Number of systems, visits per year, labor per visit, parts budget — get your break-even price, recommended annual rate, and the total value of your service agreement portfolio.
Pre-built maintenance contract ready to customize — scope of work, payment terms, included/excluded items, renewal clause, and signature block.
One email with the template + weekly business tips. Unsubscribe anytime.
A properly priced service agreement portfolio is the closest thing to guaranteed revenue in the trade business. An HVAC contractor with 200 service agreements at $250/year has $50,000 in predictable annual revenue before they answer a single service call. That changes how you schedule, hire, and plan. The math only works if you've priced it right.
Break-even on service agreements means you're covering cost and nothing more. You're scheduling visits, driving routes, carrying parts inventory, and administering renewals — all for zero margin. Price at break-even and your agreements are a burden, not an asset. Target 30–40% margin on agreements: it covers the margin risk (customers who call more often, equipment that needs more parts) and delivers profit even on high-touch accounts.
Priority service in peak season (when non-agreement customers wait 3–5 days, agreement holders get next-day or same-day). Documented maintenance history that extends equipment life and supports warranty claims. A relationship with a technician who knows their system. These are real benefits — you're not just selling two tune-ups per year. Frame your agreement that way when you sell it.
Agreements come in two flavors: labor-only (customer buys parts at cost or retail when needed) and covered-parts (your agreement includes common parts). Covered-parts agreements command higher prices — typically $50–$100 more per year for residential — but carry more risk. Budget $80–$120/year for parts exposure on a covered agreement for a 10+ year system. New systems: $20–$40.
50 accounts spread across a 40-mile radius is a different business than 50 accounts in a 5-mile radius. Route density cuts your drive time per visit, increasing the margin on every call. As you grow your agreement base, prioritize geographic density over total count — a tight route of 30 accounts is more profitable than a spread route of 50.
Service agreement templates, maintenance checklists, pricing worksheets, and the business forms to build and manage a profitable recurring revenue base.
Service agreements turn one-time customers into recurring revenue. This calculator prices annual HVAC service agreements based on your visit costs, included services, parts coverage, and target margin — so every agreement you sell is profitable, not just a customer retention tool that loses money. Use it to build a tiered agreement offering (basic, standard, premium) with clear pricing for each level.