How to Create an HVAC Business Plan

Did you know that one in every five U.S. businesses fails within its first year? The HVAC industry might be growing, but that doesn’t mean you’re guaranteed to thrive. If you want to start a successful HVAC business, you should create a business plan first.

Your plan helps you avoid common pitfalls. It will help you stay focused on your business goals and start earning a profit so you can be successful.

How will your company stand out in your local market? How will you turn a profit? What’s your marketing and sales strategy? Why are you starting your own HVAC business in the first place?

Answer these questions and more in your business plan. There’s a ton of useful information packed into this one vital document. Let’s look at what you should include in yours.

What Is an HVAC Business Plan?

An HVAC business plan details your mission. It contains a market analysis, what services you offer, and more. It also describes your business goals and how you’ll meet them.

You need a business plan to help you stand out in a crowded market. There are over 123,000 HVAC businesses in the U.S. That’s about 1.8% more than in 2022 and reflects the average growth over the past five years.

Create a detailed plan that establishes your competitive advantage. Describe how you’ll get where you want to be through marketing and sales strategies and financial management. Your plan also helps you see the bigger picture so you can make wise business decisions.

6 Components of a Good HVAC Business Plan

Here are some helpful tips for developing a solid plan for your new HVAC company.

If getting started is challenging, you can follow an HVAC business plan template. Many online resources offer free templates tailored to HVAC businesses. The Small Business Administration (SBA) also has a traditional business plan template.

However, not every heating and cooling contractor will follow the same format. For example, if you’re a sole proprietor, you won’t need a section for personnel. An established company might update its current plan. They have far more detailed financial projections and client information than a new entrepreneur does.

Still, no matter where you are in your business creation journey, you’ll include the same main components. Let’s look at what those are.

1. Executive Summary

This section is the first thing readers see when they look at your business plan, so you want it to be well-written. But because it is a summary of the other sections, write it last.

What should you include in your executive summary?

Your HVAC Business Model

Are you starting a residential or commercial HVAC company? If commercial, do you have the technical expertise to serve industrial clients as well?

Company Mission

You want to present your HVAC business to be presented in the best light possible. This is where you can describe what you hope your business will become.

Communicate your goals and what you value as a company. These are things that make up your mission statement.

Customers and Competitors

This is where you specify the clients you’ll target. Do you want to appeal to homeowners earning above a certain amount, small local businesses, or large industrial clients?

List that and how you intend to achieve it.

You’ll also introduce what makes your HVAC company stand out from the competition. You could offer better pricing or marketing. But you might rely on technological expertise, years of experience, or something else.

List whatever will help you win over your target market in the executive summary.

2. Company Summary

The company summary elaborates further on the what and why of your HVAC company. Include a paragraph on the company owner—you. Show off your experience in the HVAC industry and any awards or accomplishments.

You can also dive deeper into the company’s mission. If there is any data illustrating an opportunity in the local market for your type of HVAC company, include it here.

You may have recognized a need in the market. A lack of affordable installation and repair options could provide a valuable opportunity. Offering more technical services than your competitor also expands your reach. Whatever your story is, include it in the company summary.

3. Services Offered

Heating and cooling contracting companies typically offer maintenance, repair, installation, and system cleaning. But the way you execute those services may make the difference.

The technical skills of your technician team, the training you have, and even the type of equipment you own set you apart from your competitors.

4. Market Analysis

From 2022 to 2030, the U.S. HVAC systems market is expected to grow at a compound annual growth rate of 5.6%. Part of this robust growth comes from the high demand for energy efficiency.

To combat rising energy costs, state and federal agencies offer rebates on energy-saving systems. So, expect demand for new installations over the next few years. As such, now is a good time to start your own HVAC business, according to national industry data.

As you conduct market research for your HVAC business plan, you’ll also look at local data. Data points should include predicted real estate growth and trends in your area. It should also factor in local incentives to buy more energy-efficient systems.

Can your target audience afford new systems every few years? Will they pay for maintenance plans to increase efficiency and longevity? Are scheduled services outside their budget? Maybe your target market is more interested in repair services. They may only want installations when their current equipment breaks.

Learn about your target HVAC customers. Consider their budgets, pain points, and motivating factors. You can then hone in on what your business can do to solve its heating, cooling, and ventilation challenges. This is all information you should include in your business plan, as well as research on your competitors.

Identify which HVAC businesses are your main competitors. What value do they offer clients? Figure out how your company can stand out and provide unique value in your area. You might appeal to your target market with better pricing, a higher level of expertise, simple service agreements, or other traits.

5. Market and Sales Strategy

Your marketing strategy outlines how you’ll build brand awareness and generate demand. Disclose your website, social media marketing, digital content marketing, and digital ads. If you’re promoting your HVAC business through local media outlets, include that information in this section of your business plan.

Your sales strategy covers how you plan on converting leads. It also details how many new and recurring clients you expect to buy services each month.

For example, will you need to hire a sales manager to provide estimates to potential clients? Will your company offer promotions? A 10% discount on HVAC maintenance services may attract new clients for the first six months.

You could also offer seasonal deals to capitalize on the demand for heating or cooling services when the weather changes.

