Do you want to start a HVAC company? If YES, here is a 15-step guide to starting a heating & air conditioning business with no money or experience plus a sample HVAC business plan template.
Almost every home and office has a heating and air conditioning system installed in their facilities, and over time, these systems will require maintenance, servicing and repairs. This goes to show that there is indeed a large market for heating and air-conditioning repair and maintenance companies.
All you need to do to get started in this type of business is to learn the technical skills required to service, maintain and repair heating and air-conditioning systems and also to acquire the required working tools for the business.
In general, starting a heating and air-conditioning maintenance business requires low start – up capital, but it is indeed a very lucrative and profitable venture if it is well positioned and you know how to deliver excellent jobs. The amount you can make per day is largely dependent on your ability to market your services to both commercial and residential users of heating and air-conditioning systems.
Steps to Starting a Heating & Air Conditioning Business (HVAC)
1. Understand the Industry
The heating, ventilation and air conditioning (HVAC) industry is an industry that deals in the heating and air – conditioning of a facility or space. The truth is that heating, ventilation and air-conditioning are interconnected, most especially when it comes to the need to provide conducive temperature in an indoor facility.
Basically, HVAC systems are designed to provide ventilation, reduce air infiltration, and maintain pressure relationship between spaces. The heating, ventilation and air conditioning (HVAC) industry is indeed a very large industry that covers operation and maintenance, system design and construction, equipment manufacturing and sales.
In order to maintain high standard and best practices, manufacturers in the HVAC industry are regulated by organizations such as HARDI, ASHRAE, SMACNA, ACCA, Uniform Mechanical Code, International Mechanical Code, and AMCA.
Just like most industries within the construction line of business, the Heating and Air-Conditioning Contractors industry has been recovering over the last five years. Within the stated period, there was an appreciable increase in business activity, and end user spending benefited business expansion plans and supported new enterprises in the industry.
Going forward, the demand for heating, ventilation and air conditioning (HVAC) services is projected to rebound in the next five years. As a matter of fact, the growth in the real estate industry and the growing trend as regards energy – efficiency et al will definitely translate to growth in the heating, ventilation and air conditioning (HVAC) industry.
The Heating and Air-Conditioning Contractors industry is not dominated by any company. As a matter of fact, no company can boast of having more than 5.0% of the total annual revenue in the industry. The major players in the heating, ventilation and air conditioning (HVAC) industry are smaller firms that specialize in all kinds of HVAC systems.
Similar to any other business, the demand for heating, ventilation and air conditioning services and products usually decline during recession period/economic downturn and this is due to declining household spending and reduced demand from business clients.
As the economy grows, and income increases, there will be corresponding increase in the demand for heating, ventilation and air conditioning services and products.
The heating, ventilation and air conditioning (HVAC) industry is indeed a very large industry and pretty much thriving in all parts of the world especially in developed countries such as United States of America, Canada, United Kingdom, Germany, Australia and Italy et al.
Statistics has it that in the united states of America alone, there are about 105,598 licensed and registered heating, ventilation and air conditioning (HVAC) related businesses responsible for employing about 437,894 employees and the industry rakes in a whooping sum of $82bn annually with an annual growth rate projected at 4.0 percent.
Over and above, the heating, ventilation and air conditioning (HVAC) related businesses all over the world are still enjoying good patronage particularly if they are well positioned and if they know how to reach out to their target market (businesses, government and household et al).
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who hire the services of heating, ventilation and air conditioning servicing and maintenance companies cut across all households, offices, hotels and any facility that makes use of heating and air conditioning systems and has the capacity to pay for their services, hence the demographic composition for a heating, ventilation and air conditioning servicing and maintenance company is all encompassing.
The truth is that when it comes to heating, ventilation and air conditioning servicing and maintenance, there is indeed a wide range of available customers.
3. Decide Which Niche to Concentrate On
In order to be effective in the heating, ventilation and air conditioning (HVAC) industry, it is advisable that you choose a niche area. Choosing a niche area in this industry will make you concentrate your effort towards building a brand that can favorably compete with similar businesses not just in your location, but throughout the United States of America.
