When it comes to running a successful HVAC business, understanding the standard markup is essential. In a non-retail business, the typical profit margin is 100%, meaning that you charge the customer twice what you spent on the part or material. This requires accurate accounting and estimating skills, as prices are constantly changing. It's important to know how much you spent on each part before you can set the right price. In addition to the cost of materials, the total cost of the job also includes a labor surcharge.
This means that you charge more per hour for the technician's time than you pay them. These two margins can work together to make your company profitable. Generally, increasing materials by 100% usually increases labor force by 25%. However, some contractors raise materials up to 20%, according to the Institute of Corporate Finance. From air conditioners to ovens, your HVAC business helps people stay comfortable all year round.
Whether you're repairing old HVAC systems, replacing parts, or installing new central air conditioning systems, having some materials and parts on hand can be useful.