How to Start an HVAC Business: 10-Step Guide [2025]

What Does an HVAC Business Do?

An HVAC business keeps people and buildings comfortable by installing, repairing, and maintaining the systems that provide climate control. 

You know that warm blast of air you feel when you first enter a store in winter? Or how a movie theater is always the coolest place to be in the summer? That’s HVAC in action. 

Many companies cover the basics, such as system installation, seasonal tune-ups, and emergency repairs when HVAC systems break. Many also branch into efficiency upgrades, such as indoor air quality testing and integrating smart HVAC tech into homes. 

The industry is shifting fast. 

Energy-efficient systems that reduce utility costs, along with newer technologies like Internet-connected thermostats and high-efficiency heat pumps, are now becoming a part of everyday service calls. 

Delivering these solutions is only half the job, though. The other half is customer service, which includes showing up on time, communicating clearly, and building trust to keep customers coming back year after year.

How Do You Start an HVAC Business?

Starting an HVAC business means blending technical skills and business acumen. You’ll need the right licenses, a solid business plan, funding to cover the initial equipment, and a brand that makes your business stand out.

Here’s a clear breakdown of the 10 steps that are essential for launching your own HVAC company and setting it up for long-term success.

1. Get licensed

Every HVAC business starts with proper licensing. For most states, this means contractors need to hold either a journeyman or Class A/B license, while others break it down even further to include licensing for refrigeration and solar. 

Local municipalities can add their own unique requirements on top, so you’ll want to check out your local rules for where you plan to operate and eventually expand. 

Some states also enforce what’s known as the ‘$5,000 rule.’ This means you will need a contractor’s license for any project that’s valued over that threshold. 

Looking beyond state-based requirements, obtaining certification from groups like NATE or the EPA 608 for refrigerant disposal can also strengthen your credibility. These show customers that you follow best practices and meet industry standards. Getting licensed and certified is the best way to demonstrate to regulators and homeowners that your business is professional and trustworthy. 

Learn more about HVAC licensing requirements for the state in which you plan to conduct business.

2. Create your HVAC business plan

Before you start ordering tools or considering a logo, take the time to map out your HVAC business plan. Think of it like a roadmap that keeps you focused day-to-day and shows lenders and investors you’re serious about turning your technical skills into a real business. 

A thorough business plan for HVAC should include the following:

• The services your business will be offering (repairs, installs, maintenance, upgrades, etc.)

• The types of customers you are going to target (homeowners, commercial clients, industrial/lab, or all three).

• Which competitors are also servicing the area, and how you plan to stand out.

• Your financial projections (startup costs, expected revenue, and cash flow needs).

• The marketing approach you plan to use. 

Your business structure also matters. Whether you run a small shop with a single truck or aim to scale into a multi-crew operation, your HVAC business model shapes everything in your business plan, from pricing to hiring. 

Lay out the groundwork now, and you’ll save yourself from course corrections later on.

3. Get financing

Running an HVAC operation isn’t a lean business—it needs serious capital. Think technical and hand tools, trucks, insurance, registration fees, protective gear, and, of course, your employees. 

Failing to have a realistic budget for these expenses is the fastest way to burn through cash before you even land a customer, so create a detailed list of expenses first. That list becomes your reference point when deciding how much money you’ll need to raise and where to get it.

Funding for HVAC operations typically comes from a mix of sources:

• Personal savings: Keeps you debt-free but limits your runway.

• SBA loans and grants: The Small Business Administration offers loans with lower rates and longer repayment periods than most banks. Additionally, it can provide grant opportunities for qualifying businesses. 

• Bank loans: Widely available but typically require collateral and higher interest.

• Investors: Provide the capital you need in exchange for a share of profits or equity in your business.

Some owners also use equipment financing to spread the costs of trucks or expensive tools. 

Regardless of the route you take, lenders and investors require a well-thought-out business plan, realistic cash flow projections, and a plan for managing repayments and expenses. 

