How to Create the Best HVAC Business Plan

Did you know that all you need is one document to build a solid HVAC business? For long-lasting success, the number one resource you’ll need is a robust HVAC business plan.

Despite what you might think, a great HVAC plan isn’t as complicated as it seems.

Use the HVAC business plan outlined in this article to simplify the process and start creating your own plan today!

How the Best HVAC Business Plan Builds a Foundation for Success

Before we dive in on the process for building out an HVAC business plan, let’s talk about how it’s going to help your heating and cooling business.

An HVAC business plan is VITAL to the growth and success of your business.

Use your new business plan to help you:

  • Stay organized
  • Prepare for unexpected events
  • Establish and stay focused on clear, achievable goals

Also, it’s important to keep in mind that your HVAC plan is NOT a one-and-done document. It’s critical that you always know what’s going on in your business by regularly updating it with monthly financial revisions and yearly complete revisions. This will allow your business plan to grow with you! 

1. Cover Page

Your cover page is a concise cover letter that introduces your HVAC business, which is why your business plan should resemble a professional booklet.

Your cover page gives readers (namely new employees and financial professionals) a quick overview of your management and contact structure, which helps streamline the training process.

Plus, if you apply for any grants or loans, the cover page gives the financial institution a quick reference point for contact information.

These are a few essentials you should include in your cover page:

  • Logo
  • Business name
  • Contact information
  • Business address (if any)
  • Any key stakeholders (and their roles) in your HVAC business

2. Executive Summary

Your executive summary provides a brief synopsis of your entire HVAC business plan.

Use the summary to help formalize the main concepts in your business by establishing concrete, clear and achievable goals to scale your HVAC business for growth.

Be sure to include these essential elements in your executive summary:

  • Company history
  • Mission statement
  • Business goals and objectives
  • Competitive advantages (your keys to success)

3. Business Overview

Your business overview provides basic information about everyday functions as well as the operational structure of your HVAC business.

This section allows new people entering your business (i.e. new employees or third-party financial advisors) to instantly see how your business operates.

Company Summary

Your company summary is a brief summary of your vision for your HVAC business. Take advantage of your company summary to give readers an understanding of where you HVAC business will go.

A company summary may also help you create a picture of what your ideal HVAC client looks like.

Include these elements in your company summary:

  • What types of HVAC services will/are you offering?
  • Are you offering services for residential HVAC, commercial HVAC, or both?
  • How frequently do you plan to service your customers?
    • For example, your residential customers will likely need scheduled maintenance once or twice a year, while commercial customers are more likely to need quarterly check-ins.

Just by answering the questions listed above, you’ll have a complete executive summary. However, each HVAC business is different, so you might find that you need to include additional information.

Company Ownership

Your company ownership states which business entity you’re registered as (i.e. partnership, corporation, sole proprietorship, etc… ). This is important due to  tax implications.

It’s important to establish your business as a separate entity in order to protect yourself from being personally liable for your business. So it’s important to state your ownership status  in your HVAC business plan.

Also, if you haven’t already registered your business, be sure to check out our guide on starting an HVAC business.

Start-Up Summary

The start-up summary is used to determine the value of your HVAC business by evaluating your start-up costs and assets, which are great predictors of success. If you ever seek grants or loans, this is one of the most important sections financial institutions review.

For established HVAC businesses that aren’t start-ups, this section will include your business expenses and assets.

Start-Up Costs

Your start-up cost is the amount of money you need to spend on equipment and materials in order to start your HVAC business. Your start-up cost summary helps as you’re looking for outside investors and loans. It can also help you develop a financial plan!

Your start-up costs help you to determine where to set your HVAC pricing in order to maximize your profits. To start, include estimated start-up costs in your overhead costs.

However, if you already own some equipment and materials to start your business, don’t include them here. Only include the things you need to purchase in this section.

