Pricing

Unlock profitable pricing! Learn the crucial difference between markup (cost-based) and margin (revenue-based) pricing for contractors. Markup is great for quick bids, while margin reveals true profitability and guides financial goals. Use both: bid with markup, then validate with margin. Master these for sustainable growth and avoid underpricing!

In an economy that's often unpredictable, the home service industry can be vulnerable to fluctuations in demand. Many homeowners cut back on non-essential services when budgets get tight, which can lead to a rollercoaster of a business cycle for HVAC, plumbing, and electrical companies. However, there's a powerful strategy you can use to build a more resilient and profitable business: creating a recurring revenue model. By shifting away from a transaction-based approach, you can establish a consistent cash flow and strengthen your customer relationships, ensuring your business stays strong no matter what the market does.

Our featured article breaks down how to build a preventative maintenance subscription that offers your customers peace of mind and keeps your business thriving. Learn how bundling services like filter, UV bulb, and battery replacements—along with discounts on repairs and priority service—can provide immense value to your customers for a low monthly price. This model not only secures a stable income stream for your company but also transforms one-time clients into long-term, loyal customers who are far less likely to shop around when the economy slows down.

Many home service contractors confuse markup with margin, and that mistake can drastically reduce profitability. While markup simply adds a percentage to your costs, margin ensures a specific percentage of your selling price is profit—covering overhead and driving net profit. This article explains the math behind markup vs margin, why margin-based pricing is essential for HVAC, plumbing, and electrical businesses, and how to set prices that achieve your target margin. Learn how to build a pricing strategy that supports your revenue goals and keeps your business financially healthy.