Do you want to build an HVAC company? Are you unsure of where to even begin?
Starting an HVAC business can be confusing, but you don’t have to worry about anything!
We’re here to help you through every hurdle you’ll encounter.
We’ve done our research and compiled this beginner’s guide on how to start an HVAC business.
It covers everything you may want to know, from resources and necessary licenses to your expected budget.
If you follow these steps, we’re confident you’ll be able to gather potential customers and create a successful HVAC business!
- How Profitable Is Owning an HVAC Business?
- What You’ll Need to Start an HVAC Business [& Associated Costs]
- Why You Should Consider Starting an HVAC Business as a Side Hustle
- How to Start an HVAC Business in 6 Simple Steps
- Things to Consider When Building an HVAC Business
- INSPIRATION: HVAC Business Ideas
- Frequently Asked Questions
- Similar Businesses to Consider Starting
- Wrapping Up
How Profitable Is Owning an HVAC Business?
Those involved with the maintenance of commercial refrigeration and the air conditioning unit of a house can make $48,630 per year.
This was according to the US Bureau of Labor and Statistics as of 2021.
You’ll earn more as an HVAC business owner if you add other aspects, such as distribution or manufacturing.
The HVAC market will reach $271.5 billion by 2026.
Demand is increasing because of new technology for smart HVAC systems.
What You’ll Need to Start an HVAC Business [& Associated Costs]
How much do you have to dish out to start an HVAC business?
If you want to go for distribution and installation, you may need a bigger capital.
It’s more affordable to offer HVAC services instead. Here are the expected costs:
- Labor: You might need an HVAC technician to help you with the technical aspects of the business. To hire one, it’ll cost you about $4,000 per month on his salary.
- Equipment: The most common HVAC tool includes screwdrivers, wrenches, metal cutters, and PPEs. You’ll also need HVAC equipment like thermal image cameras, phase detectors, megohmmeters, and leak detectors. All in all, it may cost you $1,500 for everything.
- Products: If you’re planning on starting an HVAC distribution business, you may have to stock up on your products. A single HVAC unit can set you back $5,000. You may get around this if you can agree on delayed payment terms with your manufacturer!
- Marketing: According to Statista, small businesses spend an average of $500 on digital marketing. The most effective marketing strategy is by using email lists and Facebook ads.
- Training and Business Licenses: The most basic 6-month HVAC training course can cost up to $1,200. If you’re hiring HVAC professionals, then there’s no need for this. Licensure can cost up to $300 for the first year and $150 for renewal.
- Insurance: All HVAC contractors should have liability insurance to cover accidents on site. The smallest you can get is about $400 per year.
In general, you may have to pay at least $12,900 during your first month of running the business.
It includes labor, equipment, stock, marketing, training, and insurance.
The price will decrease during the next few months because some of the fees are annual.
Do I Need a License or Certificates to Start an HVAC Business?
Yes, you’ll need an HVAC contractor license. It means that you’ll have to pay an application fee and pass your state’s license exam.
Some states may do a background check on your education, too.
For HVAC certification, you have to get a Section 608 Technician Certification.
You may want to look at the EPA Type I Certification for servicing small appliances.
An EPA Type II Certification for servicing high-pressure appliances works as well.
Why You Should Consider Starting an HVAC Business as a Side Hustle
Having an HVAC business does have its perks. You can make a difference as an HVAC contractor!
Here’s why you should consider it as a side hustle.
- Urbanization: Cities are expanding and many governments are pushing for infrastructure reforms. Buildings and residential homes alike all need to have HVAC systems.
- No Lack of Work: Even if you’ve built an HVAC system in one house, your client will still need to call you back for maintenance. It means that you’ll have a steady stream of projects.
- It’s Affordable to Start: If you’re going for a service type of business, all you’ll need are some equipment, and yourself.
- You Get to Help: HVAC is all about making living spaces better for everyone. You can make homes energy efficient and improve work environments.
How to Start an HVAC Business in 6 Simple Steps
Now that we’ve gotten the requirements out of the way, let’s talk about the steps you have to take.
Here’s how to start a HVAC business.
Step 1: Begin Training and Licensure
The first thing you should get out of the way is your training and certification.
The minimum amount of training time would be around six months to one year.
For this, you may want to look at North American Technician Excellence.
It’s a non-profit organization that provides training and certificates for HVACR technicians.
After training, take your state’s licensure exam. Note that some states don’t require a license and your certificate is enough.
With these steps, you set yourself up for success by getting essential knowledge and acknowledgment to do your work.
Step 2: Do Your Paperwork
After you get your license, you can now work on building your business. Lay out the groundwork before registering.
