The Importance of a Business Plan for HVAC Companies

When you have your own HVAC business, that means you attune yourself to the seasonal ups and downs of running this type of business. The first step toward managing this business’s peaks and lulls involves carefully crafting an HVAC business plan. If you didn’t create your heating, ventilation, air conditioning, and refrigeration plan at the start of your business, now is the time to construct one.

Heating and air-conditioning contractors are part of a $96 billion industry. Between 2015 and 2020, revenues grew by 2.9%, with a 3.1% growth for HVAC businesses. When you consider these statistics, it’s no wonder why a business plan is vital to running your HVAC company effectively and smoothly. Your business plan helps you automate your business, sell more maintenance agreements, and complete more follow-up services.

In this guide, we focus on the elements of an HVAC business plan, details about your HVAC marketing plan, how that plan aligns with your business plan, your company’s business model, and where to find business plan templates.

What Do Companies Need an HVAC Business Plan?

It isn’t uncommon for some small business owners to get lost in their daily operations without stopping to look at the big picture. When you develop an HVAC business plan, that forces you to take a step back from operations and focus on creating your business’s goals. For example, you’ll be taking the ideas that float around in your mind and put them into action.

This plan is an excellent tool for solidifying your goals and determine how to achieve them. Plus, if you need to find an investor to help achieve business growth, creating this plan enables you to provide them with a detailed document.

Essentially, this plan’s design is to provide you with strategies for the next steps for taking your company to the next level. When you use your business plan, you can:

  • Create a roadmap you can travel toward success.
  • Develop marketing and sales strategies
  • Identify any potential business threats and weaknesses.
  • Maintain focus on the crucial parts of your business
  • Raise the funds your company needs to operate successfully
  • Set achievable and realistic goals

The Elements of an HVAC Business Plan

The United States Small Business Administration (SBA) describes a business plan as a roadmap that an HVAC business owner can use to guide them throughout their early years. Your HVAC business plan is an essential tool to use for your HVAC company’s management and growth.

An HVAC business plan is also an excellent tool when a new business wants to secure funding. The materials you include in this document show investors and lenders how your company operates and the current financial situation. That way, they can see that you’ve carefully thought out your goals and mission statement while making a compelling case for funding, and those funds can contribute to the success of your HVAC company.

Because this plan is involved, it isn’t uncommon for some HVAC contractors to feel overwhelmed by the process. You can streamline this process a bit by familiarizing yourself with the elements of an HVAC business plan. Then, spend some time tackling each section, ensuring you include as much information as possible. Here are examples of the areas your plan should include:

Executive Summary

When writing your executive summary, you’re presenting a brief overview of your HVAC business. Use this section to detail the products and services your company offers, its service location, who manages it, and the number of employees. This section should also contain your company’s financial projections and its funding requirements.

Even though your plan’s executive summary is the first section, some find it easier to write out this information last. The main reason is that it’s easier to highlight data in this section after writing out the rest of the sections. Ideally, your executive summary should be no longer than one or two pages.

Company Description

Use this section for diving deeper into your company. The information you should include in this document should contain the following:

  • The mission of your HVAC company
  • Your business’s purpose and the problems it intends to solve
  • Your company’s target audience, customers, and market
  • What makes your HVAC company stand out from the competition (unique selling proposition)
  • Your company’s management team
  • How you and your team define and measure success

Market Analysis and Industry Research

I want to give you some fair warning that when you complete this section of your HVAC business plan, it’s going to feel like the most significant homework assignment you’ve ever done. The main reason is that you’re researching your business’s intended market. You’ll accomplish this by:

  • Identifying trends in the HVAC industry
  • Gather data about your competition
  • Determine how your HVAC business can outperform or address unmet needs
  • Collect information from market research companies
  • Complete a market analysis of trending stories in HVAC industry trade publications
  • Go over reports available in general business publications.
  • After conducting this market research, you’ll summarize your findings within this section of your business plan.

