The Number You Say Out Loud
Ask an owner how many maintenance agreements they have and you'll hear a number fast. "About three hundred." It comes out the same way every time: at the supply house, at the bank, to the guy from the consolidator who keeps calling.
Now ask where that number comes from. Usually it's the count of customers who signed up at some point. Some of them renewed. Some moved. Some paid once in 2023 and have not been touched since. A few are still on the list because nobody wanted to be the one to take them off.
That's a memory of sales. And it's the number most shops carry into the most important conversation they will ever have about the business.
Why the Book Matters More Than the Revenue
A job list is last year. An agreement book is next year, already sold.
When someone looks at buying a shop, or lending against one, the recurring base is the first thing they want to see. Install revenue swings with the weather and with whoever's answering the phone. A customer who pays you every year to show up twice is revenue that doesn't depend on the owner being in the room.
That is why the book gets picked over harder than anything else. It's also why a soft answer hurts you. "About three hundred" invites the next question, and if you cannot answer the next question, the buyer assumes the worst version of it.
You don't need a formula to see this. A book you can prove is worth more than a book you can describe. A book you can't prove gets treated like it's smaller than you say.
The Four Questions
Anyone serious about your book will ask some version of these. You should be able to answer them on a Tuesday afternoon without calling your office manager.
How many are live right now? Not signed ever. Live: inside their term, not cancelled, not lapsed. An agreement that ended in March and never renewed is a former customer with good memories.
Who's still owed a visit? Every agreement is a promise. Two visits a year means two visits a year, and the customer paid for them. If it's October and 40 of your spring tune-ups never happened, you have 40 customers holding a receipt for work you did not do. That's a liability on the book, and it's the fastest way to lose a renewal.
Who signed and never paid? This one surprises people. A tech sells a plan at the kitchen table, the customer signs, and the payment never lands. Card declined, check never mailed, invoice never sent. The customer thinks they're covered. Your list counts them. Your bank account does not.
How many renewed? The renewal is the only proof the plan is worth something to the customer. A shop that sold 200 agreements two years ago and kept 170 has a different business than one that kept 90, even if both owners say "about two hundred" today.
Live Versus Listed
Start with the first question, because it shrinks the number and everything else hangs on it.
Pull every agreement and sort it three ways: inside its term, past its end date, and cancelled. The middle pile is where the surprise usually is. Agreements lapse quietly. Nobody cancels a maintenance plan with a phone call. They just don't renew, and if nobody's watching end dates, the agreement sits on the list for a year after the money stopped.
Then look at what's coming. Every agreement that ends in the next 60 days is a renewal conversation you either start or lose. Sixty days gives you time to send the offer, follow up once, and have a tech mention it on the next call. Thirty days is a scramble.
Visits Owed
This is the part of the book that turns into a reputation problem.
Here's how it goes. Mrs. Alvarez signs up in April for two visits a year at $189. The spring tune-up happens in May. The fall one gets scheduled for October 14, then the shop gets slammed with no-heat calls, the job gets moved, then moved again, and suddenly it's December. Nobody did it. In April her renewal shows up and she says the thing every owner has heard:
"I paid for two visits last year and you came once. Why would I renew?"
She's right. Nobody undercut you on price. Your own calendar lost her.
The fix is boring. Count a visit as done only when the job behind it is completed, not when it was scheduled. A scheduled visit is a plan. A completed job is a delivered promise. If your system counts scheduled visits as done, your book looks healthier than it is, and you find out the truth one renewal at a time.
Signed, Never Paid
Go find every agreement with a signature and no payment against it. If you collect by card, this is a list you can build in minutes. If half your customers pay by check, it's a manual job, but do it once a year anyway.
Each name on that list is one of three things. A customer who meant to pay and didn't, who will pay the minute you ask. A customer who changed their mind and never told you. Or a billing mistake on your side. All three are worth a phone call, and none of them belong in the number you say out loud.
The Renewal Rate Needs a Real Denominator
Here's the trap with renewal rate. If only six agreements have reached their end date, your renewal rate is a coin flip with a percent sign on it. Five of six is 83 percent, and it means almost nothing.
Wait until a real group has come up for renewal before you quote a rate to anyone. Until then, say what you know: how many came up, how many renewed, and when the next big wave ends. "Forty agreements end between March and May, and that's our first real renewal season" is a stronger sentence than an 83 percent you cannot stand behind.
And count a renewal only when the customer took it. Sending the offer does not count. A shop that counts offers as renewals watches its rate climb every time it asks.
Do the Math on Your Own Book
Skip the industry numbers. Run yours.
Take your live, paid agreement count and multiply it by your annual plan price. That's your recurring base: the revenue that shows up next year whether or not the phone rings.
Now take the agreements with an overdue visit and multiply by the same price. That's the part of next year's base you've put at risk yourself. Say you have 220 live agreements at $189. Your base is $41,580. If 35 of them are owed a visit, $6,615 of that is sitting with customers who have a reason to say no.
Then do the same for the signed-but-unpaid list. That's money you think you have.
Three numbers. They take an afternoon, and they'll tell you more about your book than the count you have been saying for two years.
Even If You Never Sell
Most owners reading this are not selling next year. Doesn't matter.
The same four answers that make a book worth more to a buyer make it worth more to you. Live agreements are the customers you can book in the shoulder season, when the phones go quiet and your techs still need hours. Visits owed are work you can schedule before it turns into a refund request. Unpaid agreements are cash. Renewals are the one signal that tells you the plan is priced right and delivered right.
And the tune-up is where your techs find the next repair. A customer who gets both visits is a customer whose weak capacitor you catch in May, instead of hearing about it in July from somebody else's truck.
The Bottom Line
Your agreement book is worth what you can prove about it. A number you say out loud is a story. A list of live, paid agreements with every owed visit delivered and a renewal history behind it is an asset.
Get the four answers: how many are live, who's owed a visit, who signed and never paid, and how many renewed. If you can answer them in five minutes, you know your business better than most shops your size. If you can't, start there. A buyer's first questions will be the same ones.
Setpoint keeps your maintenance agreements in one book that flags who's awaiting a signature, whose visit is overdue, whose agreement ends in the next 60 days, and, when you take payment through Setpoint, who signed but hasn't paid. A visit counts as done only once its job is completed. See how it works →