Here are some of the niche ideas in the heating, ventilation and air conditioning (HVAC) industry that an aspiring entrepreneur can choose from if you want to launch your own business;
- New construction HVAC installations
- Existing structure HVAC installations (i.e. replacements)
- HVAC maintenance and repairs
- Refrigeration system installations, maintenance and repairs
- Air conditioning system installation (except window units)
- Air vent installation
- Furnace conversions (i.e. from one fuel to another)
- Refrigeration system (e.g. commercial, industrial or scientific) installation
- Heating, ventilation and air conditioning (HVAC) contractors
- Furnace humidifier installation
- Natural gas fireplace installation
- Duct work (e.g. cooling, dust collection, exhaust, heating and ventilation) installation
- Ventilation equipment installation
- Heating and ventilation system component (e.g. air registers, diffusers, and filters) installation
The Level of Competition in the Industry
The competition that exists in the heating, ventilation and air conditioning (HVAC) industry goes beyond competitions amongst heating, ventilation and air conditioning (HVAC) businesses in your location; you are expected to compete with others manufacturers of these systems who also offer repair and maintenance services.
The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your services or business properly, you will always make headway in the industry. Just ensure your workforce can carry out thorough repair and maintenance services, you can deliver excellent customer care services and you know how to attract and reach out to your target market.
But over and above, there are several heating, ventilation and air conditioning repair and maintenance companies scattered all around the United States.
So, if you choose to start your own heating, ventilation and air conditioning repair and maintenance company in the United States of America, you will definitely meet stiff competitions amongst other heating, ventilation and air conditioning repair and maintenance companies.
Besides, there are larger heating, ventilation and air conditioning repair and maintenance companies that determine the trends in the industry and you should be ready to compete with them for customers.
Economic Analysis
If you are planning towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic and cost analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
The heating, ventilation and air conditioning repair and maintenance business is not a Green business as you will come across several heating, ventilation and air conditioning repair and maintenance companies when you drive through town, search through directories and browse through the internet.
So, if you are mapping out your economic and cost analysis, you should carry out thorough market survey and costing of the amount required in renting a space where you are expected to open your business and the amount required to purchase the required working tools and equipment, and also the cost to successfully run the business.
Over and above, if you are considering starting a heating, ventilation and air conditioning repair and maintenance company, then your concern should not be limited to the expenditure you have to make as regards registering the business and purchasing your working tools, but also on branding and on how to build a robust clientele base. The truth is that if you are able to build a robust clientele base, you are sure going to maximize profits in the business.
4. Decide Whether to Buy a Franchise or Start from Scratch
If you are looking towards starting a heating, ventilation and air conditioning repair and maintenance business, it is advisable to start from the very scratch despite the fact that there are fewer heating, ventilation and air conditioning repair and maintenance company franchise out there.
Besides starting a heating, ventilation and air conditioning repair and maintenance business from the scratch is less stressful when compared to other similar small – scale businesses which usually requires detailed groundwork before launching the business.
With a heating, ventilation and air conditioning repair and maintenance business, you should just try as much as possible to learn the trade, register your business, purchase the required working tools and equipment and then leverage on every marketing tool within your disposal especially the internet when it comes to marketing your services.
Please note that most of the big and successful heating, ventilation and air conditioning repair and maintenance companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
5. Know the Possible Threats and Challenges You Will Face
If you decide to start your own heating, ventilation and air conditioning repair and maintenance company today, one of the major challenges you are likely going to face is the presence of well – established heating, ventilation and air conditioning repair and maintenance companies and manufacturers who also offer maintenance and repairs within your business location. The only way to avoid this challenge is to create your own market.
Other challenges and threats that you are likely going to face is economic downturn and unfavorable government policies. There is nothing you can do as regards these threats and challenges other than to stay positive that things will work well for you.
6. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale heating, ventilation and air conditioning repair and maintenance business especially if you are just starting out with a moderate start – up capital in a small neighborhood and with just one outlet.
But if your intention is to grow the business and have offices and corporate clients all across key cities in the United States of America and other countries of the world via franchising, then choosing sole proprietorship is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships.
Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your heating, ventilation and air conditioning repair and maintenance business; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
If you take your time to critically study the various legal entities to use for your heating, ventilation and air conditioning repair and maintenance business with the ability to sell franchise and have offices and corporate clients all across the United States of America, you will agree that limited liability company; an LLC is most suitable.
You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
7. Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from.
So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your heating, ventilation and air conditioning repair and maintenance business.
Here are some of the basic insurance covers that you should consider purchasing if you want to start your own heating, ventilation and air conditioning repair and maintenance company in the United States of America;
- General insurance
- Health/Medical insurance
- Liability insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
8. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own heating, ventilation and air conditioning repair and maintenance company, usually you may not have any need to file for intellectual property protection / trademark. This is so because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
9. Get the Necessary Professional Certification
Apart from the results you produce as it relates to providing professional heating, ventilation and air conditioning repair and maintenance services, professional certification is one of the main reasons why some heating, ventilation and air conditioning repair and maintenance companies stand out.
If you want to make an impact in the heating, ventilation and air conditioning (HVAC) industry, you should work towards acquiring all the needed certifications in your area of specialization. Certification validates your competency and shows that you are highly skilled, committed to your career and up-to-date in this competitive market.
These are some of the certifications you can work towards achieving if you want to run your own heating, ventilation and air conditioning repair and maintenance company;
- HVAC Technician, Commercial Refrigeration, Contractor, and NATE Certification
- Professional Certificate of Competency in Heating, Ventilation and Air Condition
- Heating, Ventilation & Air Conditioning (HVAC) Degree
Please note that you can successfully run a heating, ventilation and air conditioning repair and maintenance company in the United States and in most countries of the world without necessarily acquiring professional certifications and business license as long as you have adequate experience cum background in the heating, ventilation and air conditioning (HVAC) industry.
10. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations.
If you do, it won’t be too long before the long hand of the law catches up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own heating, ventilation and air conditioning repair and maintenance business in the United States of America;
- Certificate of Incorporation
- Business License
- Tax Payer’s ID / Tax Identification Number
- Chemicals handler certificate
- Health inspection Certificate
- Business Plan
- Non – disclosure Agreement
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Online Terms of Use (if you have a website)
- Online Privacy Policy Document (basically for online payment portal)
- Company Bylaws
- Memorandum of Understanding (MoU)
- Building License
- Franchise or Trademark License (optional)
11. Raise the Needed Startup Capital
When it comes to starting a heating, ventilation and air conditioning repair and maintenance business, you can be rest assured that it is cost effective especially if you choose to start on a small scale by running the business from your home or sharing an office space.
Securing a standard office space in a business district and purchasing working tools and equipment are part of what will consume a large chunk of your start – up capital.
If you choose to start the business on a large scale, you would need to go source for fund to finance the business because it is expensive to start a standard large scale heating, ventilation and air conditioning repair and maintenance business with over a handful of full-time employees.
When it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for start – up capital for your heating, ventilation and air conditioning repair and maintenance business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell of shares to interested investors
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends
12. Choose a Suitable Location for your Business
When it comes to choosing a location for your heating, ventilation and air conditioning repair and maintenance business, you can choose to locate the business in any location of your choice especially if you are offering basic services, services that do not require your clients to come to you for except for meetings.
But the location you chose to open your heating, ventilation and air conditioning repair and maintenance company is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people and businesses who own heating, ventilation and air conditioning systems and with the required purchasing power.
