The Ultimate Guide to Starting an HVAC Business in 2023Written by Marya Sutimi on March 13, 2023
Heating, Ventilation, and Air Conditioning, popularly known as the HVAC industry, has a positive growth outlook in 2023 as the demand for comfortable indoor environments has increased in the past few years due to various factors.
It was only last year that the UK got hit by the intensifying heatwaves, highlighting how Great Britain doesn’t have the suitable infrastructure to withstand anything more than 30°C. On top of that, a growing focus on energy efficiency and sustainability drives the demand for sustainable HVAC systems and solutions that make the industry most likely thrive in 2023.
In this article, we’re going to outline an ultimate guide to starting a business in the HVAC industry. From the necessary research that you need to conduct before launching your business, the tools required for your HVAC business operation, to some tips to find customers for your HVAC business.
So, what do you need to know before starting an HVAC business in 2023?
What You Need to Know Before Starting an HVAC Business
Industry knowledge is necessary when you consider starting an HVAC business since Heating, Ventilation, and Air Conditioning aren’t everyone’s cup of tea.
Knowing the trends, regulations, and best practices in the HVAC industry will help you provide high-quality services for your clients while simultaneously helping your business stay competitive and minimizing potential legal or financial liabilities.
One of the best ways to familiarize yourself with the industry is by joining relevant communities so you can get updated resources related to the HVAC industry. Some of them include the following:
- HVAC trade associations such as Air Conditioning Contractors of America (ACCA) in the USA or Air Conditioning and Refrigeration European Association (AREA) in Europe.
- Online forums where HVAC professionals connect to exchange knowledge and information within the industry, like HVAC-Talk.
- Social media groups with relevant keywords related to the HVAC industry. For instance, you can use #HVAC on Twitter and find Facebook groups with HVAC as a keyword to join.
- HVAC industry conferences can also be a great option to connect with professionals in the industry. In 2023, there will be the American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE) Annual Conference in Tampa and the International Institute of Ammonia Refrigeration Natural Refrigeration Conference & Expo in Seattle.
Once you’re confident that you’ve got what it takes to initiate a business in the industry, there are several essential things you need to know before starting an HVAC business, including:
- Necessary license and permits to start an HVAC business: Depending on where you want to establish your business, you may need to obtain specific licenses and follow the regulations to start an HVAC business. In the UK, you must follow the Energy Performance of Buildings (England and Wales) Regulations 2020 to ensure you operate your business accordingly.
- Thorough financial plan before starting an HVAC business: Starting a business in the industry will require a significant upfront investment, as you will need to purchase the necessary equipment to get your business running, hire qualified staff, and market your business from the ground up.
- The type of insurance required for an HVAC business: The HVAC industry comes with potential risks and liabilities that may arise during your business operations. From general liability insurance to property insurance, you may want to protect your business from any potential damage in the process.
- Competitive research in the HVAC industry: Knowing your competition is crucial before starting an HVAC business, as it will give you insights into the potential gaps and opportunities in the market so you can find the competitive advantages against your competitors.
- Innovative strategy and solutions in the HVAC work: The industry is continually evolving with new technologies and techniques that emerge regularly. Staying up-to-date with the latest advancement can help your business tremendously to provide top-notch client services and customer experience.
Now that you have prepared yourself with the things you need to know before starting an HVAC business, it’s time to dive deep into how to start a business in the HVAC industry in 2023!
How to Start an HVAC Business in 2023
Starting an HVAC business requires careful planning, research, and preparation. Knowing the industry won’t be enough if you don’t top it all with the knowledge of the business side of it. From creating a thorough business plan and executing a strategic marketing plan to enhancing your branding, here are some tips for starting an HVAC business in 2023!
Develop a Business Plan for Your HVAC Business
A well-written business plan is essential for any business, as it can anchor how you operate your business and what you can do to achieve your goals and objectives. A thorough business plan requires you to consider the strategies for potential opportunities and overcome challenges for your HVAC business.
Before starting an HVAC business, it’s essential to develop a comprehensive business plan outlining your goals and strategies to achieve success in the industry. Some of the essential components to be included in your business plan for your HVAC company include:
- An executive summary that covers your business goals, market analysis in the HVAC industry, and strategies for achieving your company’s goals.
- A business description that highlights the details of your HVAC business and what kind of HVAC services you will provide for your customers.
- A market analysis that determines the size of the overall market for your HVAC business. You can also include the market trends and competition to establish the brand positioning for your business. In this section, you can also identify your target market, which can help you craft suitable brand messaging that targets your potential customers.
