A Guide to Air Duct Cleaning Business Profits [2024]

How Profitable Are Air Duct Cleaning Businesses?

While air duct cleaning businesses are known for their recession-proof nature and flexible schedules, the real benefit lies in their impressive income potential.

An industry report by Fact.Mr forecasts that the global HVAC cleaning services market will reach $17.4 billion by 2032, with a steady annual growth rate of 4.3 percent.

Another report from IBISWorld values the United States’ air duct cleaning industry—which has been increasing at a CAGR (compound annual growth rate) of 0.7 percent since 2019—at $1.1 billion.

Although these numbers are attractive, a duct cleaning company's profitability depends on various factors, which we will examine in detail in the next section.

Note: Find out how to start your own air duct cleaning company.

What factors can affect the profitability of an air duct cleaning business?

Air duct cleaning businesses’ profitability depends on the following factors:

• Upsell rate: Upselling customers on additional services generates higher revenue per job, boosting your profits. Completing multiple services in one customer visit reduces operating costs, such as fuel.

• Service quality: Delivering high-quality services attracts new customers and convinces them to leave positive online reviews, return, and refer others to you. This increases customer retention and referral rates, leading to higher profitability.

• Job completion rate: Job completion rate is the number of jobs your team finishes within a given timeframe, typically a day, week, or month. Completing more jobs daily lets you service more customers, generating more revenue.

• Season: Most customers prefer cleaning their air duct in the winter to get rid of built-up dust. Therefore, you can expect to experience increased profitability at that time of year.

• Unexpected events: Supply-chain disruptions, global health emergencies like COVID-19 and economic recessions can lower customer demand and reduce profitability.

• Region’s market demand: The profitability of your duct cleaning business hinges heavily on regional demand for HVAC system cleaning services—the higher the demand, the greater the profitability. The market size depends on your region’s living costs, population density, and dust storms and allergens exposure.

• Local competition size: A high number of competing businesses can reduce profitability. You will have to reduce profit margins by offering discounts to attract potential customers and invest more in marketing and advertising, which impacts your bottom line.

How Can You Calculate The Profits of an Air Duct Cleaning Business?

Determining your company’s profitability starts with calculating key profitability indicators.

To explain how to perform each calculation, we’ll use a fictional air duct company called A, generating $500,000 in sales revenue. Service costs amount to $100,000, operating expenses amount to00,000, and taxes total $20,000.

Operating profit

This is the amount left after subtracting the expenses you incur when delivering your services, except taxes. Such expenses include your operating costs (e.g., utilities and marketing expenses) and the cost of services (the labor and material cost of each service). 

Operating profit is calculated by this formula.

Operating profit = (sales revenue – cost of services) – operating costs

For example, company A’s operating profit is:

($500,000 – $100,000) – $300,000 = $100,000

Operating profit can be expressed as a percentage of revenue, to produce the operating profit margin.

Here’s the formula:

Operating profit margin = operating profit/sales revenue x 100

Using the above formula, company A’s operating profit margin will be:

$100,000/$500,000 x 100 = 20%.

This means company A converts 20 percent of its revenue into operating profit.

Gross profit

This is the difference between your company's total revenue and expenses directly tied to delivering your service (cost of services), except taxes. Here’s the formula.

Gross profit = sales revenue – cost of services

Using the above formula, company A’s gross profit is:

$500,000 – $100,000 = $400,000.

Gross profit margin indicates your profit on each job compared to the resources it consumed—labor and material costs. Here’s the formula:

Gross profit margin = gross profit/sales revenue x 100

Using this formula, company A’s gross profit margin is:

$400,000/$500,000 x 100 = 80%

Net profit

This is your company's actual profit. It indicates your company's profit after you've accounted for all expenses, including taxes and interest.

The net profit formula is given by:

Net profit = total sales revenue – total expenses (i.e., the sum of service costs, operating costs, and taxes)

This means that company A’s net profit is:

$500,000 – ($100,000+$300,000+$20,000) = $80,000

Net profit can be used to calculate the net profit margin, which indicates whether operating and overhead costs are under control and whether you're generating enough profit to remain operational.

The net profit margin formula is given by:

Net profit margin = net profit/sales revenue x 100

Going by the above formula, company A's net profit margin is:

$80,000/$500,000 x 100 = 16%

How Can You Increase Air Duct Cleaning Business Profits?

Here are some excellent strategies for generating additional revenue and boosting your company’s profitability.

