How to start an HVAC business

ENERGY STAR advises homeowners to have the cooling system checked in spring and the heating system in fall, because contractors get busy once summer and winter come. That advice is your calendar. Book tune-ups in the shoulder seasons and you meet customers before their system fails, not after.

Some states license HVAC work through a mechanical board, some through the contractor board, and some leave it to cities. Gas piping and electrical connections can bring in other licenses. Replacements usually need a permit, and the permit is what an inspector will ask about.

The EPA says its rules under Section 608 of the Clean Air Act require technicians who maintain, service, repair or dispose of equipment that could release ozone-depleting refrigerants to be certified. The test has a core section and three types: Type 1 for small appliances, Type 2 for high-pressure equipment and Type 3 for low-pressure equipment. Residential split systems fall under high-pressure equipment, and many techs take all three for a universal card.

The EPA does not issue the cards itself. You test with an EPA-approved certifying organization, which issues the card. Suppliers ask to see it before they sell you refrigerant.

The SBA lists the launch steps in this order: pick a location, choose a structure, choose a name, register, get federal and state tax ID numbers, apply for licenses and permits, open a business bank account, and get insurance. For a HVAC business working out of a truck, the location is usually your home address and the area you will serve.

• Structure. A sole proprietorship is the simplest. An LLC keeps the business separate on paper. Ask an accountant which fits your state and your plans.
• Tax ID. The IRS gives out an employer identification number (EIN) online, and says you never have to pay a fee for one. Websites that charge for an EIN are not the IRS.
• Self-employment tax. The IRS lists the self-employment tax rate as 15.3%: 12.4% for Social Security and 2.9% for Medicare. Income tax comes on top, so set money aside from every job.
• Bank account. Open it before the first payment lands, so every dollar in and out is easy to find at tax time.

Your name goes on the truck, the invoices, the Google profile and the yard signs, so pick it once. The free hvac name generator gives 36 ideas for your town and style, each with a domain idea, and lists the checks to run before you commit: your state's business name search, a federal trademark search and the domain itself.

The SBA describes general liability insurance as cover for financial loss from bodily injury, property damage, medical expenses and defending lawsuits. It says businesses with employees are required to carry workers' compensation, unemployment and disability insurance, and some states ask for more.

HVAC work mixes gas, electricity and roof or attic work, so ask your agent about general liability limits that match the jobs you take, commercial auto for the van, and tools and equipment cover. Builders and commercial customers will ask for a certificate of insurance, and some require them to be named on it.

No total here on purpose. What you spend depends on what you already own, new or used, and how much work you plan to take on. Price your own list with a local supplier, then put the numbers in the startup cost table of the free business plan template, which adds them up for you.

• A van with shelving and a way to carry and secure refrigerant cylinders
• Gauges (analog or digital), a vacuum pump, micron gauge and recovery machine with tanks
• Electrical meters: a multimeter with clamp, and a non-contact tester
• A combustion analyzer for gas furnace work
• Hand tools, a brazing kit, a nitrogen setup and a ladder that fits your van
• A stock of common parts: capacitors, contactors, igniters, flame sensors, filters

The recovery machine, vacuum pump and gauges are the core spend after the van. Your EPA card is required to buy refrigerant, so get certified before you stock the shelf.

Work out your hourly cost first: the pay you need, insurance, the van, tools and software, divided by the hours you can bill. The free HVAC labor rate calculator shows each step. Then price common repairs as flat prices, so a capacitor swap costs the same at 2 p.m. and 9 p.m. except for an after-hours charge you set.

For replacements, size the system before you price it. The HVAC load calculator gives a rough first number, and a permit-grade load calculation settles it. Price maintenance plans with the maintenance plan calculator so two visits a year cover your time with room for the plan discount.

• Be there in the rush. When it is the first hot day, the shop that answers gets the job. Koira answers on your number and books by text when you are in an attic.
• Tune-ups as the way in. Advertise a spring cooling check and a fall heating check. Every tune-up is a chance to sell a plan.
• Google and reviews. A profile with your service area, real photos and steady reviews. See SEO for HVAC.
• Your past customers. When the season turns, Koira texts and emails the people you have worked for with one tap to book.
• Property managers and small commercial. Rooftop units and rentals bring steady service work.

Take a deposit on replacements, since equipment is a large cost up front, and offer financing so a homeowner with a dead system can say yes today. For service calls, send the invoice when you finish and let them pay at the door. Then put them on a maintenance plan: Koira bills it and books the two visits.

The first hire is usually an install helper for replacement season. Every tech who handles refrigerant needs their own EPA 608 card, so build that into hiring. Track how many plans you have: each one is two visits you know are coming. Read how HVAC shops run on Koira.