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Complete Guide to Starting an HVAC Business

Complete Guide to Starting an HVAC Business

Want to start an HVAC business? This complete guide covers everything you need to know, from market research to financial planning and marketing. Learn how to succeed in this growing industry.

Starting an HVAC business in the United States is worthwhile.

The country has over 130 million households as of 2022, a significant increase from 52.8 million in 1960. 

This number translates to a potentially large customer pool. After all, HVAC involves heating, ventilation, and air conditioning systems which are constant in almost every home nowadays.

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But there are approximately 145,000 active HVAC contractors in the United States. This indicates that there is still room for new HVAC businesses to succeed.

And how do you start yours in the USA?

Let’s find out. First, let’s have an overview of current market conditions.

Understanding the HVAC Market in the United States

North America continues to boast the largest HVAC market, with the United States as a major player.  

The US HVAC market is worth $18.2 billion at the moment, and predictions are that the figure will climb higher. Factors like global warming, extreme climates, and the growing real estate market will drive demand for HVAC products.

Particularly, the US HVAC market could be worth close to 27 billion by 2030. That’s a compound annual growth rate of 5.6 percent, which is impressive.

Data shows the Midwest region boasts 22.4 percent of the HVAC US market share. Hence, if you start your HVAC business in this area, there are higher chances  of landing many sales.

Furthermore, while HVAC consists of four product categories, the US market is narrowed to three: heating, cooling, and ventilation. Of all, cooling products hold sways with over 57 percent of the US HVAC market share. 

Also, the U.S market is welcoming to both those that want to target individuals or businesses. 

So, if you’ve decided to start an HVAC business in the USA, you’ve made the right decision. 

And here is how to go about it.

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Steps to Set up an HVAC Business In the United States

Launching an HVAC company in the US is not as challenging as it may seem. It’s easy to pull off with the right guidance. And that’s what this post is about. So, let’s begin:

1. Craft your business plan

A business without a roadmap will struggle. So, the first thing to do is outline your HVAC business plan.

Every step you’ll take to actualize and augment your business will follow your laid-out plan. We explain approaches to take below.

Market research

Start by researching your local HVAC market. The goal here is to understand your target customers and potential competitors. The internet is a good resource for data here. But, also consider running your surveys and interviews to source primary information.

Use these insights to differentiate from the competition.

Use the right template

Your plan should be comprehensive yet definite. Even the most minute detail should not be left out.

To guarantee this, you should use a template. Here’s what we recommend you include:

  • An executive summary
  • Business overview
  • Procurement
  • Marketing and sales
  • Business operations
  • Employee planning
  • Financial planning

In each of the above categories, pen down your business goals and the steps you’ll take to achieve them. We recommend these seven smart business plan writing tricks.

Note that your business plan being definite doesn’t make it a one-time document. You can always review and revise to keep up with current U.S HVAC market trends.

2. Secure financing

The HVAC industry is expensive, and the high costs easily drive new startups to close shop. You can avoid that by securing financing early — unless you have more than enough capital.

The good news is that there are several financing options to leverage in the United States. Examples include term loans, merchant cash advances, SBA loans, and equity financing. 

Weigh the above options with your proposed business scale and select the best. However, the goal is not to plunge your new HVAC business into debt. So we advise equity financing or crowdfunding.

Equity financing

Equity financing involves offering some portions of your HVAC company to investors in exchange for capital. In our experience, it’s suitable if you have limited credit history and business age.

Perhaps the best advantage here is that you acquire partners. These may be more experienced businesses that’ll help you grow in the long run.

Here are equity financing options to consider:

  • SBICs
  • Angel investors
  • Mezzanine financing
  • Initial public offerings (IPOs)
  • Venture capital
  • Royalty financing
  • Equity crowdfunding

We have written comprehensively on small business equity funding options. You might want to check out the resource for more insights. 


Already, we mentioned crowdfunding as an option for equity financing. But besides that, here are other crowdfunding options that can benefit your HVAC startup:

  • Donation-based crowdfunding
  • Reward-based crowdfunding
  • Peer-to-peer lending

When it comes to crowdfunding, using the right platform is critical. We have expertly identified seven best crowdfunding options that can help your business grow.

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3. Register your HVAC business

You must obtain a license to operate as an HVAC contractor in several parts in the US. 

We recommend following this guide on how to get a contractor license for steps on getting it done. Once you receive your license, you can proceed to register your business.

Registering your business name

Do you plan to run a sole proprietorship, partnership, corporation, or LLC? Your business plan will answer this question and determine the business registration process. 

Nevertheless, you need to check with your state’s Department of State if your proposed business name is available. 

If it is, then, file a Certificate of Assumed Name with your county if your HVAC business is a sole proprietorship or general partnership.

However, for a corporation or LLC, you’ll file a Certificate of Incorporation or Articles of Organization, respectively, with the Department of State. 

Obtaining federal tax ID

You’ll apply for an Employer Identification Number (EIN) with the IRS.

This is mandatory, irrespective of your HVAC business type. Fortunately, it’s easy to complete online. And if your information checks out, you’ll receive your EIN immediately.

