How to Write an HVAC Company Business Plan

How to Write an HVAC Company Business Plan and Template

The HVAC industry has been growing at an above-average pace over the last several years, which has led to a growing demand for HVAC business plans, HVAC business plan templates, and HVAC proforma financial projections. 

There are numerous reasons for the growth of HVAC business plan requests.  For example, an important niche in the HVAC industry is providing heating/cooling units for new homes built as well as commercial buildings.  With the current shortage of housing throughout the US, new construction starts have been growing consistently over the last several years.  As new construction starts to take place, inevitably, the need for HVAC businesses as well as business plans are correlated in the growth.  This is because HVAC business owners may use their business plans to raise capital as well as to submit to builders for company approval.  No matter the reason for needing an HVAC business plan, having some tips and tricks available for anyone is important.  From this, our HVAC business plan writer has come up with some thoughts and ideas to help business owners write their own HVAC business plan, business plan template, or customize their pro forma financial model (3/22).


Executive Summary for an HVAC Company Business Plan.

The executive summary section for an HVAC company business plan should encapsulate the whole business plan in a succinct manner.  However, for HVAC companies, it is imperative, based on the experience of our business plan writer, that the business owners stress their specialty in the HVAC industry.  For example, some HVAC organizations dedicate their efforts to new home installations.  Other organizations specialize in commercial HVAC installation and repairs.  Still, further, a large portion of HVAC organizations do residential installation and repairs.  No matter which specialty your organization will embrace, make sure to describe it in detail in the executive summary section.

Company Information and Location for an HVAC Company Business Plan.

The location of an HVAC company may be important to include in some business plans but not very important in others.  For example, if the HVAC company will do home installations and repairs, then a central location is important to describe in the business plan.  In contrast, commercial HVAC organizations have more flexibility in their location due to the inherent travel time needed for HVAC services in commercial locations.  From this, our business plan writer recommends significant details for the location section if the location is a competitive advantage.  If not, then a brief statement regarding the location more often than not will suffice.

Also, in the company information section, make sure to include what type of legal structure your company will embrace.  Our business plan writer has found that HVAC company businesses are mostly either limited liability corporations or corporations.  As a limited liability company, business owners are able to protect their personal assets in case something happens with their HVAC business.  However, in some instances, business owners are taxed twice on revenues.  Not a great scenario.  Because of the numerous pros and cons of various legal structures, make sure to consult an accountant or tax attorney for assistance in this matter.

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Product Description and Competitive Advantages

The product and service description section of an HVAC business plan should highlight the services provided by your organization.  If your organization specializes in residential homes, then your HVAC services may include repairs, installations, and expansions of existing central heat and air systems.  However, in certain circumstances, HVAC business owners will target homebuilders.  As a result, these types of business plans should describe new construction installation and warranty call specializations.  On a final note, depending on specialty, make sure to describe your competitive advantages from the perspective of the consumer, whether it be a home builder or a home resident.

Target Market for an HVAC Business Plan Template

The target market for an HVAC business plan depends on the HVAC company's specialization.  To illustrate, if an HVAC company specializes in commercial air conditioner installation and repair, then the target market would be building owners and small business owners.  In contrast, home residential HVAC business plans may need to explain a geographic location as compared to a specific demographic.  An example of this would be an HVAC company servicing homeowners within a 37-mile radius of the organization's location.  No matter the target market, always specifically states the entity in specific terms and justify your reasoning for selecting the target market.

Industry research for an HVAC Business Plan

The industry research section for an HVAC company should almost always start with a national review of the industry.  Specifically, find statistics related to the HVAC industry.  To illustrate, the current market size of the HVAC industry is approximately $240 billion as of 2019.  Also, industry experts project over 150 million HVAC units will be sold within the next three years.  Finally, another important statistic to examine might be the HVAC industry experts anticipate a 13% job growth over the next several years.  These are just some of the many statistics that may be included in an HVAC business plan that supports the need for the expansion or startup of a business.

Owner and Management Section

The HVAC owner and management section of the business plan, based on research from our business plan writer, should almost always start with the professional experience of the HVAC business owner.  Professional experience would include previous job work, professional associations, and other job-related qualifications.  Once the solid foundation is set for employment history, then the HVAC owner should describe their educational achievements, such as which school they receive their HVAC certification.  Finally, the section should then summarize the motivations behind starting an HVAC company.  Some motivations may include a loyal customer following or new opportunities in the marketplace.

Funding Request for an HVAC Business Plan or Template

The funding request section of an HVAC business plan should start by explicitly stating the dollar amount needed to start the company.  Once a dollar amount is identified, then the business owner should specify how much of the funding will be an equity investment and how much of the money will be needed from a loan or partner investment.  Once the debt and equity segments of the funding are described, then the business owner should break out the categories into how the money will be spent.  Some popular HVAC business plan categories would include equipment, truck, advertising, office and storage space, and working capital.  Once this is complete, the business owner should then total up the dollar amount of each category and display the number at the bottom of the page.  Keep in mind, that the total funding amount requested at the top of the page should be identical to the totaled dollar amount of all categories at the bottom.  The simple structure shows an alignment between the funding request need and the dollar spent.

Financials and Financial Projections for an HVAC Company.

Every good HVAC company business plan or business plan template will have in-depth financials describing how revenues will be generated, the cost involved, and potential profits.  When constructing financial projections for an HVAC company, make sure to start with daily or weekly sales.  Further, break the sales into installations and repairs.  Once the daily revenues are calculated, then multiply this number by the number of days worked in the month.  This will result in an HVAC company's monthly revenue projection.  At this point, the business plan writer should then deduct labor costs, operating costs, and variable costs.  The end result is a basic HVAC financial projection with adequately described revenues, costs, and finally, profits.  If needed, make sure to apply growth rates to the revenues and costs when expanding this structure to encapsulate one to five years of profits and revenues.

Hopefully, these insightful tips and tricks for writing a business plan were helpful.  As always, if you need help with a business plan or financial projections, just send us an email or give us a call. 

Author: Paul Borosky, Doctoral Candidate, MBA., Author

Owner of: Quality Business Plan, and Quality Business Consultant.

Date: 1/18/2022