How to Start an HVAC Business in 2023

If you are looking for a profitable and rewarding business opportunity, you might want to consider starting an HVAC business. HVAC stands for heating, ventilation, and air conditioning, and it is one of the most in-demand services in the residential and commercial sectors. According to Intercoast, the HVAC industry has had significant growth of 13 Percent in recent years, and the year ahead appears to be promising as well.

However, starting an HVAC business is not as simple as buying some tools and equipment and putting up a sign. Have the right skills, certifications, licenses, insurance, business plan, marketing strategy, and funding to succeed in this market. In this article, we will guide you through the key steps on how to start an HVAC business in 2023.

HVAC Business

Step 1: Research and Estimate a Start-Up Cost

The first thing you need to do before starting an HVAC business is to research and estimate a start-up cost. HVAC is not a cheap business to start, and you need to have enough capital to cover the initial expenses and the ongoing operational costs. According to Field Camp, the average start-up cost for an HVAC business ranges from $3,000 to $12,000, depending on size and scope.

Some of the major expenses you need to consider are:

  • HVAC tools and equipment: You will need various tools and equipment to perform installation, maintenance, and repair services for heating and cooling systems. These include hand tools, power tools, gauges, meters, testers, torches, ladders, ductwork, refrigerants, etc. The cost of these items can vary depending on the quality and quantity you purchase.
  • Company vehicle: You will need a reliable vehicle to transport yourself, your staff, and your tools and equipment to different job sites. You can either buy or lease a van or truck that has enough space and load capacity for your needs. You will also need to pay for fuel, maintenance, insurance, registration, and branding for your vehicle.
  • Other essential supplies: You will need some other supplies to run your HVAC business smoothly. These include uniforms or t-shirts with your company logo on them, business cards, invoices, receipts, contracts, safety gear, etc. You will also need to invest in some software or apps to manage your scheduling, invoicing, accounting, inventory, etc.
  • Marketing strategy: You will need to promote your HVAC business to attract customers and generate leads. Use marketing channels such as online advertising, social media, website, email marketing, referrals, etc. You will need to allocate a budget for each channel and measure the return on investment (ROI) of your marketing efforts.
  • Worker’s salary: You will need to hire some staff or contractors to help you with your HVAC business. Based on your business size and service demand, you may require technicians, helpers, office staff (bookkeeper), or other personnel. You will need to pay them competitive wages or fees according to their skills and experience.
  • Taxes: You will need to pay taxes on your income and expenses as an HVAC business owner. Depending on your location and business structure, you may need to pay federal income tax (IRS), state income tax (if applicable), self-employment tax (Social Security and Medicare), sales tax (if applicable), etc.

To finance your start-up, consider personal savings, bank loans, co-partners, private investors, or government grants/loans. You should compare the pros and cons of each option and choose the one that suits your needs and goals.


Step 2: Decide Which HVAC Service You Will Offer

You have to decide which HVAC service you will offer to your customers. There are many types of services that fall under the HVAC category such as:

  • Installation: This involves installing new heating or cooling systems or replacing old ones in residential or commercial buildings. This may include furnaces, boilers, heat pumps, air conditioners, water heaters, etc.
  • Maintenance: This involves performing regular check-ups and tune-ups on existing heating or cooling systems to ensure they are working efficiently and safely. This may include cleaning filters, lubricating parts, checking refrigerant levels, testing electrical components, etc.
  • Repair: This involves fixing any problems or malfunctions that occur in heating or cooling systems due to wear and tear or external factors. This may include replacing faulty parts, refilling refrigerant, repairing leaks, solving wiring issues, etc.

You can choose to offer one or more of these services depending on your skills, experience, and market demand. To stand out and command higher rates, consider specializing in a specific system (e.g., gas heating, solar cooling) or sector (e.g., residential, commercial, industrial).

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Step 3: Brainstorm an HVAC Company Name

Brainstorm an HVAC company name that reflects your brand identity and value proposition. Your company name should be catchy, memorable, and easy to pronounce and spell. It should also convey what you do and how you do it differently from others. Here are some tips to help you come up with a great HVAC company name:

  • Use keywords related to your service (e.g., heating, cooling, air, etc.)
  • Use acronyms or abbreviations of your service (e.g., HVAC, AC, etc.)
  • Use your location or service area (e.g., Austin HVAC, Texas Air, etc.)
  • Use your name or initials (e.g., John’s Heating, JB Cooling, etc.)
  • Use rhymes or alliterations (e.g., Cool Comfort, Heating Heroes, etc.)
  • Use puns or wordplay (e.g., Chill Out, Air Force One, etc.)