You’ll need to submit most of this information to register your business.
- Business Name and Location: You should familiarize yourself with business name laws. As a tip, have a business name that’s catchy and related to HVAC. Plus, look for a location that’s near your potential clients.
- HVAC Business Plan: HVAC includes heating, ventilation, and cooling. You can decide to cover one aspect of it to make it easier, then expand as you go along. Put this plan into writing.
- Business Structure: Will you hire employees? What roles will they take? Your business structure should describe everyone’s day-to-day operations. You’ll have to submit the management structure and directors’ names.
- Financial Plan: Your financial plan should include all the expected startup costs. You can check the US Small Business Administration for funding.
Step 3: Register Your Business
Make your business legal!
With a business registration, you can get personal liability protection, tax benefits, and legal benefits.
You’ll want to get a federal tax ID and make a file with the IRS if your business type is an S corp.
Most states will require you to register with the Secretary of State’s office, a business agency, or a business bureau.
Step 4: Get Your Things In Order
Look for suppliers that you can trust.
It’s important to invest in good quality equipment, protective gear, and tools.
Hire competent HVAC technicians with the appropriate licenses as well!
Step 5: Launch Your Business
Come up with the right marketing plan and execute it.
You may want to invest in a website and post blogs that target HVAC SEO.
Open an account with Google My Business and make a business profile so you can be visible to a new customer.
You can also opt to post your business card so people can contact you.
Step 6: Service Customers
As a business that focuses on installation and maintenance, you need to have good customer service.
Many businesses fail because they forget to prepare for this aspect!
It’s best to prepare for a potential customer who’ll need you to come back and check for issues.
If you do this, he’ll leave good reviews and make repeat orders.
Things to Consider When Building an HVAC Business
These are additional things that you may want to think about if you’re going to join the HVAC industry.
Can You Run an HVAC Business by Yourself?
Yes! Heating, ventilation, and air conditioning contractors can work alone.
In fact, according to the US Department of Energy, most start-up contractors are self-funded.
You can start by servicing residential homes as a side business.
You’ll need to do all the marketing and bookkeeping alone, but they should be simple enough.
Do You Need to Learn About HVAC Software?
It’s best if you study software for the maintenance of your HVAC system.
It may be hard to learn, but it’ll help you in the long run.
The software will let you manage customers, inventory, scheduling, routing, and equipment tracking.
It can help a field service, like your HVAC business, grow.
Will You Get Customers On the Off-Seasons?
The HVAC industry booms during the summer and winter months.
Some contractors forget this fact and fail to adjust for the rest of the year.
Boost your sales on the off-seasons by coming up with promos and incentives.
Likewise, you can look for partner businesses that’ll agree to take your HVAC service.
INSPIRATION: HVAC Business Ideas
HVAC has many aspects to it. You can choose to focus on one part of the business to save up on costs! Here are some HVAC business ideas.
- Franchising: Instead of doing the work yourself, you could open an HVAC franchise instead. This will allow you to gain more profits with minimal effort.
- Distribution: Distribution is for those who don’t have the desire to study too much of HVAC’s technical aspects. You could buy and sell HVAC components and focus on purely business.
- Manufacturing: If you have innovative ideas that you want to invent, you could go for manufacturing them. You can patent your designs and get rich selling them!
- Maintenance and Repair: A HVAC maintenance and repair home service could be the cheapest option. You can start a business with your skills and knowledge.
Frequently Asked Questions
Can You Become a Millionaire In HVAC?
HVAC is a multi-billion dollar industry, so yes, you can become a millionaire. The profit margin in the industry is good.
All you have to do is have the necessary knowledge to make your business work!
Focus on making a name for yourself and gather the trust and loyalty of your customers.
Why Do HVAC Businesses Fail?
A new business may fail because of poor planning and research. I
It doesn’t expect the off-seasons, and it forgets to focus on the customers. It lacks the personnel to focus on customer complaints as well.
Additionally, some HVAC businesses fail because they don’t seem trustworthy enough.
It could be a lack of online presence or a lack of training certificates.
Similar Businesses to Consider Starting
Want to know about other businesses? Here are some related articles you might want to look at!
- How to Start a Handyman Business: Learn how to start a business on general construction and repair services.
- How to Start a Real Estate Business: Sell properties without having to make huge investments.
- How to Start a Landscaping Business: Start the low-cost business of beautifying and maintaining backyards.
The HVAC business makes everyone’s homes and workplaces more livable. It’s a growing industry because of new technologies.
That’s why we believe that it’s worth your time.
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