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How to Grow an HVAC Business in 2021: The Step by Step Guide

User IconDiana Lamirand
Clock IconJanuary 7th, 2021
Glasses Icon14 Min Read
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Table of Contents
  1. undefinedCreate an HVAC Business plan

  2. Train a Qualified HVAC Workforce

  3. undefinedInvest in Your HVAC Company Culture

  4. undefinedOrganize Your HVAC Company with Systems, Checks and Balancesundefined

  5. undefinedApply Focus Before Expanding Your HVAC Business

  6. HVAC Marketing Ideas to Reach the Right Audience

  7. Focus Your Online HVAC Marketing Strategies

  8. Want to Grow Your HVAC Business? Know Your Why

HVAC service is essential to homes and businesses, in good times and bad. Your small business keeps a vital mechanical system working properly to maintain comfortable air temperatures and improve indoor air quality, no matter the season.

Your company’s HVAC service techs show up when customers need them—to fix a broken air conditioner in the middle of a heat wave or come to the rescue on a cold, frigid night in a home without a heat source.

They also show up in times of crisis, continuing to provide essential heating, air conditioning, and air quality services to customers in need.

Give your techs what they need by showing them how a good company leader develops a business plan that keeps an eye on growth while confidently weathering any setbacks.

In this how-to guide to grow an HVAC business, ServiceTitan wants to help you position your HVAC company to survive any future disruptions, and be prepared to grow and adapt in a “new normal” for the home services industry. 

What does the service industry look like when the health crisis subsides? Will quality customer service ease homeowners’ fears about allowing HVAC contractors inside their homes? Will standard operating procedures need to change? How do you continue to grow your HVAC business in a smart and thoughtful way?

The lessons learned during times of health and economic uncertainty can better position your HVAC company for growth in the short term, and for the long haul. Now is not the time to stop hiring for your company or marketing to new customers, home service experts say. 

“Resist the reactionary,” advises business owner and HVAC-R industry consultant Ben Stark. “I’ve gone through a recession, a crisis. … We put on the accelerator (for the marketing plan and hiring) and we have always come out on the positive side.

“Push it a little bit, instead of pulling back.”

Need a roadmap to follow as you step on the gas? Learn from Stark and other highly successful home service industry experts as they share insider tips, tricks, and tactics for growing an HVAC business. It’s good advice to follow during normal or challenging times.

» Want to grow your business with HVAC software today? Click here to get a demo.

Create an HVAC Business Plan by Modeling It After the HVAC Business You Want to Become

  • Find a mentor who’s doing what you want to do.

  • Shadow your mentor on the job and ask questions.

  • Go find 10 more mentors, and do it all over again.

  • Listen to HVAC podcasts; network with top HVAC organizations.

  • Read books, written by leading industry experts, on how to grow an HVAC business.

The modeling advice is something Tommy Mello, The Home Service Expert, wished he’d known when he started his own garage-door business 15 years ago.

“You’ve got to act like the business you want to become, and I didn’t know that back then,” says Mello, owner of A1 Garage Door Service, which topped $30 million in revenue last year.

“If I would have listened to a mentor tell me, ‘This is why you shouldn’t do this,’ or, ‘This is why you should,’ it would have definitely fast-forwarded the business.”

Find a role model who’s doing what you want to do, especially if you're a new business startup. Shadow them on the job. Ask tons of questions. Startup costs? Business structure? Then go find 10 more mentors, Mello advises, and do it all over again.

He also suggests reading or listening to books to grow your business, such as The E-Myth by Michael Gerber, The 7-Power Contractor by Al Levi, The Ultimate Sales Machine by Chet Holmes, Essentialism by Gary Keller, or even his own book, Home Service Millionaire.

“Leaders are readers,” Mello says. “Reading has been a big part of my success, and hanging out with successful people.”

That’s good advice, according to Angel Nava, owner of 24 Hour Air Conditioning & Heating in St. George, Utah, and a self-described “big fan” of Tommy Mello.

