Start with the cost of fulfilling the agreement
An agreement brings a future obligation as well as recurring revenue. Before setting a monthly fee, estimate the number of included visits, labor time, travel costs, materials, and annual administration. Enter costs—not customer-facing selling rates—so the target contribution is added only once.
The calculator totals those costs, then divides by one minus the target contribution margin. It shows an annual plan price and a monthly equivalent. The monthly figure is the annual price divided by 12; it does not assume a discount for annual payment.
A two-visit HVAC maintenance plan
Suppose each visit requires 1.5 technician hours at a $45 loaded labor cost, $20 of travel cost, and $25 of materials. Two visits plus $24 of annual administrative cost produce $249 in annual fulfillment costs. These are illustrative assumptions, not a recommended maintenance price.
| Component | Example |
|---|---|
| Labor per visit: 1.5 × $45 | $67.50 |
| Travel + materials per visit | $45.00 |
| Two visits + annual administration | $249.00 |
| Annual price at 30% contribution margin | $355.71 |
| Monthly equivalent, rounded to cents | $29.64 |
| Annual contribution before other costs | $106.71 |
- Monthly and annual billing totals can differ slightly after cent rounding; set the final billing amounts deliberately.
- This contribution covers any overhead and costs you did not enter. It is not automatically net business profit.
- If your loaded labor rate already includes travel or administration, leave those duplicate cost entries at zero.
Keep additional sales separate from plan pricing
Repairs and replacement work may follow a maintenance visit, but they should not be assumed to make every underpriced plan profitable. This tool intentionally excludes unearned additional revenue. Measure that revenue separately when evaluating an established plan.
Before launching a plan, check what your price includes: visit frequency, equipment count, filters, priority scheduling, discounts, and service exclusions. Add expected payment fees or other allocable costs to your cost inputs where appropriate. Model more labor time or higher material costs to see whether the plan remains workable.
Questions before you set your price
Is contribution margin the same as net profit?
No. Contribution here is the plan price minus the fulfillment and administration costs entered. Any overhead, fees, or other costs you leave out still need to be funded from that amount.
Should I use my billable rate as the labor cost?
Use a loaded labor cost for delivering the visit, not the sell rate that already contains your full profit target. Otherwise you risk adding a profit allowance twice.
Does the calculator include equipment replacement revenue?
No. It prices the visits and other costs you enter. Additional repair and replacement sales should be measured separately rather than treated as guaranteed revenue.
Can I use this for more than one unit?
Yes. Enter the total technician time and material cost per visit across all equipment included in the plan. If different units have different visit frequencies, model them separately or combine their actual annual costs carefully.
Does this produce a service contract?
No. It produces a pricing worksheet. Define the services, exclusions, billing terms, and other agreement requirements separately before offering a plan to customers.
