How to Start an HVAC Company

Thinking about starting your own business? It's hard, but our little guide can help point you in the right direction.

The dream of self-employment! Making your own hours, setting your own schedule, and not having to answer to anyone (except maybe your spouse or kids)—it sounds pretty great. But to start your own HVAC company, doing what you already know how to do? That’s perfection, right?

Well, sort of.

Why would someone want to start an HVAC company?

If you are a licensed HVAC technician, starting your own heating, ventilation, and air conditioning company is probably something that you’ve thought about at least once.

Maybe you thought about it after your boss scheduled you for emergency calls all weekend and you watched your family do something fun without you. Or, maybe you started thinking about running your own HVAC business when you saw how much the guy you work for charges the customers you service. Either way, once you start imagining your own company, the image becomes hard to shake.

We get it—but slow down, Sparky.

Running your own HVAC business is NOT the same thing as doing what you already do every day as an HVAC technician.

Creating an HVAC Company

In order have a successful HVAC business, you will have to approach things as a business owner first and an HVAC tech second. Specifically, this means that you must spend the majority of your time doing tasks that all small business owners have to do, like bookkeeping, advertising, inventory, and financial planning.

Start by creating a business plan. Write down all your ideas. Your plan doesn’t have to be fancy or complicated, it just has to give you direction. List out what you want to do, specify your goals, and detail your strategy for getting there. Think of the exercise as creating a roadmap.

Along with your business plan, you will also need a marketing strategy. This covers how people will find out about your business. Word-of-mouth helps, but this alone is not a sound strategy to stake the success of your business on. Instead, you need to advertise and interact with potential customers. Social media makes a good place to start. You might also want to consider writing a blog that tells people how to behave smarter with their heating, ventilation, and air conditioning. Content like this will attract attention (and, more importantly, search traffic) to your company website.

Filing Paperwork

Starting a business also comes with heaps of paperwork—and lots of fees. Get your checkbook ready. Here are some of the things you will need to start your HVAC business:

• Local Business License: First, check with your local authorities. You might need a business license before you can do anything.
• State Contractor’s License: You also need a Contractor’s License. To qualify, you will need proof that you have the minimum amount of HVAC experience required by your state. You will also need to pass the contractor’s license test.
• HVAC Contractor’s License: Once you pass, you’ll file for your HVAC Contractor’s License and pick a name. This part of the process sounds easy enough, but it will take months to get your name approved.
• Contractor’s Insurance: At a bare minimum, you need to carry liability insurance so that you are covered if someone injures themselves on your job site. If you plan on having employees, you will also need to get workers’ compensation insurance set up.
• Contractor’s Bonds: Your HVAC business will also need a bond. This is used to secure your jobs in case someone complains about the quality of your work.

Make Investments

Once you have all the paperwork in order and you’ve written up a plan, you are ready to start investing in your company. You will need tools and equipment to do your job well. You might also need a van or a good vehicle to get you to your different job sites. Include some money in your budget for advertising, too. Adding lettering to your vehicle serves as a professional touch that gets noticed, and you should plan to buy business cards to hand out.

Will you have employees? You might start as the only technician, but who will answer calls, furnish invoices, and schedule jobs? If you hire an administrator, will you supply them with HVAC software or rely on paper an pen?

Risks of Branching Out on your Own

There are some pretty big risks to consider when you start your own HVAC business. Keep in mind that it takes some time before you will become successful, or even profitable. Money is going to be tight at your house for the next few years. There are plenty of HVAC companies already out there and they were managing the needs of your community before you ever earned your certification. You will have to work hard to build a name for yourself and your company, so you can forget family nights for a while. It will feel like having two jobs. And the worst part? The odds are not in your favor that this whole thing will even work out. Around 80% of small businesses fail in their first year and 50% will not live to see their five-year anniversary (scary, right?).

Success! It Does Happen

While lots of business do fail, people do succeed.

Dire warnings aside, it possible to start your own HVAC company and earn a living from it. With careful planning, you could even grow that business to cover your entire state and employ half the guys you compete with today. And, if you want to make real money working in HVAC, running the company is the way to do it.  Just remember—you have to play to win. But, if you fail to plan, you plan to fail.