HVAC Business Plan Template
If you want to start a HVAC business or expand your current HVAC company, you need a business plan.
Fortunately, you’re in the right place. Our team has helped develop over 100,000 business plans over the past 20 years, including thousands of HVAC business plans.
The following HVAC business plan template and example gives you the key elements you must include in your plan. In our experience speaking with lenders and investors, the template is organized in the precise format they want.
Example Business Plan For HVAC Businesses
I. Executive Summary
Business Overview
[Company Name] is a new residential HVAC company located in [location]. We will provide numerous services to ensure the residents of [location] remain comfortable in their homes. Some of these services include the repair and installation of furnaces, air conditioning systems, and hot water tanks. Customers can expect speedy and high-quality work paired with friendliness and excellent customer service.
Services
[Company Name] provides numerous services that help to keep the homes of [location] comfortable. These services include the installation and repair of the following:
- Air conditioning systems
- Furnaces
- Hot water tanks
- Air filtration systems
Customer Focus
[Company Name] will primarily serve the homeowner within a 20-mile radius of our location. The demographics of these residents are as follows:
- 261,684 residents
- Average income of $56,000
- 54.8% married
- Median age: 39 years
- 43% homeowners
These demographics indicate that there are numerous homeowners in the area who will need HVAC services for their homes. Customers typically look for HVAC contractors who are friendly, provide great customer service, and charge moderate prices. [Company Name] will provide all of this and develop a loyal client base within the area.
Management Team
[Company Name] is led by [Founder’s Name], who has been in the HVAC industry for [X] years. He started his career working for a local HVAC competitor but eventually broke off as an independent contractor. After years of experience and developing a loyal customer base, [Founder’s Name] is ready to establish his own HVAC company and manage other contractors. His years in the industry have given him the skills and knowledge to run all aspects of the business, including operations, management, and marketing.
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- The company is in an area with high homeownership rates with a good mix of old and new homes that will need HVAC services.
- The founder has a track record of success in the HVAC industry and is a proven expert in the field.
- [Founder’s Name] already has a loyal client base from his time as an independent contractor.
- The pricing will be moderate and competitive with other HVAC businesses.
Financial Highlights
[Company Name] is currently seeking $400,000 to launch. Specifically, these funds will be used as follows:
- Office design/build: $150,000
- Vehicle purchase and maintenance: $100,000
- Equipment and tools: $50,000
- Working capital: $100,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name] is a new residential HVAC company located in [location]. We will provide numerous services to ensure the residents of [location] remain comfortable in their homes. Some of these services include the repair and installation of furnaces, air conditioning systems, and hot water tanks. Customers can expect speedy and high-quality work paired with friendliness and excellent customer service.
[Company Name] is led by [Founder’s Name], who has worked in the HVAC industry for [X] years. He started his career working for a local HVAC competitor but eventually broke off as an independent contractor. After years of experience and developing a loyal customer base, [Founder’s Name] is ready to establish his own HVAC company and manage other contractors.
His time as an employee and independent contractor gave him in-depth knowledge of all sides of the HVAC business (including marketing and operations). He also has perfected his skills and maintained a large, loyal client base. His knowledge, skills, and prior client base will all prove invaluable to starting up the business.
[Company Name]’s History
[Founder’s Name] incorporated [Company Name] as an S-corporation on [date of incorporation]. Soon after, he identified a potential office space and vehicles to grow his fleet. Though the business is currently being run out of his home, all operations will run out of the office space once he has signed a lease. He and the other staff will also conduct all work through company vehicles once they are purchased.
Upon incorporation, [Company Name] was able to achieve the following milestones:
- Found a business location and signed a Letter of Intent to lease it
- Developed the company’s name, logo, and website located at [website]
- Determined equipment and supplies needed
- Identified potential work vehicles to purchase
- Began recruiting key employees
[Company Name]’s Products/Services
[Company Name] provides numerous services that help to keep the homes of [location] comfortable. These services include the installation and repair of the following:
- Air conditioning systems
- Furnaces
- Hot water tanks
- Air filtration systems
All services will be priced based on the effort involved and the equipment required. However, all pricing will be moderate and remain competitive with our competitors.