4. Insure your business

Business damages can occur at any time. So, it’s in your best interest to insure your HVAC startup from the onset.

Getting insurance for your business doesn’t have to be expensive. The cost depends on your coverage type, but it ranges from $60 to $150 monthly, which is manageable.

Here’s a detailed breakdown:

  • General liability policy: $60 monthly or $710 annually
  • Cyber liability insurance: 140 monthly, or $1,675 annually
  • Workers’ compensation: $260 monthly or $3150 annually
  • Contractor’s tools and equipment insurance: $15 monthly or $170 annually
  • Commercial auto insurance: $150 monthly or $1,810 annually

Of the above five, general liability and worker’s compensation are the most essential insurance policies for HVAC businesses in the US. You need them to be on good terms with the law.

With a general liability policy, you’re insuring your HVAC business against property damage, bodily injury, personal and advertising injury, and completed operations liability.

Workers’ compensation insurance covers your employees. As a result, HVAC sole proprietorship businesses won’t need it. However, it’s crucial if you’re a corporation or LLC. 

Ensure you work with a renowned insurance provider so your policy aligns with your state’s regulations. Check out our detailed guide on HVAC insurance for more details.

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5. Recruit qualified HVAC workers

According to the US Bureau of Labor Statistics, available HVAC jobs will increase by 5 percent each year. The reason is that qualified HVAC workers are scarce.

Yet, if you don’t hire strong hands, your HVAC business won’t survive. Nevertheless, if you have the money to pay, attracting qualified workers won’t be too difficult.

Start by creating compelling job openings. The job description, required qualifications, and potential compensation should be clear.

Post and advertise your job openings via multiple channels. Use online job postings, social media, HVAC-related sites, and even local newspapers. 

Prioritize applicants with the following certifications:

  • EPA Section 608 Technician Certification
  • NATE Certification
  • HVAC Excellence Certification 

You can take a calculated risk by recruiting trainees if you have the funds and time. Nurture them until they acquire all necessary qualifications, then onboard them.

6. Join social media

More than 4.8 billion people use social media worldwide. In the United States, the number is over 308 million, and forecasts confirm it’ll continue to increase.

So, if there’s any online medium you should leverage to reach more HVAC customers, it’s social media.

First, identify the right platforms your target clients frequent. We recommend Facebook, Instagram, Twitter, and LinkedIn.

You can use all these top platforms concurrently and easily with a solution like Sendible. Check this post for more information on how the tool works.

Complete Guide to Starting an HVAC Business 1

After joining the social media platforms, optimize your profile to reflect your HVAC brand. Then, start building followers by publishing your handles to existing customers and jumping into trending topics.

Subsequently, create quality and valuable content and contests to engage your audience. Always respond to comments and DMs professionally.

You can always leverage PPC ads to reach a new audience. Facebook and Instagram are the top options for this. Learn more about how you can leverage these platforms in our Social Media Marketing Guide for HVAC Businesses

7. Market your brand

According to renowned management consultant Peter Drucker, “The aim of marketing is to know and understand the customer so well the product and services fit him and sells itself.”

So, you can’t skip this step as it’s central to succeeding.

 The good news is that marketing doesn’t have to be complicated. Nor does it have to be expensive. Here are some free marketing strategies you can employ:

  • Optimize your website and online content for SEO so they show up on Google and other search engines.
  • Make your site easy to navigate by removing frictions. You can see just how visitors browse your pages using HotJar, as explained in this detailed review of the tool.
  • Create a comprehensive Google My Business Profile to target local customers in your state.
  • Leverage Twitter trends by including them in your social media posts.
  • Publish authoritative content on LinkedIn to build thought leadership.
  • Install a chatbot on your website to engage visitors 24/7 and convert them into leads. Collect Chat is our recommended tool here, and we explain how it works in this review.
  • Use Marketing Miner to spy on your competitors’ marketing strategies. Find out how in this comprehensive review of the platform

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8. Track your finances and operations

As you start your HVAC business, you need to accurately manage cash flow, productivity, and profitability. In other words, you must track your finances and operations. 

Every expense and action you make as an HVAC startup should count.

It’s essential, not just for business growth but also for legal reasons, since you must pay tax in the US.

So, invest in a quality accounting software. You obviously can’t manually handle your bookkeeping, invoicing, billing, reporting, and task preparation in today’s digital world. Some options you can consider include Quickbooks, Simpro, and FreshBooks.

Next, you need HVAC operation management software. You’ll use it to handle areas like task tracking, product dispatching, inventory, quality assurance, and customer service. Solutions like Jobber, FieldEdge, and ServiceTitan can work here.

For seamless deployment, we advise integrating your accounting and operation management systems. You can do that using Zapier.

Complete Guide to Starting an HVAC Business 2

It lets you connect many other business tools you’ll need.

9. Run a SWOT Analysis

A SWOT analysis involves identifying your strengths, weaknesses, opportunities, and threats. In other words, it helps uncover factors that can improve or plummet your HVAC startup.

Running a SWOT analysis from the on-set is beneficial as you launch your HVAC business in the US. And it’s straightforward.