6. Financial Projections

The financial plan outlines startup costs for an HVAC business in your area. It should also include financial projections of your expected monthly income and expenses over the next five years. This is your projected profit and loss.

You should also list projections for your assets and liabilities. This shows investors what the net asset value of your HVAC business is expected to be each month. Additionally, you’ll want to include a projected cash flow chart. It should display data for the next five years to show that you expect to have enough cash to stay operational.

You’re probably not an accounting expert, so you might want to work with one. Getting the numbers right helps you create a compelling business plan and gives your team financial goals for each month.

Bring together marketing, sales, and high-quality service to hit your financial targets each month, and you are on the path to success!

How to Research Your Industry and Competition

Now you know what information your business plan should include. It can still be tricky to figure out how to gather market data. But you need this information for more than just creating your business plan. It’s also what you’ll use to decide how your HVAC company will stand out and determine how to market to your audience.

Here are a few tips to help you get started researching your customers and the local HVAC industry.

Establish Your Target Audience

Get a clear idea of who your customers are. Gather demographic data. Include the location, income range, and employment rate of your target audience. You can find a lot of this information online from free resources. Resources provided by the SBA can help prospective business owners conduct market research.

Determine Demand

You also need to gauge demand. Do this by talking directly with consumers. If you settle on serving commercial clients, call or email local businesses and ask them about their heating and cooling needs.

If you’re already operational, you can also offer them a promotion in exchange for their time. This can help drive those early sales!

If you’re serving residential clients, use surveys or direct mail offers and see how many households respond.

Do Market Research

Learn about your competitors and determine how you can differentiate your HVAC company. Conduct a competitive analysis.

Search your competitors’ websites. Read your competitors’ online reviews. Learn their strengths and weaknesses and their approximate market share by using the SBA online resources. Find out how much they matter to your target audience and what your window of opportunity might be.

Market research is a lot of work—but this information will make you a wiser business owner in the long run.

How to Calculate Your Startup Costs

Another area where you’ll need in-depth information when starting your own HVAC company is startup costs. You should understand what your startup expenses will be.

This data is critical for getting a business loan or attracting investors. It’s also the foundational data you’ll use to project profits and determine when you will be profitable.

Here are the steps to calculate your HVAC business startup costs.

1. List your startup expenses. Include the cost of equipment, vehicles, licenses, permits, office rental, marketing, insurance, and labor. You also might want to include a fixed amount for unexpected expenses.

2. Estimate what your expenses will be each month.

3. Add up those expenses to learn how much you’ll need to be operational.

Once you have these numbers, you can figure out how much funding you might need to get started. You’ll also see how much income you’ll need each month to be successful.

How to Market Your New HVAC Business

To keep new customers coming in, you’ll need marketing. A properly marketed business can earn enough income to keep growing. So, it’s important to incorporate a good marketing strategy into your HVAC business plan.

You’ll use various channels for marketing your new business. Those channels will build brand awareness, attract leads, and strengthen customer relationships.

Together, they work to generate demand for your heating and cooling services. Here’s a look at what you can use to spread the word about your amazing HVAC services.

Company Website

This is your central online presence. It lists your services, unique value proposition, and information about your company.

Include how to contact your sales team for an estimate or to make an appointment.

Content Marketing

Content is useful information in pretty much any form. Blog posts, online videos, podcasts, infographics, and e-books all benefit your potential customers. Relevant content builds trust in your brand.

For example, your HVAC business might create blog posts on how to reduce energy costs. You may link an e-book on how to choose the right air conditioner for your needs. And, for quick engagement, embed video content on how to troubleshoot common heating and cooling problems.

Social Media Marketing

Share photos, helpful articles, and updates on Twitter, Facebook, Instagram, or LinkedIn. This will generate more interest in your HVAC business.

You can also let your audience know about special promotions in real time.

Email Marketing

Once you have a customer list, send out a helpful email newsletter or occasional promotion. It will remind them about your brand and motivate them to make an appointment.

Advertising

Create an ad budget to make your market aware of your HVAC services. Pay-per-click ads online, radio ads, and ads in your local newspaper are all valuable advertising tools.

These examples can get you started, but there’s so much more to effective marketing. Track your results, create a holistic strategy, and continually improve it. As you learn more about your target audience, you’ll understand what type of messaging resonates with them.

As with financial planning, you might want a professional team to help with your marketing strategy. When you get marketing right, you can stand above the crowd. You’ll attract a steady flow of clients more easily and knock your growth goals out of the park.

Successful Planning Is Your First Step to Launching a Successful HVAC Business

Creating an HVAC business plan is a lot of work. But, with helpful resources such as business plan templates, online statistics, and outside experts, you can create a solid plan. And thus, a solid foundation for your HVAC business.

Get Started Creating Your Business Plan Now

There’s no need to wait. A few simple steps can get you on the road to creating a successful HVAC company right away.

1. Decide on which sector of the public you’ll serve. Where do your skills and training fit the best? Where is the best opportunity?
2. Do some research on competing HVAC companies in your area. Determine ways to set your company apart.
3. Download a business plan template. Use it to guide you through the process of developing your business concept.
4. Consult marketing and financial professionals. Bringing in a third party to help with the difficult parts of your business plan frees you up to focus on the job at hand.