A six-van HVAC shop, and what 149 jobs a month actually means

The moment

Brightline Heating & Air runs six vans out of a yard in Dayton, Ohio. Eleven people: six technicians, a dispatcher, an office manager, two apprentices and the owner, who still goes out on the hard calls. Residential service and replacement, almost no commercial.

It is the first week of May. Furnace season ended in March. Air-conditioning season starts when the first hot week arrives, and nobody knows when that is. April was thin. May looks thinner. The owner is sitting in the yard office looking at a bank balance of $61,000 and trying to work out whether that is a lot or a little.

It is neither. It is a number with no meaning attached to it, and that is the actual problem.

What they did instead

The owner did what most owners do, which is to compare the balance to the balance. Last May it was $74,000. This May it is $61,000. That is worse, so something is wrong, so the answer is probably to sell more.

So they spent $2,400 on a direct-mail drop for tune-ups at $89. It brought in 41 bookings. A tune-up at $89 costs about $70 in technician time and a filter, so the drop produced roughly $779 of contribution against $2,400 spent — a loss of about $1,600, on top of six technician days that were no longer available for repair work.

That is not a mistake anybody would call stupid. It is a mistake you make when you do not know what one job leaves behind, because if you do not know that, every booking looks like progress.

The cost of not knowing is not the $1,600. It is the fact that the same decision gets made again in October.

The questions a CFO asks first

In this order, and the order matters.

1. What do you have to pay every month whether the phone rings or not?
2. Does that figure include what you take out of the business?
3. What does an average job bill at?
4. What does an average job cost you in parts and in the technician's hours?
5. How many jobs do you do in an ordinary month?

Question 2 is the one that gets skipped, and skipping it moves the answer by about a fifth. Question 4 is the one most owners cannot answer, and a tool that quietly fills it in with an industry margin gives back a break-even that looks exactly as confident as a real one.

The arithmetic, shown

Brightline's figures. Fixed costs of $58,000 a month — the yard, six van payments and their insurance, the dispatcher, the office manager, dispatch software, general liability, and $9,500 a month for the owner. Average ticket $680. Average direct cost $290, being technician hours and parts. Around 240 jobs in a normal month.

Each job leaves behind $680 − $290 = $390. That is the only number that matters and almost nobody has it written down.

Scenario one — as things stand.

149 jobs. Brightline booked 152 in May. They cleared it by three jobs, which is one bad Thursday.

Scenario two — the owner's pay taken back out.

Strip the owner's $9,500 and fixed costs fall to $48,500. Break-even falls to 125 jobs, $85,000 of revenue, 52% of an ordinary month.

The gap between the two is 24 jobs a month. That is the price of the owner being paid. It is worth seeing as a number, because "the business broke even" and "the business paid me" are 24 jobs apart and the same sentence gets used for both.

Scenario three — the seventh van.

The owner has been thinking about a seventh van for a year. Another technician, another vehicle, another insurance line: about $6,200 a month, so fixed costs go to $64,200. Break-even goes to 165 jobs, $112,200 of revenue, 69% of an ordinary month.

The van costs 16 jobs a month before it earns anything. Not "is it worth it" — 16 jobs, every month, starting the month it arrives.

Scenario four — the one where there is no answer.

If the owner does not know the $290 and does not know the gross margin either, there is no break-even. Not a rough one. The tool returns nothing and says why: without the cost to deliver, the second number does not exist, and a break-even built on someone else's margin is the number you would then run the business on.

That refusal is the most useful thing on the page for about half the people who open it, because it turns "I don't know my numbers" from a vague feeling into a specific missing figure with a name.

What changed

Nothing dramatic. Nobody raised prices.

Brightline stopped counting bookings and started counting the 149. The May mailer became a maintenance-plan renewal push aimed at the plan base, which converts at a far higher rate and costs almost nothing to send.

And the seventh van moved from "when we can afford it" to a specific test: 16 extra jobs a month, sustained through a shoulder season, before the order goes in. That is a smaller decision than it was, and it can now be got wrong on purpose rather than by accident.

What the tool will not do

It will not tell you your gross margin. If you know neither your cost per job nor your margin, it returns no figure at all rather than borrowing an industry average, and that is deliberate.

It will not divide by a contribution of zero or less. If each job loses money, no volume covers the fixed costs, and the tool states that finding rather than printing a target.

It works on averages — one average price and one average cost. A shop where replacements and service calls have very different economics gets a blended answer, and the blend can hide a line that loses money inside a business that does not.

It does not know about seasonality. 149 jobs a month is a monthly figure, and Brightline's May and Brightline's January are not the same business.

It does not tell you what to charge. That is a different question and a different tool.

It is not advice about your business. It is arithmetic on figures you supplied, and if a figure you supplied is wrong the answer is wrong in the same direction.