For more information on the different types of loans, lenders, qualifications, and application process, check out our small business loan guide.

4. Register your business

Once you’ve got your plan and financing lined up, it’s time to make everything official with business registration. 

You’ve likely already got a name in mind; just make sure it’s professional, easy to remember, and available across domains (yourname.com) and social media handles (@yourname). 

A quick search online and in your state’s trademark database can make sure the name is unique and available. And if you’re stuck for ideas, we’ve got some great suggestions for HVAC company names here.

Next comes the structure. A sole proprietorship works if you’re running a one-person shop, but your personal assets are exposed if you choose this route. 

An LLC is a popular choice because it separates personal and business liability, while still being relatively straightforward to set up. 

Larger companies may opt for a corporation, especially if they have ambitious plans or wish to attract investors.

You’ll also need an employer identification number (EIN) from the IRS website for tax purposes. Many states require additional permits or small-business licenses, so check with your local government before scheduling any work.

5. Handle finances and accounting

Strong technical skills will get your foot in the door, but solid financial management keeps your HVAC business alive. 

The most common challenge for many contractors isn’t knowing the difference between a condenser and a coil, but poor bookkeeping. 

Keeping everything organized from day one means fewer surprises come tax time and a clearer picture of whether your business is generating a profit.

Opening a business bank account

Start by separating your personal and business finances. Open a dedicated business checking account and a business credit card as well. 

This separation of business and personal affairs makes tax filing easier, protects your personal assets, and helps you track deductibles. 

Find banks that specialize in small businesses, as they typically provide better perks and lower fees, and they provide access to business advisors.

Setting up accounting

Next comes HVAC accounting. Accurate records of revenue, expenses, and invoices are required for compliance, but they also provide valuable data for making informed decisions. 

Many HVAC companies use accounting software or hire a bookkeeper to manage day-to-day tasks, including generating invoices, collecting payments, and reconciling accounts.

ServiceTitan’s HVAC accounting features take it one step further by directly connecting your field operations with your financials. The platform handles invoice generation, bill management, payment collections, and reconciliation automatically.

Features like accounts receivable tracking help HVAC contractors stay on top of any unpaid invoices, while accounts payable tools streamline vendor payments in just a few clicks.

The platform can even integrate with QuickBooks, Intacct, and other major accounting software, so you won’t have to deal with multiple apps to do one job.

6. Get your HVAC tools and equipment

No HVAC company gets far without the right gear. From your first screwdriver to your fifth service truck, tools and equipment form the backbone of daily operations. 

You’ll need a mix of hand tools, safety gear, specialized equipment, and vehicles to transport them all to the job site. Tool costs add up quickly, but you can spread them out by purchasing used equipment, financing the big-ticket items, or negotiating with local suppliers for bundled equipment.

Common HVAC tools and equipment include:

• Hand tools, such as screwdrivers, nut drivers, pliers, wrenches, and hammers

• Flashlights and headlamps

• Metal and tubing cutters

• Drills with charging batteries

• Extension cords

• Staple guns 

Don’t forget safety equipment, such as gloves, masks, boots, goggles, and earplugs. The more advanced HVAC equipment and tools you may need to acquire include: 

• Core remover

• Coil fin straightener

• Thermometers

• Multimeters

• Saw

• Caulking gun

• Pumps

• Nitrogen regulator

• Leak detector

• Psychrometer

• Hand seamers and snips

• Crimper

• Awl

• Thermal imaging tools

• Flushing solvent

You can also invest in either a single vehicle or a fleet of branded vehicles to increase your business's visibility. Alternatively, you can start smaller by having technicians use their own trucks. 

Beyond the hardware, consider the technology your team will be using in the field. ServiceTitan’s Field Service App equips technicians with customer details, job history, photos, and invoices, all on their phones and tablets. 

Instead of arriving blind, your techs will show up ready to deliver better service and equipped with what they need to provide estimates and collect payments on-site.

