HVAC
HVAC Replacement Revenue Calculator
Project replacement revenue from the equipment in your service book that is approaching end of life.
Result
Service lines rarely carry the same margin. Splitting them is the only way to see which part of the business is paying for the rest, which is frequently not the part that looks busiest.
Get a Free Business AuditWhat moves the number
- Equipment age distribution across your customer base, which is knowable if history is recorded.
- Conversion rate from replacement conversation to sale.
- Average system value.
Where this one goes wrong
Not knowing the age profile of the equipment you service. Without equipment history, replacement revenue is reactive and goes to whoever the customer calls when the system finally fails.
Questions
About this calculator
Where does replacement revenue come from?
Overwhelmingly from your existing service base. The customers whose equipment you already maintain are the ones you can see approaching replacement, if the history is recorded.
How do I know which systems are approaching end of life?
From equipment records with install dates and repair history attached to the serial number. Without that, the information exists only in technicians' memories.
When should the conversation start?
Before failure, while the customer has time to plan and compare. A conversation held on the day the system dies is a distress purchase and often goes to whoever answers first.
The formula
revenue = jobs x average value; gross profit = revenue x margin
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How to use this calculator
- Replacement jobs per month. Enter your own figure; the page starts at 7.
- Average value ($). Enter your own figure; the page starts at $9,200.
- Gross margin on this work (%). Enter your own figure; the page starts at 37%.
- Share of total revenue (%). Used to show what the whole business turns over.
The result updates as you type, so you can try a figure, see what it does to replacement revenue 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 |
|---|---|
| Replacement jobs per month | 7 |
| Average value | $9,200 |
| Gross margin on this work | 37% |
| Share of total revenue | 40% |
What comes out
| Result | Value |
|---|---|
| Replacement revenue per month main result | $64,400 |
| Per year | $772,800 |
| Gross profit per year | $285,936 |
| Implied total business revenue | $1,932,000 |
The replacement line brings in $772,800 a year and earns $285,936 of gross profit on it.
How sensitive the answer is
Holding everything else steady and changing only average value, this is what happens to replacement revenue per month. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Average value ($) | Replacement revenue per month |
|---|---|
| $4,600 | $32,200 |
| $6,900 | $48,300 |
| $9,200 example above | $64,400 |
| $13,800 | $96,600 |
| $18,400 | $128,800 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Replacement jobs per month
- A number, between 0 and 10000, starting at 7.
- Average value ($)
- A money amount, starting at $9,200.
- Gross margin on this work (%)
- A percentage, between 0 and 95, starting at 37%.
- Share of total revenue (%)
- Used to show what the whole business turns over.
What the results tell you
| Result | What it is |
|---|---|
| Replacement revenue per month | The headline result. A money figure. |
| Per year | A money figure. |
| Gross profit per year | A money figure. |
| Implied total business revenue | 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.