< Previousnue responsibility of each truck each day. If you don’t know your daily truck requirement, you’ll never know if you’re pricing jobs right or not. If you do know your daily requirement per truck, you can use the following rule of thumb to find a flat rate price for your work: Price of job = (Daily Truck Requirement x Portion of Day) + Parts I’ll break that down. Let’s say your daily re- quirement for a truck is $2,000 per day for a typ- ical service vehicle. That means each day, each truck is responsible for bringing in $2,000 of gross revenue. When you get the job, determine how long it will take. If the job is ¼ of a day, that equals two hours, ½ a day (4 hours), or one full day (8 hours). Why not ¾ of a day? Ha, you know why! There’s no such thing as a ¾ day job! So, if the daily requirement for a truck is $2,000, the breakdown looks like this: ● ¼ day job= $500 ● ½ day job=$1000 ● One day job=$2000. For a ½ day job at this rate, then, the price = (2000 x 0.5) + parts = $1000 + parts. A ¼ day job is $500 + parts. And a 1-day job is $2,000 + parts. Notice I keep saying plus parts! You know that W hat kind of crazy person would choose duct cleaning, duct reno- vation, and duct replacement calls in the heat of a Georgia summer when they could exclusively take HVAC system replacement work? My brother, Dallas, that’s who. Wait! Don’t stop reading! And Dallas, don’t disown me! Now, why oh, why would anyone who knows two cents about HVAC prioritize duct leads during prime system replacement season? And if you do choose any of these leads, how do you price them? So my brother explains it like this: Duct reno- vations can typically be done in less than a day. This summer, he is focused on scheduling three duct cleanings per day at an average of $1,400 per cleaning. These cleanings pave the way to bet- ter efficiency, indoor air quality (IAQ), and health discussions with his customers, leading to duct sealing, renovation, and replacement projects. Maybe Dallas isn’t such a crazy person after all! Perhaps we’ve been missing something! KNOW YOUR DAILY TRUCK REQUIREMENT Many contractors get stuck in the weeds trying to figure out pricing for duct renovations. How- ever, the solution is easier than you might think. The key is to know your daily truck requirement. In other words, you need to know the gross reve- How to Use Flat Rate Systems for Pricing Duct Renovations By Danielle Putnam MANAGEMENT 10 AUGUST 2021HIGH-PERFORMANCE HVAC TODAYHVACTODAY.COMAUGUST 2021 11 Flat-rate pricing screen on an iPad. This doesn’t in- clude any ancillary or upgrade sales pricing, which you should also sell. the prices of parts and materials are increasing and are all over the board right now. You must calculate your parts costs separately, or you’ll never break even, let alone make a profit. This formula works for most types of jobs since it considers the parts vari- able for the type of job you are on as well as the ever-chang- ing cost of parts. What’s the problem with this flat rate formu- la? Just that — it’s a flat rate. This price is just the minimum needed to meet the daily requirement for each truck. If you price at this level, if you don’t close every call, or for the calls you do close, you earn the least amount possible. PRICE VERSUS PRICING PROFITABLY The other problem with this flat rate formula? Not every job has a “min- imum” or basic repair. Some jobs take more skill, time, and work than you might anticipate. So, if you use this formula and find you cannot totally fix the problem at that price, you are do- ing a disservice to your customers, ar- en’t you? That’s when customers don’t receive value for the money spent. So, the above formula is an easy way to flat rate your duct renovations but is the bare-bones minimum. How can you fix this problem? By providing your cus- tomer options to do several levels of ser- vice, you can price your calls profitably. The question isn’t how to price duct renovations using flat rate systems. The question is how to price duct reno- vations profitably. So, you choose. Do you want to price, or do you want to price profitably? If you only want to flat rate price and nothing more, you can stop reading. HIGH-PERFORMANCE HVAC TODAY12 AUGUST 2021 Danielle Putnam is presi- dent of The New Flat Rate – a home service menu-sell- ing system designed to put profit directly into the hands of HVAC contractors. She is a forward-thinking businessperson who helped her father start The New Flat Rate and previously worked as director of business de- velopment for a large digital service firm. She can be reached at ncilink.com/ContactMe. That formula was the whole punch- line. If you are curious about how to make that pricing profitable, keep tracking with me. MAKING MONEY Forty years ago, flat rate pricing did change the way the market worked. But it also made pricing inflexible. All flat-rate pricing means is up- front pricing – upfront, no sur- prises, sell the job, get the check; that’s what it was all about. Making money is about something completely different. You must under- stand what things cost and what will the market bear? Once you know that, you can provide customers with options. Think of it this way: there aren’t two pans for the scale of justice; there are three – a tri-level scale. Those three