When it comes to some businesses and occupations, you can definitely make a great living as an HVAC business owner. Of course, just after a few years of training. In the beginning, you might not be able to start your own business and work around yourself without having to rely on someone else’s business. After all, technicians will work for others to gain experience and make connections.
Once they have gained them, they decide to start their own businesses based on several factors and after thinking it through.
Now, if you are in the stage where you want and can start your own HVAC business, you ought to know it’s hard work to run a business.
It can sometimes feel like you’re on a rollercoaster without a way to get off. It’s possible to make mistakes, trip over your feet, and not be perfect, but it could be one of your most rewarding decisions since you achieve freedom, independence, and much more with the hard work, you invest in it.
Therefore, we actually encourage you to give it a try. After all, there’s nothing better than being your own boss, managing your income stream, and being able to make decisions based on what you think is the best after doing proper research.
To lend you a hand (or two), we decided to pull off this guide that can help you with the common yet logical question: How to start an HVAC business?
Understand What Makes a Business Successful
It can be challenging to start a business, though we mentioned this already.
But what exactly makes it difficult? The fact that you have to deal with more than just offering the services you are used to as an HVAC tech and professional.
No one teaches you how to be a businessman or woman in the industry, and unless you take the time to go over a business degree or at least, course, you will lack in many aspects. However, this doesn’t mean they are strictly necessary to start your business.
You ought to keep in mind that you can’t just start a company and expect to be successful.
You need to create a realistic business plan in order to mitigate risks and know where you are going, but for it, you must understand what will make your profitable HVAC business in the first place.
You will need to have a clear idea of what you want and the market you are targeting before starting your business plan.
Part of what you need is vision, ideas, and knowing what will take your time. Some of the aspects and factors we recommend people to consider are:
- Analyze the situation.
When discussing the possibility of starting a business, it is important to have a discussion about your personal sacrifices.
It will be difficult for you to survive the first few years. It will take you long hours to generate revenue and then after-hours to build the business and make it successful.
This is why you must discuss your strategy with your family and get their support, or if you are alone, consider your situation carefully and determine if you can afford to do it now.
You will fail if you don’t assess the situation properly and consider all the factors at home that could negatively or positively influence your business venture.
- You need money, so consider the affordability.
Remember what we said about determining if you can afford it or not? Well, we were talking about cash as well. After all, cash is what you need the most to start the business and why so many HVAC businesses fail.
But what should you evaluate and consider from this? Definitely your cash flow above everything else.
For your cash flow, this is where business knowledge comes in handy.
It is important to understand cash flow and how it works. For starters, it refers to the money moving into and out of your company.
This is where the trick lies: Make sure more money flows into your business than out.
Customers who purchase your products or hire your services are the main source of cash. Customers who don’t pay their invoices at the time they purchase your products or services will hold this cash in accounts receivable.
The cash that flows out of your business comes in the form of payments such as rent, mortgages, vehicle expenses, tooling, and inventory.
Your first six months are crucial for your HVAC company’s success. Your success rate is very low if you don’t have enough money during this time.
You can make a profit with zero cash. Profit can be an accounting concept and doesn’t pay bills. If you don’t collect what’s owed, you won’t have any cash.
To be a successful HVAC business, you must have a plan. Anyone can start a company.
Your mind must be wired to think positively. These steps will help you to start your business. But only you can make it successful.
Your business plan should include a mission statement that states your goal to play to win and crush your competition.
Start Writing your HVAC Business Plan
The hardest step in a business venture is the first, and don’t let anyone fool you with any other answer or mention.
However, the first step and the next ones to follow can be easier when you take the time to go over your business plan and consider it as your blueprint for your HVAC company.
This exercise will help you define your vision, establish practical goals, create strategies for reaching them and plan financing and marketing while identifying potential problems.
A business plan and a foundation will help you clarify your goals and show you how to reach them. It will also give you practical guidance on how to finance and market your company.
It is simple for those who don’t understand the importance and relevance of a plan: It is your roadmap for success. Although a business plan for a one-person company doesn’t need to be complex, it is important to know the basics so you can have a better idea. Of course, with more people involved, its complexity will increase bit by bit.
The plan will help banks and investors learn about your business, financial situation, and mission, and goals so you can have support from them in the future.
Even if you don’t require funding, a business plan can still be a good idea. Without understanding your target market and researching your competitors, you can’t quantify the approach.
Also, it serves as a guideline to help you identify the necessary actions to achieve your strategic goals.
