The average profit margin for air conditioning equipment can range from 25 to 50%. If you are selling replacement parts and materials for air conditioning systems, your profit margin should be 100% or higher, meaning you are charging at least double what you paid for the part. A standard profit margin in a non-retail business is 100%, which requires precise accounting and estimating skills, since prices are constantly changing. It is important to know how much you spent on each part before you can price it properly.
The total cost of the job also includes a labor surcharge, that is, charging more per hour for the technician's time than you pay him. These two margins can be combined to make your HVAC company profitable. Increasing materials by 100% usually increases labor force less, for example, by 25%.The average profits of HVAC can vary between 15 and 35% of your total sales. The industry average standard profit margin for HVAC services is 20%.
To ensure that your company is meeting this standard, it is important to audit your business from top to bottom every quarter to check its average profit margin on air conditioning systems, starting with each sheet of paper purchased and paid for with company funds and up to each truck. By targeting new customers and selling to them, you can increase the revenue and average profits of your HVAC company. Most of the time, customers won't be able to differentiate an excellent air conditioning installation from a normal one, but they will surely remember the company that sent them service reminders exactly when their filters were running out dirtying.