- A marketing plan that outlines your strategies to promote your HVAC business to potential clients. Whether you want to use the traditional marketing strategy through canvasing and flyers or explore online marketing strategy, you can elaborate on your plan in this section.
- A sales strategy that focuses on the approach you will use for customer acquisition for your HVAC business. Add specific and measurable sales goals, which include the key performance indicators (KPI) for your sales team.
- A financial plan that provides a roadmap for the potential financial performance and success of your HVAC business. In this section, you can add a detailed plan that includes your business’s revenue, expenses, cash flow, and profitability projections.
- An operations plan that streamlines how your HVAC business will operate. Your operations plan should include the business structure that highlights the workflow of your day-to-day business, along with necessary licenses and permits and quality control for your business. Develop a standard operating procedure in your business plan to ensure the safety of employees, customers, as well as your business operations.
- A management team that includes each team member’s roles and responsibilities, along with the skills and experiences that will be the asset of your HVAC business.
- A risk assessment covers the potential risks and challenges your HVAC business may encounter during your business operation. You can also add strategies for mitigating those risks to minimize the potential damage that may be caused by them.
Once you finish the business plan, it’s time to start executing it through your HVAC business!
Register your HVAC Business
In many countries, it is a legal requirement to register your business appropriately to avoid fines and legal action against you. Before registering your HVAC business, you may need the necessary permits to operate, depending on your location.
If you plan to start an HVAC business in the USA, it is important to familiarize yourself with the state and local jurisdiction where you plan to operate your business. Many states require HVAC contractors to hold a license that involves passing a qualifying exam to meet the industry’s certain experience and education requirements.
In the UK, HVAC businesses don’t necessarily need a specific license. However, you may need to comply with certain regulations and obtain relevant certifications if you provide specific HVAC services for your customers. For instance, if your business involves installing, repairing, or servicing gas appliances or pipework, you will need to be registered with Gas Safe, the official body regulating the gas industry in the UK.
Before registering your HVAC business, choosing a suitable business structure is also essential, as you may want to consider whether it is better to register your business as a sole trader or a limited company. Filing for a DBA may also be necessary if you plan to use different brands for each HVAC service you provide for different market segments.
Obtain Insurance for Your HVAC Business
No business is immune to potential risks and liabilities, and that is why it’s necessary to have insurance coverage for your HVAC business before starting a business in the industry.
HVAC work can be complex and may involve potentially dangerous activities, such as working with electrical wiring, handling refrigerants, or installing heavy equipment. If an accident occurs on the job, you could be held liable for any resulting damages or injuries. Liability insurance can help cover the costs of legal fees, settlements, or judgments.
Depending on the services you provide in your HVAC business, some HVAC businesses also rely on specialized equipment. Insurance will help you cover the cost of repairs or replacements if they malfunction, which won’t stall your business operation when it happens.
Insurance can provide important protection for your HVAC business, giving you peace of mind and financial security for any potential risk during your business operation.
Invest in Equipment and Tools for Your HVAC Business
There are many opportunities in the HVAC industry that you can consider based on your skills, experiences, and target market. Essentially, you can choose several types of HVAC businesses before investing in equipment and tools for your business. These include:
- Residential HVAC is the HVAC business whose services focus more on homeowners as their target customers. Their services may include installing, maintaining, and repairing air conditioners, furnaces, heat pumps, and ventilation systems at home.
- Commercial HVAC is the HVAC business whose target customers are commercial properties like office buildings, retail stores, hotels, or restaurants. They specialize in large commercial HVAC system, which usually includes chillers, boilers, and rooftop units.
- Industrial HVAC is usually the HVAC business that provides services for industrial facilities like warehouses or factories. They usually provide services for more complex HVAC systems, including refrigeration and air filtration systems.
- HVAC Design and Consulting usually provides consulting services for HVAC system design and installation for various ranges of clientele. The services may include energy-efficiency consulting, project management, or HVAC system analysis.
- HVAC Sales is the business that focuses on selling HVAC equipment and supplies to other businesses or individuals. This type of business may come in the form of e-commerce, a brick-and-mortar store, or both.
- HVAC Maintenance and Repair is the type of business that specializes in providing regular maintenance and emergency repairs for HVAC systems.
Once you decide on the niche of your HVAC business, you can purchase or lease the necessary equipment and tools for your business operation.
The decision on how to invest in the equipment for your HVAC business may depend on several factors. For instance, renting equipment and tools for your HVAC business allows you to make smaller payments, but purchasing them may be a better investment if you’re planning to grow and expand your HVAC business over time.
