HVAC Business Management: 10 Actionable Tips for Contractors

1. Keep Track of Your Inventory

Inventory tracking and management are essential in successful HVAC business management because they eliminate stockouts and ensure employees have all they need to fix customer issues.

Optimizing inventory levels also minimizes the effect of long lead times on projects and reduces the cash tied up in overstocked inventory. This improves cash flow, ensuring the company maintains financial stability despite seasonal variations or changes in customer demand.

Jared Rohrs, the IT manager at John Henry's, says, “Inventory can make or break a company if you're not careful. It's another one that if you're not watching those costs, it'll eat you alive…”

To optimize your inventory in line with business management best practices, follow these tips:

• Build strong bridges with vendors so they are always willing to help when requested. Pay on time, send purchase orders quickly so they have sufficient lead time, and cultivate a personal relationship. When discontinuing a contract, do so respectfully, as you might need their assistance later.

• Have contingency plans to counter unexpected occurrences like natural disasters and global economic shutdowns. Diversify your vendor pool and always assess inventory levels. Additionally, set a stock threshold with a buffer for mitigating risks like supply chain disruptions.

• Use inventory in the order that it is received, per the FIFO principle (first-in, first-out). This reduces waste by ensuring that inventories don’t deteriorate in quality or become defective in your warehouse before use.

• Invest in software to manage inventory instead of using spreadsheets or clipboards, which waste valuable time. Software like ServiceTitan’s Inventory Management platform automates key processes such as purchases, requisitions, replenishments, transfers, and adjustments.

The platform offers a more accessible alternative to manual inventory audits. It gives handyman business owners a quick overview of the number of items on hand or on order, and their unit cost, description, serial numbers, and total value.

Even better, clicking on an item code or name redirects to an item details page, which produces a whole lot of extra information, such as:

• Current locations of the specific item

• The vendor who delivered the item

• Serial numbers

• A detailed breakdown of an item’s transaction history—locations it's been moved from, the number of times it was moved, etc.

• Locations where the item’s availability is dangerously low

This report makes it easier to maintain optimum stock levels without physically counting the number of items available in each truck or warehouse.

ServiceTitan’s Inventory Management platform also prevents stockouts by automatically adjusting replenishment schedules whenever an item is added to customers’ invoices.

Suppose a vendor is selected as the replenishment source. In that case, the software will automatically notify users to create a purchase order, which can be emailed directly to the vendor from the platform. Users can also set minimum stock levels for each item and receive notifications whenever the amount falls below the threshold.

This makes maintaining healthy stock levels and reducing lead times easier, ensuring that suitable materials are always available.

Jared Rohrs, who has used the software at John Henry’s, says, “It's increased sales, it's increased revenue, and we've made leaps and bounds and also had a cultural shift. If you get your process to match the software, your life becomes infinitely simpler.”

“What we've been able to do thanks to ServiceTitan continuing to utilize the inventory pieces and dynamic pricing and all that kind of stuff has been huge.”

2. Keep Your Customers Informed

Today’s customers expect to be kept up to speed throughout a project. 

Communicating only when it’s time to request payment does not build a relationship with a customer; without that relationship, trust can easily break down.

The result can be customers who aren’t entirely satisfied with your business, even though your workmanship was perfect.

That makes it imperative to stay in touch with customers from the first call to the day the project is finished. It’s better to overcommunicate than to leave them out of the loop and uncertain. 

So, make sure you do the following:

• Send a message to validate the job booking days before the service visit. Outline the customer's expectations and include the service’s date, time, and description.

• Notify customers a few hours before the job so they can prepare adequately for the service visit. This will retain their confidence and show that you’re on your way to fixing the issue.

• Follow up with a post-service survey immediately after the job, especially if the HVAC system works well. This allows you to correct mistakes, resolve issues, and get positive reviews to display to prospects.

You can do all the above with multiple tools for each communication channel. However, a more viable option is to use the communication channels provided by ServiceTitan’s Customer Experience platform, such as SMS, email, etc.

Ty Faust, owner of H.J. Faust Inc. Heating & Air Conditioning, believes the platform has helped the company deliver quality customer service. 

“We got a lot of responses (where customers say), ‘I want to tell you, seeing the tech's picture (...), so I know who's coming to my house and when, has been crucial to that higher level of customer experience," Faust said.

