Want to run your own HVAC business? Starting a heating, ventilation, and air conditioning company provides a promising career path. The trade will always be in demand, as people require comfortable living and working environments, and it’s an industry on the rise.
In fact, the U.S. Bureau of Labor Statistics (BLS) projects a 6% growth rate nationwide (faster than average for all occupations) for heating, air conditioning, and refrigeration mechanics and installers over the next nine years.
But high demand doesn’t mean launching an HVAC business is easy. It requires technical expertise, years of experience, financial planning, a business model, marketing, and more. This guide outlines the steps to starting an HVAC business, which include:
Training
Licensing
Business plan
Financing
Business registration and insurance
Service offerings
Tools and equipment
Pricing strategies
Marketing
Hiring
Read on for an in-depth look at all of these business aspects.
Disclaimer: The following content is for informational purposes only. Consult attorneys and financial advisors for startup business advice.
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1. Get the Right HVAC Training
To become an HVAC business owner, one must obtain the skills and knowledge necessary to install, maintain, and repair HVAC systems. This can be done by enrolling in a trade school or technical program, or by receiving on-the-job training from an experienced HVAC tech. In most states, prospective HVAC-training recruits need only a high school diploma to start an apprenticeship program or attend a trade school.
When selecting a trade school or technical program, research and choose one that is reputable and accredited. Look for programs that offer a comprehensive curriculum, including hands-on training, and demonstrate a record of producing successful HVAC professionals.
Apprenticeships allow you to earn a wage while you learn the trade. They are typically offered through trade unions, trade schools, and directly from HVAC companies.
“Training is an investment in your people, your company, and your future,” says Bill Powers, a budget and planning expert and senior industry advisor at ServiceTitan. “If you don't train, you don't learn. If you don't learn, you don't grow. You have to plan for it, and you have to budget for it.”
2. Get Your HVAC License and Get Certified
After completing an HVAC apprenticeship and paying an application fee, you need to acquire a license. Many states offer journeyman or Class A or Class B HVAC contractors’ licenses, while others require specialty licenses for air conditioning and refrigeration, solar, and other energy systems. Learn more about HVAC licensing requirements in the state in which you plan to conduct business.
Obtaining your HVAC license and relevant certifications not only demonstrates your legal compliance but also enhances your credibility and trustworthiness. Additionally, completing certification programs through reputable organizations like North American Technician Excellence (NATE) or the Environmental Protection Agency (EPA) reflects your commitment to maintaining industry standards and staying updated on the latest technologies and best practices.
3. Create Your HVAC Business Plan
Next, create your HVAC business plan, which serves as a comprehensive guide that outlines your company's objectives, strategies, and operational framework. This not only provides you with a roadmap to the business, but helps secure funding.
“Planning in business is probably one of the most important things you can do to see your business grow and to take your business to that next level,” Powers says.
The elements business owners must include in their business plan are:
Industry analysis: Conduct HVAC industry market research in your area, so you can decide how to differentiate your own business.
Executive summary: An executive summary provides a concise overview of the entire business plan, including a mission statement, business goals, target market, competitive advantage, and financial projections for future growth.
Business overview: Share your company's origin story, vision, core values, and objectives.
Products and services: Clearly outline pricing structures, services offered, and service guarantees.
Customer analysis: Define customer demographics and preferences.
Marketing plan: Detail your marketing strategy, encompassing branding, pricing, advertising, online presence, and customer experience.
Management summary: Describe your organizational structure, team roles, qualifications, and job expectations.
Operations plan: Explain daily operations, workflow processes, equipment, suppliers, and HVAC partnerships.
Financial plan: Include startup costs, profit and loss projections, cash flow forecasts, balance sheets, and break-even analysis in your financial plan.
4. Finance Your HVAC Business
Launching a successful HVAC business requires startup capital, whether that comes from investors, business loans, or your own bank account. You’ll use that capital for tools, equipment, licensing and registration, HVAC certifications, personal protective equipment (PPE), hiring staff, and more.
Consider the Startup Costs of Your HVAC Business
Make a list of HVAC business startup costs for everything you need to open your HVAC business. Be meticulous in estimating each expense, and consider potential contingencies to ensure that you have a realistic grasp of your financial requirements. This list will serve as a valuable reference point when seeking funding or managing your budget.
Decide How To Finance Your Business
You may use one of these common financing options or a combination to raise the required amount of startup capital.