Networking with other HVAC professionals, reading books on how to run a profitable business, and listening to inspirational podcasts by industry professionals like Mello helped him grow his small residential HVAC business into a profitable company.

“We haven’t broken the million-dollar mark just yet, but I personally feel like we can reach $1.2 million by next year,” Nava says.

A Good HVAC Business Model Invests Money and Time in Training a Qualified Workforce

  • Businesses fail, but fewer who build a strong company foundation suffer that fate.

  • Outline a fully developed organizational chart.

  • Always be recruiting and establish a thorough interviewing process.

  • Provide extensive training for every employee; offer HVAC continuing education.

  • Offer performance pay as an incentive to grow.

Remember that pesky trade worker shortage, before the Covid-19 outbreak? That problem didn’t disappear overnight. 

HVAC business owners, like others in the skilled trades, struggle to find qualified employees in a highly competitive climate. They also worry about investing time and money in training, only to see those HVAC service techs leave to go off on their own or work for another company.

Focus instead on building a strong company foundation with a fully developed organizational chart, Mello says. That means creating clear job descriptions and expectations for every position, providing extensive training to set up every employee for success, and using performance pay as an incentive to help employees grow.

“Some people say ‘always be closing.’ I say, ‘always be recruiting,’” says Mello, who gives employees $1,500 for referring a new hire. 

“I think a lot of us, we just don’t start the business right,” he adds. “When setting up the foundation … act like how you want your business to look in 10 years.

“Give it such a strong foundation, there’s nowhere to grow but up.”

After struggling in 2009 during the economic downturn, Fermin Rivera rebuilt his Los Angeles HVAC company, Red Apple Air, slowly over a period of several years. Today, he says ServiceTitan’s all-in-one software solution is helping him grow to $10 million in earnings for 2020, with plans to expand into other home services.

“For this year, it's just straight up, get to the $10 million as soon as we can, and do whatever we’ve got to do to get there,” Rivera says. 

That includes making sure all new applicants align with the air conditioning contractor’s core values, as well as successfully complete a three-stage interview process and hands-on test. Rivera also requires new hires to watch a series of installation and service technician training videos the company created before sending them out in the field.

What’s his biggest problem with recruiting new hires? Mindset.

“What's the least I can do to gain the most amount of money?” emerges as one of the most common themes among job candidates, he says. Whereas, expressions of gratitude or promises to work hard to earn good pay seem to happen less often.

“If we can trigger a different mindset, I think the industry will make better use of the people they have, and we’ll be able to recruit much easier,” Rivera says.

Searching for Tips on How to Grow my HVAC? Start by Building a Great Company Culture 

  • Value your company’s No. 1 asset—your employees.

  • Invest as much time in recruiting and training as you do on HVAC sales.

  • Engage potential applicants with a video showing a behind-the-scenes look at your company’s culture.

  • Share your team’s success stories regularly to motivate and inspire everyone.

Happy employees typically mean more productive employees, no matter the industry. Give your HVAC staff more than just a steady paycheck by building a company culture that really shows them how much you value their work. 

HVAC consultant Ben Stark advises keeping techs and other employees involved in the process, and making sure they know what role they play in growing your HVAC company. Let them own a piece of it, and you’ll likely get complete buy-in. 

“Employees are your No. 1 asset,” he says.

Tom Howard, ServiceTitan’s Vice President of Customer Experience and owner of multiple home service businesses, agrees. He also thinks HVAC companies need to spend as much time attracting and retaining employees as they do trying to sell HVAC services to new or existing customers.

To market the company culture at Lee’s Air, a leading HVAC and plumbing service provider he owns in Fresno, Calif., Howard created a low-budget YouTube video using a cell phone camera to give a behind-the-scenes peek into their unique workplace environment. It ultimately brought new talent to his door and boosted the company’s bottom line.

“It made such a big difference in our company,” Howard says.

Mello looks for success stories and shares them with the entire company, instead of only focusing on the poor performers.