These channels allow clients and techs to interact directly without an intermediary. Customers can use them to ask questions and submit feedback, while employees can use them to send appointment reminders, reschedule visits, and solicit reviews.

3. Improve the Accuracy of Your Estimates

Estimates determine customers' first impressions of your company, so it’s essential to do them well by quoting the correct prices. Underpricing your services on estimates leads to revenue losses while overpricing chases customers away.

To ensure accurate estimates, understand the scope of the project and what the client requires. If possible, visit the job site yourself, and don’t leave until you’ve confirmed that you and the customer are on the same page about what’s to be done.

When pricing materials, contact vendors and suppliers to confirm current prices (that’s why we emphasized building relationships with them earlier). You can add a small markup to compensate for price fluctuations.

Lastly, invest in software that lets you update item costs centrally whenever vendors update their prices. This way, technicians can always use the correct prices when creating estimates.

ServiceTitan’s Estimate Software allows users to update prices in seconds from a central location. It also integrates with the product catalogs of reputable vendors and manufacturers, empowering employees to confirm item prices without calling account managers or sales representatives.

The software also allows users to email estimates to customers. Such emails contain the estimate as a PDF and a link to a website where customers can view it, confirm details, and sign it digitally.

ServiceTitan’s Estimate Software makes it easier for field techs to build accurate estimates by providing templates for routine jobs such as leaks, plumbing work, etc. 

For example, Todd Ricks, owner of Mechollag, recently bid on a project with a family member. After seeing their low estimate, he had to point out that:

“If you had ServiceTitan, you might not lose money on that job. You would've seen that you didn't have everything in there."

Field techs can also build good-better-best estimates from scratch and present them to customers using a display interface that resembles online shopping platforms.

Customers’ familiarity with the interface makes it easier to see the different price options and pick one compatible with their budget, increasing conversion rates.

Learn how to set the right prices to maintain profitability.

4. Schedule Ahead

Scheduling jobs ahead of time is a key part of business management. It prevents underutilization—a situation where techs are idle because no job has been assigned to them—and helps keep field techs fully employed, increasing revenue generation.

With efficient scheduling, techs are assigned jobs they have the right expertise to execute, and they always arrive on time.

A key aspect of efficient scheduling is assigning jobs to techs so they know where and when to go for the service visit and have all the necessary information. However, this is impossible if you still rely on spreadsheets, clipboards, or project management software disconnected from the rest of your business processes.

That’s why we designed our Service Scheduling software, which lets users schedule jobs ahead of time and color-tag jobs requiring special equipment, language proficiency, or a specific expertise.

This helps HVAC companies plan for complex jobs and minimize idle time by ensuring that technicians always have a job assigned.

5. Optimize Dispatching

HVAC companies cannot survive without optimized dispatch processes, which reduce customer waiting times and ensure efficient resource use.

So, how can an HVAC company optimize dispatching?

Dispatchers should place pins on physical or digital maps whenever they arrive at the office to indicate the different service visits scheduled for the day. 

Then, use the pinned map to plan daily routes so technicians only handle jobs clustered in the same region. This will reduce drive times and gasoline costs and help techs handle more work orders daily.

Using manually pinned locations may work for companies that handle one to three work orders daily. However, it becomes a nightmare once daily work orders are in the tens or hundreds. Finding optimized routes will take longer, and techs may be mistakenly assigned new jobs when they’ve yet to finish their other jobs.

ServiceTitan’s Dispatch Software’s easy-to-understand interface shows all the jobs assigned to each technician, the status of each job, and the technician’s location relative to that of a job order. This helps CSRs assign technicians jobs based on their current workload and proximity to customers, preventing burnouts and late arrivals.

The software also has an Optimize Technician Route feature that automatically schedules jobs using the following:

• The jobs assigned to the technician. 

• The technician’s registered address (usually their home address).

This helps HVAC companies maximize available resources by completing more jobs with fewer field techs.

Jared Rohrs at John Henry’s believes that using Dispatch Pro has helped the company reduce drive time and increase revenue.

“If I have people getting paid, but not producing anything because they're having to drive, I am decreasing my overall chance of making money,” Rohrs said. “If I minimize those in every way, shape or form, it pays me huge dividends.”

6. Help Techs Arrive Fully Informed

Another critical aspect of HVAC business management is providing techs with all the information they need for the job, which enhances service delivery and improves customer satisfaction.

