How to Start an HVAC Business in 8 Steps

Jessica Bannister of Cam Cool Refrigeration starting an HVAC business

It’s a great time to start an HVAC business if you’re a certified HVAC technician who’s ready to be an entrepreneur. The HVAC market is worth $16.54 billion, and it’s expected to keep growing.

But first, you need to learn how to set up your company properly, plan your business strategy, and win your first customers.

Follow our eight steps to starting an HVAC business legally so you can make a living doing the work you love.

1. Register, license, and insure your HVAC business

Follow this guide to choosing a business structure, setting up your business legally, and protecting your company so you can start on the right foot.

Choose and register your business name

Pick a business name that’s professional, unique, and easy to remember. Then register the name with your regional government.

Pro Tip: To check if your business name is available, Google “NAME + LOCATION” or run a quick search in your country’s trademark database.

Once you’ve chosen a name, decide what business structure to operate your business under. For small HVAC businesses, these are your typical options:

  • As a sole proprietor (U.S., CA) or sole trader (UK, AU), you have complete control over your business. This is the most common option for business owners working alone.
  • If you’re starting an HVAC business with two or more partners, register your business as a partnership (U.S., CA, UK), or as a joint venture or co-operative (AU).
  • If you’re worried about liability, incorporate your business as a limited liability company or LLC (U.S.), corporation (CA), limited company or limited partnership (UK), or company (AU). This protects your personal assets if you run into legal issues.

If you operate alone and your business name is different from your personal name, you can file your name as a DBA (a.k.a. assumed business name or fictitious business name).

Apply for a small business license

Every business owner needs to have a business license and renew it every year. This ensures you’re operating within local laws and regulations.

Use these resources to find out what kind of business permit or license you need in your region:

Once you have a small business license, you can get your business tax number, which helps you keep your business above board and avoid issues if you’re ever audited.

Buy HVAC business insurance

HVAC work can be dangerous, so get the right types of business insurance to protect your business and your customers. Then speak to your insurance provider to discuss what coverage you’ll need for the HVAC services you offer.

The types of HVAC business insurance you may need include:

  • General liability insurance
  • Commercial automobile insurance
  • Workers’ compensation insurance
  • Professional liability insurance
  • Equipment insurance
  • Property insurance

2. Get funding for your HVAC business

What is the startup cost for an HVAC business?

HVAC business startup costs usually range from $3,000 to $12,000, depending on how much equipment you need to purchase upfront. That cost will be higher if you need to purchase a truck.

Here are common HVAC startup expenses you’ll have to budget for:

  • A van or truck with enough room to transport equipment ($15,000–40,000)
  • Everyday HVAC tools like a hammer, a step ladder, screwdrivers, tape measures, electrical testers, pliers, wire strippers, cordless drills ($200–300)
  • Air conditioning and refrigeration tools ($400–700)
  • Personal protective equipment (PPE) and other safety equipment ($35–50 per person)
  • Vehicle decals or wraps with your company branding ($1,500–5,000)
  • Business insurance ($600–2,000)

Once you have your startup budget, consider applying for a business loan or personal loan from your bank.

Or, you can look into government-funded programs like Small Business Administration Grants, Canada’s Small Business Financing Program, or UK Start Up Loans.

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Create an HVAC business plan

Your HVAC business plan will help you figure out how much money you need to launch a successful HVAC business and get funding from investors and banks.

Your business plan should include:

  • Cover page with contact details
  • Executive summary that outlines the basics of your business plan
  • Business overview that explains why your business exists
  • Financial plan you can show to potential investors
  • List of services you plan to offer
  • Market analysis with research on your competitors
  • Your business operations in more detail
  • Marketing plan that shows how you’ll get customers

3. Get the right HVAC certification and license

In most places, you need an HVAC certification and an HVAC contractor license to run your business. These qualifications are proof that you’re trained to do safe, high-quality work, and follow regional trade standards.

Follow this guide to learn what qualifications you need to start a heating and air conditioning business based on where you live.

Take an HVAC certification program

Before working as an HVAC technician, you need HVAC certification from an accredited school or program.

Although optional, a certificate from organizations like North American Technician Excellence or HVAC Excellence can give you an extra qualification and make your clients more confident in your skills.

Become a licensed HVAC contractor

While HVAC certification proves you have the knowledge and skills to work in the industry, an HVAC contractor license is the legal document that lets you service HVAC systems.