The financial section of your plan is also useful for managing cash flow in the early stages of your company (yes, cash flow, just what we were mentioning before).
If you aren’t that clear about the structure of the plan, it is usually a detailed document, and due to this, it can be difficult to create one.
You can start by learning online about the various parts of a business plan. You can then tackle each section individually until you are done.
There are tons of online resources that can help, but all of them will set different elements and factors.
If you are up for the challenge of following a complex yet complete one, you can consider the elements established by the US Small Business Administration:
- Executive Summary.
- Description of the Company.
- Market Analysis.
- Service or product line.
- Marketing and sales team.
- Financial Projections.
Financing Your HVAC Business
You will need capital to start an HVAC company or any business you have in mind, so it is only natural for us to mention this aspect for your business and something we are sure you’re more aware of than what you would like.
Now, the equipment costs and total expenses to set up an HVAC business will depend on how you structure your business (self-employed contractor or registered business).
Before you sign off or decide to start, make sure to list all of your expenses. But before doing so, you’ll first need to determine how much you will charge.
It’s not easy to determine the right price for your services. You could lose potential business by overcharging, but undercharging can cause you to run out of cash quickly and without reaching success. So, we know it is hard to find the middle point.
Talking about money is uncomfortable for most people. However, you should get paid what you are worth: Time, skills, and materials. When determining what to charge, here are some things you should consider:
- The variability of the projects: Costs can vary from project to project. Your labor is charged per hour, and the cost of materials is based on the standards you choose.
- Fixed costs: You have to pay for running your business, e.g., Vehicle payments and insurance. Because they are generally the same, they’re called fixed costs, and you need to keep them in mind to associate them with your business.
- Additional factors: Pricing should take into account your experience, qualifications, skills, and location. The more experienced you are, the more you can charge. This is simple, yet people usually forget to make themselves worth it.
Think About Your Responsibilities
You have many balls to keep your business running smoothly. You have to manage your team, keep track of your finances, and do the actual work. However, there is one aspect of trade that should not be overlooked: Industry and government regulations.
This means you have more responsibilities than you initially thought and many of them aren’t even referred to the services and products you will directly offer. Instead, these are the ones you should also think about:
- How your business will impact the environment and how you plan on dealing with it.
- Local laws governing the operation of a business, including employment laws for employees or even if you are the only person operating it.
- What do you need to do to ensure your safety and that of your team?
One of the best options to support yourself in this part of the responsibility is joining your local professional organization to keep up to date with what’s happening within the HVAC industry and what changes legally and in other aspects.
Before you can apply, you must meet the minimum qualifications.
You’ll then be eligible to receive training and professional development opportunities.
Continuous improvement is a competitive advantage. If you need to hire an apprentice or other HVAC professionals, they will be there to help. Thus, this option brings more benefits than just being informed.
Start Marketing Your HVAC Business
All right, this is something you must know before we start: word-of-mouth won’t be enough even when it keeps you visit by bringing new leads and clients.
Many heating and air Conditioning units contractors believe it is. Although it is vital for any business regardless of the niche, so many methods are available that you can’t just rely on one, especially when others can even bring better results. In other words, if you are like this, you do not see the whole picture.
Lead generation and marketing is more than one good strategy and effort. Instead, you need to find new ways (all the time) to market your business and generate deals and services.
Simply put, supply and demand. The more leads you have, the more in-demand you will be and the greater your margins.
While you must provide a high-quality service at a fair price, it can be difficult to do so when you offer sales and deals all the time to keep you busy.
But how can you work around the aspects and factors involved in marketing your HVAC business? This is what you need to do:
- Identifying your target market.
It is impossible to please everyone. It is also impossible to be the best HVAC contractor and use only the best quality products and equipment all the time. Even when this doesn’t mean you can’t try it, the actual focus we want you to have is that not everyone will be your perfect client or a potential one.
It will be easier to market your services to specific audiences and attract high-quality leads by defining the ideal customer clearly.
Your ideal clients will be your guide as you build your HVAC company. This will help you to make sure that each decision you make is beneficial for them.
For this, you also need to determine what specific area you will focus on in the HVAC industry. After all, you can either be a professional and company that wants to offer as much as possible or choose a specific one.
Thus, we encourage you to follow these steps to determine your target audience properly:
- Choose the area where you would like to work. Consider whether your customers are residential, commercial, or both.
- You can research your competitors to identify service gaps in the local marketplace that you might fill.