To that end, invest in robust HVAC software that centralizes customer data and makes them accessible to all employees. The platform must also have a mobile version or web app that field techs can use to clarify details.

ServiceTitan’s Field Service App grants field technicians unrestricted access to all customer details saved in ServiceTitan, including their name, phone number, entire service history, and outstanding estimates. The application also allows techs to access the intake call recording alongside the CSR’s notes ensuring they arrive at the job site fully up to speed.

Randi Thompson, service operations manager at Bill Joplin's Air Conditioning and Heating, says the tool has boosted the company’s efficiency.

"Technicians no longer have to call dispatchers and ask questions like, ‘What did we do the last time we were here?’” Randi Thompson, service operations manager, said. “The technician can see that history, so it shortens their whole process. It makes them a lot more efficient."

The software also allows project managers and supervisors to upload forms and program them to appear at specific job cycle stages. This way, technicians input the correct details before leaving the job site instead of trying to fill them out at the office when their recollections are fuzzy.

Once all paperwork has been completed correctly, field technicians can use the application’s property details checker to identify potential upsells. This increases the revenue generated per service visit, boosting profitability.

7. Invest in Good Technicians

An HVAC company is only as good as its staff, especially its field technicians and the expertise they bring to the business’s cutting edge.

Good technicians equal quality service delivery, which means repeat business from customers who come back, recommend your services to others, and leave glowing reviews.

That’s why you must hire employees with excellent technical skills, which you can identify using specialized interview questions. 

In those interviews, pay close attention to interviewees’ verbal and behavioral skills. They will be the face of the business and interact directly with customers. Customers will transfer any perception they form after interacting with an employee to the entire company.

It doesn’t stop there.

You should also actively invest in employee development and mentor those in the early stages of their careers. Send them to conferences, enroll them in courses, address their complaints, and empower them with the right tools. Every cent you invest in their development bears fruit in how they interact with customers and offer permanent fixes to customers’ issues.

Lastly, pay technicians competitive rates, offer performance-based payments such as commissions, benefits, and bonuses, and always pay on time. The goal is to make them feel valued and encourage them to stay longer with your company, reducing employee turnover rates.

8. Streamline Your Payment Collection

Payment collection is a crucial aspect of business management because finances play a critical role in the survival of any venture.

Without a streamlined payment collection system, businesses eventually run out of cash. At the end of every month, time that could have been spent serving customers and earning money will be spent chasing overdue invoices instead. They’ll be unable to settle vendors’ accounts, pay salaries, and fulfill credit obligations.

Processes must be set up from the office to the field to streamline payment collection.

Accounting processes must be put in place. You should know the exact amount coming in, track what each customer owes, and create a budget that is strictly follow​​ed. 

Furthermore, prepare periodic financial reports and offer multiple payment channels to accommodate customers' preferences, including cash, credit cards, and checks. 

In the field, techs must have the tools to accept payments and create professional invoices to shorten payment cycles. Give them a branded invoice template with the fields to accommodate essential details such as customer name, amount payable, etc.

We’ve designed two tools to help HVAC companies streamline payment collections; one is called Payment Processing, and the other is HVAC Billings.

HVAC companies use both platforms to collect electronic and check payments in the field, which are automatically reflected in their accounting ledger. Customers can also pay invoices via a customized portal created from the platform.

Once a payment is made, ServiceTitan’s system updates the customer’s record in the business ledger and automatically deposits the funds into your account within 24 hours. No more queuing up in bank halls for hours or waiting until the end of the day to know exactly what each customer owes.

Additionally, the platform produces three important and easy-to-export reports:

• Electronic and bank deposit reconciliation report

• Credit card transactions

• Credit card settlement

• Check settlement

• Mobile check transactions 

This improves and provides real-time visibility into the progress of your payments, making it easier to predict cash availability and plan appropriately.

9. Have a Marketing Strategy

A solid marketing strategy is essential to keeping competitors at bay and revenue flowing. In addition to attracting prospects, it will inform them of your services' quality and keep them coming back.

Effective marketing strategies combine digital and offline channels to maximize reach and impact. We’re talking channels such as:

• Personalized emails

• Paid social and search engine ads

• Organic social media posts

• Free project quotes and proposals

• Search engine optimization

ServiceTitan’s Home Services Marketing software helps HVAC companies run campaigns on different channels, including direct mail, email marketing, and paid advertising. Performance on all channels can also be tracked using intuitive dashboards, which display the exact revenue generated and the locations with the most calls.

