How to Start an HVAC Business? An Ultimate Guide to Follow

You are here:

If you’re thinking about starting an HVAC company, you’re probably in one of the two categories.

Either you’re a qualified HVAC technician planning to start your own business, or you’re an entrepreneur striving to manage a successful HVAC company.

However, you need to be both an entrepreneur and an HVAC technician to run a successful business in a technical industry such as HVAC.

Therefore, to help you learn how to start an HVAC business, we have created this guide with detailed steps.

Let’s dive in!

1. Enroll in an HVAC Certification Program

Before working as an HVAC technician, you must obtain HVAC certification from an accredited institution or training course.

    1.1. United States
    According to the Clean Air Act, all professionals in the United States who service air conditioning units and refrigeration equipment must be certified by the Environmental Protection Agency (EPA).

    1.2. Canada
    In Canada’s most provinces, refrigeration and air conditioning technicians must obtain a business license from a regulatory authority under the provincial government’s jurisdiction.

    1.3. United Kingdom
    Before working as an HVAC contractor, you should complete a bachelor’s degree and an apprenticeship. Several college courses are available to help you find work as a trainee.

    1.4. Australia
    Before you can get an air conditioning service license from the ARC (Australian Refrigeration Council), you must first complete a certificate program and then an apprenticeship.

    Although not required, a certificate from organizations such as HVAC Excellence or NATE (North American Technician Excellence) can provide you with extra credentials. It makes your customers feel more confident in your abilities.

2. Get Your HVAC Contractor License

While HVAC certification validates your knowledge and skills, an HVAC contractor license authorizes you to service HVAC systems.

Most places require you to acquire an HVAC business license, which is a legal document, but the process varies based on where you live:

  • Each state in the United States has its own requirements for obtaining an HVAC license. This typically means you require formal HVAC certification in addition to a few years of experience working as an apprentice. Without a trade license for HVAC, you risk facing severe fines and penalties.
  • HVAC contractor licenses are not required in the United Kingdom or Canada. But, Canadian technicians who work in air conditioning and refrigeration must be accredited by a government-approved program.
  • Anyone working with air conditioning or refrigeration equipment in Australia must have a Refrigerant Handling Licence.

3. Create an HVAC Business Plan

A successful HVAC company starts with a business plan that guides you to growing Your HVAC Business. You will define the following in that document:

  • Cover page
    A cover page with the name of your company, address, contact information, and the date the document was prepared.
  • Executive summary
    Your complete business strategy is briefly summarized in the executive summary. Describe your company’s mission and aims in this area, as well as what consumers may anticipate from your business plan.
  • Business overview
    The HVAC services your company performs and how it runs are summarized in your business overview. It’s basically a description of your HVAC business model.
  • List of HVAC services
    Include a list of all the HVAC services you want to provide, along with an estimate of how frequently you’ll be servicing clients.
  • Pricing HVAC services
    Now that you are aware of your primary services, utilize your business plan to outline how you will charge for them in order to remain successful.
  • Market research
    Two important factors are assessed by your market analysis: your target market and your competitors.
  • Marketing strategy
    Your marketing strategy aids in promoting your company to the appropriate demographic using the appropriate techniques.
  • Financial plan
    This area is crucial for possible investors if you’re searching for funding. Your financial strategy must incorporate sales projections, payroll expenses, equipment, and overhead costs.

Taking the time to create an HVAC business structure keeps you focused. It helps you secure startup loans from financial institutions or other investors.

4. Buy HVAC Business Insurance

The job of an HVAC professional has significant risks. Lifting a unit might injure a worker’s back, and leaking air conditioners can ruin a client’s floors. Healthcare, litigation, and repair expenses are all covered by HVAC insurance. Laws may also mandate certain insurance coverage, such as workers’ compensation.