- Ensure that the opportunities on the market match your interests and skills.
- Based on your market experience and any service gaps you have identified, narrow down the services you will offer.
- Collect data from your competitors to estimate your niche’s profitability.
Once you are done with all these aspects, you can move on with the next part: Competitive advantage.
This one focuses on the last part we mentioned about collecting data from your competitors. To do this, consider these things when researching competitors in your local area:
- What you can do better or differently.
- How to stand out.
- Existing businesses may offer potential partnerships or not.
Already done and want to move next? Your marketing plan (yes, another plan) will be needed to know how you will proceed with your strategies in this area of your business.
It can feel a little like trying to find your way through a maze and building a plan about your target market and what to do.
However, to make it simple, you can keep this in mind: You want to win as much work as you can, but you might also have a limited marketing budget. You want to get the best bang for your buck.
Focus on narrowing your focus and learning from mistakes – this will help you identify the best channels and tactics that attract quality leads.
Suppose you want us to tell you what to do regarding this. In that case, we narrow the essentials into four options: Build your website, be present in social media platforms, register your HVAC business in local directories, and consider a list of small businesses in your country.
Also, we need to go back to word-of-mouth since it is still a key strategy. It’s one of the few marketing methods you can do for free.
You can share your business online and in person with your family members and friends. Once you’ve got a few five-star reviews under your belt, you’ll be away laughing.
Set the Budget for Your Marketing Effort
Going back to what we were mentioning about contractors and HVAC companies relying on word of mouth, the truth is that all of them don’t want to set a budget either for it.
However, following what we mentioned about marketing being crucial, the next step is to definitely set one if you don’t want to go over it and make things work out properly.
If you don’t know where to start, we can help you with a few steps and an overview.
First, determine your Customer Acquisition Cost (CAC). Next, calculate how many customers you will need each week. Finally, do the math. If you have 20 customers per week and each one costs $40, you’ll need to spend $800 on marketing and advertising your HVAC company.
Of course, this can vary depending on your efforts, and remember that your revenue will be much more than what you are spending (or it should be, at least).
Considering the above information, you must not become complacent. What we mean is that you should never stop trying to lower your CAC.
Customer retention and organic traffic growth through SEO are two of the best ways you can do this.
SEO is a great investment because you are continuing to build your business’ foundation. You won’t have to advertise as often once you are on the first page of Google. This will reduce your CAC and increase your profit margins.
You should not start your business before you have enough money saved to ensure your business is well-organized and able to invest in advertising campaigns.
If you are attentive to the numbers, your ad campaigns will improve. For example, you can spend $1.000 on Facebook ads to generate $1.000 profit.
When creating your budget, consider all the things you may need. To be sure, add 30% to the total you get.
You can then start your business by setting aside money. We recommend that you get your website and SEO campaign up and running within 3-4 months of starting your journey and setting the details and foundations of the business.
Final Step: Learn from Others
If you need advice, mentors, coaches, and business associations can be a great resource.
Learn from the mistakes and successes of others who have been there. Many successful tradespeople make videos on YouTube if you don’t have anyone to talk to, or you can invest a few bucks in finding someone who can assist you during your journey.
Podcasts can be a great way to learn and listen while driving to work as well.
There are 29 million podcast episodes on all platforms. You’re sure to find something you enjoy. You won’t be bothered by too many ads because podcasts are a rapidly growing medium for content, and you can go all the way through the information.
Don’t be afraid of learning from others, and this also includes reviewing your competitors’ strategies and seeing what’s been working for them and what isn’t.
In this way, you will know what methods you should prioritize over others in marketing, business, and every aspect of your company.
A Couple of Pieces of Advice: 3 Things You Should Know
We don’t want to leave you without letting you a couple of things that can change the panoramic for your business.
This is why we decided to add a few tips you should consider and keep in mind in order to succeed in your journey in starting an HVAC business on your own.
- Be realistic and focus on what you can do.
There are risks involved in starting a small business.
A realistic business plan can help you to mitigate those risks, as we previously mentioned, but being realistic about what you can truly do or not is the best thing.
Planning will allow you to define your vision, establish achievable goals, and create strategies for reaching them, but only if you have made up your mind regarding the basics and your situation.
A business plan for HVAC doesn’t have to be complicated. You don’t even need an MBA to make one.
Some platforms and pages online even offer a few free templates you can use to have an idea or just follow without issues.
- Your referrals and their opinions are valuable.