pans are: ● Our cost, based on calculations like that formula I gave you above. ● What will the market bear? How can you justify your low cost with a market that might bear an incredibly high price? ● Value. By adding value, you can build options and offer your custom- ers choices. We used a third-party research com- pany to do a deep dive into the profit- ability of options, and the results were unanimous: 80% of your customers will choose a higher price over a bottom-floor flat rate price every time. So why, then, would you ever only offer one flat rate price for a duct renovation? It’s a new way of thinking. Take your costs and then look at your assets (what you have that builds value). THE IMPORTANCE OF VALUE Skill, talent, knowledge, craftsman- ship, experience, and tender-loving care will increase the value on top of the cost. It will allow you to go above that flat rate price we just calculated. Let’s break those qualities down to see how we might quantify them. Ask yourself: ● What talent do I have that I can add to my parts and labor to increase the value of this job? ● What knowledge do I have that will increase the value of this job when added to the parts, labor, and talent? I’m suggesting that you may never have thought about how much value each of your assets has that can help you be more profitable. Now watch. Let’s make those valuable qualities concrete, not just hypothetical. Knowledge: what do you know? You know that in your market, duct leakage costs as much as 50% of the ef- ficiency of the equipment. Therefore, you know that duct renovations will make a significant difference, even if you don’t replace the system. That knowledge brings value. What is something you could do with that knowledge – beyond a basic repair – that would be better for the customer and for which you could charge? Talent: Through your experience and training, you know several ways to increase and enhance airflow effi- ciency, functionality, and performance through ductwork. As a result, you can add duct modifi- cations where needed that will improve overall system performance. Do you think that’s worth anything? Skill: Again, your training and experi- ence helped you build the skill and crafts- manship to do a fantastic job using many different methods - whether using bub- ble wrap, fiberglass, or spray foam. You are an expert with many ways to accom- plish this project. Is that worth anything? Wisdom: in HVAC terms, knowledge is gained over time by being exposed to many (often dangerous) obstacles, many instructors, and by trying lots of things. Therefore, your wisdom brings enor- mous value to duct renovations. Plus, the more you do them, the more knowledge and experience you gain, which adds a great value. ADD IN A DASH OF LOVING CARE When people are so happy if you show up and do what you say you will do, tender-loving care adds enormous weight to the value equation. Life is a test; give it a run for the mon- ey! I’ve given you two formulas. Let me now give you this powerful secret for suc- cess: Low Cost Plus High Value Plus Un- derstanding how there is no ceiling to “what the market will bear” equals prof- its never seen before in home services. These are the things you consid- er when you build a menu of options off the calculated flat rate price. Think about what the job requires—that’s the floor. Now dream bigger. What bit more could you do for your customer that they would see as valuable? Then get paid for doing it. MANAGEMENTHVACTODAY.COM the minimum required draft for proper venting. No draft test or smoke test can quantify what is going up a flue, much less if the equipment is vent- ing at all. No test is more misleading or dangerous than a smoke test on nat- ural draft equipment with a drafthood. You will only be guessing if this is how you are measuring! CODES ARE OFTEN NOT GOOD ENOUGH What about combus- tion air? Based on code, adequate combustion air happens if there is an area of 50 cubic feet or a one-square-inch opening to the outdoors (pos- sibly a high and a low opening) per 1,000 Btus of input. Though this may be the proper area or opening to the outdoors, there is no guarantee that air is getting to the equipment. A 2000 ASHRAE study and report found that the approved code on passive combustion air – as cited above — fails to perform adequate- ly under many field conditions. We call this an- other assumption of measurement, and it will leave us guessing! GAS PRESSURE: LEGIT OR NOT? Measuring gas pressure is always recommended, but what kind of diagnostic information does this provide? Utility experts often say that tampering with gas pressure is a significant safety detriment. Are You Measuring and Still Guessing? By Jim Davis TECHNICAL Knowing how to measure is great. But if you don’t understand what the numbers mean, you are just guessing. T he motto at National Comfort Institute (NCI) is, “If you don’t measure, you are just guessing.” However, is it possible that you are measuring and still guess- ing? The answer depends on what you are mea- suring. Do your measurements have real value, or are they just token readings? Do you fully under- stand the meaning of specific measurements? There is an abundance of information available that recommends taking measurements — wheth- er in technical