These are some of the key factors that you should consider before choosing a location for your heating, ventilation and air conditioning repair and maintenance company;
- The demography of the location
- The demand for heating, ventilation and air conditioning repair and maintenance services in the location
- The purchasing power of households, businesses and corporate organizations in the location who own heating, ventilation and air conditioning systems
- Accessibility of the location
- The number of heating, ventilation and air conditioning repair and maintenance companies in the location
- The local laws and regulations in the community
- Traffic, parking and security
13. Hire Employees for your Technical and Manpower Needs
On the average, there are no special technology needed to run a heating, ventilation and air conditioning repair and maintenance company except for working tools and equipment and a truck. So also, you will definitely need computers, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
As regards leasing or outright purchase of an office and store facility, the choice is dependent on your financial standing, but the truth is that to be on the safe side, it is advisable to start off with a short – term rent/lease while test running the business in the location.
If things work out as planned, then you go on a long – term lease or outright purchase of the property but if not, then move on and source for other ideal location / facility for such business.
When it comes to hiring employees for a standard heating, ventilation and air conditioning repair and maintenance company with plans to have corporate clients all across major cities in the United States of America, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Supervisors, HVAC Technicians, Sales and Marketing Officer, Accounting Clerk, and Cleaners.
These are some of the key employees that you can work with. On the average, you will need a minimum of 5 to 10 key staff members to run a small – scale but standard heating, ventilation and air conditioning repair and maintenance company.
The Service Delivery Process of the Business
Usually, when a heating, ventilation and air conditioning repair and maintenance company gets a contract from a client, it could be to service, repair, install or maintain a heating, ventilation or air conditioning system. They will first conduct cost analysis in order for them to know the manpower and resources needed to carry out the job.
Once they conclude their cost analysis, then they will deploy the required manpower and equipment to execute the job and then they will get paid after successfully carrying out their job.
It is important to state that a heating, ventilation and air conditioning repair and maintenance company may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated heating, ventilation and air conditioning repair and maintenance business process is not cast on stone.
14. Write a Marketing Plan Packed with ideas & Strategies
Generally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a heating, ventilation and air conditioning repair and maintenance business, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for heating, ventilation and air conditioning repair and maintenance (HVAC) industry.
These are some of the marketing ideas and strategies that you can adopt for your heating, ventilation and air conditioning repair and maintenance business;
- Introduce your heating, ventilation and air conditioning repair and maintenance company by sending introductory letters alongside your brochure to commercial and residential users of heating, ventilation and air conditioning systems and other key stake holders throughout the city where your company is located
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across, so that those on the social media or those who read blogs will know who to call when they need the services of a heating, ventilation and air conditioning repair and maintenance company within your location
- Create a basic website for your business so as to give your business an online presence
- Directly market your services
- Engage in road shows in targeted business communities from time to time to promote your heating, ventilation and air conditioning repair and maintenance business
- Join local HVAC business owners’ associations for industry trends and tips
- Join local chambers of commerce and industry with the aim of marketing your services
- Advertise our business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of Word of mouth marketing (referrals)
15. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If your intention of starting a heating, ventilation and air conditioning repair and maintenance company is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening offices all across key cities in the United States and franchising, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create a corporate identity for your heating, ventilation and air conditioning repair and maintenance company;
- Place adverts on both print (newspapers and relevant magazines) and electronic media platforms
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like Instagram, Facebook, Twitter, YouTube, Google + et al to promote your heating, ventilation and air conditioning repair and maintenance company
- Install your billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted business districts to create awareness of your heating, ventilation and air conditioning repair and maintenance company
- Distribute your fliers and handbills in target areas
- Contact commercial and residential users of heating, ventilation and air conditioning systems and other key stake holders throughout the city where your company is located informing them about your company and the services you offer
- List your heating, ventilation and air conditioning repair and maintenance company in local directories
- Advertise your heating, ventilation and air conditioning repair and maintenance company in your official website and employ strategies that will help you pull traffic to the site
- Position your Flexi Banners at strategic positions in the location where your company is located
- Ensure that all your staff members wear your branded shirts and all your vehicles, trucks and vans are well branded with your company logo.