HVAC
HVAC Maintenance Agreement Calculator
Model an agreement across its full year: visits owed, cost to deliver, revenue and what it produces in additional work.
Result
Agreements often earn little on the fee alone. They are worth having for the access, the retention and the work members buy without shopping around, so judging them on the fee margin alone undervalues them.
Get a Free Business AuditWhat moves the number
- Total visits owed across the book, which is a scheduling obligation as well as a cost.
- Renewal rate, since a plan's value compounds only if it renews.
- Additional work approved during visits.
Where this one goes wrong
Growing the book faster than you can deliver it. Every agreement sold is visits you must schedule, and a book that outgrows capacity produces missed visits, which produces non-renewals.
Questions
About this calculator
How many agreements can one technician support?
It depends on visit duration and travel density, so calculate it from your own numbers. The limit is real and hitting it unprepared is how delivery starts slipping.
When should renewal work start?
Well before expiry, with time to deliver any outstanding visit. Renewal that begins on the expiry date is a collections exercise.
What is the most common reason plans lapse?
Visits that were promised and not delivered. Customers rarely decline a plan they have been getting value from; they decline one that went quiet.
The formula
recurring revenue = members x annual fee; total profit adds the margin on pull-through work
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How to use this calculator
- Agreements in force. Enter your own figure; the page starts at 180.
- Annual fee ($). Enter your own figure; the page starts at $249.
- Cost to deliver one ($). Enter your own figure; the page starts at $118.
- Renewal rate (%). Enter your own figure; the page starts at 76%.
- Extra work per member per year ($). Repairs and replacements members buy because you are already there.
- Margin on that work (%). 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 recurring revenue, 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 |
|---|---|
| Agreements in force | 180 |
| Annual fee | $249 |
| Cost to deliver one | $118 |
| Renewal rate | 76% |
| Extra work per member per year | $190 |
| Margin on that work | 48% |
What comes out
| Result | Value |
|---|---|
| Recurring revenue main result | $44,820 |
| Profit on the agreements | $23,580 |
| Profit on pull-through work | $16,416 |
| Total gross profit | $39,996 |
| Members still there next year | 137 |
$44,820 of recurring revenue, earning $23,580 on the agreements themselves and $16,416 on the work members bring back. The second number is usually the reason to sell them.
How sensitive the answer is
Holding everything else steady and changing only annual fee, this is what happens to recurring revenue. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Annual fee ($) | Recurring revenue |
|---|---|
| $125 | $22,500 |
| $187 | $33,660 |
| $249 example above | $44,820 |
| $374 | $67,320 |
| $498 | $89,640 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Agreements in force
- A number, between 0 and 100000, starting at 180.
- Annual fee ($)
- A money amount, starting at $249.
- Cost to deliver one ($)
- A money amount, starting at $118.
- Renewal rate (%)
- A percentage, between 0 and 100, starting at 76%.
- Extra work per member per year ($)
- Repairs and replacements members buy because you are already there.
- Margin on that work (%)
- A percentage, between 0 and 95, starting at 48%.
What the results tell you
| Result | What it is |
|---|---|
| Recurring revenue | The headline result. A money figure. |
| Profit on the agreements | A money figure. |
| Profit on pull-through work | A money figure. |
| Total gross profit | A money figure. |
| Members still there next year | A number. |
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.