HVAC
HVAC Maintenance Plan Pricing Calculator
Set plan pricing from delivery cost and the margin you intend, with the discount you give members counted in.
Result
Overhead and margin are taken as shares of the selling price, which is why the cost is divided rather than multiplied. Adding 15% to cost does not produce a 15% margin. 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
- Cost per visit including travel and the filter or parts included.
- The repair discount members receive, which is a real cost of the plan.
- Expected pull-through work, which is the return the plan is really buying.
Where this one goes wrong
Setting the price per month without checking what the year costs to deliver. A plan that reads well monthly can be unprofitable annually once two visits, travel and a discount are counted.
Questions
About this calculator
What margin should a plan carry?
Whatever you decide, but decide it explicitly. Many companies run plans near break-even on purpose because of the work they generate, which is valid only when it is a choice.
Should different equipment carry different plan prices?
Usually yes. A single system and a multi-zone property take different amounts of time, and one price for both means the simple properties subsidise the complex ones.
How do I raise plan prices on existing members?
With notice, an explanation, and preferably alongside an improvement in what is included. Silent increases are the most common reason a long-standing member cancels.
The formula
price = direct cost / (1 - overhead% - margin%)
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How to use this calculator
- Labour cost ($). Burdened: wages plus tax, insurance and the vehicle, not the hourly wage.
- Materials cost ($). Enter your own figure; the page starts at $210.
- Other direct costs ($). Permits, disposal, equipment hire, subcontractors.
- Overhead rate (%). Overhead as a share of revenue. Work it out from last year's accounts.
- Target net margin (%). Enter your own figure; the page starts at 15%.
The result updates as you type, so you can try a figure, see what it does to price to quote, 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 |
|---|---|
| Labour cost | $290 |
| Materials cost | $210 |
| Other direct costs | $0 |
| Overhead rate | 22% |
| Target net margin | 15% |
What comes out
| Result | Value |
|---|---|
| Price to quote main result | $793.65 |
| Direct cost | $500 |
| Overhead recovered | $174.60 |
| Net profit | $119.05 |
| Gross margin | 37.0% |
| Markup on direct cost | 58.7% |
Quote $793.65 to cover $500 of direct cost, recover $174.60 of overhead and leave $119.05 of net profit. That is a 58.7% markup on cost.
How sensitive the answer is
Holding everything else steady and changing only labour cost, this is what happens to price to quote. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Labour cost ($) | Price to quote |
|---|---|
| $145 | $563.49 |
| $218 | $679.37 |
| $290 example above | $793.65 |
| $435 | $1,024 |
| $580 | $1,254 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Labour cost ($)
- Burdened: wages plus tax, insurance and the vehicle, not the hourly wage.
- Materials cost ($)
- A money amount, starting at $210.
- Other direct costs ($)
- Permits, disposal, equipment hire, subcontractors.
- Overhead rate (%)
- Overhead as a share of revenue. Work it out from last year's accounts.
- Target net margin (%)
- A percentage, between 0 and 80, starting at 15%.
What the results tell you
| Result | What it is |
|---|---|
| Price to quote | The headline result. A money figure. |
| Direct cost | A money figure. |
| Overhead recovered | A money figure. |
| Net profit | A money figure. |
| Gross margin | A percentage. |
| Markup on direct cost | A percentage. |
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.