Inventory management

The more jobs you take on, the more tools, filters, and parts you need to keep track of. Spreadsheets might work for a one-person shop, but even they quickly become unmanageable. 

ServiceTitan’s Contractor Inventory Management System digitizes the whole process with barcode scanning, truck stock templates, and purchase order tracking.

7. Decide on your HVAC services pricing

Getting your prices right is one of the most important parts of running an HVAC company. 

It can also be one of the most difficult. If you set your rates too low, your margins vanish. Set them too high, and you’ll lose bids to competitors who price you out. 

The sweet spot is achieved by balancing labor costs, materials, overhead, and a healthy profit margin. Research what competitors are charging in your area and calculate the true costs before finalizing any numbers. 

You’ll also need a pricing strategy:

• Hourly rate: Hourly pricing, also known as time-and-materials pricing, charges clients based on the actual time spent working on a project and the cost of materials used. While this approach provides transparency, it can lead to client concerns over costs and may not incentivize technicians to work efficiently.

• Flat rate: Flat-rate pricing offers clients a fixed, upfront price for a specific HVAC service or job, regardless of the time required to complete it. HVAC contractors typically establish a price list for common services or repairs, making it easy for clients to understand the cost upfront.

• Labor and materials pricing: This approach is a hybrid method that itemizes the cost of both labor and materials separately on the invoice. Clients see a breakdown of the technician's hourly rate and the cost of materials used for the job.

Tools like ServiceTitan’s Pricebook Pro make pricing far less of a guessing game. It provides regional averages, allowing you to see where your business stands in relation to competitors.

Its Smart Start feature automatically loads the most common HVAC services into your system. These come complete with descriptions, images, and cost updates in real time, so your techs can present professional estimates in the field while you maintain healthy HVAC profit margins.

8. Get HVAC business insurance

Every HVAC business carries risk, whether that’s a ladder slip, a vehicle accident, or a customer claiming property damage. 

The right HVAC insurance protects you from financial losses that would otherwise derail your company. In many cases, obtaining insurance coverage is actually a legal requirement.

Key policies to consider include:

• General liability: Covers accidents and property damage caused during jobs. It’s typically required for licensing and contracts.

• Workers’ compensation: If your employees are injured on the job, this coverage will help pay for medical expenses and lost wages. It’s mandatory in most states if you have staff.

• Commercial auto: Whether you operate just one truck or a whole fleet of vans, this protects company vehicles and drivers.

• Commercial property: This coverage is designed to protect against any losses involving your offices, tools, and inventory stored at your facility.

Often, insurance is viewed as a formality, but it’s actually central to effective risk management. With the proper coverage, you can take on bigger projects knowing your business is protected from worst-case scenarios.

9. Market your HVAC company

Business success nowadays hinges on effective HVAC marketing. 

Word-of-mouth referrals still matter, but in this digital-first world, relying on them alone won’t get you enough leads to grow your HVAC business. To truly stand out, you need a combination of online and offline strategies that build credibility, generate consistent demand, and keep your brand visible throughout the year. 

ServiceTitan’s Home Services Marketing Software provides the tools to attract new customers while tracking the ROI and effectiveness of your marketing campaigns in real time. 

Features like the Marketing Scorecard rank your campaigns by revenue, so you know what’s working. Heat maps show you exactly where your ad spend is actually paying off. 

You can even assign unique phone numbers to campaigns to see which ones are actually converting into jobs. 

Here are the most effective HVAC marketing strategies to get your business started.

Get a website

Websites today are what phone numbers used to be back in the day. Without one, homeowners won’t even consider hiring you. 

Ensure your site includes key pages such as services, pricing, testimonials, and a clear way to contact your business. 

Additionally, since most people will find you via their smartphone, invest in making your website mobile-optimized.

List your HVAC business

Jump on Google and open a Google Business Profile for your business, then claim it. The same applies to online directories such as Yelp, Angi, and HomeAdvisor. 