Offer Competitive Pricing for Your HVAC Business
Pricing your HVAC services is crucial to set your foot in the industry. Before setting up the price for the services provided by your HVAC business, it is important to factor in all of your operational costs, including labor, equipment, materials, and profit margins. After all, you want to ensure that you make a profit on each order.
Conducting thorough research on your competitors’ prices can also help you set the ballpark pricing for your service. You want to stay competitive in the market, so knowing your competitors’ prices can help you set the brand positioning and offer your unique selling proposition in the industry.
Customers love transparency in the pricing, so make sure to provide a clear breakdown of the costs and additional charges, if applicable, so they know what they are paying for. Setting flat-rate pricing for your HVAC services may have some advantages compared to charging your clients by hourly rate.
Hire Qualified Team Members for Your HVAC Business
HVAC systems are complex, and you need to ensure that you delegate the tasks to someone with relevant knowledge in installing, maintaining, and repairing them. Hiring qualified team members with the necessary expertise will ensure the quality of your service, which may lead the customer retention to achieve success for your HVAC business.
There are several key team members that you can consider hiring for your HVAC business, including:
- HVAC technicians will be the backbone of your business as they will be the ones to deliver the services directly to your clients.
- Sales representatives will be responsible for reaching out to your potential customers and expanding the clientele for your HVAC services.
- Project managers will oversee the HVAC installation and maintenance projects to ensure the projects are completed based on the standard operating procedures of your company.
- Administrative staff will be the ones responsible mostly for managing the daily operation of your HVAC business, whether it is for handling the necessary paperwork, setting up appointments, or managing finances. Alternatively, you can also save your operational cost by automating the administration tasks by using relevant software for each task. Some include Calendly to set up appointments online or InvoiceBerry for invoicing and receiving online payments.
- Customer service representatives will interact with your customers directly, as they are responsible for assisting your clients with any concerns related to your HVAC services.
Develop Marketing Strategies for Your HVAC Business
Now that you’ve decided on the HVAC services that you can provide for your customers, along with the qualified team members to execute them, it’s time to promote your business and attract potential clients so you can start bringing in some revenue for your HVAC business!
Creating a website for your HVAC business can be a great way to establish your online presence. Optimizing your business website for search engines is also a great way to generate leads organically. Blogging is one of the best strategies to promote your website through SEO. Using an SEO-optimized blogging platform like BlogHandy can help you achieve your goal for online marketing strategies to promote your HVAC business.
Social media marketing is another inexpensive strategy to engage with your potential customers and spread the word about your HVAC services. Whether you want to run some Facebook ads or start a TikTok page to expand your audience, social media is one of the best platforms to reach your potential clients online. In addition, make sure to list your business in local business directories like Google My Business or Yellow Pages.
If you target local customers, traditional marketing can still be a game changer for your HVAC business. Reach out to your family and friends, introduce them to your business, and ask if they can refer you to anyone they know who needs your services. If you have the budget, you can also offer benefits for any referral that ends with sales for your HVAC business.
How to Deal with the First Customers for Your HVAC Business
Now that your business is up and running, it’s time to get customers for your HVAC business! Running a successful business is the combination of delivering high-quality services and top-notch customer experience.
In the HVAC industry, on top of having HVAC technicians who know how to deliver, you also need to streamline your business workflow to create a great customer experience for your clients.
Dealing with your first customers is crucial for your business’ success as they can bring more businesses through word-of-mouth marketing if they’re happy with the result. Here are some tips for dealing with your first customers for your HVAC business!
- Be professional when dealing with your customers: Communicate clearly what they can expect from your HVAC services, and listen to their needs. Your first customers can be crucial as they can be the prototype of your ideal clients as your business grows.
- Be transparent about what is included in your HVAC services: While you shouldn’t sell yourself too short, it is also important to set boundaries and be clear about what’s not included if they ask for more elements in your service.
- Provide quality service: When you deliver high-quality service for your HVAC business, it will help you build a good reputation that may result in customer retention. Happy customers won’t hesitate to promote your business to anyone in need of your service, so they can also be the referral you need to grow your business!
- Follow and ask for feedback: That way, you can learn how you can improve your services to attract more customers for your business.
The first customers for your HVAC business can become loyal customers that advocate for your business, so building good relationships with them is essential so you can gain trust and earn more business through referral.
Starting an HVAC business in 2023 requires a solid understanding of the industry and a commitment to providing high-quality services to your customers. By following the steps outlined in this guide, you can set your business up for success and position yourself as a leader in the industry.
From familiarizing yourself with the industry and joining the HVAC communities to keeping yourself updated with what’s needed in the market, you can start focusing on building a strong brand for your HVAC business. The next question is, do you have what it takes to start a successful HVAC business in 2023?