If you’re just starting out in HVAC, pricing is the part that keeps you up at night.
Price too high and you’re afraid you’ll lose the job.
Price too low and you’re working hard for free—or worse, losing money.
I’ve seen more HVAC start-ups fail from bad pricing than bad installs. Not because they didn’t know how to do the work, but because they never learned how to charge for it properly.
This guide breaks down pricing models that actually work for new HVAC businesses, why certain methods fail early, and how to price your first jobs so you can survive, learn, and grow.
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🧠 The Hard Truth About HVAC Start-Up Pricing
Here’s the reality nobody tells you:
Your first job doesn’t need to make you rich—but it must not make you broke.
Early pricing isn’t about maximizing profit. It’s about:
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Covering your costs
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Protecting your time
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Reducing stress
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Avoiding callbacks you can’t afford
Cheap jobs feel safe. They aren’t.
⚠️ Why Underpricing Is the #1 Startup Killer
New installers underprice because they think:
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“I need experience”
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“I need reviews”
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“I need to win the job”
What actually happens:
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Jobs take longer than expected
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Mistakes cost money
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You rush to make up time
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One callback wipes out all profit
Underpricing trains customers to undervalue you—and that’s hard to undo.
📊 The Three Pricing Models Every HVAC Startup Should Understand
There are dozens of pricing strategies out there, but three matter most when you’re new.
🧾 1. Time & Materials (T&M)
This is the simplest model and often the safest for first-time installers.
How it works:
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Customer pays for materials
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Customer pays hourly labor rate
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You track time honestly
Best for:
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Unknown conditions
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First installs
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Repair or retrofit work
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Learning your true labor costs
Pros:
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Lower risk
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Transparent
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Easier to explain early on
Cons:
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Customers dislike uncertainty
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Harder to scale
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Requires good time tracking
📦 2. Flat-Rate (Per Job Pricing)
This is what most established HVAC companies use.
How it works:
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One price covers labor + materials + overhead + profit
Best for:
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Replacements
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Standard installs
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Repeatable jobs
Pros:
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Customers like certainty
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Easier to market
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Higher profit when done right
Cons:
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Dangerous if you guess wrong
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Punishes inexperience
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Requires accurate estimating
Mike’s rule:
👉 Don’t flat-rate until you’ve done the job at least three times successfully.
🔀 3. Hybrid Pricing (Best for Startups)
This is my go-to recommendation for new HVAC businesses.
How it works:
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Fixed price for known items (equipment, standard labor)
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T&M for unknowns or extras
Example:
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Furnace install: flat rate
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Electrical upgrade: time & materials
This model:
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Protects you from surprises
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Keeps customers informed
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Builds trust early
🧮 How to Calculate a Minimum Viable Price (MVP)
Before quoting anything, you must know your baseline.
🧱 Your Minimum Price Must Cover:
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Equipment cost
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Consumables (wire, fittings, tape, etc.)
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Fuel and travel
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Insurance
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Licensing
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Your time
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A buffer for mistakes
If you don’t know these numbers, you’re guessing—and guessing gets expensive.
The Small Business Administration has solid guidance on cost basics
⏱️ Labor: The Most Mispriced Part of HVAC Jobs
New techs almost always underprice labor.
Why?
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They forget setup and cleanup
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They don’t count travel time
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They ignore admin work
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They assume everything goes smoothly
Reality check:
If you think a job will take 6 hours, price it at 8.
You’re not padding—you’re being realistic.
🔧 Pricing Your First Equipment Install
Your first full system install is where pricing discipline matters most.
🔥 What to Include:
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Equipment delivery time
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Disposal of old units
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Electrical modifications
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Startup & commissioning
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Documentation
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Customer walkthrough
Manufacturers expect proper commissioning and documentation:
👉 https://www.goodmanmfg.com/resources
If you don’t price these steps in, you’ll rush them—and that’s how problems start.
📋 How to Present Pricing Without Losing the Job
Customers don’t reject prices—they reject confusion.
✅ What to Do:
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Explain what’s included
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Explain why startup matters
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Explain what protects their investment
❌ What Not to Do:
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Apologize for your price
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Compare yourself to “cheap guys”
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Discount before they ask
Confidence comes from clarity, not bravado.
🧠 When (and How) to Discount as a Startup
Discounts aren’t evil—but they’re dangerous if used wrong.
✔️ Acceptable Discounts:
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First-time customer promotions
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Off-season scheduling
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Simple installs with ideal conditions
❌ Bad Discounts:
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“I just need the work”
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Matching unrealistic quotes
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Slashing labor to win jobs
Once you discount labor, you’ve told the customer your time isn’t valuable.
📸 Why Documentation Supports Your Pricing
Photos, checklists, and commissioning notes:
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Justify your price
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Reduce disputes
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Support warranties
AHRI emphasizes installation quality as part of performance:
👉 https://www.ahrinet.org
Professional documentation makes professional pricing easier to defend.
🚫 Pricing Mistakes That Sink Startups Fast
❌ Guessing Instead of Calculating
Hope is not a pricing strategy.
❌ Copying Big Company Prices
They have scale—you don’t (yet).
❌ Charging Friends & Family “Cheap”
That work costs you twice: money and stress.
🧱 How Good Pricing Builds Long-Term Stability
Correct pricing:
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Reduces burnout
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Improves install quality
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Allows slower, safer work
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Builds customer trust
Energy.gov reinforces that proper installation adds long-term value:
👉 https://www.energy.gov/energysaver/energy-saver
Pricing isn’t just about money—it’s about sustainability.
🧠 Mike’s Pricing Rules for New HVAC Businesses
If you remember nothing else, remember this:
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Price to survive, not to impress
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Protect your time
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Expect problems and plan for them
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Explain value, not just numbers
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Never race to the bottom
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Let quality justify cost
🧱 Mike’s Final Word
Your first jobs set the tone for your entire business.
If you underprice them:
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You rush
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You stress
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You burn out
If you price them correctly:
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You work calmly
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You learn properly
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You build confidence
You don’t need to be the cheapest.
You need to be fair, clear, and sustainable.
That’s how HVAC start-ups turn into real companies.
