HVAC Owner Salary: A Guide to Boost Revenue and Profits

What is an HVAC business owners' salary?

In the HVAC industry, the average business owner salary varies depending on the size of the business, geographic location, and years of experience. HVAC contractors typically earn anywhere from $67,573 on the lower end to $209,355 on the higher end, according to online compensation data. The data shows HVAC contractors' top pay may range from $98,586 to $461,723.

How much do small-business owners make? Some HVAC company experts suggest owners can earn 5 percent of total revenue, or up to 50 percent of net profit after taxes, although others suggest owners should aim for at least 10 to 15 percent in take-home pay.

As an HVAC business owner, your salary becomes just one part of the financial equation. Comparing the average small-business owner salary gives you a better idea of where your company stands and where it needs to grow.

Establish a system

• Learn from successful business owners

• Create and follow the right system

Success starts with a solid foundation. For those building an HVAC company from the ground up, creating a strong business plan is an essential first step.

Home service experts advise finding as many mentors as you can to educate yourself about all aspects of the HVAC-R service business, from business structure to processes. Networking and reading books about growing a profitable business gives you crucial knowledge.

“Leaders are readers,” says Tommy Mello, The Home Service Expert and founder of the $50 million home service business A1 Garage Door Service. “Reading has been a big part of my success, and hanging out with successful people.”

Those wanting to join an established business with a successful plan and procedures already in place may want to consider an HVAC franchise investment. Whichever business model you choose, creating and following the right system is vital to growth.

“There are three reasons why we make mistakes,” says Al Levi, who created The 7-Power Contractor approach and joined Mello in a recent ServiceTitan Growth Series webinar. “No. 1 is we don’t have a system. No. 2, we have the wrong system. And No. 3—this is a lot of the time—the system is not being followed correctly.”

Calculate costs

• Determine true business cost

• Offer competitive wages

Calculate the cost of doing business to make the right financial decisions. Obtain a solid grasp of accounting procedures, or find an expert to help keep your business on track.

Experts suggest knowing your company's break-even point so you know the true cost of doing business and your pricing. These calculations become key as you determine your desired net profit.

For home service companies, employee payroll and benefits comprise a significant portion of the budget. Heating, air conditioning, and refrigeration mechanics and installers earn an average salary of $50,590 per year, according to the Bureau of Labor Statistics. Most entry-level HVAC technician jobs require a high school diploma or equivalent, while other positions, such as an HVAC engineer, may require a bachelor's degree.

Know the average annual salaries of HVAC techs in your area, so your company offers competitive wages to attract quality recruits and retain employees.

Focus on staffing

• Improve your leadership skills

• Promote employees from within

Your residential HVAC business relies on your service techs and customer service representatives to deliver the highest quality service possible.

Creating a successful service company involves the same process coaches follow to develop a winning sports team, says ServiceTitan Director of Customer Relations Chris Hunter, an HVAC business owner and co-founder of the technician training school GoTime Success Group.

"We need to make the transition from player to coach,” Hunter says. “We may be the best technician, we may be the best salesperson, but we're going to have to remove this hat and become a coach if we want to build a team.”

Invest in your employees' HVAC career by training them to grow and succeed. Consider promoting from within, instead of trying to snag the best HVAC service technicians from competitors.

“You take the heart out of your people when you've got to fill the position from outside the company,” Levi says. “They never will say it to your face, but I will. 'What am I? Not good enough for you? I thought I came here for a career. Why is this other person, who's got nothing to do with our culture, hasn't come up, doesn't know the systems?'"

While it remains key to constantly recruit and seek quality techs, promoting current employees keeps your HVAC company's systems and processes functioning properly.

“We've got well over 200 technicians,” Mello says. “I would tell you that 80 percent of those were made, not found from another competitor. I don't want all the stuff they picked up from that last company, because you can't unlearn that stuff.”

Automate HVAC operations

• Streamline operations

• Improve dispatch and scheduling

Efficient operations perform a key role in the financial success of your residential and commercial air conditioning business.

Use ServiceTitan's all-in-one HVAC software to dispatch for profit, sending the right tech to the right call. Stay flexible with point-and-click scheduling, enabling your dispatchers to extend or reschedule jobs at a moment's notice. 

Optimized scheduling also ensures adequate staffing for complex installation or repair jobs, allowing your company to book high-ticket jobs and deliver the quality service your customers expect.

Enhance customer experience

• Prioritize customer satisfaction

• Utilize real-time customer notifications

To maintain customer satisfaction, know what your customers want, and meet their expectations. 

That's the message from Susan Frew, co-owner and president of Sunshine Plumbing, Heating & Air in Denver, whose company focuses on top-notch customer service. She interviewed women to find out what they wanted in a contractor, and top expectations included techs arriving on time, clear customer communication, and prioritizing repairs.

Increase customer communication with ServiceTitan's customer experience software. Your customer-service representatives (CSRs) can text customers a bio and photo of the technician coming to their home and notify them of when the technician will arrive. 

Offering great customer experiences benefits your HVAC company, too. One study shows 89 percent of companies with significantly above-average customer experiences perform better financially than their competitors. Plus, happy customers are more likely to share their positive experiences with others through word-of-mouth referrals or five-star online reviews.

Implement sales training

• Streamline the sales process

• Provide customers tiered options

Training empowers your team to increase sales and, in turn, revenue for your company. Teach techs how to sell in the field with mobile tools to streamline the sales process by showing customers clear good-better-and-best options on the job site. 

Customers want to buy, not be sold, and tiered options give customers opportunities to make active choices, says Vanessa Gonzales, co-founder and co-owner of Albuquerque Plumbing, Heating & Cooling, who spoke in a recent ServiceTitan webinar on boosting profit.

An integrated, flat-rate pricebook protects your profit margin, because the calculated billable labor rate covers related expenses and includes your ideal net profit. HVAC proposal software enables techs to show no-pressure sales presentations with photos and videos, and create branded estimates to close the deal in the field.

Optimize marketing strategies

• Target your marketing audience

• Track automated campaigns

A strong HVAC marketing plan helps your company stand out in a competitive environment. The best marketing plans encompass a variety of methods, including strategic email marketing, online ads, and targeted direct mail pieces.

Targeted email marketing remains one of the most effective marketing channels, earning about $40 for every $1 spent, according to Megan Bedford of Mugyver Consulting. HVAC companies should plan and budget for marketing campaigns, giving customers opportunities to renew memberships or schedule summer and winter tuneups.

ServiceTitan's home service marketing software enables your company to create new campaigns with just a few clicks. A marketing scorecard breaks down your automated campaigns into at-a-glance data, so you can easily view total revenue, cost per lead, and return on investment. Real-time data shows you what works and what doesn't, so you can get the most out of your marketing budget.

Track HVAC company metrics

• Monitor key performance indicators (KPIs)

• Track data in real time

Use ServiceTitan's cloud-based field reporting software to give your HVAC company the data it needs to get ahead.

Determine top key performance indicators, such as average ticket price, memberships, five-star reviews, tech-generated leads, and revenues based on trucks and employees. A cloud-based sync enables you track and compile statistics in real time.

Accurate data assessment is crucial to your business planning and a key component in boosting revenue and profits.