This centralization reduces the amount you pay to subscribe to premium marketing tools and provides valuable data insights for tweaking campaigns to generate more revenue.

Additionally, HVAC companies use ServiceTitan’s Schedule Engine to empower customers to book appointments 24/7.

For example, Brian Choate, assistant general manager of Choate’s Air Conditioning, Heating & Plumbing, says the software has immensely increased the company’s revenue.

“We're seeing more and more jobs are being booked from (customers’) phones—and I'm not talking phone calls,” Choate said. “Being able to book online from your phone has definitely helped us get even more calls in.”

Additionally, Vines Restoration, Plumbing, HVAC, a commercial and residential shop in Conway, South Carolina, recently hit 1,000 five-star reviews, thanks to ServiceTitan.

Howard Bromberg, the company's owner, says, “ServiceTitan’s (Marketing Pro) makes it easy to gather the Google reviews because we can send the link right out in the post-call text.”

“(The) reputation (tool) is huge.”

10. Understand What Needs Improvement

Another critical aspect of business management is finding the right data insights to spot issues and address them quickly. This helps business owners set achievable goals, mitigate risks, and maintain an edge over competitors.

Consider investing in ServiceTitan’s Field Reporting Software to track business performance metrics.

The tool helps businesses monitor their performance metrics from anywhere in the world using dashboards. The dashboards can be customized to include KPIs that matter to the user. The tool also produces performance reports that can be scheduled to hit your inbox at specific times.

ServiceTitan’s Field Reporting Software also lets managers and other higher-level employees monitor the performance of technicians and CSRs, using dashboards that track metrics such as:

• Revenue generated

• Percentage of inbound calls converted into job bookings

• Number of service contracts sold

• The general sentiment of people who interacted with the employee

You can use these metrics to find the areas employees struggle with and develop training programs to close those gaps.

What are The Benefits of Effective HVAC Business Management?

Business management is a vital skill for any entrepreneur for the following reasons:

• Boosts employee morale: When effective business management practices are implemented, technicians receive a reasonable workload, which increases their productivity and willingness to stay.

• Attracts top-class talent: A well-run business is an attractive workplace, especially for HVAC technicians who want to optimize their careers.

• Minimizes risks: Proper business management allows you to spot risks a mile away and craft strategies to avoid them. This positions the business to outcompete other companies and keep operating for a long time.

• Enhances growth: Business management helps set goals with which every employee aligns. This improves the chances of success, which helps the company to grow.

How Do You Create an HVAC Business Management System?

An HVAC business management system is a collection of processes and strategies to ensure the company achieves its objectives. Here’s how you create yours:

• Centralize all essential documents and give access to the employees who need them to perform their jobs successfully. 

• Use tools to automate and streamline business processes.

• Document your company’s culture and way of doing things. Share these documents with all employees, especially when they are onboarded.

• Create an organizational chart that shows each employee's role and responsibilities. Use this to create job descriptions and contracts for new employees.

• Organize weekly meetings to gauge progress and learn about the issues technicians face in the field. The executive team should also have meetings to create a strategy and set business goals.

How Do You Choose The Best HVAC Business Management Software?

Effective business management can never happen without having the right tools. Here’s a checklist you can use to pick the right business management software:

• Features: Search for tools whose features and use cases align with the specific business management issue you must fix. 

• Scalability: You wouldn’t want to change tools anytime your business expands. Therefore, select a tool with higher tiers to accommodate high-growth companies.

• Support: Confirm if the tool has a responsive support desk. Read reviews, ensure there’s detailed documentation, and search for help guides online.

• Ease of use: The tool should have a short learning curve. Employees should be able to get up to speed quickly instead of wasting time learning where the different buttons are located.

• Integrations: You’ll want a tool that integrates with your current software. That way, you'll have all your data in one place.

The Bottom Line

All successful HVAC companies implement effective business management practices. It’s non-negotiable.

Optimize scheduling, recruit the right people, invest in the right tools, and create effective marketing strategies, and your business will be primed for success.

Remember: ServiceTitan’s HVAC Business Management software can streamline the entire process and consolidate all your operations in one place.

ServiceTitan is an all-in-one HVAC business management software solution that empowers contractors with a suite of tools to create targeted ad campaigns, monitor business performance KPIs, and drive growth. Our award-winning, cloud-based platform is trusted by more than 100,000+ contractors across the country.