HVACBossPro Blog — Running an HVAC Business

Pricing an HVAC Business for Profit: Diagnostics, Repairs and Maintenance Plans

Plenty of small HVAC companies are busy and broke at the same time. The calendar is full, the vans are running, and there is still not much left at the end of the month. Very often the problem is not the work. It is the prices. This article is not a list of numbers to copy. Every market is different. It is a way to think about pricing so the work you do actually pays.

Start From Your Real Costs

If you are moving to new software, Switching HVAC Business Software Without Losing Customers or Tune-Ups covers the setup. Building your service list is the perfect time to look hard at your prices.

Before you look at what anyone else charges, add up what it costs to put a van on the road for a month. The van payment, fuel, insurance, tools, phones, software, shop rent, your techs' wages and your own pay. Then think honestly about how many hours of that month are actually billable. Drive time, supply house runs, estimates that do not close, callbacks and slow weeks all eat into it.

Divide the cost by the billable hours and you have the floor. Anything you charge below that loses money, no matter how busy you are. Profit is what you add on top.

Charge for the Diagnostic

A diagnostic fee covers the truck rolling to the house and the time it takes to find the problem. It is not a penalty. It is payment for skilled work. Customers understand it when it is explained up front: “Our diagnostic is $89. That covers the visit and finding out what is wrong. If you go ahead with the repair today, here is what the repair costs.”

Whether you credit the diagnostic toward the repair is your call. What matters is that it is on the invoice every time it should be. Unbilled Diagnostics: The Quiet Profit Leak in an HVAC Business covers how often it quietly goes missing.

Price Repairs From a Service List

The fastest way to lose money on repairs is to price them in the driveway. One tech charges one thing for a capacitor, another tech charges something else, and the owner charges whatever feels right that day. Customers notice, and so does your bank account.

Put your common repairs in a service list with set prices: capacitor, contactor, drain line clearing, refrigerant per pound, blower motor, thermostat, coil cleaning and the rest. Each price should include the part, the time, the trip and your margin. In HVACBossPro, estimates and invoices are built from that list, so every tech quotes the same price for the same work.

Price Maintenance Plans So They Pay

Maintenance plans are often priced as a loss leader, and some owners never stop losing on them. A plan should pay for its own visits. Two tune-ups a year take real time, real drive time and real materials. Price the plan, say $179 a year, so both visits cover their cost, then add the benefits that cost you little but matter to customers: first in line when the system fails, a set price on the diagnostic, and reminders so they never have to remember.

The real return on a plan comes later: the repair calls those customers send you instead of a competitor, and the replacement when the system finally gives out.

Raise Prices on Purpose

Costs go up every year. If your prices do not, your profit shrinks a little each year without anyone deciding it should. Look at your service list at least once a year, usually in a shoulder season, and adjust. Tell maintenance customers ahead of time when their plan price changes, by text and email, with a short, plain explanation.

Most customers who stay with a company for years do so because of the service, not because of a few dollars. The ones who leave over a fair increase were usually going to leave anyway.

Check Your Prices Against Your Results

A price that looks good on paper can still lose money if the jobs take longer than you think. Look at completed jobs each month. Which types of work fill the day without filling the bank? Which repairs keep coming back? Use what you see to adjust prices, not your gut.

Ask your techs too. They know which jobs always run long, which attics take twice as long to work in, and which repairs customers push back on. Their answers often point to a price that needs to move or a job that needs a clearer description on the estimate.

Pricing is one piece of running the business side well. For the rest of the owner's toolset, including service lists, estimates and card-on-file billing, visit the HVAC business software page.