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HVAC Pricing Guide for Contractors

Author: Mitesh Patel
by Mitesh Patel
Posted: May 28, 2022

There are plenty of things one should take care of when it comes to charging for HVAC services. While keeping competitive or reasonable rates is crucial to surviving in the competitive market, the energy audit services providers must have to keep the right balance between their profit margins to keep themselves and their customers happy.

If you look at the reviews of all the different home energy audit providers, they are usually good. But the one or two reviews that pop up in the front of the eyes of the other customers is the irritated customer who thinks they have been charged excessively. The feeling of being ripped off is valid and genuine, and some residential energy audit service providers do take advantage of customers by charging them for the things that are not required actually.

However, there could be a misunderstanding too! And the reason behind this could be a lack of information in terms of home energy solutions or HVAC pricing. There are a couple of things to keep in mind when it comes to energy audit services pricing. Read through this blog post we have prepared for you to learn some of the most important things about correctly pricing the home energy audits or HVAC services.

Time & Material vs. Flat Rate Pricing for Energy Audit Services

Some residential energy audit service companies charge "time and materials," which is calculated by multiplying the hours worked by an hourly labor rate and then adding the cost of the supplies utilized. However, almost every residential HVAC firm nowadays employs a "flat rate price book" to set pricing for each particular customer. A flat rate price book is just a (very long) list of fixed costs for all types of repairs.

Larger HVAC or home energy solutions companies subscribe to and/or have their own version of the price book, which is published by many price book companies. This means that, within reason, most service businesses have comparable price structures, with a few tweaks and adjustments.

Understanding the benefit of flat pricing

The flat rate price book is a standardized and reproducible way for pricing residential energy audit services profitably. The technicians don't have to worry about running out of time or resources, their customers have been given a set price, and the corporation knows that each of its customers is getting the same deal (minus any appropriate discounts).

Factors to consider for appropriate pricing of HVAC services:

  • Calculate the costs properly. So the first step in pricing HVAC services is to figure out how much it will cost you. You can figure out what you need to earn by determining how much you need to spend. The expenses are broken down into three categories: materials, labor, and overhead.

  • Consider labor charges

  • Consider material charges

  • Consider overhead charges

  • Analyze your competitor's pricing model. Make sure you conduct some competitive research to see what the city or town's average HVAC pricing is. Make careful to look at both new and veteran HVAC companies to get a sense of how the price fluctuates depending on past experiences. On their website, not all of their competitors' pricing is available. You might wish to phone them and inquire about their charges. This will provide you with some useful information about how much they charged.

Make sure to familiarise yourself with their offerings and assess how comparable they are to yours. Try to understand the following things:

  • Whether your competitors provide commercial or residential HVAC services or a combination of the two, it's important to know what you're up against.

  • How long have they been in business?

  • What size jobs do they prioritize? How big is their company?

  • Whether they hire freelancers or full-time staff

All of these factors heavily affect how you can charge for the different home energy audit services.

  • Make sure you consider taxes. You're probably aware that you're required to pay business taxes. However, don't forget to factor them in when deciding on a price. When quoting your customers for HVAC Load Calculator services, it's also critical that you have two main options.

  • Taxes should be included in each invoice separately.

  • When determining to price, take into account taxes.

Because it is easier to compute and handle, most HVAC companies now prefer to list taxes separately on each invoice or quote for their energy audit services. It simply means that they charge a different price for each service. If you're going to include taxes in your price, make sure that they don't drastically reduce your profit when tax rates change.

  • Calculate your HVAC profit margin. Markup is the amount you want to charge/rate on top of all your expenses. Markup can be expressed as a percentage or a sum. Typically, you set up distinct markups for services and materials. Service industry markup and profit margins appear to be closely related.

  • Make sure you use HVAC software. HVAC contractors may find it difficult to price their residential energy audit services and make the appropriate profit. Tracking all of the job extras that can be added to the computation, in addition to pricing, is a simple operation. You also wanted to know the employment profit and loss, on top of everything else.

It's a good thing EDS HVAC software is now available! Performing accurate heat or cooling load calculations is as simple as clicking a button! Everything is streamlined and organized with this software solution.

From the start, pricing any of your HVAC jobs/services can be a lot of work. However, taking the effort to set excellent strategic rates will benefit both you and your customers in the long run. Many HVAC firms fail because they fail to take this critical step. So, by conducting competitive research, analyzing your costs, and estimating markup, you can ensure that your HVAC company can develop profitably and sustainably in the future. If you wish to get your home energy audits automated, get in touch with us now!

About the Author

Digital Marketing Manager at ENERGY DESIGN SYSTEMS, LLC. responsible for developing, implementing, and managing Digital Marketing Strategy & campaigns that promote a company and its products and services.

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Author: Mitesh Patel

Mitesh Patel

Member since: Dec 24, 2021
Published articles: 26

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