HVAC
HVAC Business Break-Even Calculator
Find the revenue or job volume the business needs each month before it starts making money.
Result
Break-even, not a target. It is the point where the business stops losing money, which is a floor rather than a plan. Owner's pay only counts here if it is inside the fixed costs you entered.
Get a Free Business AuditWhat moves the number
- Fixed overhead, which for an HVAC company with vehicles and premises is substantial.
- Contribution per job, which differs greatly between service and installation.
- Seasonality, since break-even is monthly and demand is not level.
Where this one goes wrong
Using an annual average. The shoulder months are where HVAC businesses get into difficulty, and an annual break-even conceals that those months do not cover fixed costs.
Questions
About this calculator
Should break-even be in jobs or revenue?
Revenue is more stable where the job mix varies, which in HVAC it does. Jobs works better where the ticket is consistent.
How do I survive the shoulder months?
Maintenance agreements are the usual answer, because they generate work that is not weather driven and can be scheduled into quiet weeks deliberately.
What counts as fixed?
Anything owed before a single call: premises, insurance, vehicle finance, salaried office staff, software. Technician wages sit between fixed and variable depending on how you staff.
The formula
break-even jobs = fixed costs / (average job value x gross margin%)
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How to use this calculator
- Monthly fixed costs ($). Rent, office wages, insurance, vehicle payments, software, advertising.
- Average job value ($). Enter your own figure; the page starts at $620.
- Gross margin per job (%). Enter your own figure; the page starts at 48%.
The result updates as you type, so you can try a figure, see what it does to jobs needed per month, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Monthly fixed costs | $15,500 |
| Average job value | $620 |
| Gross margin per job | 48% |
What comes out
| Result | Value |
|---|---|
| Jobs needed per month main result | 53 |
| Revenue needed per month | $32,860 |
| Gross profit per job | $297.60 |
| Jobs per working day | 2.4 |
You need 53 jobs a month, about 2.4 a working day, to cover $15,500 of fixed cost. That is $32,860 of revenue before the business earns anything.
How sensitive the answer is
Holding everything else steady and changing only monthly fixed costs, this is what happens to jobs needed per month. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Monthly fixed costs ($) | Jobs needed per month |
|---|---|
| $7,750 | 27 |
| $11,625 | 40 |
| $15,500 example above | 53 |
| $23,250 | 79 |
| $31,000 | 105 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Monthly fixed costs ($)
- Rent, office wages, insurance, vehicle payments, software, advertising.
- Average job value ($)
- A money amount, starting at $620.
- Gross margin per job (%)
- A percentage, between 0 and 95, starting at 48%.
What the results tell you
| Result | What it is |
|---|---|
| Jobs needed per month | The headline result. A number. |
| Revenue needed per month | A money figure. |
| Gross profit per job | A money figure. |
| Jobs per working day | A decimal figure. |
Before you rely on this number
Sizing, capacity and load figures here are planning estimates. A real installation depends on the manufacturer's data for the specific equipment, the duct system it is going into, and a proper load calculation for the building. Use this to sanity-check a number or price a job, not to select equipment.
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.