Maintenance Contracts: The Annuity for Your Business

Geoff Farinha calls maintenance contracts "the annuity for the business."

And then he said something that surprised me: "We do it in a way where we're not looking to necessarily make money."

Wait. You're not trying to make money on maintenance contracts? Why bother?

Because the maintenance contract isn't the point. It's the door.

The Door Opener Strategy

USI HVAC serves commercial buildings across New England—office space, labs, pharmaceutical facilities, universities, retail, banks. They're not residential. They're not restaurants. They're the company you call when your 50,000 square foot office building's HVAC system needs attention.

Here's how their maintenance contracts work:

They go in, change the filters and belts, grease the bearings, tune up the equipment. Standard stuff. But then they put together a report: these repairs need to happen now, plan for this, budget for this replacement when the time comes.

That report is the real product. The maintenance visit is just the vehicle to deliver it.

"It's the way to open the door to that client for us," Geoff explained. The maintenance contract gets them inside the building, builds the relationship, and positions them for the bigger work—the repairs, the replacements, the construction projects.

Why This Matters for Every Service Business

I've been thinking about this model a lot since our conversation. Most service businesses price their entry-level offering to make money. That makes sense on paper—why would you do work that doesn't generate profit?

But Geoff's approach flips that logic. The entry-level offering isn't about profit. It's about access. Once you're inside, once you've proven yourself, once you know the building and the client knows you—that's when the real revenue shows up.

Think about it from the customer's perspective. If your HVAC system breaks down at 2 AM in January in Boston, who are you going to call? The company that already knows your building, already has a relationship with you, already did that maintenance report showing which equipment was at risk? Or some random contractor from a Google search?

The maintenance contract isn't charity. It's a long-term positioning play.

Relationships in a Small Industry

Geoff made another point that connects to this: "Relationships are truly key. Especially in Boston. It's a very small and incestuous industry to be honest with you. Everyone knows everyone."

This cuts both ways.

"We get brought into new buildings because a facility manager will leave his current company, go to a new building and bring us along with him. We also lose properties because of that same thing happening in reverse to us as well."

So the relationship with the person matters as much as the relationship with the building. Facility managers move around. If they had a good experience with you, they bring you with them. If they didn't, they bring your competitor.

The maintenance contract is how you build that relationship over time. You're not just servicing equipment. You're proving yourself to a person who will eventually move to another building and need to decide who to call.

The Math Behind "Not Making Money"

Let's think about this economically. Say you break even on a maintenance contract—you cover your costs but don't generate profit from that specific work.

What do you get in return?

Recurring access to the building and the decision-maker
Deep knowledge of the equipment (age, condition, history)
First shot at any repair or replacement work
A reference and relationship that travels with the facility manager
Competitive intelligence on what the building actually needs

Compare that to trying to win a one-time repair job against five other contractors, none of whom have ever been inside the building.

The maintenance contract customer is yours to lose. The cold bid customer is a coin flip.

The Annuity Mindset

Geoff's framing of maintenance contracts as an "annuity" is exactly right. An annuity pays out over time. The value isn't in any single payment—it's in the stream.

Every service business has some version of this opportunity. What's the low-cost, high-frequency touchpoint that keeps you connected to your customer? What's the door opener that leads to the bigger work?

For HVAC contractors, it's maintenance agreements. For other businesses, it might be something else. But the principle is the same: don't optimize for profit on every transaction. Optimize for the relationship that generates profit over years.

My dad ran a renovation business. He didn't have maintenance contracts—renovation is project-based by nature. But I wonder sometimes if there was a version of this he could have built. Some recurring touchpoint that kept him connected to past clients. Some annuity that smoothed out the feast-or-famine cycle.

The businesses that survive long-term usually have something like this. The ones that don't are always one bad quarter away from disaster.

Building the Book

Geoff mentioned that USI keeps an eye on receivables as an early indicator of business health. "If that starts to dwindle down, we know, okay, we're slowing down a little bit."

But with a solid book of maintenance contracts, you have baseline visibility into the future. You know which buildings you'll visit next month, next quarter, next year. You know which equipment is aging and likely to need replacement. You can forecast with some confidence instead of just hoping the phone rings.

That's the annuity. Not just recurring revenue—recurring insight into where your business is going.