A heat-pump line pays for itself when the gross margin from new jobs, added up month by month, covers what you spent to launch it, plus any margin you lost from work it replaced. That point is the break-even month. You can estimate it with five numbers you already have, and it is the most useful single figure in any launch decision.
This guide shows the method with a worked example. The figures are illustrations, not industry averages. Replace every one with your own before you decide anything.
The five numbers you need
Break-even comes down to five inputs, and most owners already have four of them in their job software.
- Launch costs (one-time). Training fees and hours, tools, early slow jobs, website pages, launch marketing, and any supplier stock commitments.
- Gross margin per heat-pump job. Price minus equipment, materials, labour and subcontracted work such as electrical upgrades.
- Jobs per month, by month. Not a flat number. A ramp that starts slow and grows.
- Cannibalisation. The share of heat-pump jobs that replace a furnace, boiler or AC job you would have won anyway, and that job's margin.
- Ongoing monthly cost of the line. Extra advertising, software, insurance changes or time spent on program paperwork.
A worked example
Here is a company we will call Example Heating, an established furnace and AC business in a mid-sized Canadian city. All figures are invented for illustration.
Launch costs
| Item | Cost |
|---|---|
| Crew training fees and travel | $6,000 |
| Training hours (3 people × 40 hours × $60 lost earnings) | $7,200 |
| Tools and test equipment | $5,000 |
| First five jobs run slower than normal (extra labour) | $4,000 |
| Heat-pump pages and launch marketing set-up | $8,000 |
| Total launch cost | $30,200 |
Margin per job and cannibalisation
Example Heating expects an average heat-pump job to carry $4,000 of gross margin. Its average furnace replacement carries $2,800. It estimates that 40% of its heat-pump jobs will be homeowners who would otherwise have bought a furnace from them.
So each heat-pump job adds, on average:
- 60% of jobs are new work: full $4,000 margin
- 40% replace a furnace: $4,000 − $2,800 = $1,200 net gain
Net margin added per job = (0.6 × $4,000) + (0.4 × $1,200) = $2,400 + $480 = $2,880.
Ongoing cost
Extra paid search and paperwork time: $1,500 per month.
The ramp
| Month | Jobs | Net margin added | Ongoing cost | Monthly net | Cumulative (after launch cost) |
|---|---|---|---|---|---|
| 1 | 1 | $2,880 | $1,500 | $1,380 | −$28,820 |
| 2 | 2 | $5,760 | $1,500 | $4,260 | −$24,560 |
| 3 | 2 | $5,760 | $1,500 | $4,260 | −$20,300 |
| 4 | 3 | $8,640 | $1,500 | $7,140 | −$13,160 |
| 5 | 3 | $8,640 | $1,500 | $7,140 | −$6,020 |
| 6 | 4 | $11,520 | $1,500 | $10,020 | +$4,000 |
Example Heating breaks even in month 6. After that, each month at four jobs adds about $10,000 of net margin.
Stress-test the answer
A single answer is not enough; you want to know how fragile it is. Change one input at a time and watch the break-even month.
- Margin drops to $3,200 per job (more complex homes than expected). Net per job falls to about $2,080, and break-even moves to month 8.
- Cannibalisation rises to 70%. Net per job falls to about $2,040, and break-even also slips to month 8.
- Ramp is half as fast. Break-even moves out to month 11.
- Launch marketing costs double. Break-even moves out by about a month, to month 7.
If every reasonable bad case still pays back within a period you can fund, the line is sound. If one bad case pushes break-even past two seasons, fix that risk first, usually through offer design or a sharper first customer in the launch plan.
Funding the gap before break-even
Every launch has a stretch where it costs more than it earns, and you need to fund it. In the example, Example Heating is about $28,800 out of pocket at its lowest point, in month one. Know your equivalent figure before you start, and decide where it comes from: retained earnings, a line of credit or a slower launch that spends less up front.
A slower launch is often the overlooked option. Starting with existing-customer outreach rather than paid search, and adding heat-pump pages to your current site rather than building a new one, can cut launch costs significantly. It usually pushes break-even out by a month or two but lowers the amount of money at risk. For many owners, that trade is worth making. Talk to your accountant or lender about financing; we can only help you model the marketing side.
Where owners get this wrong
Counting rebates as margin
Program money goes to the homeowner, not to you, and programs change. As of October 2026, several heat-pump programs across Canada had closed that summer while a new federal rebate had been announced but was not yet open. Keep programs out of the base case.
Forgetting crew capacity
The model assumes you can actually do four jobs a month. If your crew is fully booked from November to February with no-heat calls, your heat-pump capacity may be lower in winter than in spring. Use your real calendar.
Treating the first jobs like normal jobs
Early installs take longer. Budget for it, as Example Heating did, rather than discovering it in month two.
Ignoring the service tail
A heat-pump customer on a maintenance plan pays you every year. Leaving that out understates the long-run value. We usually show it as a separate line so the break-even stays conservative.
Spending on ads before the list
Your existing customers produce the cheapest early jobs. In the example, if three of the first eight jobs come from outreach to past customers rather than paid search, the ongoing cost falls and break-even comes sooner. See existing-customer conversion.
Make your own version
Copy the table structure into a spreadsheet: five inputs at the top, one row per month, and a cumulative column. Then run three versions: expected, cautious and bad. Bring all three to any conversation about financing, partners or hiring.
If you'd like help building it from your real job data, the launch plan service includes the full model. Our launch sequence guide shows where break-even fits in the first 120 days. Call, text or email to talk through your numbers.
Frequently asked questions
What counts as a launch cost?
Training time and fees, unpaid hours spent on early slower installs, tools and test equipment, launch marketing, website pages and any supplier minimum orders. Count the crew's training hours at what those hours would otherwise have earned.
Should rebates be included in the model?
Leave them out of your base case. Programs change, and a model that only works with a specific rebate is fragile. Run a second scenario with program-driven demand if you like, but plan cash flow on the base case.
What is a realistic ramp-up?
That depends on your list, market and crew, so we don't quote a typical figure. Model a slow start, for example two jobs in month one rising over six months, and see whether the line still pays back within a period you can live with.
How do I account for losing furnace or AC jobs?
Estimate how many heat-pump jobs replace a job you would have won anyway, and subtract that job's margin. If the heat-pump margin is higher, cannibalisation still adds money; if it is lower, it costs you.