Your start up costs may include: 

  • Trucks
  • Inventory costs
  • HVAC uniforms
  • Office supplies
  • HVAC equipment
  • HVAC business software
  • Facility/warehouse rent and upkeep
  • Capital to pay your employees (if any)
  • Marketing expenses (i.e. your website, ads, etc… )

Once you’ve added up how much everything will cost you to get started, you’ll have a better idea of your business’ financial needs. While estimating costs may be tedious, HVAC business owners who skip their start-up cost summary will likely drastically cut themselves short or prices and lose profits.

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Long-Term Assets

Your long-term assets contribute to your HVAC business in the long-term. Essentially, your long-term assets include anything you already own that doesn’t need to regularly be replaced.

Since your long-term assets show how much your business is worth, it’s a major predictor of your HVAC business’ success. Financial institutions pay particularly close attention to this section when evaluating grant or loan applications.

Here are a few examples of some long-term assets:

  • Trucks
  • Trailers
  • Larger equipment

As you add your long-term assets to your HVAC plan, be sure to be as specific and detailed as possible. Include the make, year, model, cost, and any other pertinent information about your long-term assets.

Short-Term Assets

In contrast to long-term assets, your short-term assets need to be regularly replaced.

These are a few examples of short-term assets:

  • Tools
  • Inventory
  • Storage expenses

The more short-term assets you own, the less overhead you’ll have. In other words, you’ll have more revenue you can put towards your bottom line.

Pro Tip! Be sure to include ALL of your short-term assets – no matter how tedious it is. Use this as an opportunity to prioritize the importance of actively tracking your inventory.

4. HVAC Services

Use the costs you outlined in the previous steps to help you expand on the HVAC services you can offer.

Ensure that the  HVAC services you offer are in alignment with:

  1. HVAC equipment: what you can afford
  2. Area: what services are in high demand locally

Be sure to specify the seasonality and frequency for each of your services in your HVAC services summary. Also, be sure to label any one-time or emergency services you offer.

5. Market Analysis Summary

Your market analysis summary talks about your ideal client in detail, which helps you to sell more effectively to them.

In this section, you’ll pinpoint your ideal client’s needs, and how you’re going to meet those needs. Plus, you’ll identify some industry trends that can help optimize your marketing.

Use your market analysis summary to improve your sales skills and grow your HVAC business by getting to know your target market and local competition.

Answer these questions to complete your market analysis summary:

  • What does your ideal client look like?
    • Define their age, income, and socioeconomic status
    • Identify their wants and desires (what they care most about)
    • Find out the local target market size (how many locals live/work here?)
  • Who’s your local competition? Are they established HVAC businesses, start-ups, or are you a new pioneer in this market?
    • List your top 3-5 competitors and research their:
      • Prices
      • HVAC services
      • Offerings that  are similar to yours
      • Business sizes (number of HVAC technicians, company size, etc… )
  • Why might your ideal clients choose your competitors over you?
  • How can you make it to where your ideal clients will hire YOU over your competitors?

Be as detailed as you need in this part of your business plan. After all, the more detailed you are, the better you know your clients and can sell more effectively.

6. Business Strategy

All of the legwork you’ve done in the previous sections of your HVAC plan has prepared you for creating a business strategy. In this section, you’ll take everything you’ve already written and tie it together.

Use your business strategy to help you explore the best HVAC pricing structure for you. The main goal of this section is to identify ways to maximize your profits and build the most successful air heating and cooling business possible.

HVAC Pricing

If you want to build a successful, scalable HVAC business, then you have to know how to use pricing to maximize your profits.

As you explore how much to charge for your HVAC services, consider aspects like:

  • Profit goals
  • Taxes and fees
  • HVAC software cost
  • Overhead and HVAC equipment cost
  • Hourly rate (including employee pay)

While the elements listed above are a great place to start, these are just a few of the many factors you need to take into account for pricing. Be sure to work with your business’ financial advisor and/or accountant when determining prices!

7. Implementation Summary

Your implementation summary uses everything you’ve learned to outline how you’re going to effectively implement the right HVAC marketing and sales strategies to get HVAC customers and reach your goals.

