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How to Increase Revenue as an HVAC Owner

  • Post category:HVAC

As an HVAC owner, there are two core areas in which you can improve your business’s profitability:

  1. Increasing your billable sites per technician.
  2. Increasing your revenue per visit.

If you’re looking to increase the number of billable sites per technician here are a few things to consider…

How to increase the average amount billed per work order

#1: Dispatch Technicians Directly From Their House and Not the Office.
Dispatching the best technician to the right job is an integral part of running a successful HVAC business. You know that. But why waste time having your technicians come into the office when you can digitally dispatch them from their homes? Dispatching your techs remotely will allow them to prepare for jobs in advance, reduce the time needed for back-office operations, and improve their efficiency and mobility – completing more jobs per technician.
#2: Make Sure Bread and Butter parts are in the Truck/Van
HVAC Work Truck
No tech likes to tell the customer they need to return because they’re missing a part. It’s wasted time on their end and a poor experience for the customer. Instead, make sure all the bread and butter parts are in the truck so they can reduce trips to the supply house and increase trips to paying customers.
#3: Utilize Runners to Deliver Parts
Partrunner

You know the expression, “there’s an app for that,” well, there’s a runner for that. It’s best practice to utilize runners to deliver missing parts so that your tech doesn’t need to leave the site to get a part from a vendor. If you don’t have your own runners, there are solutions out there like Partrunner that you can tap into and rely on.

#4: Use an electronic scheduling system
hvac electronic scheduling system

Have your Dispatchers use an electronic scheduling system that can organize their calls by priority, zone, and type of work. Systems like Operix can help optimize the way you match a job with the right tech. In doing so, you’ll avoid inefficient site visits and lengthy downtimes commuting to far-away jobs.

#5: Responding to an Emergency? Make Sure to See if Preventative Maintenance is Needed
If an emergency service call comes in for a site that has a preventative maintenance agreement – and it’s due – send the technician with the filters and belts they need to perform the PM Service. This will ensure more revenue for you by collecting more money per visit.
#6: Dispatching Techs with the Right Tools and Materials
The most profitable HVAC owners rely on state-of-the-art platforms for dispatching, inventory management, time and attendance, and service agreements just to name a few. By using a system like this you’ll have fewer surprise dispatched work orders, more satisfied customers, and billable sites per technician.
We’ve only covered half of the equation. Let’s now talk about ways in which you can increase your revenue per visit. This is the meat and potatoes of profitability.

How to increase your revenue per visit

#1: Make locating the correct part for billing a cinch
Outdated Billing

You could be leaving money on the table. I hope not though.

If your technician uses a C-163 Filter Drier that costs $60.00 but charges the customer for a C-032 filter drier that only sells for $30.00 you’re losing revenue.

Sometimes this happens. It’s partially the technician’s error. And it’s partially yours. Outdated billing systems make it challenging to locate the correct part in the Field service solution to then bill the customer.

#2: Round up your hours

Don’t get us wrong, this MUST be in your service agreement but we suggest you round up your time and bill to the nearest half-hour increment.

For example, if your tech was on site for 35 minutes, charge an hour minimum and round up to the nearest hour or half-hour increments.

Again, make sure your service agreement stipulates this. Otherwise, you’ll be getting some angry phone calls.

#3: Charge for Consumables

This is a simple change.

Some HVAC companies don’t charge for consumables such as brazing material and condenser cleaner. These are expenses you can pass on to the customer. It just becomes a line item for them that helps you on your margins.

#4: Consider Charging for Special Costs
For example, are you charging refrigerant recovery fees? If not, you might want to consider doing so. The cost can add up. The time and money you spend in your shop recycling the recovered refrigerant add up.
#5: Shoot for a Gross Margin of +40%
Evaluate your parts to make sure you’re gross margin exceeds 40%. Make sure you properly mark up your parts to ensure your gross margins exceed 40%.In most cases, you should be aiming for at least 100% markup on parts.

To Recap…

Improving your profitability shouldn’t be that hard. There are levers that you can pull to make sure that you’re operating as a best-in-class HVAC business. To recap, those levers are:

How to increase your billable sites per technician

  1. Dispatch technicians directly from their houses and not from the office
  2. Make sure your bread and butter parts are in the truck/van
  3. Utilize runners to deliver parts
  4. Use an electronic scheduling system
  5. If you’re responding to an emergency, make sure to see if preventative maintenance is needed
  6. Use an effective inventory management system to identify parts available in the truck or at the warehouse.
  7. Dispatch techs with the right tools and materials.

How to increase your revenue per visit

  1. Make locating the correct part for billing a cinch
  2. Round up your hours
  3. Charge for consumables
  4. Consider charging for special costs
  5. Shoot for a gross margin of +40%