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Ultimate Guide For Starting An HAVC Business


Published on August 26, 2023

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The HVAC (Heating, Ventilation, and Air Conditioning) industry is poised for a promising year in 2023, thanks to a rising demand for enhanced indoor comfort driven by several factors. 

The preceding year, the United Kingdom experienced increasingly severe heatwaves, underscoring the country's inadequate infrastructure to handle temperatures exceeding 30°C. This highlighted the pressing need for improved cooling systems and solutions.

Furthermore, there is a growing emphasis on energy efficiency and sustainability, fueling the demand for eco-friendly HVAC systems. This sustainable approach is expected to contribute significantly to the industry's growth and prosperity in 2023.

This article aims to present a comprehensive guide for initiating a business within the HVAC industry. It will cover essential pre-launch research, the necessary tools for efficient HVAC business operations, and valuable tips for attracting customers to your HVAC enterprise.

Becoming an HVAC Technician

To embark on a career as an HVAC technician, securing certification from an accredited institution or training program is a prerequisite.

United States:

In the United States, compliance with the Clean Air Act mandates that all professionals servicing air conditioning units and refrigeration equipment must hold certification from the Environmental Protection Agency (EPA).


In many Canadian provinces, individuals pursuing careers in refrigeration and air conditioning must obtain a business license from a regulatory body operating under provincial government jurisdiction.

United Kingdom:

To work as an HVAC contractor in the United Kingdom, it is advisable to complete a bachelor's degree and engage in an apprenticeship. Various college courses are available to facilitate entry into the field as a trainee.


In Australia, eligibility for an air conditioning service license from the Australian Refrigeration Council (ARC) necessitates the completion of a certificate program, followed by participation in an apprenticeship.

While not mandatory, acquiring certificates from esteemed organizations like HVAC Excellence or NATE (North American Technician Excellence) can enhance your professional credentials, instilling greater confidence in your customers.

Obtaining an HVAC contractor license is a crucial step beyond HVAC certification, as it grants you the authority to provide HVAC system services.

Obtaining a license in the HVAC industry

The process for securing this license can vary depending on your location:

In the United States:

Each U.S. state has its specific requirements for obtaining an HVAC license. Typically, this entails formal HVAC certification and a few years of apprenticeship experience. Operating without an HVAC trade license can expose you to significant fines and penalties.

In the United Kingdom and Canada:

Unlike the United States, HVAC contractor licenses are not mandatory in the United Kingdom or Canada. However, Canadian technicians working in air conditioning and refrigeration must undergo accreditation through a government-approved program.

In Australia:

In Australia, anyone involved in working with air conditioning or refrigeration equipment must hold a Refrigerant Handling license.

Securing an HVAC contractor license is a vital legal process that varies depending on your geographic location, and compliance is essential to operating legally in the HVAC industry.

Is it worth investing in the HVAC industry? 

The HVAC services market was valued at $57.8 billion in 2020, with a 6.1% growth rate projected to reach $85 billion by 2026. A recovering construction industry, which is increasing demand for HVAC services, is driving this upward trend. The residential HVAC sector is also expected to sustain a 5% annual growth rate. This growth trend presents a promising opportunity for new HVAC business owners.

How much do HVAC technicians make?

HVAC business owners typically earn a median annual income of around $76,000, according to recent trade organization surveys. Many aim for a minimum earnings rate of 6%, which means transforming $1,266,666 in revenue into a modest personal income.

To increase their earnings, owners should focus on not just boosting revenue but also raising their earnings rate. For example, achieving a 10% earnings rate instead of 6% on $1,266,666 in revenue would result in an annual take-home pay of $126,666.

Efforts to maximize income should involve running the business at peak efficiency, ensuring that every job is completed with the right resources in the shortest time possible. The use of specialized software can help optimize material usage and streamline operations.

Taking control of various project aspects, from pricing to logistics, can push the earnings rate into double digits, substantially increasing HVAC business owners' income.

Now that you have an understanding of HVAC owners' annual earnings and the certifications required before becoming an HVAC technician, let's delve into the process of establishing an HVAC industry business.

How to start an HVAC business

Starting with creating an HVAC business plan

Cover Page:

Include the company name, address, contact information, and the date of document preparation.

Executive Summary:

Provide a concise overview of your business strategy. Define your company's mission, goals, and what customers can expect from your business.

Business Overview:

Summarize the HVAC services your company offers and how it operates. Describe your HVAC business model in brief.

List of HVAC Services:

Outline all the HVAC services you intend to provide. Estimate the frequency of service for each service category.

Pricing for HVAC Services:

Use the business plan to detail your pricing strategy for the services offered. Explain how your pricing structure will ensure profitability.