    The most typical installation-related hazards are covered by the following insurance policies:

    • General liability insurance
    • Workers’ compensation insurance
    • Commercial auto insurance
    • Contractor’s tools and equipment insurance
    • Professional liability insurance
    • Property insurance

5. Determine HVAC Business Startup Costs

The cost of starting an HVAC company is high, and failing to keep track of all business expenses is one of the biggest mistakes you can make.

Assuming that you’re purchasing a used service van or truck and trying to keep your equipment costs down, the average startup cost in the HVAC industry ranges from $2,000 to $10,000.

However, if you buy everything at once, the cost could easily exceed $100,000.

    You’ll need the following to run your HVAC business:

    • HVAC tools used for sheet metal work, such as aviators or tin snips, drive bender or folding bar, shears, staple guns, crimpers, etc. 
    • HVAC tools for air conditioning service and maintenance work
    • Uniforms and caps with the company’s logo
    • Vehicle signage
    • HVAC business website 
    • Marketing materials, such as business cards and door tags to verify service with contact information
    • Supplies
    • A service truck or van large enough to carry all your tools and equipment
    • Workers compensation insurance
    • Liability insurance
    • General tools used in HVAC, such as an electrical tester, tape measures, battery-powered drill, Sawzall, etc.
    • Safety equipment

6. Make a List of Services that You can Offer

Decide what HVAC services you want to offer so you can buy the necessary equipment and begin pricing.

    The following are the most popular HVAC repair, setup, and maintenance services that you can provide:

    • Furnace repair
    • Air conditioner installation
    • Air duct cleaning
    • Tankless water heater installation
    • Emergency HVAC service
    • Furnace installation
    • Furnace tune-up and maintenance
    • Air conditioner tune-up and maintenance
    • Heat pump installation
    • Air conditioner repair

The service that you should probably sell the most is the one that you may have specialized in during trade school. Therefore, offer services you are skilled at and enjoy performing to make your job more rewarding.

7. Purchase HVAC Tools & Equipment

You can now focus on what tools and equipment to acquire now that you are clear on the services you wish to provide.

    You’ll need the following main pieces of HVAC gear in your bag:

    • Standard hand tools including hammer, screwdrivers, wrenches, pliers, nippers, staplers, gauges, drills, flashlight, tube cutters, and extension cord.
    • Mask, gloves, ear muffs, goggles, shoes, and other safety equipment.
    • Modern HVAC equipment varies based on the services you offer, such as leak detectors, phase testers, coil fin straighteners, thermal cameras, caulking guns, core removal tools, megohmmeters, multimeters, nitrogen regulators, flushing solvents, and coolant.

8. Price Your HVAC Business Services

To run a profitable HVAC business, you must set prices that cover your expenditures while also making your company successful. 

Here’s how to get started with pricing HVAC jobs:

  • Assess your competitors to learn about the average rates in your location.
  • Determine the markup required to meet your profit margin targets.
  • Decide what additional services you can provide to raise your total quote prices.

    You can use the following pricing techniques for HVAC projects:

    8.1. Hourly rate pricing model
    Hourly rates can help you make more money on time-consuming or commercial HVAC contracts. This pricing strategy is helpful when you don’t know how long a project will take to complete.

    8.2. Flat rate pricing model
    You can determine a single, definite price for the entire job using flat rate pricing. This pricing method works well for your HVAC business when you know how long the job will take (for example, $350 for air conditioning service).

    8.3. Labor and materials pricing model
    It’s generally preferable to charge customers for installations according to the amount of labor you perform and the equipment you provide. You can more easily recoup your operating expenses with this pricing strategy.

Once you have determined your service prices, make an HVAC pricing chart that details your service costs at flat rates or hourly rates. By using a pricing chart, you can quickly and easily give clients HVAC estimates that are accurate and consistent.

Creating Estimates Has Never Been Easier!

Generate accurate estimates in minutes using our easy-to-use estimating & invoicing software and impress your clients with professional proposals.