As your company grows, you and your team will focus on providing exceptional customer service that encourages clients to recommend your business to their friends, family, and neighbors.
A solid foundation is essential for starting and operating a successful HVAC business.
To improve the customer experience, use tools such as customer surveys and online rating/review sites. Look for troublesome trends in customer complaints, and take action to set things right when necessary.
- Find a mentor or professional guidance.
Like we mentioned before, starting an HVAC company is quite different from running a business.
You can seek the guidance of a mentor, colleague, or friend if you don’t know how to start a business.
An experienced entrepreneur or professional can help you find resources to address any issues that arise, such as licensing, taxes, and human resources.
The Local Lead Generation Process for Your HVAC Business
All right! So, everything is about building properties and generating leads. But how does the process actually take place? Are there other steps I need to know?
The steps I mention below are what students from our local lead generation program follow to generate leads for businesses like yourself. So I’ll help you see what we do. And how if you join our program, you can simply generate leads for your own business (unless you want to start a side hustle and build a laptop lifestyle business).
Essentially, our lead generation can be divided into four steps:
The first is prospecting. You need to take the time to do market research on a niche (industry) and determine how many phone-driven businesses are there.
Keep in mind that this is local research as you need to know how many companies need leads. For example, you may search for “plumbing services Youngstown OH.”
You will find dozens or even hundreds of businesses trying to get themselves in front of the customers by ranking on Map Listings, organic results, and even Ad.
The second step, building. When you find a niche (plumbing, tree services, a software company, real estate…), you will need to start building your digital properties. You don’t need to be an expert in HTML or coding. It can be easy with the right tools.
The third step is now taking time to rank your lead gen website. With the site done, you need to work on SEO strategies and start dominating those Google search results. If you’re new to SEO, it stands for Search Engine Optimization.
To keep it simple, it consists of the entire process of growing a company’s visibility on search engines like Google and generating organic traffic. And remember this, local lead generation is part of the strategies.
Moving on to step four, once you rank the site, you will start getting your ROI and profits. You only need to rent it out to a local business interested in the leads the site generates. You can offer a couple of free leads to their move on with the actual pay per lead.
To review steps 1-4 above, I described it to a normal student who is building a lead gen business to help local service providers generate more calls. But replace the student with you as the business owner. And replace sending the leads to a business to simply siphoning the leads to your personal business.
By the way, fun fact, about 20% of our students in our local lead gen program are actually business owners who went through the program. And they use the skillsets we teach to generate leads for their own business.
An Example of Lead Generation: Home Advisor
You must be thinking, “if lead generation sounds so good so far, how come I haven’t seen any company?” That’s the thing; there are many out there. You just don’t know they are dedicated to it.
HomeAdvisor is one of the best examples you can find on the Internet as it is a top lead generation company that has spent millions building its brand but also earned even more zeros for this same reason.
They started small as everyone else but invested in building their brand awareness to make people who are looking for home services go to their website and find what they need. They are over 75% of people’s first choice when they need those services.
If you don’t get HomeAdvisor that much or need a refresh, users need to submit their information to request a service and get a professional or expert who can provide it.
HomeAdvisor’s job is to share your information, which makes you a lead, with local companies so they can contact you and offer the service you’re requesting. For sharing this lead information, HomeAdvisor gets paid by the companies. This happens for every single lead they send to multiple businesses.
Business owners who don’t have marketing skills or don’t even know how to have any online presence will always rely on those pages to list their services. They will save time and effort, but companies like HomeAdvisor can make them spend lots of money as leads aren’t exclusive (one lead is sent to multiple companies after all).
Using Facebook Ads aka Paid Ad Platforms: Do They Generate Leads?
They DO generate leads. If not, no one would use them.
However, you need to remember two facts:
- Paid ads or platforms can be expensive.
- They don’t generate “natural” leads.
Whenever someone sees or clicks in one of those ads, over 80% of them did it by accident or are trying to close/report it.
Why? Because they aren’t looking for those services. At least not at the moment.
What those ads do instead is interrupt their time on the platforms. Users aren’t there to find companies or businesses unless they are searching for a specific company’s user, and for that, there’s a search bar. This is why it is hard to convert them to actual customers who will show interest in the companies’ services. Also, you’re limited by a budget.
When using lead generation, everything is organic. You aren’t forcing others to pay attention to your business but rather being there when they need you. This is why Google’s organic traffic will always beat paid ads, and the reason companies continue investing in it, which is a lot cheaper as well.