Personal savings: Accessing personal savings to launch a business provides a great way to avoid taking on debt while maintaining control over the company.
SBA loans: The Small Business Administration (SBA) offers a variety of loans to small businesses, including HVAC businesses. SBA loans often come with more favorable terms compared to traditional commercial loans, including lower interest rates and longer repayment periods. The SBA also offers grants to qualified applicants.
Bank loans: Banks offer loans to small businesses, but they may be more difficult to qualify for than SBA loans and typically offer less favorable terms. Some bank loans may require you to provide collateral, such as business assets or personal assets, to secure the loan.
Investors: If you have a strong business plan and a proven track record, you may be able to attract investors to finance your business. Investors can provide you with the capital you need to get started, but they will also expect a share of the profits.
5. Handle Registration, Licensing, and Insurance
In addition to obtaining an HVAC license, take care of the following registration and license requirements.
Choose a Name for Your HVAC Business
Your HVAC business name should convey professionalism while being catchy enough to pique potential customers’ interest. When deciding on a business name, ensure it’s
Creative (provides differentiation)
Unique (not trademarked or registered in your state)
Descriptive (calls out services offered)
Gain inspiration from these HVAC company name ideas.
Register Your Business
Once you decide on a name, it’s time to register your new business. Registering your business provides legal recognition and establishes your entity's identity. It also allows you to operate under your chosen business name.
The registration process typically involves filing the necessary paperwork with your state or local government authorities. The specific requirements depend on your location and business structure (sole proprietorship, LLC, corporation).
Obtain Your Small-Business License
Research whether you need any small-business licensing beyond your HVAC license or registration.
Consider Insurance Options
HVAC insurance is an important part of any HVAC company’s risk management plan. Taking out the right insurance policies protects your business from financial losses that could put you out of business. Some of the most popular HVAC business insurance policies include:
Commercial general liability insurance: HVAC liability insurance covers accidental injuries to non-employees on the job site and property damage related to your work as an HVAC contractor. Many places require general liability insurance to obtain an HVAC contractor license, or when signing a commercial lease or customer contract.
Workers’ compensation insurance: A workers’ compensation insurance policy pays the medical bills and payroll costs of employees injured while working for your HVAC service company. Many states require workers’ compensation insurance for HVAC businesses with employees.
Commercial auto insurance: As an HVAC service company, it’s crucial to invest in commercial auto insurance to cover the company vehicles you and your technicians drive.
Commercial property insurance: Property insurance for HVAC companies protects your property investments, including office space, tools, equipment, and inventory stored on the company’s leased or owned property.
6. Create a List of Your HVAC Services
Define the specific services you will offer to your customers. Also, determine whether you plan to service homeowners, commercial clients, or both. This helps determine pricing and marketing strategies. Typical core HVAC services include:
HVAC system installation: Specify the types of heating, ventilation, and air conditioning systems you are qualified to install, such as central air systems, heat pumps, or ductless mini-splits.
HVAC system maintenance: Detail the maintenance services you offer, such as regular inspections, cleaning, and preventive maintenance to keep furnaces and air conditioners running efficiently. Also consider whether you’ll offer club memberships.
HVAC system repair: Outline the types of HVAC system repairs your business can handle, addressing issues like faulty components, refrigerant leaks, or malfunctioning thermostats.
Emergency service: If you respond 24/7 to emergency service calls, clearly state the availability and the types of emergencies you can address.
Other HVAC work you may offer includes:
Indoor air quality testing and solutions
Energy efficiency upgrades
Geothermal heating and cooling systems
Zoning systems
7. Get The Appropriate Tools and Equipment
You budgeted for the proper equipment and secured financing. Now it’s time to purchase those HVAC tools. The essential HVAC tools include:
Hand tools, such as screwdrivers, nut drivers, pliers, wrenches, and hammers
Flashlights and headlamps
Metal and tubing cutters
Drills with charging batteries
Extension cords
Staple guns
Don’t forget safety equipment like gloves, masks, boots, goggles, and ear plugs. The more advanced HVAC equipment and tools you may need to acquire includes:
Core remover
Coil fin straightener
Thermometers
Multimeters
Saw
Caulking gun
Pumps
Nitrogen regulator
Leak detector
Psychrometer
Hand seamers and snips
Crimper
Awl
Thermal imaging tools
Flushing solvent
Lastly, and probably the biggest investment, consider purchasing a fleet of company vehicles to promote branding. Another option for startups is requiring techs to drive their own work trucks.