Keep all your contact details, hours, and service descriptions consistent across all platforms. Accurate listings improve visibility in local searches and build trust with new customers.

Run Local Services Ads

When a potential customer searches for ‘HVAC near me,’ you want your business to be in the top results. Google Local Services Ads (LSAs) makes this happen. 

You can set a budget that aligns with your goals and only pay for qualified leads.

With ServiceTitan’s Marketing Pro – Ads integration, you can connect LSAs to your dashboard—allowing customers to book jobs directly from the ads they see online—and track the ROI in real time. 

Leverage email marketing

Because an email goes directly into a potential customer’s inbox, it’s one of the most effective ways to nurture relationships. 

You can use it for seasonal promotions, as a gentle nudge to book maintenance, or for engaging newsletters. 

ServiceTitan’s Marketing Pro – Email tool helps you segment audiences, build templates, automate email campaigns, and track their performance to keep your company top of mind. 

Embrace social media

Social platforms like Facebook, Instagram, and even TikTok are excellent places for HVAC businesses to showcase before-and-after photos, share maintenance tips, and run targeted ads to homeowners in their service area. 

Consistent posting is key to maximum engagement and brand recognition, while participating in local conversations positions your business as approachable and knowledgeable. Social media marketing for HVAC businesses is not so much about hard selling as building your community presence.

Be mindful of SEO

Search Engine Optimization (SEO) helps your website appear higher in Google search results. Basic practices, such as keyword-rich service pages, optimized meta tags, and building backlinks, can improve your site's chances of landing on page one. 

Local SEO is even more valuable. Claim your Google Business profile and earn reviews to appear higher in local map results. Long-term marketing supported by HVAC SEO goes a long way in building business success.

Manage your online reputation

Reviews can make or break trust in a service business. Encourage happy customers to leave feedback and respond quickly and positively to any negative feedback. 

ServiceTitan’s Marketing Pro – Reputation centralizes review monitoring, letting you track and respond to feedback across multiple platforms in one place. 

Automated follow-ups can prompt satisfied users to share their experience, resulting in boosted credibility and retention. 

10. Consider hiring HVAC technicians

Many new HVAC business owners tend to start solo, but growth usually means bringing on new HVAC technicians to handle more calls and bigger projects. 

The first step is creating clear job descriptions that outline responsibilities, required certifications, and any training you are willing to provide. Keep a list of interview questions on hand once you’re ready to start reaching out to potential candidates.

Competitive pay for HVAC technicians is another factor to consider. Research your local market rates so your offer attracts skilled candidates without stretching your budget. 

Once you’ve built your team, managing payroll becomes another challenge. ServiceTitan’s Contractor Payroll tool simplifies the process by automatically tracking time, job costing, and performance data. 

Hiring is a huge step and not one to take lightly, but with the proper structure and systems in place, it’s key to scaling your HVAC business beyond what a single person can handle.

How Long Does It Take to Start an HVAC Company?

On average, it takes anywhere between six months and five years to start an HVAC company. 

Why such a big range? The biggest factor in speed is licensing and certification. Experienced technicians may qualify more quickly, while newcomers require additional time for training. 

After that, registering the business, securing financing, and setting up operations takes around three to six months. 

Strong networking and partnerships in the HVAC industry can shorten the timeline by connecting you with suppliers, mentors, and even early clients, helping you get off the ground more quickly.

When Is the Best Time to Start an HVAC Business?

The best time to start an HVAC business is actually in the slow season (spring or fall). 

While this might seem counterintuitive, these off-peak seasons give you breathing room to set up your operations, market your services, and prepare for the summer cool rush or the winter heating surge.

Regional weather patterns can shift the timing. Warmer climates may experience year-round calls, while colder regions may experience a surge of panic as winter arrives.

How Do I Find My First HVAC Clients?

Landing your first installs and services usually means starting close to home and then expanding outward with smart and affordable tactics:

• Referrals: Ask family, friends, and former colleagues to recommend your service. Ask the same of any satisfied customers you get.