What Is Local SEO?
Don’t worry… I didn’t get it at first either. Following the short explanation, local SEO focuses on scaling businesses’ visibility on search engines. However, this is only for those who serve their communities face-to-face.
What does this mean?
Experts and professionals like painters, plumbers, and dentists (but not only them) offer their services to their local customers. Why? Because they can’t deliver them unless they are located in the same area of their customers.
To make sure those businesses get more leads, you need to rank them locally by claiming the business listing on Google to place them on Map Listings. Local SEO also involves online reviews, citation management, and how you manage your entire online presence in the local area.
If you are going to bet on lead gen, you need to adapt yourself to today’s world: The Internet.
Keep in mind that although traditional channels and methods like billboards, warm calls, and pamphlets still work, they aren’t part of your tools. Whenever someone needs a service, they go to Google and search for it.
“Dentist in Miami” or “plumbing services in Orlando,” etc. And you can keep coming up with services or professionals people need and look for. Thus, you need to make sure you’re using Google to get the companies in front of their clients.
Users will always click on the first search results (those near the top), and many of them will be either Ad links (people paid to place their websites there), Map Listing, and then you get websites. Almost all of them are your goal and where you should always aim to place yourself.
Can My HVAC Business Utilize a Local Lead Generation Strategy?
If you want customers, you better know you need it. Following the previous explanation, lead gen is all about placing businesses in front of their customers, choosing them over their competitors.
Put it simply – it’s all about closing deals and having clients for those companies to make money. The main difference with the usual methods companies use for this is how lead generation approaches different channels to get them in the right place of the market to get customers.
Those channels are all focused on the Internet as most people are searching for products but also services across the net. The issue is that the Internet is way too broad, and businesses don’t know how to place themselves. They usually try, but they get one common result: losing money and time.
How Powerful Are Organic HVAC Leads from Google?
For companies looking for customers, it’s everything. For you? Pretty much the same. When you build a business with digital properties, you get to make thousands of dollars a month.
This isn’t a “get started today and get rich tomorrow” thing, but it is HIGHLY scalable, and ROI + positive results are guaranteed. Learning a fairly decent and very needed set of skills to create your digital properties and start ranking them on Google is required.
I have invested in several online businesses over the years, and if there’s something uncertain, whether you will get your ROI or not, even more than the actual profit.
However, this business moved my earnings from five figures a year to a month in ONLY passive income while sitting comfortably at home.
On my laptop. Anywhere. Anytime.
You can look at one of the first sites I built back in 2016, and it continues making me over $1.000+ every month. The best part is that I don’t need to touch it or the rest I’ve built over the years, just like this digital property.
What Makes Lead Generation SO Alluring?
Here it goes: you can work from home.
The main issue with regular business opportunities is how much you need to invest in staff, equipment, or rent to have a place to sell your products or offer your services.
We all know the hassles of traditional businesses that involve regular expenses, which are extremely high. Can you afford it? I don’t think so, and even if you can, is it worth it? Now, it isn’t only about the money. You also need to put in a lot of work, and it isn’t only during the first couple of months or years. Usually, it is as long as you continue running it.
You can save yourself those headaches and bone-breaking tasks and expenses with lead gen since it is more about generating leads with digital channels—mainly websites.
Websites can be VERY cheap to build, and with many tools online, you get to do it in a couple of hours instead of days. Any virtual or digital business is scalable and won’t need constant maintenance.
So, let’s summarize this:
- You save money in regular expenses with traditional and most online businesses as what you need is yourself and digital properties (websites).
- You can bet on passive income.
- There’s no need to hire more people to get started.
- You can generate leads in multiple industries, which allows you to work on any niche you want.
How Can I Get Started in the Local Lead Generation Program?
Anyone can start and learn. That’s the beauty of this business model. I knew nothing about SEO, Map Listing, and everything I’ve mentioned so far. It is all about learning the skills, gaining experience, and deciding to take the step.
Remember that this business model will never get old as business owners are always looking for leads. They need to do business and scale their companies. Why not do the same while helping others and still making money?
You can start with this local lead generation course highly recommended for anyone wanting to grow in the business. It is a close training that will take you through each step and make sure you are able to get your ROI, profits and take control of your life.
You will be added to an incredible lead generation family ready to help you 24/7 when asking questions on the group. Anyone is welcome who’s willing to put in the work. Click here to watch the lead gen webinar.