III. Industry Analysis
As long as people have modern homes, they will need HVAC systems to keep them comfortable. Heating systems are required to keep homes warm in the harsh winters, and cooling systems help people survive the rapidly increasing heat waves. Therefore, the industry will remain strong as long as humans desire to feel comfortable when residing in their homes.
Furthermore, the past few years of weather extremes have shown humans how fragile our species is. It’s hard to live through an extreme heat wave without some form of air conditioning. Therefore, many people who don’t already have good heating or cooling systems will be investing in them to remain comfortable when the weather becomes severe.
Currently, the HVAC market size is valued at $16.54 billion and is expected to grow at a CAGR of 5.6% from over the next 10 years, according to Grand View Research. Therefore, it seems that the industry will still be in high demand over the next decade, which makes this a great time to establish an HVAC business.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the community residents of [location] and homeowners living within a 20-mile radius of our office. The region has thousands of single-family homes that will require our services. About 43% of the population in the 20-mile area owns a home, so we have a large customer base to work with.
Customer Segmentation
[Company Name] will primarily target the following three customer segments:
- [Founder’s Name]’s client base: [Founder’s Name] has already established a solid client base through his years as an independent contractor. We will move these clients over to our company first before marketing to other customer segments.
- Homeowners: As a residential HVAC business, we expect to primarily work with homeowners experiencing concerns with their heating and cooling systems. Therefore, we will put the majority of our marketing efforts into targeting this segment.
- Landlords: Landlords who rent out homes or small complexes can also utilize our services, so we will market to them as well.
V. Competitive Analysis
Direct & Indirect Competitors
The following HVAC companies do business within a 20-mile radius of [Company Name], thus providing either direct or indirect competition for customers:
Western Heating
Established in 1978, Western Heating has been a popular HVAC business for homeowners in the region. They provide any service that can help keep single-family homes comfortable, including the maintenance and repair of furnaces and air conditioning systems. Western Heating has remained a small business over the years dedicated to creating long-lasting connections with its smaller customer base.
Though Western Heating is a popular business, because of its choice to remain small, it does not have a large customer base. With [Founder’s Name]’s client base and his desire to grow the business, we expect to be a much more dominating competitor in the region.
Oak City Heating And Cooling
Oak City Heating And Cooling has been the go-to HVAC business for the apartment owners of [location] for decades. The business provides installation and maintenance services for all one’s HVAC needs, including air conditioning, heating, and air filtration systems. Customers can expect high-quality work and great customer service when they contact Oak City Heating And Cooling.
Though Oak City Heating And Cooling will continue to thrive, we will only experience direct competition from them when serving small apartment complexes and multi-family homes. The company does not serve single-family homes, so we will continue to dominate that market.
Smith HVAC Services
Smith HVAC Services is run by an independent contractor and was in direct competition with [Founder’s Name] during his independent contractor days. He can help anyone who needs simple or straightforward maintenance services and provides high-quality work and long-lasting relationships.
Smith HVAC Services has a list of loyal clients. However, since it is a single-manned operation, those clients are few. Now that [founder’s name] is establishing a business and expanding it, we expect to see very little competition from Smith HVAC Services.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. Those advantages include:
- Management: [Founder’s Name] has been extremely successful working in the industry and will be able to use his previous experience to provide the work and customer service experience. His unique qualifications will serve customers in a much more sophisticated manner than [Company Name]’s competitors.
- Relationships: [Founder’s Name] knows many of the local leaders, business managers, and other influencers within [location]. With his [X] years of experience and good relationships with business leaders in the area, he will be able to get connections to supplies and equipment as well as expand his current customer base.
