, taxes and the owner's salary. But the deepest cash need is EGP 989,385 in month 5, 1.85 times the start-up costs, because companies pay two months later. In any month once the book is full, companies owe you EGP 359,520 not yet collected. The difference between profit and cash is explained in cash flow for small businesses.

What if you lose the biggest contract, parts get dearer or travel takes longer?

The same example with one assumption changed at a time; in the first three scenarios after the base the change starts in month 7:

• The large contract is 12.3% of revenue but 56.5% of monthly profit: when it ends, profit falls from EGP 72,234 to 31,442. Your bank balance does not show it at once, because its last two invoices are collected in months 7 and 8.
• Parts 15% dearer take EGP 16,242 a month: the consumables inside the fixed contract price, and call-out parts if you do not update your prices. Parts invoiced to companies at cost plus 20% pass the increase on, but you pay for them now and collect 60 days later.
• Half an hour more on the road costs EGP 10,536 a month: EGP 5,103 of petrol and 10 call-outs there is no longer time for. Worse, the five scheduled technicians are 99.8% booked, leaving no room for an urgent fault or a late visit.
• A 2-hour response needs a second reserved technician, so you lose 31 call-outs and EGP 16,842 a month. Only promise it at a price that covers it.
• The air-conditioning season: call-outs falling from 200 to 120 a month in winter take EGP 43,463 off each month's profit, leaving EGP 28,771. In summer the five scheduled technicians have room for no more than 240 call-outs, and the reserved technician can absorb only about 26 extra contract breakdowns. Cost the overtime or seasonal technicians before you promise the same response time in August.

Spare parts: a small margin and locked-up cash

The parts margin in the example is EGP 35,920 a month, only 12.4% of contribution, yet parts and consumables use EGP 143,800 a month, and a stock of EGP 150,000 covers about 31 days. Stock the parts that come up again and again in breakdowns, and agree with nearby suppliers for the rest. A cheaper counterfeit part comes back as a warranty fault that eats a technician hour and a trip with no revenue. Write into the contract that parts other than consumables are invoiced at cost plus a margin, and that the contract price is reviewed at renewal. Pricing methods are covered in how to price your product.

Collecting from companies, and the taxes on your invoice

• Withholding tax: according to PwC's summary (last reviewed 17 August 2026), local payments above EGP 300 are subject to withholding of 3% for all types of services and 1% for contracting and supplying, treated as an advance payment of corporate income tax and not an additional cost⁵. In the example companies withhold about EGP 4,500 a month from contract fees, EGP 54,000 over a full year with the full book, which comes back to you only through your tax return. Ask your accountant which rate applies to an invoice that combines labour and parts.
• VAT: the general rate is 14% from the 2017/2018 fiscal year, and anyone who reaches the registration threshold must register within 30 days of reaching it⁶; the threshold is EGP 500,000⁷. In the example cumulative sales pass it in month 3 (EGP 712,800). The VAT you add to an invoice is not revenue, so ask your accountant when you pay it on invoices you have not yet collected. Customers who are not registered, such as owners' associations and households, cannot deduct it, so a call-out costs them EGP 1,197 instead of 1,050.
• Payment terms: payment after 90 days instead of 60 raises the deepest cash need by EGP 126,120. Ask for quarterly invoices paid in advance, or a discount for payment within 15 days, and have owners' associations pay at the start of the month.

If your contracts include installation or fit-out work inside buildings, check the requirements on the general contracting feasibility study page. Maher Consulting Firm can handle the company formation.

Common mistakes in a maintenance company feasibility study

1. Pricing a contract by the number of units rather than by the hours of visits, expected breakdowns and travel.
2. A contract with unlimited breakdowns and no monthly cap or price for calls above it.
3. Promising a response time, or service after hours and on holidays, without counting the technicians it reserves and the overtime.
4. Counting a technician's capacity as 8 working hours and forgetting the road, the store and warranty returns.
5. Building the profit on one large contract with no scenario for losing it.
6. Spreading call-outs evenly over the year when air-conditioning demand rises in summer and falls in winter.
7. Capital that covers tools and stock only, not two months of company invoices before they are paid.

To work out working capital, see break-even and working capital.

Frequently asked questions about a maintenance company feasibility study

Sources

1. Ministry of Planning and Economic Development. الاجتماع الأول للمجلس القومي للأجور: رفع الحد الأدنى لأجور القطاع الخاص إلى 7000 جنيه (in Arabic) (2025-02-09). Checked 22 October 2026.
2. Andersen Egypt. Social insurance in Egypt (contribution rates under Law 148/2019) (2026-06-30) — secondary source. Checked 22 October 2026.
3. National Organization for Social Insurance (NOSI). التأمينات: رفع الحدين الأدنى والأقصى لأجر الاشتراك التأميني بدءًا من أول يناير 2026 (in Arabic) (2025-11-30). Checked 22 October 2026.
4. Al Khaleej. أسعار البنزين والسولار اليوم في مصر.. قرار رسمي يحسم مصير الوقود (in Arabic) (2026-10-16) — secondary source. Checked 22 October 2026.
5. PwC Worldwide Tax Summaries. Egypt: Corporate - Withholding taxes (last reviewed 17 August 2026) (2026-08-17) — secondary source. Checked 22 October 2026.
6. Financial Regulatory Authority. قانون الضريبة على القيمة المضافة رقم 67 لسنة 2016 وفقًا لآخر تعديل (in Arabic). Checked 22 October 2026.
7. Egyptian Tax Authority. ما هو حد التسجيل الإلزامي لضريبة القيمة المضافة، وما هي الأنشطة المعفاة منها؟ (in Arabic). Checked 22 October 2026.