Your HVAC business profits are the gateway to growing your HVAC business. Yet, understanding how to increase those profits isn’t always straightforward.
Here are 3 tips that you can immediately set in motion to give your HVAC business profits a boost!
1. Setting the right price
Have you ever been told by a potential customer that your quote for their HVAC job was too expensive? And then started to second-guess yourself and reevaluate your pricing model altogether?
If you have a well-thought-out pricing model, don’t be afraid to lose out on a job! Pricing below the value of a job to get the sale will not help your business health. The truth is your pricing is about more than just revenue alone. Setting the right pricing can help you:
- Identify the best customers – these are customers willing to pay your quoted price with whom you can build long-lasting relationships. Think maintenance agreements, repeat business, and free word-of-mouth referrals!
- Get the most out of your time – lowering your price also means having to spend more time and resources on doing more jobs. The right pricing, by contrast, can help you and your team do fewer jobs with higher returns.
- Highlight the high quality of your HVAC business – one way to set your HVAC business apart from the competition is to emphasize the quality of your HVAC business. Your price should reflect your team’s high level of technical know-how, years of experience spent on the field, professionalism, or other quality that sets you apart.
That is why identifying the net profit you want to achieve for every billable hour is so important. It helps you make clearer pricing decisions that can help you reach your profits goal.
2. Give your customers options
The truth is simple: people like options. Within the HVAC industry, there are two key options you can offer your customers to dramatically increase your sales, retention rate, and profitability. Financing and ongoing maintenance.
HVAC contractors that use our Credit for Comfort financing platform have a 25% increase in their average ticket price. This simple yet powerful financing tool helps HVAC contractors maximize their profit per customer. Plus, it also saves them time by making the whole application process digital. In other words, contractors can send their customers their financing applications via email or text from the platform. And their customers can fill it out and submit it electronically and get approval decisions in seconds.
Maintenance contracts are also key in providing HVAC business profits during the off-seasons. Here as well choices can really incentivize customers to opt-in to one of the contracts you offer.
3. Analyzing your P&L Statement
Your Profit & Loss (P&L) statement is so much more than facts and figures. As we mentioned in a previous post on the importance of P&L statements, your P&L statement helps you:
- Make meaningful process improvements
- Understand year-over-year (YOY) trends
- Cut out unnecessary expenditures
- Identify the most profitable aspects of your HVAC business
Ultimately, your P&L statement is worth understanding well. One best practice is to take an hour each month to go over your revenue and expenses, comparing statements to find patterns. Through this monthly exercise, you can create a roadmap to make more profitable decisions.
When you know what your pricing should be, give your customers options, and take the time to analyze the ins and outs of your P&L statement, you can boost your profitability. By implementing each of these 3 tips, you can make tangible improvements to your long-term profits and business growth.
As part of your efforts, we invite you to explore Credit for Comfort’s multiple financing options. And find out what a simpler way of offering financing can do to boost your HVAC business profits.