How To Start An HVAC Business
[Startup Guide]

How do you start an HVAC business?

With the right strategy in place, starting an HVAC business is relatively simple. Get it right, and you can access enormous opportunities and grow your company.

The HVAC industry offers massive potential for new businesses. The demand for HVAC controls on a global scale is expected to be worth 27340.5 million by 2028

This goes to show that there is always a demand for HVAC services, so starting your own business in this space is the right idea. 

In this guide, we’ll cover eight essential methods that you should follow when starting your own HVAC business.

Starting An HVAC Business In 8 Steps

1. Do You Have A Clear Business Strategy

One of the fundamental areas of starting an HVAC business is having a solid business plan in place.

Regardless of how well experienced or how well versed you are in the HVAC industry, starting a new business comes with a lot of risks, and a lot of big picture thinking. A well-thought-out business plan will help you minimize any potential risks, and help prepare you to run a successful HVAC empire.

A good business plan doesn’t need to be overly complicated. You can follow a simple business plan template.

When creating your business plan, a number of key factors should be taken into account:

Your Financial Plan

Do you have enough startup capital available? Will this cover all of your startup costs and operating expenses? And have you established what your projected revenue (gross and net profit) will be over the short and long term?

Do you have reliable accounting software that can take care of all your payments and reconciliations etc?

Market Research

Having a thorough understanding of your industry, market, potential customers, and competition is imperative to the success of your startup.

Operations Plan

Have you fleshed out what running your HVAC business will look like on a day-to-day basis? How many technicians do you plan on hiring, and what sort of software you will use for scheduling, dispatch, inventory management, etc?

It is common for new HVAC business owners to feel that they are “too small” or unable to afford proper software. When starting out, there are a lot of balls to juggle and a lot of elements that make up general operations, office practices, and customer relations.

Choosing the right software solution will allow you to leave a call or customer meeting with full confidence that everything has been appropriately documented and that nothing will slip through the cracks.

Marketing Plan

A comprehensive marketing strategy is essential for attracting customers to your business.

In the beginning, it’s not always affordable to have an extensive marketing plan (if any plan at all). Make sure that the software you choose has a well-documented history and a task manager. This will help you stay in front of every potential customer you come in contact with and form strong relationships.

Conducting thorough research and documenting the challenges identified regarding outdated systems can help you reconnect with customers and make helpful recommendations. This could be advantageous by bringing in vital revenue for your business during slow/shoulder seasons.

2. Your Financial Systems & Processes

It is no secret that sufficiently managing your finances is a critical component of your small business’s success. Using an accounting program such as Quickbooks with easily accessed “how to” information can really make the transition go smoothly.

It is important to check that the HVAC software you use integrates with your bookkeeping platform. This will streamline processes and make your life a lot easier.

Structured departmentalized profit & loss reports are also a proven way to help business owners make better decisions for your young growing company.

One of your key hires should be a financial controller/accountant/spouse or a team who is qualified to manage your finance department. This will help you put pivotal systems and processes in place to ensure that you have a clear understanding of the entirety of your company’s financial situation.

Partnering up with professionals in the HVAC industry can be a simple and affordable way to help you structure your accounting format and get the advice and understanding needed to start the company off on the right path.

Not knowing the financial side and shooting from the hip is one of the biggest mistakes new start-ups make. It’s not as confusing as it appears, so partnering with a distributor, software company, consultant, or HVAC accountant can help you tremendously when starting out.

Obtaining professional help will also assist you with compliance when submitting taxes, securing licenses, etc.

Financial Goals

Set a reasonable goal for sales, gross profit, and net profit. To help you arrive at these numbers, consider what you’ll charge for service calls, preventative maintenance visits, and installations. Remember to consider overhead costs, such as parts, vehicles, fuel, technician pay, and more.

Then, determine how many service calls, preventative maintenance visits, and installations you need each month to reach your financial goals, keeping in mind that the HVAC industry is seasonal, so some months you might come out in the negative.

With a little research and accounting help, you can budget your cash flow so that you don’t start your HVAC business with blind expectations.

Key Metrics

Track the key metrics of your HVAC business that affect your profitability on a weekly or monthly basis. These numbers are known as KPIs or Key Performance Indicators.

These include:

  • Gross profit
  • Average service call ticket
  • Average installation sale
  • Close rate of leads versus sales
  • Sales per technician
  • Labor as a percentage of overall service and installation costs
  • Parts & materials
  • Equipment costs
  • Customers with service agreements as a percentage of total active customers


Then, at the start of each work day, look over a dashboard with these crucial metrics:

  • Incoming service calls
  • Incoming leads
  • Revenue from service calls, installations, and maintenance visits
  • Number of new service agreements compared to total active service agreements
  • Cash balance


Thorough bookkeeping is vital to keeping your HVAC business on track.

3. Set Up Your Business Entity

The various options for structuring your business include a sole proprietorship, a limited liability company (LLC), and a C corporation. The structure you choose should depend on how big your HVAC business is and how many staff members you plan to have.

Generally, the best entity for a small HVAC business is an LLC. However, it’s best to speak to your accountant or a small business lawyer to help you establish the right business entity for your needs.

This can offer protection for your personal assets, as well as provide some good tax incentives.

