An HVAC business offers heating, ventilation, and air conditioning units in residential or commercial properties and can either repair, maintain, replace, or install most HVAC systems required. An HVAC business can also work as a subcontractor to larger companies or even new building construction.
You may be interested in moving into an HVAC business as an investment and hiring employees, or you may be an HVAC contractor that’s looking to expand and take on your customers.
Whatever the case, we will review the steps required to start an HVAC business.
One of the first steps is to ensure that there is enough business in your area for a new HVAC business, it can be a costly operation to form a business, and without proper research, you could lose a lot of money.
There are three main types of HVAC business that you can get into; you may want to specialize or try your hand at all of them simultaneously.
When working with residential customers, you will be interacting with homeowners or, potentially, apartment complexes. The units you’ll work on are small and not often complex. There are more residential customers, but also there can be more competition in this space.
Working with commercial customers can often bring in larger projects and more money. Still, it can be not easy to get contracts or work from existing businesses with an HVAC contract with another company.
Often HVAC contractors will work on new construction projects or for larger companies that need help with too much work. In this situation, you may need to plan out an entire ventilation system for a new building and install all components.
Once you’ve researched and determined there is enough work, you should write up a business plan, so you can build a list of steps that you need to do when opening your business; it makes sure you’re thinking about all of the business steps and not just the HVAC steps.
● Summarize your business, what it will do, and what kind of customers it will work with.
● Describe how you’re going to form your business, either a sole proprietorship, a partnership, or a registered business. It’s essential to understand the legal issues that can arise under each type of business.
● Include costs, liabilities, and what your monthly break-even value will be so that you know what the goal is.
● Include projected profits and when you expect to hit them.
● A detailed marketing plan should be included such as how you will make money and how you will hit your profit targets.
● Include any research you’ve performed on your competitors and potential customers so that you know what your competitors are doing in the way of marketing and pricing.
If you need help building a business plan, take a look here: Write Your Business Plan.
Your startup costs and operating costs for the first year are going to be necessary; you will take some time to get enough business to cover all of your expenses and recoup whatever investment or loan you’ve taken out.
Some of the potential costs you need to factor in and get estimates are:
● Insurance premiums
● Commercial Rent (You may not need this if you don’t operate a physical location.)
● Vehicle to travel to job sites (You may already have a vehicle for use.)
● HVAC tools and supplies (It’s possible you already have the equipment, but you’ll still need to purchase supplies and replacement parts.)
■ Reciprocating Saw Blades
■ Vacuum Pump
■ Mobile HVAC Software
■ Refrigerant Scale
■ Cordless Drill
■ Pipe Wrenches & Pliers
■ Tin Snips & Shears
■ Multimeter & Voltage Tester
● Business software, such as accounting and payment processing. (Much of this can be purchased online as subscription services, using online payment software like Stripe and SAAS accounting software.)
● Website development (Costs can be minimal if you’re willing to put in some effort and build your website through something like Wix.com.)
HVAC businesses are regulated, so you will need to find and meet all state and federal requirements to operate as an HVAC business, and these vary by state. You will need to check with your local clerk’s office or search online for your specific state requirements.
You need to ensure that you or your business partner have the required training, certification, and experience to operate as a primary HVAC business. This can take many years to complete, so it isn’t something you can do with no experience in HVAC.
If this is your long-term goal, you need to start working on a training program at an accredited training school and then look to get an apprenticeship with somebody. If you haven’t gone through this step yet, it can take 3-5 years to complete everything. Otherwise, you’re going to need to bring a partner that is fully certified as an HVAC technician.
If you plan to have employees, submit your business information to the IRS to obtain an employer identification number.
Make sure that you discuss insurance options with an insurer; at a minimum, you’ll want to get whatever HVAC business insurance that they offer so that you are covered for any liability or damage caused for you or your employees.
You will be working with expensive equipment, and with no insurance, you may be liable for damage when installing or problems that arise due to faulty installation.
Once you’ve created a plan, gotten your licenses and insurance set up, and purchased all the necessary tools, you need to market your business so that you can start making money quickly and becoming a profitable business.
Your website will be crucial when starting a new HVAC business unless you already have customers lined up. Any marketing material, online advertising, or business cards you hand out need to link back to your business website that provides information on your prices, services, and areas that you cover.
You may need to hire an SEO professional to help build local SEO-targeted landing pages so that you show up in natural google results or local results when people are searching for HVAC service in your area.
Build a social media presence and keep it updated with install jobs and anything else that may be interesting or shows your professional skills
Use paid advertising to bring in customers searching for HVAC service; this could include Google Adwords so that you get top position when people search Google for any keywords related to your services in your local area.
Spend some money on direct mailing to customers in your local area. It’s a proven method to attract new customers when you send the mailers at certain times of the year when they will specifically need your help.
Send out mailers leading up to cold winter months, offering to service furnaces or AC units that provide heating.
Send out mailers again during the hot summer months offering to repair or revitalize any AC units customers may have, including filter changes, repair, and general checkups.