A standard profit margin at a non-retail company is 100 percent, meaning that the customer is charged twice what they spent on the part or material. This requires precise accounting and estimating skills, as prices are constantly changing. Know how much you spent on each part before you can mark it correctly. The total cost of the work also includes a labor surcharge, that is, charging more per hour for the technician's time than you pay him.
These two margins can work together to make your business profitable. When you increase your materials by 100 percent, you usually increase your labor force less, for example, by 25 percent. However, as a general guide, the typical profit margin on materials will range from 7.5 to 10%. However, according to the Corporate Finance Institute, some contractors raise material prices by up to 20 percent.
Whether you spend most of your time repairing old HVAC systems, replacing parts, or installing new central air conditioning systems completely, it can help to have some materials and parts available. From ice-cold air conditioners to hot ovens, your HVAC business helps people feel comfortable no matter the season of the year.