1. Have a pricing strategy

A pricing strategy involves valuing your service, considering economic conditions, overheads, competition prices, your target market’s willingness to pay, and the perceived value of your services.

Your pricing strategy is a key element that affects profitability. It can attract or repel potential customers and determines your ability to compete and generate repeat business.

Here’s a step-by-step process for building a pricing strategy:

• Compute your fixed costs (rent, salaries, and insurance) and variable costs (labor rate and material costs).

• Understand customers' perceived value of your services and how much they're willing to pay.

• Check your competitors' prices to find what customers are paying.

• Determine your target profit margin.

• Pick a billing method—hourly, flat rate, or hybrid pricing.

• Monitor and change your prices to adapt to evolving market conditions and competitors' prices.

Recognizing the significance of a great pricing strategy to an air duct company's profitability, ServiceTitan created the Pricing Builder tool. 

It automatically calculates your prices using billable hours, material costs, and equipment costs specified in your price book. It also lets you create different price tiers to match each project’s complexity, ensuring your prices are always accurate.

In a recent webinar, ServiceTitan principal product manager Eyal Binshtock, and Chris Hunter, founder of Hunter Super Techs and current ServiceTitan principal industry advisor, explain how this tool increases profitability.

“The investment you make in your pricebook pays off in spades,” Binshtock says. 

“What we see are pricebooks that are fully fleshed out—you've got really solid marketing, materials and equipment linked, recommendations and upgrades linked up—on average, we see a 13 percent increase in revenue compared to those at the bare minimum adoption. That's a big deal.”

2. Invest in marketing

A key part of boosting revenue is attracting the right customers using marketing. 

Implementing marketing strategies also builds your brand awareness, positioning your company as the top choice for people who need air duct cleaning services.

Here are some marketing strategies for boosting your revenue:

• Email marketing: Send personalized content to prospective and existing customers. You can segment your audience using ServiceTitan’s Marketing Pro Email platform to send them content tailored to their current needs.

• Local Services Ads (LSAs): Sign up for Google’s Local Services Ads offering to generate leads directly from search engine result pages (SERPs). To ensure you don’t lose potential revenue, consider using ServiceTitan’s Local Services Ads integration to pull all job bookings from your LSAs directly into your ServiceTitan dashboard.

• Direct mail: Send marketing materials such as brochures and free estimates directly to prospects’ mailboxes. Use professionally designed templates on ServiceTitan’s Direct Mail platform to create your mail to save design costs.

• Referral marketing: Offer rewards such as free inspections and service discounts to incentivize customers to refer your services to others.

• Social media marketing: Develop a presence on social media platforms such as TikTok, Instagram, and Facebook. Participate in industry-relevant content and post funny memes and behind-the-scenes videos. You can also run paid ads to reach a wider audience beyond your followers.

• Strategic business partnerships: Partner with local complementary businesses to run cross-promotional offers, offer discounted bundle packages, and generate referrals.

Rather than relying on trial and error or tracking only calls and clicks, consider using ServiceTitan’s Home Services Marketing platform to track each marketing campaign’s revenue.

The platform lets you create and assign unique phone numbers to each campaign, so ServiceTitan’s system can tell you the exact campaign source of each customer call.

Using an intuitive dashboard, the platform also displays each campaign’s revenue and performance. This can help reduce operational costs by allowing you to pause poorly performing campaigns and reallocate more resources to those performing better.

3. Increase recurring revenue

Recurring revenue is money generated from repeat business or returning customers. Increasing recurring revenue boosts customer lifetime value, ensuring a predictable and stable cash flow.

Here’s how to increase your recurring revenue.

• Generate more leads.

• Improve your lead conversion rate.

• Offer discounts.

• Create service-level agreements (also known as home service contracts or memberships).

• Encourage technicians and customer support staff to sell service contracts by rewarding those who do so. 

Instead of using manual processes to create and maintain service contracts, consider using ServiceTitan's Service Agreement platform.

The platform helps you create service agreements from scratch, using fully customizable templates containing vital service agreement details such as:

• Service type

• Service and billing frequency

• Contract duration

• Pricing

• Membership type

After creating a service agreement, you can easily integrate with ServiceTitan's Service Scheduling and Field Service Dispatch platforms to ensure no visit is missed.

Using ServiceTitan's Service Agreement platform, you can access each contract’s profitability projection report to ensure you’re profitable while discounting your services.

