5 MIN. READ
Starting a business from scratch is hard work, but HVAC contractors are in high demand for residential, commercial, and government facilities. The rewards of self-employment, including the ability to decide how and when you want to work, and the earning potential for contractors make this a desirable profession. These seven steps will help you start an HVAC business.
Step 1: Create a business plan
We have all heard the famous quote by Ben Franklin, “If you fail to plan, you are planning to fail.” This still rings true today, especially in business endeavors. Starting an HVAC business is hard work, and like anything that is worth doing, you need a plan:
- Your blueprint: When you build a house, you need a blueprint. Your business plan is the blueprint for how you will run your business. Lay it out in a detailed fashion - What is your business, and how do you plan to achieve your stated goals?
- Your vision: Include your vision, strategic goals and how you will achieve the goals with a vision statement (a staple in a business plan). Vision statements concisely explain what your purpose is for your company. Your plan should include specific and realistic goals with methods that show they are achievable.
- Projections: Do your research and outline your predictions for sales, marketing, and new business growth. This is an important part of your plan. It shows potential partners and investors that you have studied the market and you know how many customers you need to reach and keep in order to meet your goals.
Step 2: Figure out your business finances
When you start an HVAC business, a good financial plan will set you off on the right foot. Understanding the best way to establish and grow your financing will set you up for success:
- Determine the best financing option: You can finance a business in a few different ways - out of pocket if you have the cash, small business loans, loans from friends and family, or other bank loans. Finding the right financing strategy that is sustainable for the long term is imperative.
- Estimate your fixed and variable costs (for labor, supplies, overhead, equipment, etc.). Investigate what your HVAC company's needs will be. How much will your rent be? Do you have business vehicles? How much inventory do you need to keep on hand? These are all questions that you should have the answers to.
- Use that information to set your pricing schedule for what you will charge customers. Once you have your fixed costs, get to know and study your competition too. What are they charging? Having all this data will give you the best possible information to set your pricing structure.
Step 3: Get all the necessary certifications and business licenses
Having the right credentials is a must in order to operate within compliance. Your state and local governments have specific requirements that you need to adhere to. All HVAC contractors must be licensed in the state(s) where they do work, so make sure you have all that in order before you start your first job. Also, make sure that you keep your license current. Additionally, you should earn certifications along the road that will set you apart from your competition and enhance your reputation as a leader and expert in your field.
Step 4: Get insurance
In addition to your license, insurance is a requirement, and it protects you and your customers. HVAC contractors must have worker’s compensation and liability insurance. Some states may also have additional insurance requirements. Be sure you understand the local laws and adhere to all policies so you do not get in trouble for noncompliance or worse.
Step 5: Build relationships with subcontractors
Especially as you start an HVAC business and grow, you may come to depend on subcontractors for their manpower and niche skills, so you want to build solid partnerships with teams that you can trust.
As you begin to form long-term relationships with subcontractors, do not forget to show them appreciation. Reward them for their good work with more work, and they will continue to produce for you.
Step 6: Build relationships with suppliers
Having the right supplies at good prices is vital to your business, especially in today’s market of global supply chain instability. If you leverage your supplier network and form solid partnerships, it can help you stay ahead of the curve and fulfill your customers' projects on time.
Good suppliers help you get the best prices on the best quality parts, so you can create accurate bids and capture market share with competitive prices. Customers will value your company when they know you provide fair pricing and the best parts and equipment. Satisfying your customer base with great service and pricing will keep your business in high demand. Join a purchasing program like Raiven to take advantage of pre-negotiated discounts, service levels and finance terms.
Step 7: Start marketing your business
Now that everything is in place, it is time to go out and get your first customers! Just because you have completed steps one through six does not mean that customers will automatically find you. Rather, you need to find them, so create robust marketing campaigns to get your name and business out there.
Network at industry events, and develop a clean and captivating website that lures customers in and shows them what you have to offer. Generate a loyal customer base, and you will be rewarded with word-of-mouth referrals and more profits.
After you start an HVAC business, what's next?
These seven steps are a great roadmap to help you start an HVAC business. But it does not end after step seven. Once you are set up, partner with a company that can help you establish a purchasing program that gives you access to the top suppliers and manufacturers in the industry. Reach out today to learn more about how we can help.
