For a lot of people, the only thing worse than a home or building that’s too hot in the summer is one that’s too cold in the winter. And the one thing worse than both of them is not being able to find a Heating, Ventilation, and Air Conditioning (HVAC) technician to help.
And finding that help could get even more difficult. Demand for HVAC services is expected to grow. Some industry journals estimate above-average growth of 15% over the next few years.
If you’ve ever thought about how to start an HVAC business, adjust your thermostat to a comfortable temperature, sit back, and we’ll take you through some of the key steps of how to start an HVAC company.
Chances are if you’re looking to start your own HVAC business, you have some training and have been working as an HVAC technician for a few years.
If you’re looking at HVAC as a new career or just starting in the industry, you’ll likely want to get some instruction and experience before striking out on your own. Here are some of the steps you’ll need to take:
If you have a high school diploma or GED, you can enroll in a certificate or associate degree program in HVAC technology at a community college or vocational school.
These programs can span 6 months to 2 years and often involve a combination of classroom study and skill development in a lab setting.
You also can consider an apprenticeship program. This approach lets you learn and work at the same time. An apprenticeship can span 3 to 5 years and include coursework as well as on-the-job training.
The basic qualifications for an apprenticeship usually include:
Not only are you getting real-world experience in how to start an HVAC business, you’re often making money as well. As a result, there is a lot of competition for apprenticeships, so it helps to know where and how to apply.
Each state has different licensing requirements for HVAC technicians. Some states require only a certificate and not a license, while other states require having both. You should check out what’s needed in your location. In many cases, you also will need certification from the U.S. Environmental Protection Agency (EPA) to work with refrigerants.
Generally speaking, the more skills you have, the more opportunities you may find as an HVAC technician. Organizations such as NATE (North American Technician Excellence) offer certification programs in a variety of HVAC areas, including:
NATE certification can increase your HVAC knowledge and boost your credibility with employers and customers.
In most cases, the answer is “yes.” As we mentioned above, states have different requirements for HVAC technicians.
However, if you’re looking at how to start an HVAC business, it’s helpful to understand the difference between an HVAC technician and an HVAC contractor.
These are the people who fix or replace a furnace or air conditioner. An HVAC technician may be fully licensed, or they may be an apprentice and likely working for an HVAC contractor (we’ll get to them next).
A fully licensed HVAC technician can start their own business where they work for themselves or for a subcontractor on projects run by an HVAC contractor.
Much like general contractors, HVAC contractors work for themselves. For smaller projects, they may do all the work themselves.
For larger projects, such as designing and installing commercial HVAC systems for commercial and office buildings, an HVAC contractor will bring on and manage HVAC technicians or apprentices.
As with technicians, each state has its own licensing requirements for HVAC contractors. Not only are the requirements different, so too are the ways each state stores and structures the information.
We can help out here with our state-based contractor licensing hub. It has details for the licensing process in each state, all cleaned, pressed, and folded. Just click on the state where you want to do business, read the article, and follow the instructions.
If you want to turn all that training and certification into a successful HVAC business, a good first step is to put together your business plan.
OK, we get it. Sitting down in front of an empty screen (or a blank piece of paper) can feel boring at best and intimidating at worst. I write for a living and even I’ve felt that way from time to time.
Here’s some good news. If you’ve been thinking about starting an HVAC business for a while, there’s a good chance that much of what you need for your business plan is already done. It’s in your head and you just need to get it out.
At Simply Business, we learn a great deal from working with small business owners like you. We’ve taken a lot of that and used it to create this easy-to-follow and easy-to-complete business plan template.
It can pay off for your business in a number of ways:
It can help you start in the right direction and stay on track. Think of it as a roadmap (or a GPS app) that identifies and details the key elements of how your business will run.
It can save you time in other areas of your business. To get your business up and running, you need to let people know you’re there to help them. That’s where a website, social media accounts, and other marketing tools can help.
Your professional qualifications, the services you offer, and what makes you the right choice are all part of your marketing message. And you can find most or all of them in a good business plan.
It can help you get funding. There’s a good chance you’ll need some money to get your business started. If you don’t have a lot of cash on hand, you may want to apply for a business loan or other financing. Most lenders will want to see a business plan in order to consider you for funding.
It’s a good bet that your HVAC training covered the importance of choosing the right tool for the job at hand. It’s much the same when it comes to deciding how you’ll structure your HVAC business.
For most small business owners, especially those just starting out, there are several options. When deciding on any business structure, It’s a good idea to consult with an attorney or business advisor.
Sole proprietorship — This is the simplest and typically the most common structure people choose when they start a business. It’s owned and run by one person (although you may have employees).
There’s no legal distinction between you and the business, which can put your personal assets at risk if the business can’t cover its debts, losses, and liabilities.
Partnership — This is a way of organizing a company so that it’s owned and sometimes run by two or more people or entities. Each partner benefits from any profits but is also responsible for any losses, much like with a sole proprietorship.
Limited liability corporation (LLC) — Unlike a sole proprietorship, an LLC is a separate business entity. It offers greater protection for your personal assets than a sole proprietorship, but it’s often more expensive to set up and operate.
Corporation — Like an LLC, a corporation is a separate legal entity, but it offers stronger protection from personal liability. Corporations often cost more to set up than other structures, and they require more extensive record-keeping, operational processes, and reporting.
Nearly all small businesses require some cash to get started. An HVAC business can have above-average startup costs, so it’s a good idea to know what you may need to buy, lease, or rent at the outset.
Most business plans account for startup costs, so if you’ve included them in yours, you’ve got a good head start.
Much of this will depend on what type of work you'll be focusing on. If you’ve been working in the HVAC business for a while, you also may have many of these items.
