HVAC
HVAC Gross Profit Calculator
Work out gross profit on a job or a period, with the direct costs defined consistently.
Result
Gross profit is what is left after the cost of doing the job. Overhead comes out of that: the building, the office wages, the vans, insurance, software and advertising. A healthy gross margin still loses money if overhead is larger.
Get a Free Business AuditWhat moves the number
- Which costs are treated as direct, since the definition has to be stable to be comparable.
- Equipment and material at landed cost including freight.
- Direct labour including burden rather than at wage.
Where this one goes wrong
Changing what counts as a direct cost between periods. The number becomes untrackable, and the trend is the only part of gross profit that tells you anything.
Questions
About this calculator
What belongs in direct cost?
Anything that exists only because the job exists: equipment, materials, direct labour with burden, permit fees, disposal. Overhead is what continues whether or not the job happens.
Should install and service be measured separately?
Yes. They have different structures and blending them hides which one is underperforming.
Is gross profit or net profit the more useful number?
Gross profit tells you whether the work is priced right. Net tells you whether the business is viable. Pricing decisions belong to the first.
The formula
gross profit = revenue - direct costs
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How to use this calculator
- Revenue ($). Enter your own figure; the page starts at $48,000.
- Direct labour ($). Enter your own figure; the page starts at $16,000.
- Materials and equipment ($). Enter your own figure; the page starts at $11,000.
- Other direct costs ($). Enter your own figure; the page starts at $2,200.
The result updates as you type, so you can try a figure, see what it does to gross profit, 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 |
|---|---|
| Revenue | $48,000 |
| Direct labour | $16,000 |
| Materials and equipment | $11,000 |
| Other direct costs | $2,200 |
What comes out
| Result | Value |
|---|---|
| Gross profit main result | $18,800 |
| Gross margin | 39.2% |
| Total direct cost | $29,200 |
| Profit per working day | $854.55 |
That is $18,800 at a 39.2% margin, about $854.55 for every working day. Overhead still has to come out of it.
How sensitive the answer is
Holding everything else steady and changing only revenue, this is what happens to gross profit. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Revenue ($) | Gross profit |
|---|---|
| $24,000 | -$5,200 |
| $36,000 | $6,800 |
| $48,000 example above | $18,800 |
| $72,000 | $42,800 |
| $96,000 | $66,800 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Revenue ($)
- A money amount, starting at $48,000.
- Direct labour ($)
- A money amount, starting at $16,000.
- Materials and equipment ($)
- A money amount, starting at $11,000.
- Other direct costs ($)
- A money amount, starting at $2,200.
What the results tell you
| Result | What it is |
|---|---|
| Gross profit | The headline result. A money figure. |
| Gross margin | A percentage. |
| Total direct cost | A money figure. |
| Profit per working day | A money 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.