How to create an HVAC business plan like a pro ‌

Key takeaways 

• HVAC services are in high demand, making this an excellent time to enter the industry 
• A business plan serves as a roadmap for your business while also enabling you to do things like secure funding for your startup
• Setting up an HVAC business plan takes time, but it helps you identify your strengths and weaknesses as a company 

If you’re just starting out as an HVAC contractor, you’re likely thinking about basics like startup costs and marketing strategies. While these are important factors to consider when getting started, perhaps nothing is more important than your HVAC business plan. Your business plan serves as a blueprint for your company, outlining who you are, what you stand for, and how you operate. 

This guide shares top tips for creating your HVAC business plan as well as why the HVAC industry is loaded with opportunity.

Why should you consider breaking into the HVAC industry?

If you’re thinking about starting a business in the HVAC industry, there’s no better time to do so. More people are working from home than ever before, which means homeowners‘ existing HVAC systems are running more frequently. Heating, ventilation, and air conditioning systems are more stressed, increasing the need for replacements. 

Furthermore, because systems are running around the clock, energy bills continue to rise. Homeowners are turning toward high-quality energy efficiency systems as a cost-effective way to save on their heating and air conditioning bills—and they may also turn to HVAC professionals for help. For instance, someone may want a boiler upgrade to better serve their hot water needs. 

Lastly, with many people focused on health and wellness, homeowners are concerned about indoor air quality. They need to know that the air they’re breathing is clean, safe, and free of viruses. In 2019, the total revenue for all HVAC companies in the United States was $96 billion. The annual growth between 2014 and 2019 was 2.9% for the industry. In the coming years, experts expect even bigger growth, making this an ideal time to become an HVAC business owner. 

Why a business plan is crucial for success 

If you’ve never owned an HVAC business, you’re probably wondering how to get your new business started. You might be eager to hire HVAC technicians so you can get to work, but there are some basics you must have in place before you start taking service calls. 

One thing that most successful businesses have in common is a business plan. The Small Business Administration (SBA) sums it up as: “Your business plan is the foundation of your business. A good business plan guides you through each stage of marketing and managing your business. You’ll use your business plan as a roadmap for how to structure, run, and grow your new business.” 

Not only does a business plan guide you through the process of starting a new business, but it also outlines your business model and practices as well as your short- and long-term goals. It can even help you secure financing from potential partners and investors. 

It might be tempting to blow off creating a business plan, especially when you simply want to acquire new customers right away, but research shows that writing a business plan makes your startup more likely to succeed. What’s more, some states require it if you’re incorporating your company. Many banks also require you to present a business plan when applying for a loan or opening a business account. 

Developing your HVAC business plan 

When you take the time to put together a business plan, it will help you paint a clear picture of your industry and the specific HVAC needs of your particular region. For instance, New England-based companies might focus on installing quality heating systems for brutal winters, while Florida-based companies will focus more on air conditioners and dehumidifiers. 

Follow these steps to create an HVAC business plan and get your company up and running. 

Find a business plan template 

Before you get started on your plan, consider using a template that you can work off of. There are hundreds of business plan templates online, but we recommend checking out these from Score or the Small Business Administration. Using a template is among the easiest ways to create your business plan and ensure you don’t miss any necessary details, but we’ll review some of the highlights so you have a clear idea of how to get started. 

Fill your HVAC business plan with essential information

Your business plan should include most, if not all, of the following information: 

• Executive summary 
• Description of your company
• Reasons for being in business
• Competitive advantage 
• Market analysis 
• Detailed organization and management structure 
• Description of your service and product line 
• Marketing strategies 
• Financial projections 
• Appendix 

Executive summary 

The first thing your business plan needs is the executive summary, which highlights your: 

• Mission statement 
• HVAC services offered 
• Business structure (e.g., sole proprietorship, limited liability company, or C corporation)
• Number of employees 
• Location
• Financial information (e.g. cash flow)
• Sales strategy and growth plan 

Description of your company

After the executive summary, you’ll need a detailed company description. This outlines your business structure, any employees, your service areas, your reasons for being in business, and the consumers and/or businesses you plan to serve. 

Competitive advantage

Your competitive advantage is what sets you apart from other refrigeration, heating, and air conditioning businesses in your area. Perhaps you provide superior products, maybe your pricing is unbeatable, or maybe you’re partnered with an experienced technician with more than 30 years of experience in the industry.

Market analysis 

The market analysis not only includes an industry outlook but also a breakdown of your target market. For example, identify the demographics of the people and/or businesses you’re trying to reach. You should also include trends that you uncover during your market research. What do competitors do well? What can you improve upon? What are the business needs of potential customers? 

Detailed organization and management structure 

Although you’ll mention it in the basic description of your company, you need to flush out your organizational structure. Explain how your business is set up and registered with your state. Do you have a board of directors? Who is in charge and who reports to whom? Go in-depth with that information in this section. 

Description of your service and product line 

You also need to expand on the services and products you intend to offer. This section should include their costs. 

Marketing strategies 

This section of your business plan outlines your HVAC marketing ideas and sales strategies to reach your target audience.

Compile market information about the HVAC industry in your area. Clearly state your potential customers and services, then conduct research to learn more about your target market. What type of climate does your target market live in? Are you targeting younger homeowners who may be more concerned about renewable energy? What is their annual income? What are their needs? 

Answering these questions ahead of time will help you avoid blindly wasting money on ads or going after an audience that doesn’t need your services.

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Financial projections 

Here, you should provide your anticipated cash flow for the next five years. You can also include past financial records and statements to demonstrate the health of your business. 

Appendix 

The last thing in your HVAC business plan is an appendix with specific documents and materials related to your company. For instance, you can include licenses for your tradesmen or a work-safe plan to show that you’re committed to safety on the worksite. 

Factor in potential costs 

If you don’t have time to write your business plan yourself, you may want to consider hiring an expert. Business plan consultants typically charge between $5,000 and $20,000 per plan. This may seem like a lot of money, but it can be money well-spent—especially if it helps you secure a much-needed loan or attract the attention of investors. 

One of the biggest benefits of hiring a consultant is that they are very detail-oriented, and the more thorough the research is in your business plan—especially when it comes to factors like industry outlook and market analysis—the better off you’ll be.

It’s worth noting that you can adjust your business plan every couple of years as your company and the industry grow and change. Perhaps you can’t afford a professional business plan consultant now, but as your company grows and cash flow increases, it may be possible later. 

Position your new company for success with an HVAC business plan 

Statistics show a direct correlation between having a business plan and achieving business success. Along with giving you a roadmap for your company and helping you focus on short- and long-term goals, a business plan is usually a requirement to obtain licenses, permits, and loans. 

Your HVAC business plan will also detail what sets your company apart, your competitive advantages, and the customers you are going to target. To put it simply, your business plan will serve as a guide to success. For a more detailed breakdown, check out our guide on how to write a business plan.

Once you have a plan in place and your company is ready to go, make sure you also claim your Yelp Business Page. Claiming your business listing gives you instant visibility on a platform that reaches millions of users. You can add your business details and contact information, upload photos, and respond to customer questions as they arise, giving you an easy and convenient place to reach potential clients in your area.