Most places require that you get an HVAC license, but the process of getting one is different depending on where you live:

  • In the United States, each state has its own HVAC license requirements. This usually means you need official HVAC certification and a few years of apprenticeship experience. Without an HVAC trade license, you could face serious penalties and fines.
  • The UK and Canada don’t require HVAC contractor licenses, but Canadian technicians who work in AC and refrigeration need to be certified by a government-approved program.
  • In Australia, anyone working with AC or refrigeration equipment needs a Refrigerant Handling Licence. See which types of refrigerant handling licenses you should apply for.

Explore our HVAC company resources

Learn more about running and marketing your business, hiring employees, and building a successful HVAC company with our free resources.

READ MORE

4. Create your HVAC services list

Decide what HVAC services you want to provide so you can purchase the right tools and start setting your prices. Here are the most common HVAC repair, installation, and maintenance services you can offer:

  • Furnace repair
  • Furnace tune-up and maintenance
  • Furnace installation
  • Heat pump installation
  • Air conditioning repair
  • Air conditioning tune-up and maintenance
  • Air conditioning installation
  • Air duct cleaning
  • Tankless water heater installation
  • Emergency HVAC service

If you specialized in one type of service in trade school, that’s likely the service you should sell the most. To make your work more rewarding, offer services you’re good at—and that you enjoy doing.

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5. Buy HVAC tools and equipment

Now that you know what services you want to offer, you can narrow down what equipment to buy. Here are common HVAC tools you’ll need in your bag:

  • Basic hand tools like screwdrivers, wrenches, pliers, hammers, gauges, metal and tubing cutters, and staple guns
  • Safety tools and PPE like gloves, masks, goggles, and earplugs
  • Advanced HVAC tools that differ depending on the services you provide, like core removal tools, thermal image cameras, leak detectors, megohmmeters, phase testers, and refrigerant scales

New HVAC contractors typically spend $200–300 on basic HVAC tools and safety equipment. The amount you spend on advanced tools depends on what kinds of services you provide.

READ MORE: The 16 best HVAC apps to boost productivity

6. Price your HVAC services

To run a successful HVAC business, you need to set prices that cover your expenses and make your business profitable. Here’s how to start pricing HVAC jobs:

  • Research your competitors to find out average prices in your area
  • Determine what markup you need to meet your profit margin goals
  • Figure out what optional services you can offer to increase your total quote prices

Here are some common pricing strategies you can use for HVAC jobs:

  • Hourly rate: Hourly rates can help you profit more on time-intensive or commercial HVAC contracts. They’re also useful when you’re unsure how long a job will take.
  • Flat rate: Flat rate pricing lets you set one predictable cost for the entire job. This type of pricing works well when you know how much time the job will take. (E.g., $325 for an air conditioning repair job.)
  • Labor and materials pricing: When pricing an installation, it’s usually best to charge your clients based on the amount of labor you do and the equipment you supply. This pricing strategy makes it easier to cover your operating costs.

Once you’ve decided on your service prices, create an HVAC pricing chart that lists your service costs per hour or with flat rate pricing. A pricing chart will help you easily provide accurate and consistent HVAC estimates to clients.

Price your HVAC services now

Use our free service price calculator to set the right prices and help your HVAC business profit.

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7. Promote your HVAC business

Marketing is essential to winning your first customers and running a successful HVAC company. Here’s what you need to start reaching new customers through HVAC marketing:

  • Brand your business. Company branding gives your business a look and personality—and it tells every potential customer you’re a pro. Create a logo and choose company colors for your business cards, HVAC website design, uniform, and all your marketing materials.
  • Set up an online presence. Having an online presence means customers can easily find your business on the internet. The more your business shows up online—with a website, social media profiles, and Google Local Services Ads, and directories—the more likely people are to book your services.
  • Go door knocking. New HVAC entrepreneurs typically rely on word-of-mouth to promote their businesses. Try getting your first few HVAC leads by knocking on doors and leaving tear-away flyers around your neighborhood.

8. Hire HVAC technicians

When you have more business than you can handle alone, it’s time to find HVAC employees. Hiring HVAC technicians to take on field work will give you more time to focus on sales, marketing, scheduling, and everything involved in running and growing your business.

READ MORE: Hiring your first employee: when and how to do it successfully

Here’s how to find and hire qualified HVAC technicians:

Find out how much to pay your HVAC workers

Get up-to-date U.S. salary reports to help your service business hire and retain a great team.

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Ready to run your own HVAC business? The best time to start is now.

When you need support, come back to this HVAC business startup checklist and check out our other HVAC business resources.

Run an organized HVAC business from day one

Start your business on the right foot. Use HVAC business software to send quotes, manage jobs, invoice clients, and get paid—faster.

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Originally published in May 2019. Last updated on July 13th, 2022.

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