manuals, installation manuals, or on the internet. There is information on venting, combustion air, building depressurization, gas pressure, O 2 , CO 2 , CO, flue temperatures, draft, Delta T, and airflow, to mention a few. How much of this is based on theory, opinion, or actual field testing and verification? OBSERVATION VERSUS MEASUREMENT Something you should eliminate immediately as a diagnostic measurement is smelling!! One re- cent manufacturer’s installation manual recom- mends smelling outside and inside their equip- ment. Another manual tells you to smell the flue cap for proper combustion. Even a gas company wants the installer or service tech to smell around the house for CO! Fact: smelling for proper combustion is not only guessing but also possibly life-threatening. I would place the other human senses (seeing, hear- ing, touching, and tasting) under the observation category rather than as measurements. Let’s start with something as simple as a draft, match, or smoke test. According to many proce- dures or codes, either test is a method to verify equipment is venting. In some cases, a certain value is given to the draft reading based on outside temperatures to establish AUGUST 2021 13HIGH-PERFORMANCE HVAC TODAY14 AUGUST 2021 TECHNICAL Ask yourself this: does 3 1 /₂-in. w.c. equal a certain amount of Btus? Does this verify a proper fuel/air mixture? What is the Btu content in gas? Do you need to know the actual size of the burner orifices? Gas pressure is more of a reference number than a valid measurement to verify proper performance. If this is one of the primary measurements on which you base equipment perfor- mance, you are guessing. GUESSING USING DELTA T? So far, we are using the measure- ments recommended by HVAC indus- try standards or equipment manufac- turer specifications. Another measure ment used for fur- naces is Delta T or temperature rise. One would think that in heating mode, the temperature rise would be consistent regardless of the manufac- turer, model, or equipment size, much like that of cooling equipment. But somehow, this is not the case. Depending on furnace size, you’ll find manufacturer-recommended tempera- ture rises in these general ranges: ● 25 to 55 degrees ● 35 to 65 degrees ● 40 to 70 degrees ● Even 50 to 80 degrees. If you check, you’ll find most heat ex- changer designs are similar, much like evaporator coils for air conditioning. Can the airflow have that wide of a range? Using the formula CFM × Delta T × ADCF correctly, the lower Delta T ranges would require CFMs that are not available. Example: You encounter a 90% ef- ficient furnace rated for 100,000 Btu input and 90,000 Btu output. It has an allowable Delta T of 30°. To deliver 90,000 Btus, you would need a blow- er running at 2778 cfm, which I do not believe is an option. Therefore, setting blower speed by Delta T only, even if within manufac- turer specifications, means you may be measuring, but you are still guessing. USING DIGITAL COMBUSTION ANALYZERS Today, many contractors use digital combustion analyzers to take system measurements. In the past, only oil- fired equipment was combustion test- ed, and that often was done using ob- servational techniques. For gas-fired equipment, if techni- cians observed a blue flame, they con- sidered combustion was good. Talk about guessing without measuring. But with the development of hand- held combustion analyzers, the im- portance of combustion testing all types of fuel equipment is now recog- nized as vital, especially when it comes to carbon monoxide. Yes, even with a blue flame, CO can be in deadly ranges. Digital analyzers measure O 2 (oxy- gen), CO (carbon monoxide), and flue temperature. Other readings include calculations based on interpolation, interpretation, and assumption. As much as manufacturers may not like hearing it, the CO 2 , air-free CO, and other efficiency calculations are mis- leading and still leave us guessing. Before getting into actual measured values, what does a digital combustion analyzer do versus old types of com- bustion instruments? You can com- pare the difference between a sundial to a digital watch or a polaroid camera versus a video camera. The old equipment gave us a sin- gle reading or a still picture. The new equipment does a continuous update of what is happening. It should be standard practice to do a combustion test from the beginning of equipment operation until the very end because of potential unstable or deteriorating combustion. If you use only one reading after five or 10 min- utes, you are measuring but potential- ly still guessing. That would be like taking a single picture of a football game at halftime and then trying to determine who won the game. You may be occasionally correct, but that is still guessing! IMPORTANT MEASURED VALUES Finally, let’s look at the valuable measurements of a combustion ana- lyzer: O 2 , CO, and flue temperature. Just measuring them doesn’t do us much good if we don’t know their proper ranges.HVACTODAY.COMAUGUST 2021 15 Jim Davis is the senior instructor for National Comfort Institute (NCI). He has a long and storied career in the HVAC Industry. That career began back in 1971. Today he is con- sidered one of the HVAC Industry’s foremost authorities on combustion and carbon monoxide safety. Jim is credited