The global market size for HVAC systems is expected to reach a staggering 208.6 billion in 2027, up from $130.5 billion in 2019.
The phenomenal growth of the HVAC industry is good news for entrepreneurs. It means that if you’re thinking of how to start an HVAC business, you’re on the right path.
But how do you go about starting an HVAC business? This is the most important question for most aspiring entrepreneurs looking to break into the HVAC industry. This comprehensive guide gives you eight expert HVAC business tips to get you started.
1. Start With a Business Plan
The first step towards starting an HVAC company is to create a business plan. Your business plan is a blueprint meant to give you focus, boost your chances of success, and help you get funding.
A good business plan details every service you intend to offer and a list of your target customers. It also details the area of your operations.
2. Conduct Finance Planning
Setting up an HVAC company requires a sizable investment. Expect to spend a few hundred thousand dollars minimum.
If you’re working on a small budget, consider purchasing only the most essential equipment to keep costs low. Note the required overheads and plan to pay for several months until your HVAC company gains traction and can pay for itself.
Financial planning will also include managing banking and taxes. If you don’t have access to an accountant, you’ll have to open a new bank account for your business. You might also need to pick a tax year for reporting costs and revenue.
3. Deal With Legal Formalities
One of the first considerations as you start your business is to define its structure. Among the most popular business structures are sole proprietorships, partnerships, and company registration. Registering a company minimizes liability on the business owner.
Another consideration as you set up your business is getting the appropriate licenses and state approvals. Every state has its requirements, so take your time to find out what your state requires. Pay a visit to your local chamber of commerce and obtain the relevant permits, licenses, and approvals.
4. Purchase Insurance
Starting any business without sufficient insurance is a recipe for disaster. Insurance protects your HVAC company from losses arising from a variety of perils.
Typically, you’ll need to have two types of insurance when starting your HVAC business:
General Liability Insurance
General liability protects you when your business causes property damage or bodily harm at your job sites. The insurance also covers HVAC installation problems.
In case a customer sues you for damages and repair costs, general liability insurance can also cover you.
Workers’ Compensation Insurance
This type of insurance is a requirement only for companies that have employees. The insurance protects you when an employee gets injured on the job, which is not uncommon in HVAC businesses.
5. Purchase Tools and Equipment
When opening an HVAC contracting business, you need to assemble all the tools and equipment of the trade. Start by making a list of the tools necessary to install, repair, and replace the HVAC systems.
In the beginning, you may not be able to afford the most advanced equipment. However, as time goes by and business grows, consider buying them.
Don’t forget to purchase the appropriate safety equipment. Technicians who work without the required safety equipment may void your insurance.
6. Hire a Competent Staff
The importance of Human Resources cannot be underestimated when running an HVAC business. Having the right talent working for you can differentiate you from all your competitors.
Generally, you’re looking for candidates with excellent technical skills, good communication skills, and the willingness to adapt rapidly. Ensure that every technician you hire has the requisite HVAC certificate.
7. Have a Marketing Plan
An effective marketing plan is vital to generating sales for your business. After setting up your business, you’ll need to spend some money on advertising.
Consider setting up a company website to reach online customers. Hire a competent website designer to create a business website that offers an excellent user experience, so you attract and maintain high web traffic. Invest in SEO to boost your discoverability.
Leverage HVAC extended warranties benefits, including their ability to enhance customer satisfaction and retention.
You may also consider charging attractive rates when you’re starting out to attract more customers. However, be careful not to charge rock bottom rates as customers may see this as a sign of poor services.
8. Invest in Field Management Tools
Managing a spread-out business such as an HVAC company can be challenging. Thankfully, there are many tools that can help streamline operations for you. You can find an appropriate field management system (FMS) software to help make things easier for you.
The best FMS software incorporates a powerful collaborative feature that helps enhance communication between your office and the field. The system will also have impressive auto-invoice generation features to enable prompt revenue generation. You can also access customized reports to make it easy for your team leaders to make informed decisions.
Put Your Knowledge on How to Start an HVAC Business into Action
An HVAC business is a huge opportunity to earn a good profit, particularly now that the industry is experiencing phenomenal growth. Now that you know how to start an HVAC business, it’s time to take a step forward and open your own company.
Would you like to learn more about starting a successful business? Keep visiting our blog.