The projected growth of the Heating, Ventilation and Air Conditioning (HVAC) industry is 13% from 2018-2028 according to the US Bureau of Labor Statistics. With the much faster than average growth, and if you are interested in helping people save money with energy efficiency while keeping their homes comfortable, then starting an HVAC business may be for you.
Develop a Business Plan
Any business and HVAC is no exception, must start with a detailed business plan. Examples of items to include in your business plan –
- Define your local market and competition
- Your marketing plan
- Basic business structure
- Legal responsibilities
- Financial obligations
- Revenue projections
By defining these categories beforehand, it will make it easier to secure startup funds from a bank or investor.
It will require a hefty amount of market research to determine if a new HVAC business will be viable in your area. Things to consider are – how many other HVAC businesses are in your service area, how many homes, what franchises will be your competition, plus how much does the competition charge for their services.
Other things to consider are – pre-determine your service area by examining how far you are willing to travel to a job. Also, are you planning on operating during regular business hours or willing to accept emergency repair calls at any time.
It is always a good idea to Google local HVAC businesses and sees who comes up on the first page. Inspect the competition’s websites and put in place a digital marketing plan to ensure you get on the first Google page.
As with any business, it is always best to have a separate bank account specifically for the business different from your personal account.
When you start an HVAC business, you can expect lots of paperwork and fees. If you lease or purchase a used truck or van and have minimum equipment cost, it is estimated that the start-up cost to be $10,000. However, if you choose to purchase all new equipment and van upfront, then you are looking at about $100,000. The biggest mistake many small businesses make is to fail to account for all the start-up costs.
Some of the most common start-up expenses include –
- Van or work truck and equipment
- HVAC general and specialty tools
- Safety equipment
- Shirts and hats with company logo
- Marketing supplies – website, vehicle wrap or signage, business cards, mailers, door tags, etc
License and Insurance for Start-Up – These will vary depending on your residence and area of business.
- Local and State Business License – Before you begin, always check with local and state municipalities for licensing requirements.
- State Contractor’s License – In order to qualify for a state’s contractor’s license, most states require proof of minimum HVAC experience or education to take and pass the contractor’s exam.
- HVAC Contractor’s License – After passing this exam, you will make progress and be able to pick your business name.
- Contractor’s Insurance – Liability insurance to cover any employee’s injury or job site damage.
- Worker’s Compensation Insurance – If you have employees, you will need to set up a worker’s compensation insurance.
- Contractor’s Bonds – To protect you if a customer has a complaint about the work quality.
Common recurring monthly expenses –
- Office supplies
Skills, Education, and Certifications
The good news is that you don’t need a four-year degree to own an HVAC business. However, depending on your state there are typically two routes to becoming an HVAC technician – trade or technical school or training through being a journeyman or apprentice.
The Journeyman – Apprentice Route:
To receive training through the journeyman or apprentice route, most states require 2000 hours per year on-the-job training and a minimum of 144 hours of technical training. Through this route, the individual will learn how to read blueprints, safety practices, various HVAC systems and tools of the trade.
Even though the student doesn’t earn a full technician’s wage, he will earn while he learns. This is a great option for someone who may not be able to afford the technical school route.
- At least 18 years of age
- Have a valid driver’s license
- Must have a high school diploma
- Pass a math test
- Pass a drug test
The Technical or Trade School Route:
Another option to becoming an HVAC technician is by completing a course or program at your local trade school, technical school or community college. A program typically last 6 months to 2 years, depending on the certification you desire.
After becoming an HVAC technician, you can continue your education and gain more certifications that will benefit your business by giving it credibility, open up larger and more complex projects, and allow you to earn more money.
Additional HVAC Certifications:
Remember the licenses and certifications vary from state to state, but here is a general overview.
EPA 608 Certification – covers four levels of certification that is required any HVAC technician working with refrigerants, including buying and handling. To gain this certification, a technician must pass a written test.
- Type I Certification – For Servicing Small Appliances
- Type II Certification – For Servicing and Disposing of Very High-Pressure Systems
- Type III Certification – For Servicing and Disposing of Low-Pressure Systems
- Universal EPA Certificate — For Servicing All Types of Equipment
NATE Certification – stands for The North American Technician Excellence (NATE) certification. After passing this exam, the technician is nationally recognized within the industry and tends to garner higher wages.
HVAC Excellence Certification – requires a couple of years of field experience before you are allowed to take this exam because of it test experience instead of book knowledge. Since this certification is widely recognized in the HVAC industry, it is worth obtaining.
Preparing to start an HVAC business is something that is not to be taken lightly. However, now it is probably the greatest time to start one. There are many steps to the process and we just covered the basics.
Michael Tobias PE is a visionary in the construction industry. His passion resonates as the Founding Principal of New York Engineers, an Inc 5000 fastest growing company. New York Engineers is the most innovative construction engineering firm focusing on Mechanical, Electrical and Plumbing (MEP) engineering designs in Chicago and New York. Michael has overseen the design of over 1000 construction projects in all market sectors, including LEED-certified and Passive House certified projects. He leads a global team of 50 top performers.