First, specify your objective. Perhaps you want to increase sales, launch a new HVAC product, improve customer service, and so on. Ideally, align this with your business plan.

Next, gather data relevant to your objective. If you plan to improve your customer service, for example, reviews and feedback are information sources to consider.

With your data in hand, create your SWOT matrix. Your matrix will have four columns corresponding to the following:

  • Strengths: internal positive attributes 
  • Weaknesses: internal negative attributes
  • Opportunities: external positive attributes
  • Threats: external negative attributes

Review your data and place each point in the right column. Then, analyze your results to see how you can improve. 

Follow up with an action plan with clear steps to reach your objective. 

10. Develop a customer retention strategy

According to statistics, 60 to 70 percent of a business’s sales come from existing customers. That implies your HVAC startup will bolster faster if your customers always return to patronize. 

So, you need a staunch customer retention strategy. Here are quick tips to help:

  • Always collect and work with customer feedback.
  • Create helpful articles that offer guidance to searching customers.
  • Launch loyalty programs to reward your top customers.
  • Upsell products.
  • Constantly monitor your mentions and engage on social media.

Check out our HVAC Customer Retention Strategies post for an in-depth guide on executing the above tips.

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Growth Opportunities for HVAC Startups in the US

The best thing you can do for your HVAC startup is to always be on the lookout for growth opportunities. In the current state of the US HVAC market, there’s a number of options you can leverage to give your business an edge. And from expert analysis, we identify technological integration, targeting niche markets, and geographical expansion as the top ones.

Technological integration

You can boost your startup by ensuring you always offer the best innovations as products. Particularly, consider integrating technology that allows more convenience into your HVAC products.

Focus more on smart systems, which people can operate with their smartphone. For instance, you can design an AC that works with a mobile app.

Another technological area to capitalize on is energy efficiency. More customers are looking to save money — on electricity — when they purchase HVAC systems. So, by integrating energy efficiency tech in your products, you become highly sought after.. 

Targeting niche markets

Reaching the top on a general scale might be difficult. However, when you narrow down to a particular HVAC customer base, it becomes easier. That’s why we recommend targeting niche markets as a growth opportunity.

You can pick a particular HVAC product as the flagship for your startup. However, this opportunity favors service providers the most, as they can tailor their services to clients in a particular industry. 

Geographical expansion

Any business will want to expand to newer locations. If you want that, know it’s a worthwhile route for growth. But you should start exploring your options from the on set.

Identify regions with unmet HVAC needs and less competition. Also, try partnering with businesses in related industries like real estate and construction. These will give you an upper hand.

We’ve discussed some HVAC growth opportunities you can leverage as a startup. However, the road won’t always be rosy.

Challenges and risks will arise, which you must sail through for your business to stay above water. At the beginning stages, competition and economic fluctuations are primary.

The good news is, bettering your competitors is easy if you follow the growth opportunities. You stay above everyone else with technological innovations, and targeting niche markets reduces rivals by default. 

However, you should also pay attention to more common factors that measure your HVAC startup’s performance against competitors. Examples here include price, delivery, and customer support. Your HVAC business must offer better than average in these categories to beat the competition.

Regarding economic fluctuations, an ingenious way to handle the challenge is by optimizing operational efficiency and cost-effectiveness. Here you’ll want to employ data to optimize your business performance, such that there’s no room for waste.

Furthermore, always stay up to date with economic conditions, and price your HVAC products and services accordingly. 

Running an HVAC Business in the USA

Starting an HVAC business in the US is literally what it is: a start. It may take time for your brand to be among the big players, but perseverance matters most at the beginning stages.

You should follow the latest trends and technologies to keep your product and services current.

It’s also ideal to join industry associations and groups. The advantage is that you expand your network, opening doors to more opportunities.

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How do I get my HVAC business certified in the US?

To get your HVAC business certified in the US, you need to obtain all the necessary certifications and licenses. You either get EPA, NATE, or a local license. Then, register your business name with your state’s Department of State and apply for federal tax.

How do you raise funding for your HVAC Startup?

You can raise funding for your HVAC Startup via different channels. However, the best options are equity financing, as they come with low risk. Equity financing sources funding from top investors who will subsequently own a portion of your HVAC business. Meanwhile, with crowdfunding, you welcome donations from anyone that wants to see your business grow.

How do you write an HVAC business plan?

You can write an HVAC business plan by first analyzing the current market condition. With the insights you get, you can then specify what goal you want to achieve and outline steps to take to get there. Ensure to use the right business plan template to ensure you cover all essential areas.

Is SWOT analysis for HVAC businesses important?

Yes, SWOT analysis is important if you’re an HVAC business, even if you’re a startup. The approach makes it easy to uncover your internal and external strengths and weaknesses and areas where you can improve. It’s easy to carry out if you have workable data.

How do you build a strong HVAC brand?

You can build a strong HVAC brand by offering all-round value. Your products and services must be quality to meet customers’ demands. Also, explore different HVAC marketing techniques to publicize your business and reach more clients.


  • J.R. Isong

    As a business growth strategist, I specialize in helping small business, especially HVAC and Legal Practices, achieve sustainable growth through the development and implementation of strategic initiatives.

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