Legal Structuring

In this section, you’re describing the legal structure of your HVAC business. That means identifying if it’s a corporation, LLC, partnership, or sole proprietorship. This section also explains how you intend to organize the business. It’s a good idea to create an organizational chart depicting which of your team members manages what. You might also want to include CVs (curriculum vitae) or resumes for your team’s key members.

Products and Services Provided by HVAC Contractors

This section is all about the products and services that the HVAC contractors on your team provide. For example, if your HVAC company specializes in residential homes, you might outline services like expansions, installations, maintenance, and repairs.

However, if your target market is homebuilders, this section describes how your company completes new construction installations and warranty service calls. It’s also a good idea to outline details about how homeowners perceive your competitive advantages.

Target Market

Before determining your HVAC company’s target market, you must figure out your specialties. For example, if your HVAC business specializes in commercial air conditioning systems, your company targets small business owners or other building owners.

However, if your company’s specialty is residential homes, your business plan might need to explain demographics and their relationship to a specific geographic location. For example, your company might provide HVAC service to homeowners who need HVAC systems within a 50-mile radius.

Product Pricing

An incredibly challenging step when starting an HVAC company is setting prices. The main reason is that it’s challenging to achieve the minimum attractive return rate (MARR) while simultaneously attracting customers toward that rate. Start by researching the competition’s rates for the same products and services you’re offering. Then, set your price ranges similar to that range.

Marketing Strategy

Do you know how to bring awareness for your HVAC business within your target market? Do you intend to get new customers through referrals, or do you want to get in front of them using social media and a website?

Even though word-of-mouth referrals are the most cost-effective advertising form, that doesn’t mean you don’t have work to do. You’ll use this section to provide details regarding your visions for your company’s marketing strategy. Prepare yourself for adjusting this marketing and sales strategy as your company’s needs change.

Funding Requests for Your HVAC Company

Begin this section of your plan by outlining the specific dollar amount your HVAC startup needs. After identifying the dollar amount, you’ll need to specify how much of this funding is:

  • An equity investment
  • A partner investment
  • A loan

After describing the debt and equity segments, it’s time to break down the spending categories. For example, those expenses might include funding for:

  • Advertising
  • Equipment
  • Office materials and supplies
  • Storage space
  • Trucks
  • Working capital

Once you complete these categories, you can add up the total dollar amount for each and include this data at the bottom of the section. Creating this structure shows how your company aligns between your funding requests and the expenses you have.

Financial Projections

Every business plan details in-depth financial projections about its intended revenues, potential costs, and projected cash flow. Constructing your company’s financial predictions starts by detailing your daily or weekly sales. Then, take those projections and break them down further into installations and repairs.

After calculating daily revenues, multiply that number by the number of days your company works each month. The result of that equation is your company’s monthly revenue projections. Take that number and deduct for labor, operating, and variable costs. Then, you’ll have a rudimentary financial projection that adequately outlines your company’s revenues, costs, and profits.

About Your HVAC Company’s Marketing Plan

The marketing strategy section of your company’s business plan involves considering several factors before writing a marketing plan. Your company’s target audience is a critical component when determining how your marketing strategy shapes up. Ask yourself the following:

  • Does your HVAC company cater to commercial real estate or residential customers, or both?
  • Which specific types of businesses, facilities, or homes do you intend to serve?
  • What is the expanse of your geographic servicing area?

Before you can create a marketing plan, you have to have answers to those questions. You’ll also need to think about the best ways for advertising your HVAC business. In this stage of creating your company’s marketing plan, ask yourself the following questions:

  • Do you intend to list your company in home improvement business directories, including Angie’s List and HomeAdvisor?
  • When it’s affordable for your company, do you plan on placing television ads?
  • What ideas do you have for incorporating social media into your strategy?

When things aren’t as busy for your company, that’s an excellent time to brainstorm creative promotional ideas. That could include participating in event marketing, including home and garden or trade shows. Or you might consider boosting sales by hosting a contest or offering a special financing agreement. Your best recourse is to experiment with several different strategies and determining which fits best into your marketing plan.

While providing quality services to your customers is an integral part of running your HVAC business, so is ensuring you can reach them effectively. That involves reviewing your marketing efforts to determine where you’re effective or lacking.

