Interested in being a part of HVAC business, but curious to know how much do HVAC business owners make? We got you!
The HVAC industry is valued at USD 17.15 billion today, and with unending demand for HVAC services by both residential and commercial owners, this could be a profitable business opportunity for you.
If you want to find out the revenue, profit margin, and investment required to start an HVAC Business, among other important things, then keep on reading!
What is An HVAC Business?
An HVAC business offers services for ventilation, air conditioning, and heating units across residential and commercial properties.
A professional HVAC technician is trained to offer the maintenance, repair, installation, and replacement of these units.
This type of job can include on-site visits or emergency repair when the HVAC system fails or incurs a problem.
This is why HVAC business offer both on-call services and services during normal hours.
3 Types of HVAC Businesses
The technical knowledge of HVAC and its application is similar irrespective of the type of HVAC business you are in. However, the demand and pay could vary.
Here are the three types of HVAC businesses:
- Commercial: This type of service is catered to large commercial properties. Here the units are usually larger and even industrial in size, which allows you to make more money.
- Residential: In this type, you are supposed to offer HVAC services to homeowners and families living in single homes, apartments, etc.
- HVAC contracting: HVAC contracting focuses more on implementation and installation. Construction sites or builders might hire you to develop and install an HVAC plan on the site.
Job Outlook For HVAC Business
Before entering an industry, it is important to know its job outlook. Is the HVAC job in demand? Will there be a need for HVAC jobs in the future?
- According to the U.S. Bureau of Labor Statistics, the demand for HVAC is projected to increase by 5% from 2021 to 2031.
- This figure is more than twice the growth across all occupations.
How Much Does it Cost to Start an HVAC Business?
The startup cost for an HVAC business range from $10,000 to $25,000.
Down payment on a van or truck, HVAC education, and certification and tools are some of the major expenses in starting this business.
A list of items that are required to start your HVAC business successfully includes:
- Hammers
- Pliers
- Screwdrivers
- Tape measure
- Flashlight
- Drills
- Crescent wrench
- Pipe wrench
- Coil fin straightener
- Core removal tool
- Multimeter
- Thermometers
- Nitrogen regulator
- Pumps
- Thermal imaging tools
- HVAC load calculator
- Psychrometer
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Setting up a business name and corporation | $150 – $200 | $175 |
| Insurance | $100-$300 | $200 |
| Business licenses and permits | $100 – $300 | $200 |
| Business cards and brochures | $200 – $300 | $250 |
| HVAC training and certification | $5,000 – $15,000 | $10,000 |
| Website setup | $1,000 – $3,000 | $2,000 |
| Tools | $2,000 – $3,000 | $2,500 |
| Truck or Van down payment | $1,500 – $3,000 | $2,250 |
| Total | $10,050 – $25,100 | $17,575 |
Pros & Cons of HVAC Business
Pros of HVAC Business
- Steady demand.
- Profitable business.
- Excellent job prospects.
- No threat of automation or outsourcing.
- Rewarding work.
Cons of HVAC Business
- Might have to work at odd hours sometimes.
- Requires professional certification or courses.
- Requires necessary experience.
- Physically demanding.
How Much Do HVAC Business Owners Make?
The earnings of HVAC business owner varies depending on their degree, experience level, specialization HVAC tech hold, etc.
According to Ziprecruiter, however, an HVAC owner makes $63 an hour or $131,526 a year on average.
The top HVAC owners make as much as $399,000 and as low as $14,000 a year.
