HVAC business guide
How to build a flat-rate price book for HVAC
Build an HVAC flat-rate price book from your own numbers: work out what one billable hour costs your shop, time the few dozen repairs that fill most tickets, add parts on a sliding markup, and price every task as hours times your task rate plus parts. Test it on last summer's invoices before a tech ever shows it to a customer.
Most small HVAC shops start on time and materials, then notice two problems. The fastest tech gets punished for being fast, and homeowners hate open-ended bills. A flat-rate price book fixes both: every common task gets one price, and the customer approves it before a tool comes out. Building one takes a few evenings with last year's invoices, not a consultant.
Start with your task rate
Everything in the book comes back to one number: what an hour of billed work has to earn. Most owners guess it too low because they divide overhead by hours worked instead of hours billed. Supply house runs, drive time, estimates and callbacks all eat into the day.
Example numbers
A three-truck shop has about $270,000 a year in overhead: trucks, fuel, insurance, the office, software, marketing and the owner's draw.
Each tech bills about 1,100 hours a year, so the shop bills 3,300. That's roughly $82 of overhead per billed hour.
Add a tech's loaded cost of about $40 an hour and one billed hour costs $122.
To aim for about 20 percent profit, divide by 0.80. The task rate is about $153, rounded to $155.
Plug in your own overhead and billed hours. If the result surprises you, that's the point of doing it.
Build the book in eight steps
- Pull last year's tickets. Sort them by what was actually done. In most residential shops a few dozen tasks cover the bulk of repair calls: capacitors, contactors, condenser fan motors, blower motors, igniters, flame sensors, pressure switches, drain line clearing, float switches and thermostats.
- Time each task with your average tech. Not your best one. Include setup, testing after the repair and cleanup. Leave access problems out of the base time; you'll add them later.
- Price the parts. Use your real cost from the supply house and a markup that shrinks as the part gets expensive (see the scale below).
- Do the math. Task hours times your task rate, plus the marked-up part. Round to clean numbers that are easy to say.
- Add good, better, best where it helps. A failed capacitor might have three lines: the capacitor alone, the capacitor with a new contactor, or both plus a hard start kit on an older compressor. Stop at three choices.
- Add adders instead of padding. Separate lines for attic or crawlspace access, second floor air handlers, rooftop units and after-hours work keep the base prices honest.
- Test it on real history. Re-price twenty old tickets with the new book. Any number that makes you wince, in either direction, needs another look.
- Put it where techs work. A tablet app or a laminated binder, with the member price printed next to the standard one.
A sliding scale for parts markup
A flat markup on every part either overprices big components or underprices the small ones that carry your margin. A sliding scale is common. This one is an example to adjust, not a standard.
| Your part cost | Example multiplier | Typical parts |
|---|---|---|
| Under $15 | 3 to 4 times | Fuses, wire nuts, float switches, small fittings |
| $15 to $75 | 2.5 to 3 times | Capacitors, contactors, flame sensors, igniters |
| $75 to $300 | About 2 times | Condenser fan motors, inducer assemblies, control boards |
| Over $300 | 1.5 times or less | Variable speed blower motors, larger boards |
Example scale only. Markups vary by market and by how much warranty handling each part creates.
How techs should talk about flat rate
Give the price for the fix, never the hours inside it. If a homeowner asks how long it will take, answer honestly and add that the price stays the same if it runs long. Present options from the top tier down, and let the customer pick. When the honest answer is that the whole system is near the end, switch to the repair vs replace conversation instead of stacking repair lines.
Your diagnostic has to fit the book too. Decide whether each task price includes a trip or assumes the diagnostic fee covered it, and write that rule at the top of the first page.
Where first-year price books go wrong
- Techs discount by feel. Set a written discount policy (members, maybe seniors or veterans) and nothing else.
- Prices sit frozen for three summers. Parts climb and the margin quietly disappears.
- Too many lines. If a tech can't find the task in under a minute, they'll make up a number.
This week, pull your top twenty-five tasks from last cooling season and time them. That's most of a price book already. More HVAC pricing and operations guides are collected on the HVAC hub.
Questions owners ask
How often should I update my HVAC price book?
At least once a year, ideally in late winter so it's ready before cooling season. Also update it when a supplier sends a price increase letter or your labor costs jump. Refrigerant and motor prices tend to move more than small electrical parts, so give those lines a look more often.
Should refrigerant be flat rate or priced per pound?
Many shops price it per pound because charge amounts vary so much from one system to the next. Some add a flat line for a small charge adjustment. Either way, pair any added refrigerant with a leak conversation, because a system that needed refrigerant has a leak somewhere.
Is flat rate fair when a job goes faster than the book says?
The customer is paying for a result at a price they approved before the work started. When a job runs long because a bolt seizes or a panel won't come off, your shop absorbs it. Over a season those swings even out, and the customer never gets a surprise bill.
Should I buy a ready-made price book instead of building one?
Subscription price books save a lot of setup time and usually come with task times already filled in. The risk is that the prices are tuned for someone else's overhead and market. If you buy one, replace their task rate with your own number and spot check the results against your old invoices.
Do maintenance members get a separate price column?
Commonly, yes. A member discount on repairs, often somewhere around 10 to 20 percent, is one of the easiest plan benefits to show. Printing both prices side by side also sells the plan for you, because the homeowner can see what they would have saved today.