The average profit margin on HVAC equipment is between 25 and 50%. If you sell replacement parts and materials for air conditioning systems, your profit margin should be 100% or more, which means you charge at least twice what you paid for the part. The standard profit margin at a company that isn't a retailer is 100 percent, meaning you charge the customer twice what you spent on the part or material. This requires precise accounting and estimating skills, since that prices are constantly changing.
Know how much you spent on each part before you can write it down 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 them. These two margins can be combined to make your company profitable. When you increase your materials by 100 percent, you usually increase your labor force less, for example, by 25 percent.
A lot depends on the number of contractors in a city or region, the level of competition, and other factors. Average HVAC profits can range from 15% to 35% of your total sales. The industry standard average profit margin for HVAC services is 20%. No one would blame them for having little patience to sit down every quarter and audit the company from top to bottom to determine its average profit margin in terms of air conditioning, starting with each sheet of paper purchased and paid for with company funds and up to each truck.
Most of the time, customers won't be able to differentiate an excellent HVAC installation from a normal one, but they will surely remind the company that sent them service reminders exactly when their filters were getting dirty. If you target new customers and sell them products, you can increase the average revenues and profits of an air conditioning company.