How to Create a Marketing Plan that Aligns with Your Business Plan

Now it’s time to run through several concepts focusing on constructing a marketing plan for your HVAC business. Ultimately, you’re creating a plan that helps you achieve long-term goals. Here are HVAC marketing statistics for the past two years and projections moving forward:

We all want our HVAC companies to prosper, so that means ensuring the business plan and marketing plans don’t remain stagnant. That means you can’t create these plans and then never touch them again. Instead, you have to determine what’s working and what adjustments you need to make for what’s not working.

Let’s look at several tips for creating a marketing plan and ensuring that it aligns with your business plan.

Get to Know Your Target Audience

Expanding your customer base is more than knowing how to install an air conditioner or heat pump. While those skills are essential to doing your job, you also have to understand how to hone in on your target customer. What are their challenges, needs, and wants? How can your HVAC company make their lives better? When you determine who your target customer is, you can create a buying journey that helps with their aspirations, frustrations, needs, and wants.

Improve Your Company’s Website

The last thing you want your current or potential customers to see is a website featuring a poor design. When they arrive at your site, it should be easy to navigate and full of correct information. For example, if they’re looking for ways to improve their indoor air quality or for systems featuring energy efficiency, your site should lead them to that information.

Request Customer Reviews

One of the best strategies for generating new business is to ask your previous customers to post reviews. Not only do these reviews help generate on-going work, but they also spread new information about your HVAC business to new customers. Your customers can post reviews on sites like Yelp, Angie’s List, HomeAdvisor, and more.

Use these reviews to help boost your company website’s SEO. These reviews also play an integral role in building trust among your current and potential customers. For example, when customers see an honest opinion or review, that can be just as effective as receiving word-of-mouth referrals.

Tackling Customer Service Strategies

The key to growing a successful HVAC company is offering high-quality services. Measuring this success sits directly with your customers. For example, word gets around quickly if you overcharge, have contractors with a negative attitude, keep worksites messy, or don’t show up for appointments. Providing the highest customer service level is an excellent way of leaving customers with a good impression of your business.

Don’t Ignore SEO

When potential customers Google the phrase, “HVAC businesses near me,” your company’s website should be on their first page of results. Even though you receive referrals from past customers, there’s an entire segment of potential customers with no access to or contact with your existing customer base. That’s where the importance of SEO comes into play.

While it doesn’t seem to relate to how your HVAC company operates, your digital footprint is either a dealmaker or deal-breaker for your HVAC marketing plan. Because algorithms change frequently, SEO strategies can be challenging. Incorporating SEO into your marketing strategies is a long-term goal that requires on-going work to ensure your company continues showing up in the top results.

Your Company’s Business Model

Understanding the importance of an HVAC business plan and its alignment with a marketing plan is one thing. But what about your company’s business model? Constructing your company’s business plan involves developing a business model that features the following components:

Accessories and Indoor Air Quality

You can separate your HVAC company from competitors by ensuring your team offers accessories your customers need for comfort. When you and your team listen to your customer’s needs, you can better understand how to provide the accessories they need.

Demand Service Calls

An excellent opportunity for putting your company in front of its target customer is by answering demand service calls. Ensure every team member follows proper protocols, goes above and beyond, and exceeds the customer’s expectations.

Maintenance Agreements

One of the essential aspects of a successful HVAC business is a maintenance agreement. It’s critical to this business model’s success for customers to understand their relationship with the technician and the importance of regularly scheduled HVAC maintenance.


When the time is right, your target customer is ready to choose your company’s products and services. That means, when it’s time to replace equipment or complete maintenance, they won’t look for a different company.

Replacement Sales

Offering replacements helps create a delineation between repairs versus replacements in your company’s business model. When homeowners understand when a replacement is necessary, they’ll be one step closer to achieving year-round comfort solutions.


Educate your customer about the tune-ups your company offers and how you’re ensuring their systems are running optimally. Your team should complete a tune-up every time they’re on a service call to continuously build a trusting relationship with your customers.