Once you have a list of potential names, you should check their availability and legality. Use online tools such as Namechk or GoDaddy to check the domain name and social media handle availability for your chosen name. You should also check the trademark database of the USPTO to see if the name is already registered by someone else. If the name is available and legal, you can proceed to register it with your local government.

Step 4: Create an HVAC Business Plan

HVAC Business

Ensure you create an HVAC business plan that outlines the goals, strategies, and actions for your HVAC business. A business plan is a document that describes the following aspects of your business:

  • Executive summary: This is a brief overview of your business that summarizes the main points of your business plan. Include the company name, mission, vision, value proposition, target market, competitive advantage, financial projections, and funding needs in your plan.
  • Company description: This is a detailed description of your business that explains what you do, how you do it, why you do it, and who you do it for. It should include your company history, legal structure, ownership, location, services, niche, etc.
  • Market analysis: This is a thorough research of your industry and market that identifies the opportunities and challenges for your business. Including industry overview, market size, trends, customer segments, needs, behavior, competition analysis, SWOT analysis, etc.
  • Marketing plan: This is a strategic plan that outlines how you will promote and sell your services to your target customers. It should include your marketing goals, marketing mix (product, price, place, promotion), marketing channels, marketing budget, marketing metrics, etc.
  • Operational plan: This is a practical plan that describes how you will run your day-to-day operations and deliver your services to your customers. Incorporate goals, processes, resources, policies, and costs into the plan.
  • Financial plan: Create a realistic business plan projecting income, expenses, and financial goals for the next 3-5 years. Include financial statements, assumptions, ratios, and break-even analysis.

A business plan is not only a useful tool for planning and managing your business but also a crucial document for securing funding from banks or investors. Therefore, you should write an effective and professional business plan that showcases the potential and viability of your HVAC business.

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Step 5: Register Your Business

Establish your business as a legal entity by registering with authorities and acquiring required licenses and permits. Depending on your location and business structure, you may need to register with the following entities:

  • Federal government: You will have to obtain an EIN from the IRS if you have employees or operate as a partnership or corporation. You may also need to register with other federal agencies such as OSHA or EPA if you deal with hazardous materials or environmental issues.
  • State government: You may need to register with your state’s secretary of state or department of revenue if you operate as a sole proprietorship or partnership. You may also need to obtain a state tax ID number if you collect sales tax from your customers. Comply with state regulations such as workers’ compensation or unemployment insurance if you have employees.
  • Local government: Register with your city or county clerk’s office or chamber of commerce if operating as a sole proprietorship or partnership. You may also need to obtain a local business license or permit if you provide HVAC services in your area. You may also need to follow other local ordinances such as zoning or noise regulations.

For HVAC business registration requirements, consult the SBA website or contact your local SBDC for guidance.

Step 6: License Your Business

License your business and obtain the necessary certifications and credentials to perform HVAC services professionally and safely. Location and service type determines the need for licenses and certifications like HVAC contractor, technician, and EPA certifications.

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Step 7: Insure Your Business

Make sure to insure your business and protect yourself from potential risks and liabilities that may arise from your HVAC services. Location and business size determine insurance needs, which may include general liability, professional liability, workers’ compensation, and commercial auto coverage.

For HVAC business insurance requirements, visit the Insurance Information Institute or consult an independent agent for guidance and quotes.

Step 8: Get Funding for Your Business

Get funding for your business and secure enough cash flow to start and grow your HVAC business. To cover HVAC business start-up and operational expenses, external financing might be necessary due to the associated costs.


Starting an HVAC business in 2023 can be a lucrative and rewarding venture if you follow the right steps and plan ahead.  This guide helps research costs, determine services, name your HVAC business, create a plan, register, license, insure, and secure funding. By doing so, you will be able to launch and grow your HVAC business successfully in 2023.

We hope this article has helped you learn how to start an HVAC business. If you have any questions or comments, please feel free to leave them below. We would love to hear from you.

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