Finally, ServiceTitan's Service Agreement platform lets you automate agreement renewals to maintain recurring revenue. Customers also receive a notification weeks before their contract expires, maintaining transparency.

4. Identify where costs can be reduced

Air duct companies can increase their profit potential by reducing the expenses incurred in delivering their services without sacrificing service quality.

Cost reduction eliminates excessive expenditures while maintaining the same service volume. It's essentially doing more with less.

That said, temporary decreases in material costs and labor costs caused by changes in economic conditions do not qualify as cost reduction processes.

Some cost-reduction processes you can implement include the following:

• Automate or outsource tasks such as accounting to cut labor costs

• Opt for energy-saving devices to cut down electricity consumption

• Negotiate fee reductions and trade discounts with suppliers

• Reduce office space to scale down utilities

• Allow some office staff to work remotely

• Allocate resources to only high-performing marketing campaigns

5. Offer additional services

Offering additional services, such as air purification and mold removal and remediation, can help you generate more revenue. Customers prefer using one service provider to solve all their air duct cleaning needs, which builds trust.

Beyond creating multiple revenue streams, offering a more comprehensive range of services can position you as an indoor-air-quality expert that customers trust, boosting profits.

Another way to offer additional services is to strategically upsell extra services to customers and provide multiple service tiers for different budgets.

However, this requires a streamlined approach, where ServiceTitan's Customer Financing platform is handy.

This tool streamlines the process of displaying good-better-best options to customers, highlighting the potential cost savings they will enjoy using financing.

ServiceTitan's Customer Financing platform also lets you create custom rules based on the business size and ticket, ensuring your bottom line is always protected.

6. Invest in customer experience

Delivering exceptional customer service generates referrals and repeat business, increasing your revenue.

Satisfied customers are also more likely to leave positive online reviews, which boosts your online reputation and attracts new customers through the power of social proof.

A key part of investing in customer experience is using the right technology to facilitate communication and continuously update customers throughout the job cycle.

ServiceTitan’s Customer Experience platform is created to streamline customer interactions, allowing customers to contact you directly and book appointments. It also offers tools for:

• Recurring services management: Lets you create, manage, and edit recurring services.

• Customer notification: Keeps customers updated on job status and helps them participate in surveys, confirm appointments, and ask questions.

• Sales opportunities and unsold estimates: Helps to plug potential revenue losses.

• Integrated SMS: Empowers customers to contact you from their mobile device.

With these ServiceTitan tools, you can deliver exceptional customer service, grow a loyal customer base, and continuously generate new business.

7. Identify areas for improvement

Continuous tracking of business performance insights helps entrepreneurs identify areas for improvement and spot potential resource waste early before it impacts their bottom line. 

This proactive approach saves money, boosts efficiency, and keeps your business on track for success.

Here are KPIs (key performance indicators) you can track to measure your company’s performance and spot areas for improvement:

• Customer-centric KPIs like customer retention rate, average response rate, customer satisfaction rating, and average complaint resolution rate.

• Operational efficiency metrics like job completion rate, cost- effectiveness, and return on investment (ROI).

• Marketing metrics such as website traffic, lead conversion rate, and click-through rate.

• Sales KPIs like customer lifetime value, customer acquisition cost (CAC), and the number of engaged leads.

• Human resource metrics like employee retention rate, total number of overtime hours, employee satisfaction, and employee turnover.

• Financial KPIs like gross margin, monthly recurring revenue, profit margin, total billed hours, and operating cash flow.

You can use an analytics and reporting tool designed specifically for home services businesses, like ServiceTitan’s Field Reporting software to measure these metrics.

It lets you track key business performance metrics using custom and system-designed dashboards. These dashboards reveal:

• Revenue growth by custom date ranges.

• Transactions data by date range.

Technician and customer service representatives (CSR) performance data.

Also, ServiceTitan’s Field Reporting software's cloud-based feature allows you to access performance metrics from anywhere with an internet connection. 

This unrestricted access empowers you to work on your business, making strategic decisions based on data rather than being chained to your desk working in the business. Justin Tarr, owner of Daffy Ducts, alludes to this. 

“I wanted to grow this business so our trucks could become their own business units,” he said. “And how do I measure those things on an individual basis?

“None of the software we had previously allowed me to do anything remotely close to that. But ServiceTitan had it all and has added so much more since then that really makes it easy and effective for us to manage the way that we want to manage.”

Recommended read: Check out ServiceTitan’s Service Grader tool to measure your company’s health.