Market Research:

Evaluate your target market and competitors. Analyze customer needs and market trends to guide your business strategy.

Marketing Strategy:

Develop a marketing plan to effectively reach your target audience. Specify the marketing techniques and channels you will employ.

Securing financing for your HVAC business

Starting an HVAC business can be capital-intensive, but securing financing early can prevent financial strain or closure. Here are some financing options to consider, 

Term Loans:

These are traditional loans with fixed repayment terms and interest rates. Suitable for established businesses with good credit.

Merchant Cash Advances:

A lump sum of cash in exchange for a percentage of future credit card sales. Useful for businesses with consistent card transactions.

SBA Loans:

Loans backed by the Small Business Administration offer favorable terms and rates. Ideal for small businesses looking for long-term financing.

Equity Financing:

This involves selling a portion of your HVAC company to investors in exchange for capital. Suitable for startups with limited credit history and business age. Advantages include gaining experienced partners who can aid in long-term growth.

Consider the following equity financing options:

  • Small Business Investment Companies (SBICs)

  • Angel Investors

  • Mezzanine Financing

  • Initial Public Offerings (IPOs)

  • Venture Capital

  • Royalty Financing

  • Equity Crowdfunding

Note: While seeking financing, it's crucial not to burden your new HVAC business with excessive debt. Therefore, options like equity financing or crowdfunding are advisable, especially if you're in the early stages of your business. These approaches can help you secure capital without accumulating substantial loans.

Registering your HVAC business

Obtain the Necessary License:

In many parts of the US, you must obtain an HVAC contractor license to operate legally. Follow the steps in the contractor licensing guide to secure this license before registering your business.

Register Your Business Name:

  • Determine your business structure (sole proprietorship, partnership, corporation, or LLC) based on your business plan.

  • Check the availability of your proposed business name with your state's Department of State.

  • For a sole proprietorship or general partnership, file a Certificate of Assumed Name with your county.

  • For a corporation or LLC, file a Certificate of Incorporation or Articles of Organization, respectively, with the Department of State.

Obtain a Federal Tax ID (EIN):

Apply for an Employer Identification Number (EIN) with the IRS, regardless of your business type. You can complete this process online, and if your information is verified, you'll receive your EIN immediately.

Insure Your Business:

Protect your HVAC startup from potential damages by securing appropriate insurance.

Consider the following insurance types and costs:

  • General liability policy: $60 monthly or $710 annually

  • Cyber liability insurance: $140 monthly or $1,675 annually

  • Workers’ compensation: $260 monthly or $3,150 annually

  • Contractor’s tools and equipment insurance: $15 monthly or $170 annually

  • Commercial auto insurance: $150 monthly or $1,810 annually

  • General liability and workers’ compensation are crucial insurance policies for HVAC businesses in the US, ensuring compliance with the law.

  • Work with a reputable insurance provider to ensure your policy aligns with your state’s regulations.

Investing in Equipment and Tools for Your HVAC Business

In the HVAC industry, your choice of specialization depends on your skills, experience, and target market. Before you invest in equipment and tools, consider the type of HVAC business you want to establish:

Residential HVAC:

This business primarily serves homeowners, offering services such as installing, maintaining, and repairing home air conditioners, furnaces, heat pumps, and ventilation systems.

Commercial HVAC:

Targeting commercial properties like offices, retail stores, hotels, and restaurants, this business specializes in larger commercial HVAC systems, including chillers, boilers, and rooftop units.

Industrial HVAC:

Focused on industrial facilities like warehouses and factories, this business handles more complex HVAC systems, including refrigeration and air filtration systems.

HVAC Design and Consulting:

Provides consulting services for HVAC system design and installation for various clients. This may include energy-efficiency consulting, project management, or HVAC system analysis.

HVAC Sales:

Focuses on selling HVAC equipment and supplies to businesses or individuals. This business may take the form of e-commerce, brick-and-mortar stores, or a combination of both.

HVAC Maintenance and Repair:

Specializes in regular maintenance and emergency repairs for HVAC systems.

Once you've decided on your HVAC business niche, it's time to acquire the necessary equipment and tools for your operations.

Hiring Skilled HVAC Workers

The demand for HVAC professionals is on the rise, and attracting qualified talent is crucial for the survival of your HVAC business.

Creating Compelling Job Openings

Craft job listings that clearly outline job descriptions, required qualifications, and potential compensation to attract top talent.

Wide-reaching Job Postings:

Advertise job openings through various channels, including online job boards, social media platforms, HVAC industry websites, and local newspapers.

