Entrepreneurship grants you control of your entire schedule. This independence is unbeatable—but it means that you need to face challenges alone.
One of the biggest challenges you’ll face is getting started. And if you’re wondering how to start an HVAC business, you likely have many questions about where to begin.
Don’t worry—we have the answers. This guide provides eight clear and easy steps and four tips to help you start your HVAC business.
The Step-by-step Guide to Start an HVAC Business
Any business starts with a series of questions. What are the start-up costs for an HVAC business? What licenses are needed to open an HVAC business? How do I start an HVAC business with no experience?
Here’s everything you need to know.
1. Decide What Services You’re Going To Offer
Any business starts with a plan of what to offer. Consider your skill set and certifications. You can’t perform services you aren’t licensed to do. You also might be better at a certain type of repair. Keep your initial services list small and centered around what you’re confident you can do an excellent job at.
There are some basic listings that customers expect any HVAC business to offer. That includes servicing for basic heating, ventilation, and air conditioning units. Businesses might offer duct cleaning, air quality testing, or basic plumbing and electrical repairs.
Do some research to see what other technicians in your area are offering to identify gaps in the market. Are there a lot of companies offering furnace repairs, but few who specialize in air conditioning repairs? Try to offer the services that are under-provided in your area.
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2. Create an HVAC Business Plan
A business plan is your roadmap to success. It lets you plan how you’re going to succeed as an entrepreneur. Business plans include sections like:
- An executive summary. How would you describe your vision for the business in just a few sentences?
- Business goals. What do you hope to achieve with your business?
- Strategies. How are you going to stand out from competitors? Will you have a loyalty program or 24/7 service?
- Market analysis. What are other businesses in your area offering?
- Operation plans. Will you work alone? What equipment do you need to acquire? How will you operate day-to-day?
- Local demographic information. What’s the population like in your service area? Will you be working more with homeowners or landlords?
- Financial projections. How will you maintain your bottom line? Do you have an expected amount that you’ll spend and profit in your first few months?
When drafting a business plan, keep it professional. You might need this document to apply for a loan or meet with investors. Regularly review and update your business plan to reflect market changes and evolving goals.
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3. Put Your Business Finances in Order
Organizing your business’s finances can seem just as daunting as drafting a business plan. Here are a few things to consider when you’re planning your finances.
Start-up Costs
Starting your HVAC business will have many initial costs. You might spend on:
- HVAC equipment
- Office space
- A work truck
- An invoicing software
- A project management software
- Licensing fees
- Website building
- Advertising
Acquiring Funding
Determine how you’ll pay for start-up costs. Some entrepreneurs save for years to build a fund to start their business. Others take out loans from banks or credit unions. You can also look for small business grants from local, state, and federal governments or non-profits.
Opening a Business Bank Account
Open a dedicated business bank account with your financial institution. While it can be tempting to mix your business and personal finances, it’s not recommended. Separating personal and business income and expenses makes it far easier to manage where business revenue is going and pay fees and taxes.
Creating an Operating Expense Budget
Outline the operating expenses you expect your HVAC business will have. Consider everything from renting an office to vehicle maintenance to taxes. See if there are any things that you can cut out of your initial budget to keep cash flow positive.
You should also decide if you have room in your budget to hire employees or if you’ll be working solo. Being an employer comes with another set of responsibilities and costs, but it could increase revenue.
Invoicing
Once you have prices set and customers requesting services, you need to collect payment.
Timely and accurate invoicing is essential for collecting payments and remaining professional. Customers appreciate accurate invoices nearly as much as you appreciate receiving their payment.
Finding an invoicing platform that accepts online payments is recommended, making it even easier for clients to pay you. With Joist, clients can pay for services straight from their invoices.
Contacting Financial Professionals
Making a mistake is expensive. Errors can lead to tax nightmares or unhappy customers. Consider finding a financial advisor, accountant, or tax professional to help with the most complicated aspects of your business.
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4. Get the Necessary Licenses and Register the Business
Technicians in the HVAC industry need proper licensing and business registration to meet public health and safety standards. Meeting these requirements also proves to customers that your business can complete their project safely.
Each state has its own set of regulations and requirements governing HVAC businesses. There could also be local permits required or bylaws you need to follow. Take the time to research what requirements you need to meet to open an HVAC business.
5. Get Bonded and Insured
Being bonded and insured means your business has legal and financial protection. This is important for both you as the business owner and your clients. Not having the proper coverage opens your business to legal and financial risks, including injury, property damage, or client contractual disputes.
Look into general liability insurance and professional liability insurance. If you’re going to hire any employees, you also need workers’ compensation insurance.
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6. Hire HVAC Technicians and Other Employees
Growing a successful business means having the right people alongside you. They need to provide exceptional customer service and an unparalleled experience. When hiring HVAC technicians, consider their skills, experience, and attitude.
You might also find that doing your own bookkeeping or project management is filling your schedule. If you prefer to be on site doing repairs, consider hiring someone to take on the office-related tasks involved with running a business.
Salaries and benefits are often a business’s most significant expense, so don’t rush into hiring. Hire when the business is ready for the additional personnel. Investigate what benefits you’re legally required to provide. Then, consider the nice-to-have benefits you may want to offer as recruitment incentives.
7. Invest in HVAC Tools and Equipment
HVAC businesses require the proper tools to get the job done. Investing in tools can be expensive upfront but pays off when you start earning profits. Think of them in terms of longevity, quality, and reliability. Consider buying higher quality tools or planning which ones to upgrade as revenue increases.
Some of the HVAC tools you’ll need include:
- Hand tools. Buy a variety of sizes of screwdrivers, wrenches, wire cutters, hammers, and more.
- Caulking tools. Ducts and vent work need to be sealed.
- A staple gun. Secure lines and joists in ductwork.
- Power tools. Drills and saws will come in handy when adjusting and installing tools, tubes, and more.
- Safety equipment. A CO monitor, harness, and hard hat can all keep you safe on the job.
- Measurement tools. Make sure your work is solid with thermometers, pressure gauges, and data loggers to test systems.
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8. Design a Marketing Strategy to Launch Your HVAC Business
With a business plan written, staff hired, and tools purchased, it’s time to acquire clients. A marketing strategy is your plan to sell your services.
Consider how to communicate that your services stand out.
Second, decide on the platforms and places you intend to advertise. Design a website, have business cards printed, and put up posters in your intended service area. Create social media accounts and join relevant groups or communities to connect with potential customers.
When you start doing jobs, ask clients how they heard about you. Try to replicate that method and put extra energy into that marketing channel.
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3 Tips to Set Your HVAC Business Up for Success
Once your business is up and running, you need to keep operations profitable. Here are three tips to stay successful.
Consider Hiring a Business Manager
Not every entrepreneur wants to be a manager. If management and business operations aren’t up your alley, that’s okay. Hire someone to keep things running while you’re on site.
The Customer Isn’t Always Right
We’ve all heard the adage, “The customer is always right”. But if the customer is always right, you won’t stay in business long.
Maintaining positive customer relationships is essential, but protecting your business interests is equally important. Focus on delivering an excellent experience to your clients while accepting that sometimes you need to remind them that you’re the expert.
Know Your Worth
Being a local business is about providing excellent value to your customers. But keeping your business operational is just as important. Don’t set your rates too low in the hope of attracting customers. Set your rate competitively while expressing the expertise and value you provide.
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Send Professional Invoices to Your Customers
Invoicing is critical to ensuring timely and accurate payments when starting a new business. Create and share invoices in just minutes with Joist, an easy-to-use mobile invoicing tool. Record payments, issue payment reminders, and easily keep track of your monthly sales with Joist.