Want to make more money? Let’s face it – we all do! Most HVAC businesses set out with a goal to generate more profit.
But growing your business can be hard… So what’s the secret to making money in HVAC?
We have narrowed it down to three key components, along with a bonus tip:
- Build a business plan and define pricing strategy
- Create a brand and use marketing to increase sales
- Add value with happy customers
1. Build a business plan and define your pricing strategy
A solid business plan is a staple for every business and critical to your success. Your business plan lays the groundwork for an optimal pricing strategy. Making sure you are charging enough and setting the right profit margin is vital to your growth.
Business Plan
Some businesses make the mistake of starting a business without the foundation of a business plan. That’s like building a bridge without a construction plan!
Your business plan is your roadmap for structuring your business. The plan is a structured document that defines a company’s objectives and the steps to achieve them. It includes details on starting and managing a business.
Your team may not be the only group reviewing your business plan. It’s your key document that can help the business gain funding or add business partners or investors. An influx of investment allows you to grow your business, so you can ultimately make more!
What exactly is in a typical HVAC business plan? Here are the basics:
- Cover Page: Introduces the business with contact information
- Executive Summary: A brief synopsis of your HVAC business plan including company history, mission statement, business goals and competitive advantages
- Business Overview: Everyday functions and operational structure of your HVAC business
- HVAC Services: A detailed outline of the services you provide
- Market Analysis: Identifies your ideal client and industry trends
- Business Strategy: This ties everything together to identify ways to maximize your profits
- Implementation Summary: Outlines how you plan to implement the right HVAC marketing and sales strategies to gain and keep HVAC customers.
- Management Summary: This section deals with controlling your labor costs
- Financial Plan: Helps to plan ahead and scale the business with all your financial information such as balance sheets and sales forecasts.
A business plan increases business growth by 30%! For more help on building a business plan, check out How to Create the Best HVAC Business Plan.
Pricing Strategy
Do you often think about whether you are charging too little or charging too much? Do you worry about telling your customers that you have to raise prices?
Most HVAC contractors are in the same boat. If your pricing isn’t right, then you’re probably NOT making money in HVAC.
There are many factors to keep in mind when setting your pricing. But no need to feel overwhelmed!
Here are the key factors to consider prior to setting prices:
- Profit goals and overhead costs
- Customer feedback and satisfaction ratings
- Your break even point and the job amount you need to get there
- Your target market and the services they prefer
- Your financial advisor’s advice
- The right pricing model for your business
How do you know which pricing model is best for your business? Research the two most popular pricing models to see which fits best: flat rate pricing vs. time and materials.
2. Create a brand and use marketing to promote it
As an HVAC business, most of your business is going to be local or come from one market. You want your business to stand out from your competitors in this tight space.
Your goal is to be recognizable and frame yourself as a friendly face in the community.
Creating a strong brand is key to attracting more sales.
How to Create Your Brand
There are several factors to keep in mind when developing your brand such as logos, taglines, and using consistent colors.
- Create a logo that pops! A logo serves as the foundation for your brand identity. Your logo needs to “pop” and stand out from the background wherever it is used so it doesn’t get lost. Use it consistently on shirts, invoices and signage.
- Focus on consistency: Whether it’s your brand colors, imaging or logo placement, people are more likely to recognize consistent brands. To do this, use similar voice and visuals across all your channels – including emails, social and website. Consistent branding increases revenue by 33% and shows professionalism!
- Keep taglines short: Many companies use jingles or taglines to help customers recognize and remember their brand. Company taglines need to be short and memorable. When writing your tagline four to six words is ideal for a tagline. Use active verbs ending in “ing” such as delivering or moving.
Promote Your Company
Marketing usually lands close to last on the list of small business priorities, but this shouldn’t be the case. A consistent marketing message attracts new customers and allows for engagement with current customers.
“97% of people learn more about a local company online than anywhere else”
Improving your website and all marketing efforts will lead to making money in HVAC and greater growth.
When identifying where to start, begin with your website. Your website is your greatest marketing asset so you want to make sure it is optimized for the web. Social media is a big part of ranking on Google so you will need fresh content to share with your customers and potential leads.
Email marketing and social media are also necessary to keep your brand top of mind with potential customers.
Company reviews are also important to gain new customers. When you have a happy customer, ask them to write a review for your business.
For our top marketing tips to build your website, email and social, get our 13 HVAC Marketing Hacks to Heat Up Your Business.
3. Create value with happy customers and be honest!
What’s the result when your customers are happy and satisfied with the work that you do?
- First, they are going to come back to you for additional services and may be open to upgrades or new equipment.
- Second, they are going to recommend your business to friends and family.
Both of these options put more money in your pocket. So how do you ensure customers are happy?
Here are a few tips for satisfied customers (and how to keep them happy long-term!):
- Be selective about who you hire. The labor market is tight, but you want employees that are willing to go above and beyond making sure your customers are satisfied. Ensure they are friendly and speak to clients respectfully.
- Follow up with customers and ask if you could have done anything differently the next time to improve their experience. If they had a positive experience, ask if they would be willing to submit a review (Tip: good reviews can also boost sales!).
- Be honest with your current and potential customers. If you or a tech makes a mistake, own up to it and offer to make it right. Always be upfront with your pricing and what they really need.
- Once you gain a new customer, do everything you can to keep that customer! Follow up with them during warmer months to check in, and add them to your email list. By simply increasing customer retention by 5%, HVAC business owners can increase profits by up to 95%.
BONUS: Making More Money in HVAC is Simple with FieldEdge Service Software!
One way to make more money is with HVAC software that streamlines your entire business process. Your business will grow faster and be more profitable with all the time and money saved!
With FieldEdge software you can:
- Get paid faster with instant invoicing
- Create estimates on-the-go
- Create efficient routes to quickly dispatch electricians
- Access job history and customer information from anywhere
Want to see how our features help you save time and make more? Book your FREE personalized demo today!
Make It Rain for Your HVAC Business!
Today we covered several tips to help you make more money in your HVAC business. These strategies may take some time to kick in, but they will be well worth it. You’ll be making more money in no time!
You now have learned the strategies to:
- Build a business plan and define pricing strategy
- Create a brand and use marketing to increase sales
- Add value with happy customers
- Streamline your business with FieldEdge service software.