CTA arrow

9. Advertise Your HVAC Business

Marketing is critical for gaining your first clients and operating a successful HVAC business. Here’s what you’ll need to get started with the marketing strategy for HVAC contractors to reach new customers:

    9.1. Company branding
    A company’s branding gives it a look and a personality and communicates to all potential customers that it is a professional operation. Create a logo and select colors for your HVAC company’s website, uniforms, business cards, and all other marketing materials.

    Pro tip:


    Impress your clients with professional, fully customizable invoices that reflect your brand. Try HVAC invoicing software today!

    9.2. Go door-to-door to reach new customers
    To spread the word about their businesses, new HVAC business owners frequently rely on word-of-mouth. Knock on doors and distribute flyers throughout your neighborhood to try and generate your first few HVAC leads.

    9.3. Create your online presence
    Clients can easily find your HVAC business on the internet if you have an online presence. 

    • The more online presence your business has, including a website for your HVAC company, accounts on social media platforms, and Google Local Services Ads, the more customers are likely to contact you to book your services.
    • Take control of your Google My Business listing and add your company to Google Maps. This increases your chances of appearing in local searches for “HVAC companies near me.” 
    • On your social media accounts, you post photos of your completed projects, share heating and cooling system maintenance and refrigerator/freezer maintenance tips, and post information on the advantages of keeping your home and car’s heating and cooling systems well-maintained as well.

    9.4. Close in more sales
    By doing more than just HVAC installation and repair, you can increase your earning potential. To help your customers maintain their own HVAC systems in between maintenance visits, you can sell air conditioner filters and other necessary accessories.

    9.5. Increase word-of-mouth
    Every professional in the field service industry understands the value of providing excellent customer service. So, providing your clients with the best service you can is something you should prioritize.

    • When customers tell their friends and family about their experiences, they will have nothing but positive things to say about your HVAC business and services.
    • For your HVAC company to survive and thrive in the industry, reviews and recommendations are essential. Ask your existing clients to post reviews and testimonials about their experiences with your business on social media platforms.
    • Whenever possible, hand out flyers of your services and your HVAC business cards
    • The best way to improve the experience for customers is to pay attention to their feedback and make changes as needed.

10. Reduce Additional Expenses

Monitor all expenditures very carefully. Just because you currently have the best deals available does not guarantee that this will always be the case.

As you assess your expenses, look for opportunities to cut costs. You can do so by stocking up on supplies in large quantities, obtaining manufacturer discounts for parts, or participating in loyalty programs to save money on fuel and other overheads. 

It’s possible that as you expand, you’ll be able to take advantage of more discounts with bigger orders.

11. Recruit Professional & Experienced HVAC Technicians

It’s time to hire a certified HVAC technician when your workload becomes too great for you to handle on your own. Hiring HVAC technicians to handle fieldwork will free up more of your time so you can concentrate on sales, scheduling, brand management, and other aspects of managing and expanding your new business.

    Here are some tips for discovering and hiring skilled HVAC technicians:

    • Determine if you want to recruit employees or HVAC contractors and subcontractors.
    • Create a fantastic job description for HVAC contractors, and post it on websites for job-searching contractors or employees.
    • Prior to hiring a heating and air conditioning contractor, prepare some questions to ask them.
    • Verify the references and request police background checks.
    • Get ready to train your staff once they’ve been hired.
    • Pay your team well and create a positive atmosphere at work.

Optimize Your HVAC Estimating & Invoicing Process With InvoiceOwl

With just a few clicks, you can quickly generate, send, and track HVAC invoices and maintain a client list who owe you money for the work done.

CTA arrow
Frequently Asked Questions
  1. What is the cost of starting an HVAC business?

    For starting an HVAC business, a small business owner would require money ranging from $3,000 to $12,000. It basically depends on what tools and equipment you need to buy upfront.