with developing the first combustion testing protocols and field diagnostic methodologies using digital combustion analyzers. To contact him, go to ncilink.com/ContactMe . Today the only recognized read- ing is carbon monoxide. The gen- eral industry acceptance is to keep CO below 100 ppm in the flue gases. Occasionally, different carbon mon- oxide ranges show up in recent in- stallations, but mostly on modulat- ing-condensing boilers. Flue temperature ranges are rare- ly listed, which are difficult to de- termine without multiple field ap- plications and testing, given all the variables in the field. The good news is that organizations like National Comfort Institute have established such flue temperature ranges by conducting thousands of ac- tual field tests and applications over the years. These are not things that the manufacturers can control or list. So, you have a combustion analyz- er. You take some measurements. You have no clue if those measurements are good or bad. This is where training comes into play. Understanding what your mea- surements mean cannot be learned from YouTube™ videos. They are not black and white, either. You must learn to interpret those measurements and use the results to diagnose what is happening in the system. NCI offers combustion and CO classes. Learn more here: ncilink. com/COTest. If you don’t know the proper op- erating equipment measurement pa- rameters, even using the latest and greatest digital instruments leaves you still guessing. Measuring is one of the most im- portant things we can do today, and we have the best instruments to take those measurements. However, if we don’t understand the ranges where measurements should fall within or what they mean, we are still guessing. HIGH-PERFORMANCE HVAC TODAY16 AUGUST 2021 “As an HVAC contractor or HVAC technician, you could be held liable for installation or main- tenance mistakes involving furnaces, boilers, and other HVAC equipment.” Thus, every employee who enters a custom- er’s home must perform two must-do safety tests every time. These two tests are: ● Check for the presence of ambient CO ● Conduct a basic building pressure test. Again, because you are the HVAC professional, as- suring customer and employee safety is 100% your responsibility as the business owner or manager. Every building that your people enter poten- tially has excessive levels of CO. The only way to know for sure is to test. A calibrated combustion analyzer in the hands of a trained operator is the most accurate way to do this. The reality is, this can be cumbersome. PERSONAL CO MONITORS LEAD THE WAY We’ve found a much easier way is to have all our field staff wear a belt clip formerly called the CO An- gel, now the Industrial Pro. For around $200 per person, you can assure that no building your people enter has high ambient CO levels. We recommend you provide every field per- son one of these and require them to wear it on every call. I guarantee you will be surprised at how many buildings have an issue with carbon monoxide, and without testing, you would have never known. By the way, Industrial Pro personal monitors are available from National Comfort Institute E very time one of our employees enters a customer’s home or building, we take responsibility to assure both our tech- nician’s and customer’s safety. Case law across America has proven that ignorance of this fact is no defense. Let’s face it. HVAC system failures can and do happen. When someone (a homeowner or your technician) becomes ill or injured from Carbon Monoxide (CO) poisoning, you can be on the hook as the business owner. On the Heating Safety Inspections website, safetyinspections.org, it states, “General- ly, HVAC contractors and HVAC technicians are held legally responsible for HVAC work. Two Combustion Safety Tests You ‘Must Do’ By Tom Johnson TECHNICAL The Industrial Pro is a personal CO monitor that is small enough to clip to your pocket and fit into the palm of your hand. Yet it is powerful enough to measure low levels of CO, down to one part-per-million.HVACTODAY.COMAUGUST 2021 17 Installing a test port is key to accurately measuring static pressures in a building. (NCI). Click here for more informa- tion: ncilink.com/IndPro. The other must-do test is a basic build- ing pressure test. The tools required for this test are quite minimal. You need a battery drill, a drill bit, and a drill bit sleeve to install test ports. You can learn more about adding test ports to an HVAC system here: ncilink.com/TestPorts. You’ll also need to provide a $50 Dw- yer 460 draft gauge (ncilink.com/Dw- yer460) to measure draft. You can then test the draft in any chimney within the building. All chimneys should have a .01- .02-in. w.c. draft in them, or it’s time to start looking for why they don’t. Visual inspections can be beneficial but, you need to learn what to look for in terms of the following: ● All the CO sources within the building ● The visual clues of CO spillage ● The building pressure influencers ● Typical building pressure visual indicators. After you learn and understand these things, you can begin having conversations with your customers about these problems and explaining how to correct them. You will soon find the additional income generated from these two basic tests quickly pay