What Heating and Air Conditioning Costs

Sticker shock surrounding a recent heating and air experience? Me too! Even as fair as I keep my prices compared to others, I still hear “but you were only here for 40 minutes”. And it’s true! But let's take a little dive into why HVAC costs what it does. And keep in mind, this is from my point of view, as an owner of a small (1-5 tech) company, and that my costs are not the same as a large (25-50 tech) company.

Let us start at day one! 

School: Tech school can cost 12-25k depending on where you go. And most courses are a year long.

Ride along time: Coming out of tech school you still know next to nothing in regards to real world heating and cooling issues. Sure you fixed the furnace that your instructor broke in a nice lab, or can weld perfect joints when the copper is held together at perfect working height in a bench top vise. It may even be likely that every class was ace’d with flying colors (this story and example sounds really familiar). But the reality is we're not welding lines together as they sit in a vise, it's usually upside down, backwards, and in the rain. So fresh out of tech school, nobody is really a tech. They need to spend the next 3-6 months riding in a van with a senior tech learning the real nitty gritty of the trade. All that time in the van the apprentice makes the company 0 dollars. They actually cost the company. This sunk cost is then sprinkled into the cost of overhead every company has.

Now that we're no longer riding with someone, it's time to get our own van and be on our own!

So now we need a van, or a truck. Have you seen the price of a vehicle lately? WOW!

And once loaded, they tend to be gas guzzlers. Like 2 tanks a week at 32 gallons a fill!

And just like every car, these vehicles need maintenance too. Only it usually tends to be a bit more expensive on some models, as the engines are bigger, tires more heavy duty etc.

Now we have our 30-60K vehicle, we need a place to put all of our stuff. Lets throw some $1500 ladder racks on top, and roughly $5,000 worth of shelves inside.

Now let's fill those shelves!!!

The tool bag I carry with me, just the bag, was over $200 (I hope my wife does not read these!!). Now I need some tools in the bag! On any given day, and it changes with the seasons, I have almost $1000 in tools in my bag. From electric meters to air flow meters to screwdrivers and an assortment of others. The sad truth is, it doesn't take much to get to $1000 in small hand tools.

That's right, that is just the small hand tools I keep in my carry on bag.

For furnaces I carry a combustion analyzer that lets me fine tune units and ensure they are running safe. And depending on the model you're looking at forking over between $500-1500 for a residential model and much much more for commercial/industrial models. And, they typically need yearly maintenance performed on them!

Air conditioners and heat pumps need a few extra tools as well! We have a vacuum pump and all the hoses for it, and valve core removal tools. A micron gauge. A recovery machine. Recovery tanks. Refrigerant gauges. On the cheap end of all these tools, you're still looking at almost $2000.

Now we need our power tools. Each tech has their preference of what they need, but most still carry several. From the 12v compact screw gun for small maintenance tasks to the 18v kits needed for those tougher jobs. Most of us are still packing $1000-2000 in power tools around with us.

And this is not even a comprehensive list. There are a multitude of tools that we need to carry but may not use on an everyday basis.

Now that we got our schooling van and tools, we now need our technology. Cell phone, I pad, computer, accounting software, load calc software and the list goes on. And most of them come with a monthly or yearly fee.

Now we need protection. Typical insurance coverage includes general liability, workers compensation and vehicles. But the larger the firm the larger the insurance needs! 

Alright so we’re almost ready to take our first call! But wait, who is answering the phone? Who is doing the accounting? Who manages the advertising? What about dispatching? Anyone who is sitting in an office environment, not turning a wrench, is not producing income for the firm. Their jobs are incredibly important, and most companies would fail without these people, but they are not bringing in dollars. Yet their salaries need to be paid for by the work the guys in the field are doing! Another added cost of overhead!

Great, now we have our school, truck, tools, insurance and a person to answer the phone. We are set to run our first call. But wait, how does anyone know we exist or to call us! We need to advertise our company. This amount ranges from $5 a month to infinity!

We finally have everything in place. People know to call us, someone will answer the phone, and our truck is filled with tools!

I have not done the math yet, but I have a feeling it's getting expensive! O yeah, and we have not even left the shop! AND, we haven't even bought the parts we need to fix the unit. And it feels like the cost of parts and units keeps going up every 3-4 months in this current economy!

And to think I have condensed my list and thoughts in the interest of your time! 

This example does not just apply to heating and air. It applies to all the trades! Flooring, painting, electric, plumbing. All of us have costs that we pay before we even leave the shop. I'm sure there are places that avoid some of these costs, but is that what we're after? No need for school expenses? Cut out insurance costs? No need for those special tools?

Every shop in town has a different cost to replace a motor. That does not mean one shop is a rip off or one shop is cheap. They most likely have very different costs. But nonetheless, the cost every trade company deals with is high. And those costs are what are reflected on the final cost of the bill. So while it might be true, I was only in your home or business for 45 minutes, it took a lot of time, effort, and money just to get there!

One of my favorite quotes I came across recently in a trade publication read like this, “Just because the job only took me 30 minutes, please do not discount the 30 years it took me to perfect my skills so that I can do the job in 30 minutes”.  I believe this rings incredibly true everyday, and not just in the world of HVAC, but in everything all of us do.

Questions? Comments? Concerns? 

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