Planning to Launch an HVAC Business? Here’s What You Got To Know!
The demand for heating, ventilation, and air-conditioning (HVAC) services keeps growing and will only proliferate going forward. Rise of energy-efficient HVAC systems and increasing urbanization are the driving forces behind the growth of the HVAC market. The US Bureau of Labor Statistics reports that employment opportunities in the HVAC business are projected to grow at a rate of 13% during 2018-2028, which is higher than the national average of many other jobs.
The message is clear!
If you’re thinking of starting an HVAC business, you’re on the path to success and profitability. Launching an HVAC business is a daunting task. If you’re ready to take the plunge, here is a quick start guide that will help you hit the road easily.
Related Reading: HVAC Technology Trends: Market Growth and Utility of HVAC Systems
A quick start guide to roll out your HVAC business
The first step towards setting up an HVAC business is to create a business plan. Detail every single service that you plan to offer, list out the target customers, and finalize the area of operations.
Once you lay out the business plan, you need to consider these factors:
1. Finance Planning
Starting an HVAC business requires a sizable investment. A typical HVAC startup invests anywhere between $2,000 to $100,000 in the US, reports Entrepreneur.com. Starting with the least equipment and a used vehicle allows you to keep the upfront costs low. This way, you can estimate the capital needed and arrange for the required funds. Know the overheads and cater to pay for the first few months until the business gains traction and can pay for itself.
2. Legal Formalities
Often, the first consideration when starting a new business is to define the structure of the business. The common structures are sole-proprietorship, partnership, and company registration. Registering the business minimizes the business owner’s liability.
Another early consideration when starting an HVAC business is licenses and approvals. Each state and even local authorities will have their own requirements. Many regions/ areas enforce different safety requirements. Approach the local chamber of commerce for the specific list of licenses, permits, and approvals required.
Regulations also play a key role in driving the HVAC industry trends. For instance, in the northern US, furnaces must meet a 90% efficiency rating, while those in the southern US require only an 80% efficiency rating, reports Aeroseal- a leading Duct Sealing Services Provider in the US.
It is important to fine-tune your operating procedures and standards according to the local regulations.
Starting an HVAC business without adequate insurance is equal to burning your fingers. Insurance protects your business from any losses, hazards, mishaps, or damages.
Two important insurances that you need to consider are liability insurance and workmen’s compensation insurance.
Liability insurance protects the business from claims made by customers against negligence. Workmen’s compensation insurance protects the business from personal injury claims from workmen. Not having this insurance may bankrupt even very successful businesses.
4. Tools and Equipment
Get all the equipment and tools of the trade upfront. Make a list of all the tools required to install, repair, and replace the systems, including the most basic systems. Scale up to include advanced tools as per the business plan.
Some of the basic tools of the trade include drills, pipe wrenches, vacuum pumps, testers, tape measures, shears, staple guns, and more.
Do not cut corners on safety equipment. Technicians working without mandatory safety equipment may void the insurance.
T-shirts with the company logo, signage on vehicles, and other decals add a professional touch to the business and improve brand loyalty. It also makes for free advertisement.
A difficult consideration when starting a new business is fixing a price point. List out obvious costs such as labor, consumables, and taxes. Next, consider the hidden costs, such as the depreciation of tools and equipment. The tricky question is to distribute overheads and fix a mark-up.
Charging heavily or more than the acceptable fare is a sure way to drive away customers. Similarly, charging very low, even to attract customers, risks selling oneself short. Research the charges of local competitors to get an idea of the ballpark rates and the average operating cost estimates. Many start-ups compete on value rather than price. They strive to offer better value for the same or even higher price.
Related Reading: Tips To Help You Retain Your HVAC Customers
6. Competent Staff
Never underestimate the importance of Human Resources. Skilled technicians and contractors may make the difference between two competing HVAC businesses.
Take the time and effort to find qualified HVAC experts with industry experience. Experienced technicians compensate for the lack of customer testimonials for a new business. Hire candidates with good technical skills, communication skills, and willingness to adapt quickly. A new HVAC business will have to change plans and offerings frequently and adapt swiftly to the customer requirements much more than what an established firm does.
Make sure the hired technicians have the requisite HVAC certificate. For instance, EPA Type I certification qualifies technicians to service only small appliances. EPA Type II certification allows the technician to service high-pressure systems. EPA Type III certification allows servicing low-pressure systems.
7. Field Management Suite
A robust FSM software to manage operations is the backbone of a spread out business such as HVAC.
The best field service management system streamlines operations. Advanced field service management suites like ReachOut offer the following features:
- A strong collaborative component to improve communication between the office and the field.
- Auto-invoice generation capabilities for prompt revenue generation.
- Intuitive customized reports for managers to make informed decisions.
- Push notifications to keep stakeholders informed of work orders and other information.
- Seamless integration with the inventory control system. Technicians check for parts from their smartphones, request orders, and receive updates.
With all these in place, it is time to launch intuitive marketing campaigns and attract customers. As the adage goes, “well begun is half done.” A successful HVAC business always strives for efficiency and ensures top-notch customer satisfaction. We’ve covered a few practical things that you need to take care of while starting an HVAC business. Ultimately, what makes or breaks your company is customer service and reputation. If you take care of your customers by offering good service, compassion, and empathy, they will recommend you.
Are you planning to get started with your HVAC business? What’s your strategy? Let us know.
ReachOut: Inspection & Work Order Management Software
Do you still use paper or Excel spreadsheets to manage your service business? ReachOut is a web and mobile solution for companies to schedule, dispatch and deliver inspections, work orders, ticketing and more.