Series
How Many More Sales Dollars Do You Need To Cover An Expense? | HVAC Pricing Series Part 14
Another Math Formula: Expense $’s ¸ Profit % = Increased Sales $’s to Cover Expense Example:You are considering adding a secretary to your business. Secretary Salary plus Incidentals/Taxes = $30,000Net Profit = 5% (.05) $30,000 ¸ .05 = $600,000 in Increased Sales You can use this formula for any expense (Cost) you are considering adding
How Do You Raise Your Prices? Part Two | HVAC Pricing Series Part 13
This article will discuss the most important element of how you raise your prices: you must raise the value of your company in the eyes of your customer. Your customer must be able to see your company as being worth more money. Your customer has to see and understand that when he chooses your company
How Do You Raise Your Prices? | HVAC Pricing Series Part 12
We discussed in a previous article that raising your Prices is the easiest and best way to increase your Profit. And increasing your Profit will allow you to have a better, more professional company that remains solvent for years to come. But, most HVAC dealers are very afraid of raising their Prices because they feel
How Do You Increase Profit? | HVAC Pricing Series Part 11
There are only three ways to increase the Profit in your company. You can increase your Total Sales, you can cut your Direct Costs and Overhead Costs, or you can raise your Prices. We will examine each of these to determine which is the most effective and easiest to accomplish. In order to do this
Does The Right Price Cover The Financial Constraints of Your Company? | HVAC Pricing Series Part 10
The financial constraints of your company are simple: you must cover your Direct Costs and your Overhead Costs and you must have some Profit. If you don’t do these three things you will either lose money or not make money. So let’s fill in the chart below to see if our example covers these financial
The Formula for The Right Price | HVAC Pricing Series Part 9
$2000 Is 62% of the Right Price Therefore: The Right Price X 62% = $2000 The Right Price = $3226 Critical Point!?! What did we divide the direct costs by to get the right price? 62% And where did we get the 62%? By subtracting the sum of the Overhead % + Profit% from 100%.
The Elements of the Right Price | HVAC Pricing Series Part 8
The Right Price Must Cover Direct Costs, Overhead Costs and Profit The Whole Pie Chart Below Is the Right Price The Whole Pie = The Right Price = 100% Assumptions: Direct Costs = $2000 Overhead Costs = 28% Profit = 10% The Right Price = Direct Costs + Overhead + Profit The Right Price (100%)
Include Profit, You’re Worth It! Part 2 | HVAC Pricing Series Part 7
In Part One of our discussion on Profit, we established that the successful HVAC companies strive for a 15% Profit. But, in reality, Profit is not the same on every job you perform. Some jobs have more risk than others and those jobs should be priced with more Profit in order to cover the increased