Arkansas HVACR NewsMagazine May 2026

HVACR NewsMagazine May 2026

State National Chapter News

Ruth King Pricing for Profit Class takes home lots to think about April 16 was a class to think about. Ruth King spoke about Pricing for Profit and followed up with several forms and calculators. Class began with the question, “What Makes Money?” The answer— Billable Hours. Sales, Accounting, Management, and Training all play an integral part; however, you charge based on Billable Hours. Yes, you could say equipment but that is only finalized with Billable Hours for the install. Service is about Billable Hours. Billable Hours are what you charge the customer for work performed with accompanying and ancillary items. You may charge for travel but even that is a billable hour. You may charge for equipment used or refrigerant reclamation; but, that only happens as a result of Billable Hours. Equipment, tools, and supplies sitting in the warehouse aren’t chargeable until they are connected to Billable Hours. Why is this important? You need to know what your Billable Hours are costing you so you will know what you need to charge. Most new contractors determine their price by how much their previous employer was charging. Whatever that amount was, they lower it and enter the life of their new business knowing they are going to get rich — at least compared to what they were making as a tech; however, Billable Hours are only

Profitable Hours if you know how much they cost you and then price to meet your profit expectations. Of course, you can charge what you want but competition will be the governor on your speed. It is a balance between what the market will allow, what you want to make, and your costs. Costs include employee pay and benefits, office and warehouse, equipment and tools, fuel and uniforms, vehicles and insurance, taxes and permits--just to mention some of the most obvious. You must know these costs and enter them into your Billable Hours cost. Remember that you never charge based only on the hours spent at the customer’s home. There was travel / windshield time and picking up parts, etc. that must be considered. If you and your employees spend 80% of their time at the customer’s home, you are doing pretty good. That alone means that you must charge 25%