Phil Risher tells HVAC owners why they're stuck under $1M: their pricing is outdated, set when they worked alone. Most claim they reinvest profits but have no real strategy. He says fix your prices first, not the ad-hoc formula of material times 1.5 plus 10% labor plus $50.
You and I talk to business owners every day and they're like, yeah, we're just not profitable yet. We're just reinvesting everything back in the business. But when I say, well, what are you reinvesting in? They're like, I don't really know. So they really have a plan. They don't have a strategy. Usually comes down to pricing. They just don't have their pricing right. Their pricing was probably from when they were a one man band and they could, this is great, guys. I make a hundred thousand dollars, I can go serve a couple clients, my phone rings a couple times a day. But they've never updated their pricing or actually have a real pricing strategy to be able to afford to scale to 2 million, 3 million. So that's where I'd encourage everybody out there listening, start. If you're just under a million, you probably have somebody answering the phone. You've got a couple people in the field, but you might not be sure, am I charging enough? When I say, well, how do you price jobs? People are like, I take the material, multiply it by 1.5, add 10% to labor, then throw in an extra 50 bucks on top. That's not really a strategy. So you really got to know your numbers.