Prioritizing Certifications:

Give preference to applicants holding essential certifications, such as:

  • EPA Section 608 Technician Certification

  • NATE Certification

  • HVAC Excellence Certification

Consider Training:

  • If resources allow, you can take a calculated risk by hiring trainees and investing in their development. Provide the necessary training until they acquire the required qualifications before fully integrating them into your team.

  • By focusing on these strategies, you can attract and retain skilled HVAC workers, ensuring the success and growth of your business.

Pricing Your HVAC Business Services for Profit

To run a successful HVAC business, pricing your services appropriately is crucial. Here's how to get started with pricing HVAC jobs effectively:

Competitive Analysis:

Begin by researching your competitors to understand the average rates in your local market.

Determine Profit Margins:

Calculate the markup needed to achieve your desired profit margins.

Value-Added Services:

Identify additional services you can offer to enhance your overall service quote. Consider implementing the following pricing techniques for HVAC projects:

Hourly Rate Pricing Model:

Utilize hourly rates for projects that are time-consuming or require detailed attention. This approach is useful when project durations are uncertain.

Flat Rate Pricing Model:

Set a fixed, all-inclusive price for the entire job. This method works well when you can accurately estimate the job's duration.

Labor and Materials Pricing Model:

  • Charge customers based on the labor performed and materials provided. This approach allows for better cost recovery.

  • Once you've determined your service prices, create an HVAC pricing chart that outlines your service costs either at flat rates or hourly rates. A pricing chart simplifies the process of providing clients with accurate and consistent HVAC estimates.

Building a Strong Customer Retention Strategy

Statistics show that a significant portion of a business's sales come from existing customers. This highlights the importance of retaining customers for the growth of your HVAC startup. To achieve this, you need an effective customer retention strategy. Here are some key tips:

Gather and act on customer feedback:

Continuously collect and utilize customer feedback to enhance your services and meet their evolving needs.

Provide helpful content:

Create informative articles that offer guidance to potential customers in search of HVAC solutions. Establish yourself as a trusted source of information.

Launch loyalty programs:

Reward your most loyal customers with exclusive benefits or discounts. Loyalty programs can incentivize repeat business.

Upselled strategically:

Offer complementary products or services to your customers based on their needs. Upselling can enhance the value you provide.

Social media engagement:

Keep a close eye on your social media mentions and actively engage with your audience. Responding promptly and professionally can build a stronger customer relationship.

By implementing these strategies, you can not only retain your HVAC customers but also foster their loyalty, which is vital for the sustained success of your business.

How do you get online reviews for your HVAC company?

Online reviews significantly influence consumers' choice of an HVAC contractor. Prospective customers rely on the feedback of others before making decisions. A wealth of positive online reviews instantly elevates your business as a preferred option.

Follow-Up Email:

After completing a successful HVAC service or installation, send a follow-up email thanking the customer for their business. Politely request that they leave a review on your website or a popular review platform. Provide direct links to make it easy for them.

In-Person Request:

When you finish a job and the customer is satisfied, personally ask them if they'd consider leaving a review. Emphasise the importance of their feedback in helping your business thrive.

Social Media Posts:

Utilize your HVAC business's social media channels to request reviews. Share customer success stories and encourage others to share their experiences as well. Include clear instructions on how to leave a review.

QR Codes on Marketing Materials:

Place QR codes on your business cards, service invoices, or promotional materials. When customers scan these codes, they can easily access your review page and leave feedback.

Engage with Existing Reviews:

Regularly engage with existing reviews by responding to them, whether they are positive or negative. When you respond to reviews professionally and express gratitude for positive feedback, it encourages others to leave their reviews.

How to Practice HVAC Business Etiquette

Maintaining HVAC business etiquette is vital for fostering trust and professionalism. HVAC companies should prioritize punctuality, clear communication, and honesty when dealing with customers. Technicians should exhibit respect for customers' properties, ensure safety, and consistently deliver high-quality workmanship.

Here are some examples of HVAC business etiquette:

Punctuality: Arriving on time for appointments and service calls is crucial. It shows respect for the customer's time and demonstrates reliability.

Professional Appearance: HVAC technicians should present themselves cleanly and professionally, wearing uniforms and carrying identification badges.

Clear Communication: Effective communication with customers is essential. Technicians should explain issues, solutions, and costs clearly and in a way that the customer can understand.

Respect for Property: Technicians should treat the customer's property with care and respect. This includes wearing shoe covers and cleaning up after the job is complete.

Honesty and Transparency: Being truthful about the condition of HVAC systems and any necessary repairs or replacements builds trust with customers.

Customer Privacy: Respecting customer privacy and confidentiality is crucial. Technicians should not share personal information or details about the customer's property without permission.