Tapping your personal savings can often be the fastest and easiest way to fund your business. If that’s not an attractive option for you, don’t worry. There are other ways to get startup capital, including loans and grants.
To save you some research time, we’ve pulled together a few good articles for you from our small business resource center, Simply U.
Whether you have investors behind you, small business loans, or you’re relying on your savings, you’ll likely have a lot on the line with your HVAC business. Not to mention the time and effort you’ll be putting in.
The last thing you want is to lose it all unexpectedly.
That’s where HVAC business insurance can help. HVAC insurance is often made up of different types of policies to help financially cover you from different types of risks. Two core policies you may want to consider are general liability insurance and workers compensation insurance.
No matter how carefully you plan or how skilled you are, things can go wrong. This is often true in life as well as in the HVAC business. That’s a big reason why general liability (GL) insurance can be essential for HVAC business owners.
If you don’t have GL coverage as part of your HVAC insurance and something goes wrong on the job, you could be held responsible for some or all of the costs associated with the accident.
Those costs can be substantial, especially for a small business. In fact, the average claim for property damage or accidents for small businesses is around $30,000.
Consider this possibility. Let’s say you were carrying an AC unit into a customer’s house and didn’t realize the storm door was closed. You walked right into the door, which completely shattered it. Not cool. Not cool at all.
General liability insurance could cover the damages to the broken door. Plus, if necessary, it also could cover medical costs and legal fees, up to the policy limits. Getting covered can be fast and easy.
As an HVAC professional, you not only need to know your line of work, but you may also have to have a good understanding of electrical, plumbing, and framing work that ties into HVAC work.
Even with all that knowledge and know-how, it still can be easy to get confused and stymied by HVAC contractor insurance. That’s where we can help. Like you, we have a broad skill set.
Not only do we know insurance — we also understand small business owners. That enables us to help you get coverage without taking a lot of time or costing you a lot of money.
All it takes is a little information online, and we get to work finding great coverage and great prices from leading national insurers. In 10 minutes or less, we can often find a general liability policy for as little as $25.95/month*.
Get an affordable & customized policy in just minutes. So you can get back to what matters: Your business.Start Here >
As we mentioned earlier, it’s not uncommon for an HVAC contractor to hire another technician or apprentice to work with them, especially if they’re doing a lot of design and installation work.
That’s when your HVAC business insurance or HVAC contractor insurance should include a workers compensation policy.
In most states in the U.S., you’re required to have workers compensation insurance if you have one or more part-time or full-time employees. A workers comp policy not only covers you legally — it also can cover you financially.
Workers compensation insurance can cover medical bills and lost wages associated with an employee who gets hurt or sick on the job. And with the average cost of workers comp claims in recent years being $42,000, having coverage could make a lot of sense.
You may have heard the expression about referees and sports officials: When they do their jobs well, no one notices. It can be similar with HVAC. If homes and buildings are comfortably warm during cold weather and pleasantly cool during hot weather, no one is thinking about HVAC service.
Until something goes wrong.
How do you increase your chances of getting the call to repair a broken system as well as the nod to install a new one? Marketing.
For some small business owners, marketing can seem like remembering to floss regularly or eat a high-fiber diet. There’s some value there, but do you really need it?
Yes. Yes you do. And the good news is that it can be a lot easier than eating more kale or trying to reduce plaque buildup.
When people need help or information, many head straight to the web. If you’re reading this article, there’s a good chance you did that very thing.
So it can make a lot of sense to meet your customers where they’ll be looking for you. Online.
Consider these two statistics:
Your website may be the only part of your business that works harder than you. For instance, if you’re in a cramped attic installing ductwork, your website can be providing potential customers with information about your services, sharing reviews, and even setting up estimates and appointments.
There are a number of sites where you can easily get your website up and running. We can even offer you some helpful tips on what to do and not do on your small business website.
Once you have a website, make it easier for customers to find it. Many people will use a search engine, like Google, to find HVAC service. You can list your business with Google and Google Maps so it’s easier for customers to find you.
You also may want to create business pages on social media platforms such as Facebook and Instagram. They can provide a great way to highlight projects you’ve worked on and promote special offers.
You also can use social channels and email to share helpful tips and information about HVAC topics. For instance, posting a reminder about routine system maintenance could spur some customers to get in touch for service.
If you could use a head start to some of your marketing efforts, we have a good supply of resources at Simply U.
Here are a few articles to get you started:
With an HVAC business up and running, you could be putting in a lot of hours. That can include normal business hours plus any emergency calls you may have to make in the middle of the night or on a weekend.
After putting in all that hard work, the last thing you may want to do is billing, accounting, and assorted paperwork. But those are often the first things you need to do in order to get paid for all that hard work.
The good news is that technology is on your side. There are several accounting software and online invoicing systems that can streamline a lot of the “business” functions of your business and save you time behind the desk.
We can save you even more time looking for the right small business accounting software for your needs with this helpful article.
There are few places in the world where it’s never too hot or too cold at some point during the year. That means just about all of us rely on heating, ventilation, air conditioning, and refrigeration.
It also means that just about all of us may have to rely on an HVAC professional at some point.
There is a good amount of training, investment, and practical experience that goes into starting an HVAC business. Still, it can be a great feeling at the end of the day to know you’re helping the rest of us enjoy more comfortable lives — at least in terms of keeping the temperature at a comfortable level.
* Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - December 2020 data of 10% of our total policies sold.
As a 9-year-old at summer camp, I hated it — especially after being pulled screaming from the pool during the swimming competition. While this left me without an aquatic achievement patch, it also inspired the letter to my parents that got me an early release from Camp Willard. That showed me the power of writing. I’ve done my best to use it only for good ever since, such as writing for small business owners.
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
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*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.