How to Write an HVAC Company Business Plan
The HVAC industry has been growing at an above-average pace over the last several years. There are numerous reasons for the growth of HVAC revenues. For example, as more homes are built, these homes need HVAC, also known as central heat and air, installed and maintained.
This is just one of many segments of the industry that has contributed to the growth of HVAC organizations.
However, as the demand for HVAC companies grows, new competitors will be entering the market, and established organizations will be seeking to expand operations. Regardless if you are a new competitor or an established company, the need for an HVAC business plan is almost always a certainty. Because of this need, our business plan writer has compiled some helpful hints for business owners seeking to write their own HVAC business plan.
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, 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.
The location for 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.
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 home resident.
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 organizations 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 currents 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 expansion or startup of a business.
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
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, 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.
Every good HVAC company business plan 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