An In-Depth Guide on How to Start an HVAC Business in 9-Steps

Zaid's picture
Joey Randazzo
August 22, 2022
An In-Depth Guide on How to Start an HVAC Business in 9-Steps

Starting a business can sometimes feel as if you’re on a rollercoaster that you have no way of getting off of. If you’re an HVAC professional looking to start your own business, you may be looking for guidance on where to start or what steps to take to create a successful business. 

If you’re ready to put in the work to get your dream business off the ground, we’re here to help. We’ve created a concrete, nine-step guide on how to start an HVAC business. 

Keep reading to learn more.

Table of Contents

Ask Yourself These 5 Questions Before You Start Up Your HVAC Business

Are you ready to bring your vision of starting an HVAC business to life? Ask yourself these five questions before you take the dive. 

#1: Do you Have the Time to Dedicate Yourself to the Business?

A business can’t be built overnight. It takes dedication, time, and lots of effort. 

According to a survey, the majority of business owners dedicate at least 50 hours per week to running their business. 

Can you make the time to give your business your all? 

Although you will be able to hire more employees and delegate tasks and responsibilities to others in time, in the beginning phases, you will be responsible for taking on many different roles in your business. 

#2: What Are You Willing to Sacrifice to Make Your Dream a Reality?

Think of your business as your baby – almost all of your time and efforts will be put into it. You’ll need to make sacrifices to focus on your baby and hit the ground running. 

Reports show that the typical costs of starting an HVAC business are anywhere from $2,000 to $10,000. If you’re considering purchasing a franchise, it can cost anywhere between $50,000 to $80,000. 

Owners of HVAC companies just getting started generally make financial sacrifices in order to afford these start-up costs. These sacrifices may look like:

  • Waiting to make big personal purchases like buying a new vehicle or house 
  • Holding off on big vacations 
  • Cutting back on spending unnecessarily on hobbies and leisure activities

Before starting your HVAC company, remember that your business doesn’t have to be your entire world – some things cannot be replaced and should not be sacrificed for your business. It’s critical that you identify the things that you are not willing to sacrifice for the sake of your business, such as: 

  • Family
  • Relationships
  • Your health – both physical and mental
  • Your happiness and wellbeing

Before starting your HVAC business, take the time to create a list of sacrifices you might have to make, and decide which you would be willing to make and which are non-negotiables.

#3: What Goals Would You Like to Reach With Your Business?

You’re searching for how to start an HVAC business because you’ve got big goals – but what exactly do those goals look like? 

What are you hoping your business accomplishes? Do you have your goals and objectives clearly stated? How do you define success? 

Creating a clear pathway on how to achieve success involves knowing how you’re going to achieve them in a very specific way. 

Some examples of what these goals look like include:

  • “I will have seven employees by the end of the first year of business.” 
  • “I want to be building a profit by the end of the year.” 
  • “My business will be the most trusted HVAC business in my community.”

Once you have a clear picture of your goals, working to create a plan and meet those goals will seem much more realistic. 

#4: What Are Potential Roadblocks You May Anticipate With Owning Your Business?

Only those who dare to fail greatly can ever achieve greatly” - Robert F. Kennedy

Preparing for any roadblocks and potential “failures” while starting your business can help you become more equipped to handle those situations. 

Think about what could possibly go wrong when starting an HVAC business. Some typical roadblocks new business owners face are: 

  • Equipment financing. Underestimating the cost of equipment required to make your HVAC business run successfully. Many traditional credit card options don’t offer enough credit limits to finance these costs.

    If you’re stuck in a predicament like the one mentioned above. The Flexbase card is the card for your HVAC startup. Flexbase offers 10x the credit limit of traditional credit cards, 0% interest within the first 60 days, and $0 in annual fees. Click here to learn more and get pre-approved today.
  • Marketing mistakes. Hiring a cheap web developer may lead you down a terrible path. Now, you’re redoing your ad campaign on an even smaller budget. You didn’t quite understand Google’s requirements for your Google Business Profile and now you’re risking it being suspended.