Depending on your overhead costs and HVAC pricing, you’ll be able to calculate how many HVAC customers you need to be profitable. Next, you’ll have to explain how you’re going to win those customers.

In addition to word of mouth, consider taking advantage of marketing platforms to help increase awareness of your business. Take a look at a few basic marketing strategies to get your started:

Get more in-depth tips by reading our free HVAC marketing guide.

In addition to marketing, make sure you also include sales forecasts and sales strategies in your summary as well as listing any milestones and competitive advantages.

Your implementation summary will help you strategize how to reach your ideal customers. In turn, you’ll establish an effective plan to help you conquer (and surpass!) all of your goals.

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8. Management Summary

Typically, in the field services industry, labor takes up about 30% of your annual revenue costs. Considering how other industries have about 20% in labor costs, this number is considered high.

Since your labor costs make up a heavy portion of your business, it’s important that it gets its own section of your HVAC business plan to lay it out in full detail.

Your management summary helps you to control your labor costs by streamlining day to day business operations and optimizing time management practices.

Need help managing operations and time? FieldEdge is an HVAC software that automates and tracks these areas and more.

Here are a few essentials to include in your management summary:

  • Your salary
  • Labor costs and employee pay
  • Number of employees needed to reach your goals
  • How many jobs you can realistically finish in a day (especially if you’re flying solo)
  • What’s the minimum job cost/rate that will allow you to reach your profit goals?

If you’re just starting your HVAC business, you may not have enough clients to hire HVAC technicians. However, don’t feel discouraged. It’s normal for new businesses to fly solo for a few years as they gain additional HVAC customers.

When you begin feeling exhausted and overworked, then you know it might be time to start the hiring process. However, if you’re ready to start hiring but you don’t have the budget, then it’s time to raise your HVAC pricing.

Don’t wait, improve prospecting and business operations with FieldEdge! Book your free demo today!

9. Financial Plan

Your financial plan helps you to plan ahead and scale your HVAC business for growth. In turn, you’ll have a full scope of the financial state of your HVAC business and its profitability.

Since the financial plan usually takes the longest to evaluate, many business owners are tempted to rush through this section – sometimes even skipping it altogether. However, businesses that skip their financial plan are more likely to go bankrupt.

Your finances are the lifeblood of your business. If you focus on any portion of your HVAC business plan, then let it be this one.

As you create your financial plan, it’s in your best interest to meet with a trusted financial advisor throughout the process, especially before you finalize it. Your financial advisor will identify any profit holes and will help you to evaluate any potential concerns.

Even though hiring a financial advisor might set you back a bit in your budget, it’s arguably the most important key to building a successful HVAC business. After all, your finances have little room for error and will make or break your HVAC business.

These are a few elements you can include in your HVAC financial plan:

  • Balance sheet
  • Sales forecast
  • Sales Strategies
  • Business ratios
  • Start-up funding
  • Personnel plan
  • Expense budget
  • Break-even analysis
  • Projected cash flow
  • Projected profit and loss

The elements listed above in bold are required, while the rest can help you have the best grasp on your finances. Even though not everything in this list will apply to your business, it’s an important start in creating a great HVAC business plan.

Use Your HVAC Business Plan to Build a Wildly Successful and Scalable Business

At last, you have a complete outline with everything you need to create the perfect HVAC business plan.

  1. Cover Page
  2. Executive Summary
  3. Business Overview
  4. HVAC Services
  5. Market Analysis Summary
  6. Business Strategy
  7. Implementation Summary
  8. Management Summary
  9. Financial Plan

Whether you’re a new or established heating and cooling business, it’s never too late to start utilizing the power of a great HVAC business plan.

And always remember, your HVAC plan MUST be updated on a regular basis. Make sure you plan time for monthly financial revisions and yearly complete revisions.

Use this outline to start creating an HVAC business plan to build a wildly successful and scalable air conditioning business!

Related: Gain Loyal Customers Through HVAC Maintenance Contracts

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