Quality Workmanship: Providing high-quality HVAC services ensures customer satisfaction and helps build a good reputation.

Safety: Prioritizing safety in all aspects of HVAC work, both for technicians and customers, is fundamental etiquette.

Follow-Up: Following up with customers after service to ensure their satisfaction and address any concerns demonstrates care and commitment.

Ethical Business Practices: Conducting business with integrity, including fair pricing and honest billing practices, is essential.

Adhering to these HVAC business etiquette standards not only enhances the customer experience but also contributes to the overall professionalism and success of HVAC companies.

The Significance of Messaging for HVAC Businesses and How Cloodot Can Help

In the HVAC business, effective messaging plays a pivotal role in enhancing customer interactions and overall business success. Here's why messaging is crucial and how Cloodot's features can be beneficial:

1. Seamless Customer Engagement:

HVAC companies often deal with urgent requests for repairs or maintenance, and HVAC businesses often communicate with customers through various channels, such as websites, social media, and SMS. Cloodot's unified inbox consolidates messages from multiple channels into one place. This streamlines communication, ensuring that no customer inquiry or request goes unnoticed.

2. AI-Powered Efficiency:

Cloodot's AI capabilities provide quick responses and customizable canned replies, enabling HVAC businesses to engage with customers promptly. AI-powered custom notes summarize interactions, helping your team understand customer needs better. This feature is particularly useful for addressing HVAC queries efficiently.

3. Multi-Channel Accessibility:

HVAC customers have diverse preferences for communication. Cloodot allows businesses to connect with customers on various platforms, including Google messages, Google map listings, Facebook Messenger, WhatsApp, websites, and SMS, all through a single inbox. This widens your reach and ensures you're present where your customers are.

4. Efficient Service Scheduling: With Cloodot, you can efficiently manage your HVAC technicians' schedules. When a customer contacts you for service, your AI chatbot can instantly check technician availability and schedule appointments, ensuring prompt service delivery.

5. AI Chatbot for Instant Support: HVAC issues can arise at any time, even outside of business hours. Your AI chatbot can provide instant answers to common questions, offer troubleshooting tips, and, if necessary, schedule a service call. This round-the-clock support enhances customer satisfaction.

6. Personalized Recommendations: Cloodot's AI can analyze customer data to provide personalized recommendations. For instance, if a customer has a history of requesting AC repairs in the summer, your AI chatbot can proactively send maintenance reminders or suggest HVAC system upgrades before the season starts.

7. Team Collaboration:

Your HVAC team is the face of your brand. Cloodot facilitates efficient team collaboration by allowing you to assign live conversations to the most suitable team members. This ensures quicker resolutions and a delightful customer experience.

8. Automation for Scalability:

HVAC businesses can benefit from Cloodot's custom chatbots and workflow automation. These tools reduce the need for manual labor and enable you to engage with more customers at scale. Automation can handle tasks like contact creation, labeling, custom field editing, and feedback collection.

In summary, Cloodot's features, such as unified inboxes, AI-powered responses, multi-channel accessibility, team collaboration, and automation, can significantly boost your HVAC business's customer engagement and overall success.

We've provided you with comprehensive information about the HVAC industry, including how to kickstart your business successfully. To inspire you further, here are some of the top HVAC companies in 2023 that you can look up to for excellence.

Top HVAC companies of 2023

Heating, ventilation, and air conditioning (HVAC) systems often escape our attention until they malfunction, highlighting their crucial role in maintaining indoor comfort. As the most significant investment for many households, selecting the right company is paramount when it's time for a replacement.

To simplify your decision-making process, we've conducted extensive research and compiled our list of the Best HVAC Companies in 2023. This list includes reputable names such as Carrier, Bryant, Goodman, Lennox, Rheem, and more. Our ratings and gathered information will not only assist you in comprehending HVAC systems but also aid you in finding the ideal HVAC company that aligns with your specific requirements.

Starting your own HVAC business requires careful planning and streamlined processes to ensure success. By partnering with Cloodot and utilizing its CXM (Customer Experience Management) software, you can kickstart your HVAC venture on the right foot. 

Cloodot's CXM software offers comprehensive solutions for managing customer interactions, tracking leads, and providing exceptional post-sales support. 

With features like lead management, automated communication, and customer data insights, Cloodot empowers you to build strong customer relationships and grow your HVAC business efficiently. From the initial stages of lead generation to delivering top-notch service, Cloodot simplifies and enhances every aspect of your HVAC business, helping you achieve your core business goals more effectively.

There is much more to know about Cloodot. Sign up with us and get a free trial, or schedule a free demo to learn more about Cloodot. There is a lot more hidden inside Cloodot; check it out. 

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