Chartered Financial Analyst with 15+ years experience in small business finance and home services management.
Find your HVAC business’s breakeven point. Enter any three variables—Monthly Fixed Costs, Avg. Price per Service Call, Variable Cost per Call, or Breakeven Service Calls—to solve for the fourth.
HVAC Breakeven Calculator
HVAC Breakeven Formula
The breakeven formula for an HVAC business finds the total number of service calls (Q) you must complete each month for your total revenue to cover all fixed and variable costs.
Q = F / (P – V)
Solve for Monthly Fixed Costs (F):
F = Q * (P – V)
Solve for Avg. Price per Call (P):
P = (F / Q) + V
Solve for Variable Cost per Call (V):
V = P – (F / Q)
Variables Explained
- Monthly Fixed Costs (F): Your total, recurring monthly overhead. This includes van payments, business/auto insurance, shop rent, marketing, software, and office staff salaries.
- Avg. Price per Service Call (P): Your average revenue from a single customer job, including call-out fees and labor charges.
- Variable Cost per Call (V): The average cost directly tied to one job. This is primarily the cost of parts and materials (filters, refrigerant, components), fuel, and any commissions paid to technicians.
- Breakeven Service Calls (Q): The total number of jobs you need to complete each month to reach $0 in profit.
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What is an HVAC Breakeven Point?
An **HVAC Breakeven Point** is the exact number of service calls (Q) your company must perform each month to cover all expenses. It’s the minimum sales volume required to pay for your fixed “overhead” costs (like your fleet, insurance, and office) and the variable “job” costs (like parts and fuel) for each call.
**Fixed Costs (F)** are your consistent monthly overhead, whether you run 1 call or 100. This is your biggest hurdle and includes van payments, commercial auto/liability insurance, shop rent, marketing, software (like ServiceTitan), and salaries for dispatchers and office staff.
**Variable Costs (V)** are the costs incurred *only* when you run a service call. This is primarily the wholesale cost of parts and materials (capacitors, refrigerant, filters, etc.), fuel for the van, and any sales commissions or per-job bonuses paid to technicians.
The **Contribution Margin** (P – V) is the profit from a single service call that goes toward paying your fixed costs. If you charge an average of $400 (P) for a service call and your parts/fuel (V) cost $120, your contribution margin is $280. This calculator finds how many $280 “profit chunks” you need to cover your total fixed costs.
How to Calculate HVAC Breakeven (Example)
Let’s calculate the breakeven point for an HVAC business with two vans.
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Identify Monthly Fixed Costs (F):
Your monthly van payments ($1,200), insurance ($1,800), shop rent ($1,500), marketing ($2,500), and office staff ($3,000) total $10,000.
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Identify Avg. Price per Call (P):
Between basic tune-ups and complex repairs (not including full installs), your average service call revenue is $400.
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Identify Variable Cost per Call (V):
You calculate that the average job costs $120 in parts, materials, and fuel.
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Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per call: $400 (P) – $120 (V) = $280.
Next, divide the fixed costs by this margin:
Q = $10,000 / $280 = 35.71 -
Conclusion:
Your company must complete 36 service calls (rounding up) each month to cover all costs. The 37th service call of the month will be your first profitable job.
Frequently Asked Questions (FAQ)
It’s better to calculate your breakeven for *service calls* separately from *installations*. Installations have much higher (P) and (V) values and can skew your data. Use this calculator for your service/repair department, and run a separate calculation for your install department.
If you pay your technicians a fixed weekly/annual salary, it’s a **Fixed Cost (F)**. If you pay them a base wage *plus* a commission or bonus for each job or sale, the commission portion is a **Variable Cost (V)** and the base wage is a **Fixed Cost (F)**.
Look at your last month’s service department data. Take **Total Service Revenue** and divide by **Total Service Calls** to get (P). Take **Total Parts/Materials Cost** and divide by **Total Service Calls** to get (V). Be sure to exclude installation revenue/costs.
Enter your (F) (e.g., $10,000), your (V) (e.g., $120), and a *target* number of service calls (Q) you can realistically run (e.g., 50). The calculator will solve for (P), telling you the *minimum average price* (e.g., $320) you must charge per call to hit your goal.