“I always call the guys who are winning,” Mello says. “Some of them have a breakthrough or one will have the best day ever. Those are the things I love hearing. I learn it, then I share it. I’m kind of an encyclopedia of everybody’s great story.

“Storytellers are important. Storytellers are your leaders,” he adds.

Mello also uses ServiceTitan’s reporting data to boost his team’s spirits with a “morning mojo call” every Thursday. It often highlights the top-performing tech’s work for the past week and shows other employees how to find the same success.

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Grow my HVAC Company with Systems, Checks and Balances

  • Create a well-defined operating system that includes an organizational chart and operating manuals.

  • Include checks and balances for each department to ensure accountability.

  • Automate with field-service software.

  • Control and track inventory with custom reporting in real time.

Most successful HVAC businesses run effortlessly with a well-defined operating system. This includes checks and balances for every department, such as comparing your CSR booking rates to actual jobs completed by your techs, or comparing inventory controls to parts used on each job.

Jason Ellington uses ServiceTitan’s HVAC software to keep his business, Ellington Air Conditioning & Heat, running smoothly in Brevard County, Fla. He says ServiceTitan’s HVAC job estimate templates help customers really understand the service repair and his techs can set up financing options right inside the platform. 

“We also love the ability to create forms inside ServiceTitan, which triggers other actions in the platform. We made a form for ‘parts needed’ for each specific job and it automatically puts a tag on the job, so everyone knows the parts are ordered for that job.

“Stuff like that is beautiful,” says Ellington, who owns a $6.5-million HVAC company. “The communication you’re allowed to do within ServiceTitan is awesome.”

Mello says Art Levi, The 7-Power Contractor author and home services expert, taught him the importance of establishing a good system for running his garage-door business. 

An in-depth organization chart clearly defines each employee’s role, the management hierarchy allows only five direct reports to any one manager, and various operating manuals outline proper procedures for just about everything.

It’s a recipe for success, Mello says, and one used by big players in other industries.

“Look at McDonald’s or KFC, they open a new store every four to six hours. It’s this master plan to go in and everything’s the same, there’s a system and checks and balances around every single aspect. That’s how they create success,” Mello says.

Looking for HVAC Business Opportunities? Apply Focus Before You Expand

  • Master your own HVAC business before buying another.

  • Build your business to succeed without you.

  • Narrow your focus to what you do best, and shed the rest.

Are you an HVAC business owner who thinks they can do it all? Do you want to expand into other home services as soon as possible? Be careful not to spread yourself too thin.

Mello tried doing it all, from operating his warehouse and controlling inventory to buying all of his own trucks and fixing them on-site when they broke down. When his expenses exceeded revenue, he decided it was time to rein in some of his entrepreneurial activities.

“I just realized focus is everything,” Mello says. “Instead of being a jack-of-all-trades, you want to be a master of one. … Focus on one, get so big at one, then you can take on a new branch.”

Think in terms of building your business as a commodity with shareholder value—and one that’s able to operate efficiently, even when you’re not around.

“A business that depends on you to work is not a business I want to buy,” says Mello, who is an owner, partner or investor in 14 other businesses. 

A1 Garage Door Service continues to set records every month, even though Mello says he’s sometimes gone for weeks at a time working on other projects. 

To what does he attribute that success? “We really started to narrow our focus,” he says. 

The company no longer takes calls from Home Depot looking for subcontractors or home warranty services. Instead, A1 sells more customer service agreements, completes more follow-ups, and automates its business operations with ServiceTitan for better efficiency, tracking and reporting.

“The biggest game changer is when you start to automate processes,” Mello says.

HVAC Marketing Ideas to Reach the Right Audience

  • Identify your target audience with specific demographics.

  • Develop HVAC marketing strategies beyond word of mouth to reach your specific audience.

  • Don’t put all of your eggs in one marketing basket.

  • Save cost per lead with targeted email marketing.

Before deploying any type of marketing strategy, small-business owners need to know how to target the right audience of potential customers.

