You're doing $3 million in revenue. You take home $75,000.
That's not a hypothetical. The average HVAC business operates at 2.5–3.5% net margin. On $3 million in revenue, that's $75K–$105K.
Meanwhile, the top-performing HVAC shops — same market, same services, same customer base — hit 15–25% net margins. On that same $3M, that's $450K–$750K.
The difference between $75K and $750K isn't talent. It's not harder work. It's not better marketing. It's pricing.
The median HVAC owner earns $76,000
Let that sink in. The median HVAC business owner — the person who took all the risk, signed the lease, bought the trucks, carries the liability — earns $76,000 a year. That's roughly what a senior technician makes with overtime.
You took on all the risk and got the same paycheck. Worse, you work more hours, you carry more stress, and you don't get to clock out.
This isn't because the market won't support higher prices. It's because the average contractor underprices every job by 10–15%. Profitability Partners, which has reviewed 200+ contractor P&Ls from private equity acquisitions, confirms this is the single most common finding: systematic underpricing.
Why you're underpricing and can't see it
You don't know your true cost to deliver a job. Not really.
You know what the parts cost. You have a rough idea of labor. But the fully loaded cost — drive time, truck costs, warranty callbacks, insurance, overhead allocation per tech hour — isn't in your head when you're writing a quote.
So you price by feel. You price by what the guy down the road charges. You price by what feels "fair."
And "fair" is 10–15% below what you need to actually build a profitable business.
On a $3M shop underpricing by 12%, that's $360,000 a year you're giving away. Not losing to competition. Not losing to bad luck. Giving away because you can't see your own numbers clearly enough.
Installs vs. service: which one makes money?
Most HVAC owners can't answer this question with confidence. They have a gut feel — "installs are where the money is" or "service is our bread and butter" — but they've never pulled the data to see which job types actually generate margin and which ones they're doing at cost.
When we sit down with shop owners and pull their data, the answer surprises them almost every time. Some are subsidizing their install business with service revenue. Others are running service calls at a loss because they haven't recalculated their hourly rate since 2022.
You can't fix what you can't see.
The fix isn't more revenue — it's more margin
You don't need more trucks. You don't need more leads. You don't need to work harder.
You need to know — with precision — what every job type costs you to deliver, what margin you're actually making, and where the 10–15% you're leaving on the table is hiding.
The top shops that hit 15–25% margins aren't working 3x harder than you. They know their numbers. That's the difference.
See where your HVAC shop is leaving money
We pull your actual data — ServiceTitan, Housecall Pro, Jobber, whatever you use — and show you which job types make money and which ones you're doing at cost. Not theory. Your numbers.
Call (507) 577-5982 or book a discovery call.
15 minutes. Free. No pitch.
See how we work with HVAC businesses, or learn about our full process.