• Build an online presence: Claim your Google Business Profile and add your details to local directories, so you can start appearing in local searches.

• Community networking: Partner with contractors, join trade associations, and connect with local businesses to generate referrals.

• Offer seasonal promotions: Affordable maintenance specials or first-time discounts can help you quickly attract homeowners looking for a low-risk way to try out your services.

This is only scratching the surface. Explore our guide on generating HVAC leads for more detailed approaches to lead generation.

What Are the Benefits of Starting an HVAC Company?

Starting an HVAC company offers a lot of benefits for entrepreneurs willing to put in the hard work:

• Steady demand: Everyone wants climate comfort, no matter the season.

• Profit potential: Smart pricing and efficiency can deliver strong returns.

• Independence: Run your own schedule and grow on your terms.

• Flexibility: The choice between residential, commercial, or niche industrial markets (or all three).

• Sustainability: Offer energy-efficient upgrades and eco-friendly solutions.

• Inspire the next generation: Your HVAC success story can prove how far new business can go and inspire new generations to enter the trade.

What Are Common Mistakes When Starting an HVAC Business?

New contractors often fall into the same traps as their predecessors. Many of these are tied to the common challenges all industry pros have faced at some point:

• Underpricing services: Cuts into profit margins and undervalues your work.

• Poor cash flow management: Unpaid bills and stalled growth.

• Skipping insurance: Leaves you exposed to costly accidents and claims.

• Ignoring marketing: Doing this makes it nearly impossible to compete with established companies.

• Weak customer service: Damages your reputation and reduces the likelihood that anyone will come back.

How Can You Grow an HVAC Business?

Once your company is stable, the next step is finding ways to expand without losing control of operations. 

Growth can take on many forms, but it always requires thoughtful planning and putting the right systems into place to build a successful HVAC business. 

• Expand services: Add offerings like indoor air quality testing or energy efficiency upgrades to attract new customers and upsell to existing ones.

• Invest in software: Tools and technology built for HVAC keep your office and field teams aligned, allowing you to handle more jobs.

• Use marketing automation: Automate your emails, ads, and review requests to keep your pipeline full and free up time for staff.

• Strengthen your foundation: Place an emphasis on training and focus on recruiting, building, and developing your company culture.

Smart, steady growth comes from doing the basics well, then scaling with purpose.

Over to You

Starting an HVAC business takes a combination of planning, licensing, the right tools (both hardware and software), and strong marketing. Growth is achieved through steady hiring, excellent customer service, and efficient systems, including effective marketing.

Focus on each step in this guide and you’ll build a company that’s prepared to thrive for years to come.

Tools like scheduling, dispatch, payroll, pricebook, marketing, and reputation management are all built into ServiceTitan, giving contractors the support they need to start well and grow profitably.

Frequently Asked Questions (FAQs)

How much does it cost to start an HVAC company?

The cost of a lean HVAC startup ranges from $10,000 to $50,000. Factors include licensing, tools, vehicles, insurance, and the initial costs of marketing. 

What is a good profit margin for an HVAC company?

Healthy HVAC profit margins range from 8 percent to 15 percent. Strong pricing, efficient scheduling, and effective cost control all contribute to maintaining profitability. Margins vary depending on the service mix and regional weather conditions. 

Is an HVAC business profitable?

Yes. Demand is steady and always will be due to climate control needs. According to the BLS, HVAC employment is projected to grow by 8 percent through 2034. A technician can be expected to be paid close to $60,000 per year.

What software should an HVAC business use?

Software use in HVAC is common among contractors. They typically use accounting software like QuickBooks, CRM tools, estimating systems like Trimble, and all-in-one field service software like ServiceTitan.

What training or certifications are recommended for HVAC company owners?

NATE certification, EPA section 608 for refrigerants, and OSHA safety training are essential for HVAC company owners. Manufacturer accreditations and ongoing technical education also build credibility and keep skills sharp.