Example Income Statements

(Showing the Value of Selling the "Good Stuff")

Smart Dealer

Typical HVAC Dealer

Sales
Direct Costs
Labor
Material
Equipment
Total Direct Costs
Gross Margin (GM)

$3,667 100%

$3,667

$100
$100
$2,000

$100
$100
$2,000 *

Overhead (OH)
Net Profit Before Taxes
*
**

*
*
*

100%

$2,200

60%

$2,200

60%

$1,467

40%

$1,467

40%

$1,283

35%

$1,283

35%

$183

5%

$183

5%

Dealer Inputs
Consider Liability Insurance - Approx. 1%-2% of Increase in Sales Price

**

Smart Dealer

Typical Dealer

After Changing Mix To:

#DIV/0! = High Efficiency

Standard
Equipment
Number of Jobs Per Year
Net Profit Per Job
Total Annual Profit
Effects on:

* Dealer Inputs

High
Efficiency
*

$183

$183

$0

$0

Standard
Equipment

Total

0
$183

$0

Employee Morale? Marketing? Referrals? Warranty Work? Employee Turnover?

Ability to Hire the Best People? Owner's Motivation? Company Culture?

Effects of Raising Price

Typical HVAC Dealer

Smart HVAC Dealer

Percent Price Increase =
Percentage of Jobs Lost =

Sales
Direct Costs
Labor
Material
Equipment
Total Direct Costs

$3,667 100% Sales

$3,667 100%

$100
$100
$2,000
$2,200

Direct Costs
Labor
Material
Equipment
60% Total Direct Costs

$100
$100
$2,000
$2,200

60%

Gross Margin

$1,467

40% Gross Margin

$1,467

40%

Overhead

$1,283

35% Overhead

$1,283

35%

$183

5%

Net Profit Before Taxes

$183

5% Net Profit Before Taxes

Typical HVAC Dealer

Smart HVAC Dealer

After Changing Mix To:
#DIV/0! = High Efficiency

AND Raising Price

Number of Jobs Per Year

Net Profit Per Job
Total Annual Profit

Effects on:

0%

Standard
Equipment

"Good Stuff"
Equipment

Standard
Equipment

Total
Jobs

0
$183

0
$183

0
$183

0
#DIV/0!

$0

$0

$0

#DIV/0!

Employee Morale? Marketing? Referrals? Warranty Work? Employee Turnover?

Ability to Hire the Best People? Owner's Motivation? Company Culture?

Typical HVAC Dealer

"Good Stuff" Dealer

After Changing Mix To:
0%
AND Raising Price
0%
AND Getting More Referrals
AND Marketing Aggressively

Standard
Equipment

"Good Stuff"
Percentage
*

Number of Jobs Per Year

Net Profit Per Job
Total Annual Profit

Effects on:
* Dealer Inputs

0
$183

$0

$183

Number of
Standard
Equipt. Jobs
100%

High Efficiency

Percent
Increase in
Total Jobs
*

$183
+

Employee Morale? Marketing? Referrals? Warranty Work? Employee Turnover?

Ability to Hire the Best People? Owner's Motivation? Company Culture?