Do you dream of starting an HVAC company of your own but don’t know how to start an HVAC business? Well, we’re here to help!
With recent changes in energy efficiency standards and technological growth in the HVACR industry, the possibilities are practically endless for starting an HVAC business in 2023 and beyond.
Let’s take a look at what you need to know before starting an HVAC business:
1. Know Your HVAC Certifications
Before you can begin work as an HVAC technician, you must complete an HVAC certificate program from an accredited program or school, depending on your state. You must then obtain your HVAC license from the state you plan on working in and pass corresponding certification exams.
The different types of HVAC certifications are:
- EPA Type I Certification – For Servicing Small Appliances
- EPA Type II Certification – For Servicing High-Pressure Systems
- EPA Type III Certification – For Servicing Low-Pressure Systems
- Universal EPA Certificate
- North American Technician Excellence (NATE): Offers professional level certifications for professionals, including:
- Air Conditioning (AC)
- Air Distribution (AD)
- Heat Pumps (Air-to-Air) (HP)
- Gas Heating (GS)
- Oil Heating (OL)
- Hydronics Gas (HG) (service only)
- Hydronics Oil (HO) (service only)
- Light Commercial Refrigeration (LC) (service only)
- Commercial Refrigeration (RC) (service only)
- HVAC Efficiency Analyst (Senior Level) (EA)
2. Create an HVAC Business Plan
Starting an HVAC business starts with a business plan. In this phase, you’ll define your local competition, target market, marketing plan, business structure, revenue projections and more. This not only helps keep you on the right track, it will also help secure funding from banks and other investors when the time comes.
Knowing how to start an HVAC business means knowing what other businesses yours will be going up against, so market research is a crucial part of this initial step. To get a better sense of other HVAC businesses in your area, the services and prices being offered and the viability of the local commercial and residential market, we suggest using resources like city-data.com, the US Chamber of Commerce, and the Bureau of Labor and Statistics (BLS).
3. Determine Startup Costs
Once you have a sound business plan in place, you’ll need to take inventory of the expenses that will be going into starting an HVAC company. Assuming you’re actively working to keep your equipment costs down, the average cost for starting an HVAC company tends to range from $2,000 to $10,000, but could easily hit $100,000+ if you’re buying all-new equipment, vehicles, etc.
In general, the costs associated for starting an HVAC business include:
- A vehicle large enough to carry all tools and equipment
- Liability insurance
- Workers compensation insurance (if you’ll have at least one other employee)
- Assorted hand tools
- Safety equipment/PPE
- Branded materials (vehicle logos, shirts, hats, etc.)
- Website
- Marketing (business cards, digital marketing, etc.)
See how to get started with HVAC business loans and financing.
4. Register Your HVAC Business
When you operate as a person, rather than a business, you open yourself up to potential legal implications that could drain your personal assets. So, building a legitimate, legal business is a huge step in starting an HVAC business.
Not only can this help protect your personal assets if you get sued or a client disputes your services, it will also help you when handling and filing your taxes.
If you’re wondering whether to register your HVAC business as S Corp or LLC, keep this in mind:
- Registering your business as a sole proprietorship LLC means you’ll have to pay self-employment taxes (social security and Medicaid), so your business’ entire profit is taxed for a particular year.
- When you’re registered as an LLC with an S Corp, you (the business owner) will get a salary, meaning your salary will get taxed for self-employment taxes (as opposed to your total profit paying for it)
5. Get Bonded and Insured BEFORE You Start Working
As you navigate how to start an HVAC business, be sure to look into finding a trusted HVAC business insurance provider.
Even though insurance is going to cost you money on the front end, it protects you from financial repercussions if something goes wrong on a job site. This helps protect you and your business from going bankrupt if someone tries to sue you for damages or liabilities.
6. Make Your HVAC Business Look Professional
Establishing trust with your customers is key, especially when starting an HVAC company that’s brand new. If you’re wondering how to start an HVAC business and keep it looking professional, keep the following in mind:
- Set up a professional website with company information that’s easy to navigate and incorporates SEO keywords.
- Create a professional work email with your company URL.
- Go branded – dress in a shirt with your company name and logo, add signage to your company vehicle, etc.
Learning how to start an HVAC business means looking the part, so make sure your company is prepared to make a strong first impression with customers in your local market.
7. Plan for Growth
Knowing how to start an HVAC business means planning for tomorrow as much as today. As your business grows, you’ll need to be prepared to scale and expand accordingly. Hiring additional staff, managing a team, purchasing new equipment and taking on new clients at a higher rate all taking planning and preparation, so make sure you plan ahead when starting an HVAC company.
Ready To Start Your HVAC Business?
Starting an HVAC business is a challenging but rewarding opportunity. Be sure to do your own research, take your time and be as prepared as possible when starting an HVAC company of your own.
The unexpected is bound to happen, but with the right plan in place, you can be confident in knowing how to start your own HVAC business that can grow and succeed.
