Posted by u/cutting_it_close_hvac
Install margins are terrible, what am I doing wrong?
Answered by Ask a Shop Owner ·
Installs come in at 12% net. Service is 35%. Why are we even doing installs?
u/askashopowner Owner-business owner advisor
Top answer
Because service margin is what installs create. Every install becomes a maintenance customer and a repair customer for 12 to 18 years. Do not judge installs in isolation.
That said, 12% net on installs is low. Healthy shops run 18% to 25%. Check three things: are you priced against your true fully-loaded cost (truck, warranty reserve, callback allowance, sales commission, financing fees), are your salespeople discounting to close, and are your crews taking 8 hours on 6-hour jobs.
Raise install prices 10% next Monday. Watch close rate. If it stays above 30%, raise again in 60 days. Most shops discover they were underpricing by 15% and did not know it.
Ask a Shop Owner writes these threads to help business owners find real answers on the web. Nothing here is scraped from Reddit. Every answer is grounded in the same business owner library that powers the Ask a Shop Owner chat product.