- Client-oriented service: [Company Name] will put an emphasis on customer service and long-lasting connections to establish trust and loyalty from our customers.
- Pricing: [Company Name] will price its services moderately and in a way that remains competitive with our local competitors.
- Complete list of HVAC services
- Highly trained and capable staff
- Affordable pricing
- Excellent customer service
- Bookkeeping
- Marketing
- Website and social media maintenance
- Customer service
- Hiring and training staff
- Schedule services
- General maintenance functions
- Provide excellent customer service
- Purchase equipment and tools needed for HVAC work
- Installation services
- Repair and maintenance services
- Charge customers for work done and provide flexible payment options
- Administrative Assistant (1 to start)
- Marketing Manager (1 to start)
- HVAC Contractors (2 to start)
- Office design/build: $150,000
- Vehicle purchase and maintenance: $100,000
- Equipment and tools: $50,000
- Working capital: $100,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
VI. Marketing Plan
You can download our Business Plan Template (including a full, customizable financial model) to your computer here.
[Company Name] seeks to position itself as a high-quality HVAC contractor in the industry. Consumers can expect to receive high-quality HVAC services from skilled contractors in [location] who are trained and certified.
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
Promotions Strategy
[Company Name] expects its target market to be family households located within a 20-mile radius of its location. [The Company’s] promotion strategy to reach these individuals includes:
Social Media
[Company Name] will invest heavily in a social media advertising campaign. The company will hire a brand manager to develop the company’s social media accounts and invest in ads on all social media accounts. It will use targeted marketing to appeal to the target demographics.
Major Publications
We will also invest in advertising in selected larger publications until we have achieved significant brand awareness. We will also air commercials that will broadcast during peak TV times.
Website/SEO
[Company Name] will invest heavily in developing a professional website that displays all of the services the company will be able to provide. It will also invest heavily in SEO so that the brand’s website will appear at the top of search engine results.
Community Events
The company will have tables and booths set up at local community events to hand out free flyers, brochures, and other promotional materials to get the word out about the new company.
Commuter Advertising
We will drive attention toward [Company Name] by renting billboard ad spaces along routes or highways that hold heavy traffic. Advertising on heavily traveled commute routes is an opportunity to alert large numbers of residents to our opening.
Client Referral Programs
[Company Name] will create a client referral program that gives discounts to existing clients for every successful referral.
Pricing Strategy
[Company Name]’s pricing will be moderate, so customers feel they receive great value when working with us. Our customers can expect to receive quality HVAC services at a more affordable price than what they pay for larger local HVAC businesses.
VII. Operations Plan
Functional Roles
In order to execute [Company Name]’s business model, the company needs to perform many functions, including the following:
Administrative Functions
Service Functions
Milestones
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s Name], who has been in the HVAC industry for [X] years. He started his career working for a local HVAC competitor but eventually broke off as an independent contractor. After years of experience and developing a loyal customer base, [Founder’s Name] is ready to establish his own HVAC company and manage other contractors. His years in the industry have given him the skills and knowledge to run all aspects of the business, including operations, management, and marketing.
Hiring Plan
[Founder’s Name] will serve as the Owner and Manager of [Company Name]. In order to launch, the company will need to hire the following personnel:
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenue will primarily come from the fees charged for the HVAC services it provides.
The major cost drivers for the company’s operation will consist of the lease payments, equipment, supplies, vehicles and maintenance, labor expenses, and marketing expenses.
Capital Requirements and Use of Funds
[Company Name] is currently seeking $400,000 to launch. The funds will be used for capital expenditures, office build-out, hiring initial employees, marketing expenses, and working capital.
Specifically, these funds will be used as follows:
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of Clients | Average |
|---|---|
| FY 1 | 100 |
| FY 2 | 120 |
| FY 3 | 150 |
| FY 4 | 200 |
| FY 5 | 225 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRETAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