8. Decide on Your Pricing
To sustain business growth, HVAC contractors must first establish an effective pricing strategy for the HVAC services they intend to offer. Prices need to cover all expenses and ensure healthy profit margins. Start by researching your competitors to find out average prices and calculating your expenses.
Then, decide which pricing strategy to use:
Hourly rate: Hourly pricing, also known as time and materials pricing, charges clients based on the actual time spent working on a project and the cost of materials used. While this approach provides transparency, it can lead to client concerns over costs and may not incentivize technicians to work efficiently.
Flat rate: Flat-rate pricing offers clients a fixed, upfront price for a specific HVAC service or job, regardless of the time it takes to complete. HVAC contractors typically establish a price list for common services or repairs, making it easy for clients to understand the cost upfront.
Labor and materials pricing: Labor and materials pricing is a hybrid approach that itemizes the cost of both labor and materials separately on the invoice. Clients see a breakdown of the technician's hourly rate and the cost of materials used for the job.
Flat-rate pricing is often preferred, because it incentivizes techs to execute jobs more efficiently, leaves no room for customer haggling over the price, and ultimately results in higher average tickets. To streamline pricing, check out ServiceTitan Pricebook Pro. It shows regional pricing averages for your services so you can see where you stand in your market.
Pricebook Pro’s Smart Start automatically adds a few hundred common services personalized for you. And once you’re set up, Pricebook Pro delivers regular content updates to costs, images, descriptions, and sold hours. A simple and professional pricebook enables techs to find, show, and sell services in the field.
9. Market Your New HVAC Business
HVAC marketing helps attract and retain customers, establish your brand, and ultimately grow your business. ServiceTitan’s home services marketing software offers tools to help you attract and convert new customers, and track the ROI with real-time data.
Consider the following marketing tactics when launching your HVAC business:
Create a website: Many customers start their journey online these days. If you don’t have an HVAC business website, you’ll miss out on a large segment of the in-market buyers.
Run ads: Consider using platforms like Google Ads and social media advertising to target potential customers searching for HVAC services in your area. ServiceTitan Marketing Pro - Ads integrates Google Ads and Analytics with ServiceTitan data to get true ROI and optimize ads in real time. The ServiceTitan Local Services Ads integration helps you book more HVAC jobs directly from Google searches.
Consider traditional marketing methods: While digital marketing is essential, don't underestimate the effectiveness of traditional methods. Utilize direct mail, flyers, business cards, and local newspaper advertisements to reach local customers who may not be actively searching online. ServiceTitan Marketing Pro - Direct Mail lets you build acquisition audiences based on property data, like age of home or property type.
Leverage social media: A consistent social media presence can boost brand awareness and trust, while providing opportunities for engaging with your audience and showcasing your expertise. Pick a few platforms to start, like Facebook, Instagram, and LinkedIn.
Consider SEO: Invest in SEO strategies to improve your website's ranking on search engines.
Use email marketing: Email marketing is an effective way to nurture relationships with existing and potential customers. Send regular updates, tips, promotions, and newsletters to keep your HVAC business top of mind. Use ServiceTitan Marketing Pro - Email to identify hyper-targeted audiences, build templates, automate your email campaigns, and track true ROI all from one place.
For help, consult with an HVAC marketing agency.
10. Consider Hiring HVAC Technicians
If you plan on operating as a one-person show at first, you can delay this step. But as your company grows, you’ll eventually need to hire HVAC technicians. Start by writing an HVAC technician job description.
Use our HVAC interview questions for help on narrowing down applicants. Before making an offer, determine competitive and fair salaries for your HVAC technicians, taking into account factors like experience, certifications, and local market rates.
For help managing staff once they’re onboarded, invest in ServiceTitan Contractor Payroll software, which streamlines timekeeping, managing payroll, and tracking profitability.
Overview
After following the steps to launch an HVAC business, you’ll find yourself bidding, scheduling, dispatching, and more. HVAC software helps busy entrepreneurs streamline these day-to-day operations, allowing you to run your HVAC business more efficiently in just one platform. Schedule a demo today to get started.
ServiceTitan is a comprehensive HVAC business software solution built specifically to help service companies streamline their operations, boost revenue, and achieve growth. Our award-winning, cloud-based platform is trusted by more than 100,000+ contractors across the country.