However, the majority of them in the United States make between $39,000 (25th percentile) to $181,500 (75th percentile)
Top 10 Highest Paying Cities For Hvac Owner Jobs
Sunnyvale, CA, is the highest paying city for HVAC jobs, where the hourly rate hovers at $79.33, followed by Livermore, CA, which offers $78.38 an hour, and Kent, WA, for $76.47 an hour.
| City | Annual Salary | Hourly Wage |
|---|---|---|
| Sunnyvale, CA | $164,997 | $79.33 |
| Livermore, CA | $163,040 | $78.38 |
| Kent, WA | $159,053 | $76.47 |
| Vacaville, CA | $158,636 | $76.27 |
| Hillsboro, OR | $156,632 | $75.30 |
| Cambridge, MA | $156,195 | $75.09 |
| Manhattan, NY | $155,939 | $74.97 |
| Rochester, MN | $155,114 | $74.57 |
| Arlington, VA | $154,684 | $74.37 |
| Santa Rosa, CA | $154,435 | $74.25 |
HVAC Business Profit Margin
Usually, the profit margin for the HVAC business hovers between 2.5%-3.5%.
However, successful businesses can improve their profit margin and make it as much as 10%, and HVAC businesses performing exceptionally well can keep a profit margin of as much as 25%.
Only 5% of HVAC businesses have a profit margin of more than 10%, and if you want to attain this level, then you can do so.
Tips To Maximize HVAC Business’s Profit
If you want to maximize your profit margin as an HVAC business owner, then here are some tips that can be really useful for you:
Analyze your expenses
It is imperative that you are well aware of all the expenses of your HVAC business. The major expenses for an HVAC business include the following:
- Overhead costs
- Total revenue
- Labor costs
- Gross and net profit for each department
Having a clear idea of these expenses will help you understand your HVAC business expenses and will allow you to make room for changes to maximize your profit margin.
Try Increasing Your Revenue
You must find ways to increase your HVAC revenue to increase your profit margin. Here are some ways that can help:
- If you have high demand, then you can charge more for same-day service.
- You can introduce performance-driven incentives for your employees that will prompt them to work better, which will improve customer service and allow you to earn more ultimately.
- Come up with recurring service agreements or subscription plans. This will allow the customer to save in the long run & allow you to get repeated business.
- Start a referral system. This will help you to secure new customers and keep the old ones.
- Increase the prices of your service as per the changing demands and inflation in your country.
Reduce Your Costs
You can raise your HVAC business profits by simply reducing your costs. For this:
Add Extra Value
When you offer something extra to your customer, it gives them a reason to choose you over other contractors.
For example, you can offer priority service or improve your warranty terms. This will allow you to attract more customers while still keeping your expenses in check.
Focus on Customer Retention
Did you know it can cost you five times more to find a new customer? Hence focus on customer retention to avoid additional costs. For this, you can:
- Send out newsletters.
- Offer loyalty discounts.
- Offer free annual inspections, etc.
How To Start a Successful HVAC Business?
Tips For Starting an HVAC Business
Wrap Up
HVAC is an evolving industry offering lots of opportunities on a plate to HVAC owners.
The starting salary for HVAC owners might not be a lot, but like with any other field, you can earn a lot of money from this business as you gain more experience.
In this guide, we tried to answer all the questions that you might have regarding how much HVAC business owners make; we hope you found this useful.
FAQs
Is HVAC business profitable?
Yes, the HVAC business is quite profitable. With a few years of experience, you can easily charge as much as $63 an hour.
Even at the start, you can start small, hire technicians later, and earn a six-figure income as you grow in this business.
How much should I pay my HVAC employees?
The average pay for HVAC employees is $25 an hour. However, you should check the standard pay for HVAC employees in your area and pay them accordingly.
Can I become a millionaire with HVAC business?
The HVAC business has steady demand, and so if you establish yourself with your skills and service in this industry, then sky is the limit for you.
Amit Gupta is an experienced expert in digital marketing and co-founder of DrFranchises. With more than 11 years of knowledge in franchise digital marketing, SEO, email marketing, and social media marketing, Amit has helped many brands achieve incredible success online. As a passionate entrepreneur and owner of 7 franchises, he continues to study franchise models, looking at costs, revenue, and profitability to guide brands toward profitable growth. When he’s not working on digital marketing, Amit enjoys spending time playing with his beloved dog.