    As a new business owner, marketing mistakes are going to happen – it’s nearly inevitable.  Mitigate these problems by preparing for them ahead of time in your budget and doing your research before picking a marketing guru. 
  • A slow start. It’s always possible that your new business doesn’t take off as quickly as you hoped. Make sure to account for this in your financial projections and budget planning so you can work on increasing business without feeling strapped for cash.

#5: Is Owning an HVAC Business Your Passion?

If your heart isn’t in it, it may be worth reconsidering starting a business.

If you’re considering starting a business as a way to bring in more money quickly or to prove yourself, you may find yourself struggling to get past the start-up curse. (The curse being that 80% of start-ups don’t survive past their first year.) 

Passion is a must when it comes to starting and maintaining an HVAC company. 

How to Start a HVAC Business in 9 Steps

If you have the drive, passion, and commitment to start your own business, you’ll want to stick with us – here are nine steps on how to start an HVAC business.

Step 1: Decide What Services You Will Offer

Deciding what services you offer is the first step to starting your HVAC business. Consider the following questions: 

  • What services will you be offering? Will you specialize in anything specific?
  • What equipment will you need to purchase to be able to provide these services?
  • Will some services come with a higher profit margin than others?
  • Will you be a 24/7 business or will you establish specific business hours?
  • What areas do you plan on offering services to?

As your business grows you can always add or take away services. In the beginning, focus on providing the services you are most confident in and that creates a great profit margin.

Analyze the Market

When deciding which services you’ll offer, check out the competition in your area. Analyze their websites, services, and pricing. 

Are those companies meeting all the needs of your community? Could you offer better services? What does your competition look like?

Is your community the best place to start an HVAC company, or is it oversaturated? 

Before jumping into step two, do your research on your potential service area. 

Step 2: Decide What Will Set You Apart From Your Competition

You likely won’t be the only HVAC business that services your area – and potential clients will be searching the internet to find the best fit. 

What sets your business apart from others? Why is your HVAC business the best choice? 

This is where your branding comes in. People like to see values that resonate with their own. Does your team have years of experience working in your community? Maybe your company will be contracted with a military base in the area as a way to say “thank you” for their sacrifices. 

Although you want to be the number one choice for your community, don’t fall into traps like offering prices that you won’t make a profit from. Doing so can actually hurt your business by scaring off customers who think your quality of work is reflected in your prices.  

Step 3: Choose a Name for Your HVAC Business

Choosing the right name for your business is critical. When it comes to deciding on a name for your company, consider the following: 

  • Keep it simple: Choose a name that is easy to remember and simple to spell. 
  • Make sure the name isn’t already taken: Be sure to run a trademark search before choosing your HVAC business name. After you’ve picked a name that isn’t taken, register it for a trademark. 
  • Ask for feedback: Don’t be afraid to share your ideas with family, friends, and business partners. This is an easy way to get opinions on any that stand out. 
  • Don’t wait, Set up your social accounts and domain name. Once you’ve decided on your business name, search social media and Google to make sure that your handle (and name) aren’t already taken. If you’ve registered your business for a trademark, setting up social media, your domain name, and your website should be next on your to-do list.

Step 4: Take Care of the Necessary Paperwork

Understanding the business regulations and requirements of your state is vital to get started. It’s also important to know what red tape is involved to save yourself unnecessary hassles later. 

Some of the typical paperwork you’ll need to complete may include the following.

Ensure You Have the Proper Certifications

Working as an HVAC professional in many states requires you to have different types of HVAC licensure. 

You can find more information on HVAC licensing requirements here

Apply For a Business License

The Small Business Association, states that obtaining a business license can be different from state to state

The process of applying for a business license generally looks like this: 

  • Deciding whether you will need to register your business as a limited liability company (LLC), corporation, or partnership.
  • Put together the following documents needed for your application: 

                   a. A description of your business, location, and planned activities

                   b. Proof of your local/state tax status

                   c. Copies of corporation information, such as bylaws

                   d. The registration fee

                   e. A list of business owners and managers

                   f. Proof of insurance

                  g. Records verifying your business certifications

  • Apply for the business license
  • Comply with any policies and renewals in order to maintain your business license.

