How to Start an HVAC Business: Expert Tips and Free Tools

Image of entrepreneur starting an HVAC business

So long as people need heat, air conditioning, and ventilation, HVAC professionals will be in demand.

In fact, HVAC jobs are set to grow 13% by 2028. So if you’re thinking of starting an HVAC business, the opportunity is ripe.

But growth has its challenges. It means more competition, which makes it harder to stand out and be profitable. In all likelihood, your first year will be your most challenging.

This post will help set you up for success. It includes a six-point checklist, tips from HVAC professionals, and a free CRM so you can get organized from day one.

Our HVAC Job Toolkit makes it easy to track estimates, invoices, and client information—and it’s completely free. Sign up today to get organized and save yourself from future headaches.

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Use this checklist to start your HVAC business. Tackle each step in the order that’s best for you. Bookmark this page so you can pick up where you left off.

Jump to:
1. Understand the cost of starting an HVAC business
2. Write an HVAC business plan [free outline]
3. Get your HVAC license and registration
4. Marketing your business to get clients
5. Put in a system to manage your operations [free CRM and estimate app]
6. Set customer service standards

☑️ 1. Understand the cost of starting an HVAC business

Before you do anything, ask yourself: Do I really want to start an HVAC business? Here’s what it takes.

What is the startup cost for an HVAC business?
Startup costs range from $3,000 to $12,000. They depend on the type of business, equipment needed, and the marketing you’ll do.

You should also consider your ongoing operating costs, as you’ll need enough cash to cover at least the first few months of operation.

“Every business is different,” explains Marc Brewer of DALCO HVAC. “For example, my small HVAC business of myself plus four subcontractors needs to make $720,000 a year before I’m able to pay myself. That means I need to make $60,000 a month to start making money.”

Seasonality will also affect your costs and revenue. Read on for how to deal with seasonal highs and lows.

What is the HVAC business owner’s salary?
According to a 2018 survey, an HVAC owner’s median annual income is $76,000. Another way to think about business owner salaries is by percentage of revenue. Most entrepreneurs aim to take home 6% to 15% of overall revenue as their salary.

Is owning an HVAC business a good career?
Yes, there is a clear demand for HVAC professionals in an industry that continues to grow. So there’s money to be made. Other perks that come with running an HVAC business are being your own boss, creating good jobs, and doing meaningful work in your community.

But don’t be fooled. Entrepreneurship is not for everyone and requires hard work and discipline. Keep reading to make sure you start off on the right foot.

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☑️ 2. Write your HVAC business plan

With the business basics out the way, it’s time to create your HVAC business plan. Think of it as a blueprint that gives you focus, improves your chance of success, and helps you get funding from investors or banks.

We suggest opening a blank document right now. Fill it in as you go through the rest of the steps on this checklist.

Don’t get overwhelmed or discouraged. It will take time, but everything you write down will help turn your HVAC business idea into reality.

To start, follow the outline below or get more detail in our complete article, how to write an HVAC business plan.

HVAC Business Plan Outline:

Cover Page
Include your logo, business name, role, address, and contact details.

Executive summary
Summarize your business plan on one page. Write down your income and expense forecasts, how much funding you need (if any), and what sets you apart from the competition.

Business overview
Detail your business’s technical details such as your business structure ( LLC, sole proprietorship, etc.), type of business, and trading name.

Business Description
Describe your short and long-term goals, location, mission statement, and services, e.g., furnace repair, air conditioning installation, and tankless water heater installation.

Market Analysis
Research your market and competition. Look at your target market’s age and income and how their needs relate to your services. Review how much your competition charges. Then, think about how to position yourself differently, e.g., through better expertise or pricing strategies.

Business Operations
Describe what you need to get the work done such as the type and number of employees, equipment and tools, and HVAC operations software to book jobs, schedule work, and create invoices.

Marketing Plan
This is your plan for getting customers so you can run a successful business throughout the year. Limit your HVAC marketing plan to 3-4 tactics to start to prevent overwhelm. Because marketing is so important, we have dedicated an entire section to it (see below).

Financial Plan
Detail your HVAC startup costs (write down and cost what you need), monthly expense and income forecasts (estimate monthly bookings and how you’ll price services for income), and your break-even point (the point in time where you start to make a profit).

How to deal with high and low seasons in the HVAC business

One of the biggest challenges for new HVAC businesses is low seasons. “I’d say that four months a year you’re losing money for seasonalities. There are only eight profitable months, and four of eight are very profitable,” says Marc of DALCO HVAC.

The best way to work with these seasonalities is to understand how sales in high season makes up for low season. “Selling a furnace unit and AC in one day during the summer makes up for the slow time of the year. So even if you’re not working for a few days in slower months, higher volume months make up for any losses you have,” Marc explains.

“I decided not to obsess over monthly income in my annual business statements. Instead, I compared each month on an annual term (for example, this March to the previous year) to see if the top and bottom-line numbers improved or not.

I didn’t change my proposal and accounting overhead if something had changed from the previous month. HVAC businesses are seasonal, so monthly comparisons are not helpful.”

☑️ 3. Get your HVAC license and register your business

You might be excited to start working, but first, you need to make your business official and operate within the law.

HVAC is a highly regulated trade, so a license is almost always required. There are different types of licenses depending on your location and HVAC specialty.

Find out everything you need to know about getting HVAC certified here.