“The first thing I’m going to ask you is, ‘Who is your customer?’ If you say, ‘Anybody with an air conditioning unit,’ I’m going to say you’re full of crap!” Mello exclaims.

“I’m going to say, ‘This is the age, this is the gender, this is the average household income, this is their credit score.’ You should know more and more about who your real customers are, and then you focus on direct response … and branding.”

Knowing the best marketing tactics to deploy is hard work, and poses one of the biggest challenges for the HVAC industry, Stark says. 

“You used to depend on the phone book or direct mail advertising or newspaper advertising,” he says. “In recent years, multimedia internet and digital communications … has really opened up so many different levels to choose from.”

Targeted email marketing is the most cost-effective strategy for keeping your brand front and center in the minds of customers, says Megan Bedford, who runs Mugyver Consulting to help small companies in the trades.

Not only is the cost cheaper for targeted email marketing—$12 or less per lead—it’s the type of communication customers prefer, as opposed to direct mail or a promotional text. The key, Bedford says, is to find the right tool to automate the process, then target the right audience with the right message.

Direct mail remains a powerful way to get your message right into the customer’s hands, Stark adds, but he’s also finding new ways to do creative marketing through various digital media channels.

“Marketing is such a beast these days. It's so multi-layered that you’ve got to always be looking for ways to get your name out there, however it may be,” Stark says.

Focus Your Online HVAC Marketing Strategies

  • Post helpful HVAC content to boost Search Engine Optimization (SEO) on Google.

  • Invest in Pay-Per-Click advertising to increase brand awareness.

  • Incentivize techs to get more reviews.

  • Expand your service area in conjunction with Google Local Services.

“Just understand Google is God when it comes to home service,” Mello says, explaining how consumers find 70 percent of all services online through Google searches. 

“Half of your marketing dollars should be spent on SEO, PPC, Google My Business, getting reviews, and Google Local Services.”

Billboards and TV or radio ads can still work, but with one caveat.

“You better be good at Google and you better have mailers going out, because that’s going to increase the conversion rate on the direct response stuff,” Mello advises.

Marketing via Facebook also works for some HVAC companies, he says, but it’s hard to make a ton of money on the social media platform.

“Facebook is more of an upside-down pyramid,” Mello explains. “The way I do Facebook is you’ve got a lot of customers at the top who really don’t know about your service or they don’t need it today, but you’re building a funnel. It's at the top of the pyramid, but it’s an upside-down pyramid.”

Some customers will find you because they need your services today, whereas others may find you through brand awareness.

“They call it ‘top-of-mind awareness.’ You’re starting to get that online reputation of ‘Hey, I’ve seen that company before, now I need them.’ Now, they’re going to think of you,” Mello says.

Want to Grow Your HVAC Business? Know Your Why

  • Know your own strengths.

  • Don’t become an HVAC business owner just because you want to be your own boss.

  • Keep work-life balance in focus.

  • Understand the financial aspect of running an HVAC business, or find someone who does.

Work-life balance is a buzzword that gets thrown around a lot, but Mello thinks it’s something to keep in mind when pondering whether to start your own HVAC business or grow the current one. 

He recommends reading the book, Off Balance on Purpose: Embrace Uncertainty and Create a Life You Love, by Dan Thurmon to gain a better perspective, especially in this time of great uncertainty.

“The reason you should own a business is NOT because you don’t want to work for someone else,” Mello says. You may exhibit excellent HVAC technician skills in the field, but lack the financial knowledge or expertise in managing an HVAC business.

“I feel bad for a lot of people, they have no business owning a business,” he says. “They better start to learn and get some mentors, or maybe it’s not for them.”

Some companies hit $3 million in revenue and decide that’s as far as they want to go, because their life is a mess and they’re under stress.

“I feel like I’m just getting started...I literally feel like it’s there to build, it’s ours for the taking,” Mello says. “For me, success just means if I want to go do something, I do it. 

“You’ve got to choose what’s important to you and decide what’s your ‘Why?’”

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