back any educational costs incurred learn- ing how to test and fix these problems. At Summit 2022 in Scottsdale, AZ, I will be hosting a seminar to discuss these topics more in-depth. If you hav- en’t registered yet, click on gotosum- mit.com and get yourself squared away. I hope to see you there. To learn about this subject more in- depth, it would be helpful for you and your technicians to attend the CO and Combustion three-day class to earn certification in these procedures. HIGH-PERFORMANCE HVAC TODAY18 AUGUST 2021 See Tom Johnson During NCI Summit 2022 The High-Performance HVAC Summit 2022 is happening in person from April 4th to the 7th, 2022 at the We-Ko-Pa Re- sort in Scottsdale, AZ. Our theme this year is “ This Time It’s Personal,” and it reflects the first live gathering of High-Per- formance HVAC contractors since the start of the pandemic. Tom Johnson of T.M. Johnson Brothers, Inc., Cam- bridge, MN is one of eight speakers showcasing the postive impact of high-performance on your companies. This article is based on Tom’s upcoming session. Summit 2022 will offer you and your team the opportunity to make it personal: You can customize your program based on where each of your team members are on the Path to Performance . Each breakout has three options, totalling 18 per- sonalized learning opportunities. The options are for those at the Novice level, the Practitioner level, and the Mastery level. Summit 2022 includes NCI’s traditional Tradeshow (where you can learn about the latest products and services from our industry partners), several general ses- sions , the popular Idea Meeting, and their coveted NCI contractor and individual award presentations . You can learn more about the 2022 High-Performance HVAC Summit online at GoToSummit.com . Tom Johnson is a Plumb- ing and HVAC contractor from Cambridge, MN. Johnson has more than 40 years of industry experience and 10+ years of experience in the area of testing and repairing CO problems in the field. If you have questions on combustion safety, he can be reached at ncilink.com/ContactMe . TECHNICAL Watch for more NCI information as several such classes will be held around the country this fall and winter. Look for one coming to an area near you. Furthermore, the Safety Inspection website has some reference tools you can use to keep you, your teammates, and your customers safe. Check them out here: safetyinspection.org/ references. ● Service First Pros, LLC, Auburn, GA ● SoCal Airflow Pros , Rancho Santa Margarita, CA ● SOCO Heating & Cooling , Colorado Springs, CO ● Southern Plumbing, Electrical, Heating and Air, Aiken, SC ● SuperTech HVAC Services, Timo- nium, MD ● Texas AirZone , Dallas, TX ● The Lee Thompson Co. , Houston, TX ● Top Tech Mechanical Services, Inc., Kennesaw, GA ● Vailes Heating & Air , Staunton, VA ● Van’s One Hour Heating and AC Inc., De Pere, WI ● WCT System Repair , Hialeah Gar- dens, FL. We are pleased you all opted to join our family and look forward to hear- ing from you. Please look for regular member benefits updates here and in our digital magazine. If anyone has questions about their membership, please call our Customer Care line at 800-633-7058. Welcome New NCI Members Membership in an organization like National Comfort Institute (NCI) is a step toward becoming a Perfor- mance-Based Contracting firm. It is a commitment that has an extraor- dinary impact on your business and your team. So, it is our pleasure to recognize and welcome those new members who joined our ranks since December 2020: ● A/C Pros Kingman, Kingman, AZ ● Balancing Technologies Inc., Pep- perell, MA ● Bruin’s Plumbing and Heating Ltd., Red Deer, AB ● Cool Comfort Services , Plymouth, MA ● Fixed Right and Guaranteed , Hun- tingtown, MD ● Home Heating & Cooling , Bend, OR ● Kuhn Air Conditioning , Nashville, TN ● Paramount Heating and Air Condi- tioning LLC, New Albany, OH ● Picture Rocks Cooling Heating and Plumbing , Tucson, AZ ● RES Air Cond. , Henderson, TX ● SABRS Home Comfort , Lewes, DE NCI UPDATE Ladies and Gents: Your August PowerPack is Ready! Membership does have its priv- ileges and the monthly Power- Pack is one of many you receive as an NCI member. Hopefully, you took advantage of all the great tools from your July PowerPack, which included tools and training focused on energizing your team as you integrate testing and diagnostics into your company’s culture. This month we focus on field measurement tips and tools. Please Note: Some of the tools included in the PowerPack each month may not nor- mally be accessible with your membership subscription package. However, you will be able to access these tools through this PowerPack portal during the current month. We think you’ll find these materials very helpful as you continue to grow your High-Performance HVAC business. The August 2021 Power Pack consists of the following: ■ System Temperature Measurement Basics (Online Training) ■ Enthalpy Chart (Download) ■ CoolMaxx™ Report and Procedure (Download) ■ Measuring Wet Bulb Temperature Tech Tip (Download) . Be sure to share the August PowerPack with your entire team. Just go to ncilink.com/PwrPak to access it today. If you have any questions or cannot access any of the tools in this program, please contact us at 800-633-7058. AUGUST 2021 19HVACTODAY.COMNext >