Register Your Business

Generally, businesses must register at all local and state levels. This usually involves:

  1. Deciding on a business structure, such as an LLC, corporation, or partnership
  2. Registering the name of your business with your local government
  3. Registering your business with the IRS and obtaining a Tax ID number
  4. Registering your business with the state tax and revenue authorities
  5. Applying for the proper license and permits required based on the state you live in

Apply for an Employer Identification Number

Applying for an Employer Identification Number (EIN) with the IRS is the next step you’ll need to take when starting an HVAC business. Click here for resources from the IRS that can help you apply for your EIN.

Step 5: Get Your Business Insured

Step five is one you cannot ignore. Your business must be insured. Starting and running an HVAC business must involve being insured – this isn’t just to take away some financial risks, most states actually require it.

Your HVAC business may be required to have the following: 

  • General liability insurance
  • Worker’s compensation insurance; and
  • Income protection insurance. 

You’ll also want to insure assets like tools and business vehicles.

Do your due diligence and contact an insurance representative to figure out which insurances your business will be required to carry as well as what types of insurance coverages you will need based on your business.

Step 6: Create a Business Plan

You can never be too prepared. The more preparation you do, the better the chances of your HVAC business being successful. Creating a business plan is one of the best ways you can set yourself up for that success. 

Your business plan should cover every aspect of your HVAC business, including: 

  • Key partnerships: who are you working with and what are their roles in the business? 
  • Key activities: What will be required to get your business running? 
  • Key resources: Can you leverage resources that will create value for your potential customers?
  • Value proposition: How can you highlight your brand’s values? Can you create a compelling statement that portrays your brand in the right light? 
  • Customer segment, relationships, and channels: How do you plan to communicate with your target audience? Do you know who they are?
  • Financial projections and budgeting: What potential costs will your business incur? Create a budget forecast reflecting these.
  • Revenue streams: Can you identify the streams of revenue your HVAC business will have? 

Step 7: Create a Financial Plan

After you’ve created a business plan, you’ll want to create your financial plan. 

A financial plan outlines: 

  • Your current financial situation
  • Your ideal financial projections
  • How you plan to meet your financial goals and objectives
  • Profit and loss statements
  • Balance sheets
  • Cash Flow statements
  • And more

Your financial plan can help you organize and keep track of any assets or loans invested into your start-up. 

How Much Does It Cost to Start an Electrical Business?

As we shared at the beginning of this guide, the average start-up cost for an HVAC business can range anywhere from $10,000 to $80,000, depending on if you’re planning to purchase a franchise or start a standalone business. 

Various factors can impact the start-up cost for your business, including:

  • How large your business is
  • The cost of equipment
  • Certification fees
  • Whether you are purchasing a brick-and-mortar location and company vehicles
  • The number of employees you hire
  • Your marketing budget
  • And more

Step 8: Hire a Team

Your company relies on the team that’s behind it. When you’re hiring your team, get to know potential team members' values and goals. Remember, these are the people who will help you grow your business and increase your revenue. 

When deciding who to hire, consider the following: 

  • Whether a new hire will fit in with other employees
  • The experience level of potential hires
  • How a potential hire may fit into your company culture
  • And more

Step 9: Begin Marketing Your HVAC Business

Marketing is a crucial component of successfully starting an HVAC company. 

Before you launch your business, make sure your website, social media accounts, and any other marketing materials are ready – and up to your standard. 

There are many marketing strategies you can use to make a splash as a new HVACbusiness. And if marketing expenses are a cause for concern, consider a card like the one offered from Flexbase. With less stress over interest rates, spending limits and more, Flexbase offers start up HVAC businesses an opportunity to grow. 

Blogs you might like

Finally, a credit card built for construction companies.

Get 0% interest for 60 days.
Get pre-approved