Following this business model engages your customers and team members, allowing your company to survive pivotal moments like economic downturns or weather conditions.

The Best Time to Review Your Plans

It’s a good idea to review your HVAC business and marketing plans at least once annually. However, experts suggest updating or at least thinking about your plan should happen more often. Several factors trigger an update to these plans, including:

  • Taking on a new partner or co-owner
  • Adding to or changing locations
  • Changing your company’s products or services
  • Competition gaining the advantage
  • Financial declines
  • Growing rapidly
  • Missing goals
  • The need to seek funding

How to Review Your Business Plan

Start by looking at your HVAC company’s mission statement, products, service offerings, and marketing strategies. Then, compare that information against your HVAC company’s performance for the past year. Ask yourself the following questions:

  • Does your company adhere to its original mission statement?
  • Has the HVAC industry experienced unforeseen developments?
  • Has your company experienced unforeseen business opportunities?
  • Did other surprises happen, causing you to rethink your mission statement?

Next, analyze your company’s customer feedback, competition, and sales patterns. Has your customer base bought items you predicted would bring in the highest revenues over the past year? Have you noticed that your customers face new challenges or problems that need addressing? Do you believe you’re at risk of losing your current or potential customers because the competition offers solutions that you are not?

It’s also essential for you to complete a periodic financial analysis for your company. Because companies typically generate monthly financial statements, it’s a good idea to review this part of your business plan every month.

Reviewing your business plan should also include tracking your installation sales, service agreement, service calls, and other sales to determine the revenue and profit from those categories. For example, if you fall short during a specific timeframe, consider adjusting your marketing and sales strategy. You can also adjust your products and services to generate additional revenue.

Example of the Components of an HVAC Business Plan Template

Cover page

  • Title of HVAC business plan (or company name)
  • Prepared by: [Your name]
  • Email address
  • Date

Executive Summary

  • Objectives
  • Unique Selling Point
  • About Us (Company Summary)
    • About the Company Owner
    • Why You’re Launching This Business
    • How You Intend to Start This Business

Services & Pricing

  • One or two paragraphs detailing your company’s specialties
  • Examples of services:
    • Inspections
    • Installations
    • Maintenance
    • Repairs

Target Market

  • One or two paragraphs


  • One or two paragraphs

Marketing Plan

  • Phase One
  • Phase Two

Operational Plan

  • One or two paragraphs

Key Team Members

  • Names, short biographies, and photos or key team members

Financial Plans

  • Create a table featuring the company’s startup costs, including a description of the cost, dollar amount, and percentage of total—example:
    • Commercial space
    • Licenses and permits
    • Office equipment
    • Other expenses
    • Startup fund available
    • Total startup fund requirements
  • Create another table featuring the projected profit and loss, including a description and sections for up to three years:
    • Sales
    • Less cost of sales
      • Materials and equipment
      • Labor
    • The total cost of sales
    • Gross profits
  • Less the expenses
    • Wages
      • Utilities
      • Insurance
    • The total cost of sales
    • Net Profit (or Loss)
  • Create a third table featuring your company’s projected balance sheet for up to two years:
    • Current Assets
      • Cash
      • Accounts Receivable
      • Prepaid Expenses
      • Inventory
    • Total for Current Assets
    • Current Liabilities
      • Accounts Payable
      • Accrued Expenses
      • Unearned Revenues
    • Total for Current Liabilities
    • Long-Term Liabilities
    • Other Long-Term Liabilities
    • Total for All Liabilities
    • Shareholder’s Equity
      • Equity Capital
      • Retained Earnings
    • Total Shareholder’s Equity
    • Total Liabilities and Shareholder’s Equity

The Bottom Line

It’s exciting to start an HVAC company, especially during the early years. While it’s tempting to let that enthusiasm continue driving you forward, it isn’t enough. If you want your company to have staying power, you must spend the necessary time developing an HVAC business plan. When doing so, remember that this plan isn’t supposed to be a static document. Instead, it serves as a framework that guides the launch or restructuring of your business. That way, you can use this plan to continue building and reorganizing your business as it evolves over the years.

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