4. Create A Marketing Plan

What is a business without customers?

Establishing a comprehensive marketing plan to reach clients and grow your database is paramount.

Here are a few important strategies that you will need to set up when starting your business:

  • Create a highly engaging HVAC website
  • Establish a strong social media presence on various platforms
  • Set up a Google My Business profile
  • List your business on local service directories
  • Consider creating marketing content (blog posts, YouTube videos, etc)
  • Encourage customers to write reviews/testimonials and include these on your website
  • Setup an account with Mailchimp to send out email marketing (newsletters, promotions, general info, etc)


When running targeted campaigns, ensure to analyze the metrics. Are your efforts having the desired effect? Are you using the right tactics for your audience?

These are a few of the most important marketing strategies to use when you start your own HVAC business. However, you can develop additional creative marketing ideas, like running a referral program to get repeat business or hosting a giveaway on social media to gain followers.

Seeking the help of a professional, who understands the nitty-gritty elements of the inbound and outbound marketing world can greatly benefit your business.

The marketing strategy is very important to get the phone to ring and get your business off the ground.

One of the most important things you can do as a new business owner is to make sure the software you choose helps you stay in front of the leads you spent money to get, at zero or little cost.

The software should have the functionality to send you reminders of customers you performed tune-ups for in the last year that didn’t buy an agreement. And the busy season service customers who have old and neglected systems that you need to repair and maintain (this can be done during the slow season).

This Task Manager feature alone is a vital part of your quick success and can help you grow each year and build your customer base.

5. Implement A Service Agreement Program

HVAC companies thrive on loyal clients, and encouraging customers to sign a service agreement is a proven way to lock in their business for years to come.

Service Agreements are the heart and soul of any Service and Retrofit HVAC company wanting to grow and be profitable. For every 1000 Service Agreements, there’s 1.2 – 1.3 Million dollars worth of business if managed properly.

The right HVAC software platform can even track service agreements automatically so that you know which customers to approach about signing up, who you should track with new installations, and those that require first-year tune-ups.

The software needs to be flexible enough to offer a variety of agreements with different annual visit options, payment terms, and recurring invoicing to minimize administrative responsibility for the office. More revenue with fewer overheads. This is where HVAC-specific software is crucial.

Service agreements are a highly efficient way to implement quality control for installs, reduce callbacks and increase customer satisfaction, along with customer retention for continued maintenance, service, and system enhancements.

It is important to develop a strong customer retention process for every customer you come in contact with. Agreements play a tremendous role in customer retention.

3. Hire High Caliber Employees

Recruiting the right technicians and dispatchers is a crucial part of owning an HVAC business. After all, the success of your business will come down to the quality of the service you deliver.

You’ll probably start out small, or even solo. However, you will need a plan for employees as your business grows.

Finding a key “A Class” employee early on will be a tremendous help to a new start-up company. So make sure to do the due diligence early on.

You will need to find a reliable, hard-working person with everyone’s best interest in mind. An incentive program can help pay the money needed to employ these key employees. And an efficient software program will help track this type of performance pay structure for you.

A useful avenue to seek quality candidates is to contact a recruiter. Some may even specialize in this field.

Once your new hires start, it is vital that you invest time and resources in their training to ensure that they are fully competent and ready for a client interface.

Most new start-up businesses struggle to find the time to do this. The right software program can help with “how-to videos” built into the platform. This can assist new owners by serving as a guide or training plan to get new employees up to speed quickly.

Also, always be on the lookout for people who could benefit your team, and maintain a list of names and key positions you think they could fill. Keep in touch with these individuals so that in the event that a position becomes available, you can recruit and onboard them quickly so that your operations aren’t negatively impacted.

7. Use The Right Tools

A key part of starting an HVAC business is investing in the right tools to help you run your business. This entails investing in the right HVAC software.

There are a lot of moving parts involved in running an HVAC business, and the right software will automate processes, and create a seamless experience for all parties.

When researching different HVAC software options, ensure to look for a platform that encompasses the following key features (a single dashboard that acts as a central hub is a bonus):

8. Keep Up To Date With Technology Trends

HVAC is one of the fastest-changing industries out there. To remain competitive, you must stay informed and be willing to adapt to industry changes.

In every organization, change is inevitable. Regardless of the software you choose, keep in mind that you will have to adapt your current system to a new, more improved system to stay up to date with industry trends. This will be hugely beneficial in the long run.

Never has there been such a wealth of resources for HVAC business owners. You can read trade magazines, business books, and HVAC blogs. You can attend seminars, conferences, and dealer meetings.

Best of all, you can tap into HVAC software designed to simplify your scheduling, billing, invoicing, and reporting processes.

With a solution like 3C Connect, you can save money, improve productivity, and automate more processes to reduce costly errors and oversights.

Best of all, with Cost Recovery Plus, the setup and membership costs of running this HVAC software are absorbed into the fees you charge your customers. In this way, you can adopt an invaluable HVAC tool at no cost to you.


Knowing the fundamentals of starting your own HVAC business is crucial. This includes creating a comprehensive business plan, devising an effective marketing strategy, hiring quality talent (and adequately training them); and lastly, using the right tools to run your business.

With the right software platform, your HVAC business will run like a well-oiled machine.

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