Next, spend a few hours getting registered and insured. To register your business, you’ll need:

  • Your business name. Choose something that sounds professional and describes your services, your name, your values, or your city of operation. For example, Trust Home Comfort Ltd., DALCO HVAC, or VMech Mechanical Contractors. Make sure you’re happy with your business name because you’ll use it for your contact information, marketing, and business registration later on.
  • Contact information. You’ll need a business phone number and email. Make sure your email contains your company name and your name, if possible. For example, [email protected] Here’s some great resources to help you set up a Gmail account or a custom email domain.
  • Business address. You might not be ready to invest in a separate office space just yet. That’s okay. However, you should purchase a P.O. box. You’ll be able to use this address to register your business and separate your business from your home address (this is helpful for those who wish to get an LLC).

Technical business rules vary between states and provinces, so do your research. Ask your local city hall about how to start a business in your city. Here are some standard best practices:

  • Business license and registration. This helps you ensure you’re operating within local laws and regulations. With your 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.
  • Trade License. You need your trade license in most states before you can start performing work in the HVAC industry. Without it, you could face serious penalties and fines.
  • Business insurance and bonds (LLC). HVAC insurance and bonds helps you protect and separate your personal assets. For example, your personal assets will be protected if you accidentally cause damages to your clients’ property.

It’s important to do everything right the first time, even if it means it’ll cost you a bit more money upfront. Spending the money upfront could save you thousands of dollars in legal fees and fines down the line.

If you’re not sure how to start your business professionally, speak to a consultant or business advisor. There’s no shame in that!

☑️ 4. Market your HVAC business to get your first clients

We’ve written a complete guide on the best ways to market your HVAC business, so we won’t detail all the marketing methods.

If you’re really just starting out, here’s what we suggest:

  1. get referrals from family and friends,
  2. build an HVAC website
  3. create a Facebook business page
  4. buy high-quality leads with Google LSA

You don’t need a big marketing budget to start. Juan and Luisa Vesga, Co-Owners of VMech Mechanical Contractors, started where many small business owners do: with friends and family.

Juan started fixing residential air-conditioning units for people they knew, and had licenses to work on large and small units. “Then we started sending emails everywhere, we opened a Facebook Business Page, and sent text messages to everyone we knew. We basically asked for help,” says Luisa.

Through word of mouth, they connected with a client who needed an air-conditioning repair contact. It was a large property management company with 3000 houses on its roster. They landed the contract and started working.

“We became so busy that we had to hire someone just one year later. We were getting more and more calls on the residential side as well. One building recommended another building…That’s how we did it! All on recommendations.”

READ MORE: How Juan and Luisa generated $1.5 million in HVAC sales

☑️ 5. Put in a system to manage your operations

There are plenty of HVAC tools you need to run a successful business. Some tools you can buy or rent as your business grows.

HVAC business tools, on the other hand, work better the earlier you set them up. One misplaced invoice can cost you thousands of dollars.

If you don’t know where to start, a basic CRM (client relationship manager) is the first you thing need.

A CRM helps you track important client information while reminding you to follow-up on an invoice or call them about seasonal maintenance.

“You need to consider a CRM right away. I found Jobber before I even started the business. You want to look professional, and this really helps.”  – Van Wu, Trust Home Comfort

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For bookkeeping and accounting, get a Quickbooks account to save headaches at tax time.

Finally, to make scheduling and dispatching easier, try Jobber’s HVAC scheduling software. 

☑️ 6. Set customer service standards

If you follow all of these steps, you’ll have an HVAC business!

But you won’t go far without a customer service plan.

Excellent customer service is the most important way to differentiate your business from your competitors. It’s the main reason why clients will use you again and recommend you to others.

Here are two ways our experts suggest you make customer service part of your business model:

Hire employees who uphold your values
Juan and Luisa’s business model is to provide stellar customer service. This means they need employees who uphold their values.

“We are clean. We respect the place. We wear boot covers. We leave chocolates with a note thanking the customer for allowing us into their home. I make sure that the people working for me are of the same mindset.”

These small things stand out to clients who’ve experienced HVAC techs showing up late with a messy uniform and bad manners. Even a little can go a long way, but we recommend going the extra mile. Word about your service will travel around town fast.

Offer your clients empathy and compassion
Van Wu, Co-Owner of Trust Home Comfort Ltd, keeps lifelong customers by going the extra mile “Normally, customers are mistreated by tradespeople because they think they know more than them, yet they lack good customer service skills to treat them well.” Van Wu’s team adds value by going beyond expectations. They are helpful, complete extra services for free, and offer financing to their clients.

“We once had a senior who had a broken down furnace, no money, and no heat. All the other companies in town turned her down. But we looked into financing companies in the area. We look at all options to help our clients. It’s the right thing to do.”

READ MORE: 12 more customer service tips from service-based businesses.

Start Your Own HVAC Business Today

Starting an HVAC business may be a big opportunity, but it’s also a huge challenge that requires lots of work.

But you can make a success out of it by focusing on the right areas from the start, including your business plan, licensing, marketing, and HVAC business tools.

From there, it’s just a matter of optimizing what you have and continuously delivering the best customer service to generate a steady stream of clients.

Up Next: 6 Ways to Run an Effective HVAC Business

Read More

This post was originally published on May 30, 2019. It was last updated in February 2021.


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