    The following are common HVAC startup costs that you should factor into your budget:

    • Insurance for HVAC businesses ($600–$2,000)
    • Basic HVAC tools such as screwdrivers, tape measures, hammer, stepladder, electrical testers, wire strippers, pliers, wire strippers, and cordless drills ($200–300)
    • A van or truck big enough to carry equipment to job sites ($15,000–40,000)
    • Equipment for safety and personal protection equipment (PPE) ($35–$50 per person)

  2. What are the skills, education, and certification required for small business owners in the HVAC industry?

    There are several types of HVAC certifications, including

    • EPA Type I Certification (for servicing small appliances)
    • EPA Type II Certification (for servicing high-pressure systems)
    • EPA Type III Certification (For servicing low-pressure systems)
    • Universal EPA Certificate
    • NATE (North American Technician Excellence) offers professional-level certifications for HVAC professionals.

  3. Is it hard to start an HVAC company?

    But following the step-by-step procedure that we discussed in this blog can help. The above-discussed procedure will provide you with all the information necessary for the easy establishment and profitable long-term success of your company.

  4. How do I start my HVAC side hustle?

    If working for yourself is your ultimate objective and you want to start an HVAC side hustle, then here are a few preliminary steps to starting your business:

    • Obtain the required certifications
    • Choose the business structure
    • Get a Contractor License
    • Open a new bank account for your HVAC business
    • Get necessary business insurances

  5. How do I get HVAC customers?

    The cornerstone of any prosperous business is marketing, and with it, your HVAC company can draw in a growing number of customers. Fortunately, several effective marketing strategies can be easily used.

    • Create a program for HVAC customer referrals.
    • Utilize SEO, content marketing, and pay-per-click advertising
    • Implement video marketing
    • Use social media to promote your HVAC brand
    • Use HVAC flyers and distribute them to nearby residences
    • Develop the most effective HVAC Website

  6. Where can I find HVAC leads?

    From lead generation websites to referral programs, you can find new leads using a variety of methods.
    Here are some lead-generation strategies to help you find quality leads.

    • Develop your social media presence
    • Plan out your SEO
    • Start paying for adverts
    • Create an online review portfolio
    • Offer incentives for referrals
    • Hire marketing staff or contract out the task
    • Networking with people and businesses can also help

  7. How do I scale my HVAC business?

    Here are some tips to scale your HVAC business:

    • Increase the effectiveness of your marketing and advertising activities by focusing more on SEO, PPC advertisements, running promotional campaigns, and providing discounts.
    • Offer new products or services that augment your current offerings.
    • Billing software offers multiple advantages. So, to streamline your business processes use automated ordering & billing software.
    • Start using GPS vehicle tracking, cloud-based software, and customer relationship management software.
    • Utilize the appropriate tools and technology to streamline your business processes. It includes the use of automated ordering and billing software, GPS vehicle tracking, cloud-based software, and customer relationship management software.
    • Provide top-notch customer service and high-quality products.
    • Boost your knowledge and abilities.

Use an HVAC Estimate & Invoicing Software to Scale Your Business

Starting your own HVAC business requires extensive planning and organization. However, if you take a comprehensive, systematic, and strategic approach, your own HVAC business will be up and running in no time.

Start off right by signing up with HVAC estimating & invoicing software, such as InvoiceOwl, to optimize your work processes and scale your business.

It will enable you to create multiple, error-free HVAC invoices, purchase orders, and estimates effortlessly with complete automation.

InvoiceOwl can also track your payments and generate analytical business reports. So, you won’t have to do these tasks manually and would rather spend that time establishing strategies to realize core business goals.

Author Bio
Jeel Patel
Jeel Patel

Jeel Patel is the founder of InvoiceOwl, a top-rated estimating and invoicing software that simplifies the invoicing and estimating processes for contractor businesses. Jeel holds a degree in Business Administration and Management from the University of Toronto, which has provided him with a strong foundation in business principles and practices. With understanding of the challenges faced by contractors, he conducted extensive research and developed a tool to streamline the invoicing and estimating processes for contractors. Read More

United States