How to Start a HVAC Business The Smart Way

April 19, 2021

Did you know that most small business owners (58%) started an independent business from scratch? If you never thought your goal of starting an HVAC business was attainable, this statistic is sure to change your mind.

The success of small businesses has many people wondering how to start their own. If you're a technician in the HVAC industry, you could start your very own HVAC business this year.

Read on to learn how to start a HVAC business the smart way.

Know the Cost of Starting an HVAC Business

Understanding how to start a HVAC business begins with knowing how much money it takes. So, how much does it cost to start an HVAC business?

A startup can cost anywhere from $3,000 to $12,000 depending on the type of HVAC services provided and the necessary equipment.

Since you likely won't make a profit right away, you'll also need to consider ongoing operating costs. Crunching the numbers is not easy. When you begin creating a budget, don't forget to note how seasonality may affect revenue.

As a small business owner, you can plan to take home between 6% and 15% of overall revenue as a salary which adds up to around $71,900 per year on average.

However, it may take months or even a year before you can afford to pay yourself. Luckily, there is a demand for HVAC professionals as the industry continues to grow.

Create a Business Plan

The next step on how to start your own HVAC business is to create a business plan. This will act as the blueprint that focuses on your goals and outcome for success.

Without a clear business plan, you won't have a great chance of getting funding from banks or investors. Your business plan can start small by writing down everything that could help turn your business idea into a real deal.

Business Plan Outline

A business plan outline should include a cover page, executive summary, business overview, business description, market analysis, business operations, marketing plan, and a financial plan.

Your cover page will simply be details of your company such as the business name, logo, address, and contact information. Make sure your business name is registered and unique.

An executive summary is about one page of income and expenses forecasts and how much funding you'll need. You may have saved up money for this exact moment and not need outside funding at all.

The overview should get into the technical details; the business structure and type of business.

A description should explain your short and long-term goals and your mission statement. Provide a list of the services you plan to provide as well.

You must conduct a market analysis in your business plan by researching the competition. Note how much your competition charges and how you can position your services differently from theirs.

In the business operations category, you'll need to describe how many employees it will take to get the job done. You should also include other needs like equipment, operations software, and invoices.

Every great business requires a marketing plan to reach customers. You should have no more than four tactics ready to avoid overwhelming your startup.

Lastly, you'll need to provide detailed information about your startup costs in the financial plan section. Do some math to figure out when you'll hit the break-even point.

This may sound like a lot, but these are just the basics to get you started. Start small, you don't have to go overboard with a startup business plan.

Get the Proper Licenses and Registration

An HVAC business is not official until it operates within the law.

Because the HVAC industry is regulated, you'll need a license. The type of license required will depend on your business location and the HVAC specialties you plan to offer.

The HVAC business requirements may take a few hours to complete, but this is a necessary step to get started. To register your business, you'll need a business name, contact information, and business address.

Your business name must sound professional and describe in some way the services you provide. Take the time to come up with a business name you'll be happy with. You'll be using it for a lot of things.

A business must have a working phone number and email address. The email should contain the name of the company.

If you haven't bought a space for your business yet, don't fret. Having a P.O. box will work just fine for registering your business. You shouldn't use your home address to register your business.

The technicalities of registering a business depend on the state you are in. You can contact your city to determine the requirements in your area.

Generally, these are the best practices to follow for an HVAC business:

Business License

A business license will keep you operating within the local laws. A license can also give you access to your business tax number. If you're ever audited, this number will help you avoid issues.

Trade License

Before you can do work in the HVAC industry, you need a trade license. Most states require this, but not all.

Without a trade license, you could face fines and penalties and risk losing your business. Doing this right the first time can save you from spending more money down the line.

Business Insurance and Bonds (LLC)

Insurance and bonds will protect and separate your business from your personal assets. If you cause damage to a client when performing work, your personal assets won't be involved.

Market Your Business

If you start a business without a marketing plan, chances are, no one will know your business exists. Promotion should begin before your business opens and throughout the life of the business.

You don't need to have a huge marketing budget when you are first starting. The most important things your budget should include when it comes to marketing your startup are:

  • Getting referrals from friends and family
  • Creating an HVAC website
  • Building a Facebook business page
  • Generating quality leads

Creating an HVAC Website

Having a website is one of the more important things your marketing budget needs to include when you start. Without a website, you won't have an existing online presence.

You need to purchase a custom domain. Many website building platforms offer this as a monthly or yearly fee.

If you are an HVAC technician, you may not have the skills necessary to build a well-working website. Even though some platforms are easy to use, hiring a company to complete this task for you may be your best bet.

Your website should have the basics like a work request form and a place for customers to leave reviews.

The TrueReview system makes it easy for happy customers to leave a review. Customers who are unhappy with your service will have a place where they can provide direct feedback to avoid leaving a negative review on your site.

Your website must also be optimized for mobile use. Many consumers search for HVAC services on their phones or tablet devices. Desktop and mobile are equally important website versions.

Find the Right HVAC Business Tools

Finding the best HVAC business tools and software may not seem like something you need to implement right away. However, the sooner you set them up, the smoother your business will run.

For example, if you lose just one invoice, it can cost you thousands. Don't let this be an issue and set up business tools right away.

There are many different tools out there so it can be hard to choose the right ones. A great place to start is with a client relationship manager (CRM).

The great thing about CRM software is that you can add to it later when your business grows. It will help you track needed client information that you may not be able to keep up with on your own.

You should also look for an easy-to-use bookkeeping and scheduling tool to start your business with.

Build a Standard for Customer Service

The above steps will help you create an HVAC business. Yet, without a customer service plan in place, you won't have much business at all.

Those looking for HVAC companies use customer service as a tool to differentiate one company from another.

With a great standard of customer service, you make it more likely that current customers will recommend you to the people they know. Word of mouth is one of the best marketing techniques you just can't buy.

To make customer service a strong value of your company, hire employees you can trust to maintain the standard. When dealing with clients, every member of the team should act with compassion and empathy.

How to Start a HVAC Business the Smart Way Explained

Understanding how to start a HVAC business means nothing if you aren't willing to put in the work. You can start small as long as you focus on the areas that matter most to a startup.

If you truly want your business to be successful, following the tips in this guide can help. From there on out, upholding business standards and generating leads through marketing techniques is key.

Looking for more ways to expand your newly found HVAC business? Schedule a free demo with us today to see how we can help.

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