8. Improve inventory management

Ensuring effective inventory management is an excellent way for air duct cleaning companies to boost profitability. It prevents overstocking of supplies and materials, stops waste, and frees up capital to invest in other areas.

Effective inventory management also helps ensure that all air duct cleaning equipment is in top shape and that technicians have the necessary tools and materials to handle each work order.

This minimizes downtimes and delays, improving job completion rates and generating more revenue.

Invest in specialized software instead of spreadsheets and clipboards to eliminate confusion and streamline inventory management.

ServiceTitan’s all-in-one air duct cleaning software has a built-in Inventory Management platform that facilitates inventory tracking and integrates with other tools to automate key business processes. 

Companies that use ServiceTitan’s Inventory Management platform can do the following:

Track equipment, tools, and materials: The platform’s Item Overview report displays real-time inventory levels, allowing you to maintain optimum stock levels.

Manage purchase orders: This allows you to manage purchase orders in one place.

Create inventory templates: You can allocate items to different trucks and warehouses.

Automate replenishment: This platform automatically adjusts your replenishment schedule whenever technicians add items to customers’ invoices via the Mobile App. Thus, you can maintain preferred inventory levels in each location.

These features jointly streamline the inventory management process, ensuring tools, equipment, and materials are in optimum condition and are available in the right quantities.

9. Serve more customers

An air duct cleaning company's success hinges on technician efficiency—more completed jobs translate to higher revenue. 

For example, a team that tackles four jobs daily generates significantly higher revenue than one managing only two.

Although increasing technician efficiency and job completion rates increase revenue, it’s essential to be wary of burnout and overworked technicians.

So, instead of indiscriminately stacking work orders on each of your technicians to generate more revenue, implement the following tips:

• Motivate technicians with efficiency bonuses and little rewards such as public recognition to be efficient.

• Design standardized workflows for repeatable jobs such as invoicing and pre-job checklists to allow technicians to focus on their primary job—cleaning air ducts.

• Appreciate technicians' efforts so they will go the extra mile.

• Digitize forms, job reports, and post-job surveys to reduce time spent searching for paper documents.

• Optimize schedules and workloads to minimize travel time between jobs.

Consider using ServiceTitan’s Scheduling and Dispatch platforms to boost technician efficiency.

ServiceTitan’s Scheduling platform gives dispatchers a bird's-eye view of each technician's progress with each job. 

This real-time visibility allows dispatchers to strategically queue up new jobs for technicians nearing the completion of their current project, eliminating downtimes between jobs and increasing productivity.

ServiceTitan’s Scheduling feature also allows you to schedule and prepare for jobs requiring special expertise weeks and months ahead so the right technicians are assigned to the right jobs.

ServiceTitan’s Dispatch platform empowers customers to confirm appointments via SMS. These appointment confirmations automatically reflect on your dispatch board, reducing wasted time and missed appointments.

Also, the platform’s route-optimization feature allows dispatchers to assign jobs according to traffic conditions and the technician’s current location, reducing travel time.

This way, technicians can complete more jobs in less time, boosting revenue.

10. Empower your employees

Even the most experienced and technically competent air duct cleaning technicians require technological support to elevate their performance.

They need the right tools to be more productive, close more deals in the field, and engage with customers.

Recognizing the importance of empowering employees with the right technologies, ServiceTitan created Call Booking software and the Field Service App.

With the Call Booking software, CSRs can record every incoming call and view customers’ critical property data, such as property age, size, and previous maintenance runs. This empowers CSRs to deliver personalized services, and spot upsells.

Additionally, CSRs can review past conversations and gain valuable insights for delivering quality service to other customers.

Furthermore, ServiceTitan’s Field Service App allows technicians to access all customer intake data and collect credit card, cash, and cheque payments.

Technicians can also switch to the app’s presentation mode, which resembles conventional shopping interfaces, putting customers in charge of the checkout process.

This display makes it easier for technicians to sell to customers in the field without the struggle of crafting sales pitches, generating more revenue.

Over to You

Tracking and monitoring your profitability is key to staying competitive and operational.

Investing in marketing, increasing revenue, and serving more customers will help you remain profitable.

To further boost your profitability, consider using comprehensive air duct cleaning business software like ServiceTitan to automate key business processes and increase employee productivity.

ServiceTitan is a tool home service businesses use to streamline their operations, manage resource allocation, grow their customer base, and boost profitability. Book a demo to join the thousands of contractors using the software to increase their revenue.