When you start an HVAC business, you’re signing yourself up for all the challenges and excitement that comes with running a company in a high-demand industry. Constructing a solid business plan is one of the most important foundational steps.
Writing a business plan might sound a bit dry on the surface of it, but this is far from the truth and in fact is one of the most vital things to get right if your business is to succeed. A robust business plan will be essential for you to maintain a solid stream of customers throughout the year where the demand for HVAC services is often seasonal. Research has shown that writing and following a strategic business plan can double your chances of long-term success.
Keep reading to learn about the basics of business plans and how to write one for your new HVAC business.
A business plan is essentially a written document that outlines your business goals and the methods and time frame you plan to achieve those goals. Technically, writing a business plan isn’t essential when starting an HVAC business. What it does provide you with however, is a considered framework right from the beginning that will help you achieve business growth and secure business funding.
A well-structured business plan gives you a sturdy roadmap to follow, keeping you on track to reach specific goals and milestones. It should include a good description of who you are, what you do, why you do it, and how you plan to do it.
For example, if you plan to use a particular HVAC Software for business management purposes, that may give your business a competitive advantage over those who don’t, so would be beneficial to state in your plan.
Ultimately, your business plan can be the difference of you not joining others in becoming part of the 20% of startups that fail within their first year, the 30% that fail within their second year, or the approximate 50% that fail by the end of the fifth year.
Writing a business plan is relatively straightforward once you understand how to do it. Here are the five key elements that you should include:
This is also called a market analysis — a part of your business plan that requires the most extensive research. Your industry analysis should look at other businesses in the market to understand your competition. Here you’ll point out how you differ and what advantages you have. Perhaps you’ve discovered that many similar services use outdated technologies, allowing you to focus on providing a more efficient service. Or maybe by using robust systems like a templated HVAC estimate for consistency and a reduction in human error, will enable you to offer elevated customer satisfaction in relation to your competitors.
The HVAC industry was valued at USD$240.8 in 2019 and is expected to reach USD$367.5 by 2030. So, it’s clear that it’s a vast and competitive marketplace. At this point, you should clarify where you position yourself within the industry. For instance, whether you’re providing commercial or residential HVAC services and how you plan to solidify your place in the market.
This is the introduction to your business plan and should act as a summary of everything covered. It should give a brief overview of your company, what it does, its leadership, finance, operations, and the number of employees. If you’re seeking funding, it’s in your best interest to mention how much you’re looking for and for what purposes.
You should also include your mission statement, goals, and anything else that makes your business stand out from the competition. Remember that the executive summary appears first, but it’s often easier to write it last.
In this section, go into more detail about the business. Here, you’ll consider why you started the business and what you plan to provide and offer your customers. Clearly define your mission statement and describe what makes you different.
You might have experienced bad service from another HVAC company in the past and decided to start your own business to combat these failings. For example, you might have encountered a company that provides a poor-quality service at an extortionate price. Maybe you aim to provide the best heating and cooling services at an unbeatable price to make HVAC systems more widely available.
Whatever the reason, it will be valuable to include this for reference in your company description.
Every business must have a marketing strategy – and it’s ok for this to change over time. This part of your business plan should explain how you plan to advertise your business and attract customers. You might even include several small business marketing strategies that you intend to trial as you discover what works best for you.
Lay out the plan for your business’s financial and organizational structure. Ensure you include a breakdown of your budget, income, and cash flow — detail where all funds go to or come from and your expected income and expenses.
Especially if you’re trying to secure funding, it’s a good idea to create a five-year financial statement. This gives potential investors a good grasp of how their money will be used and how soon they can expect a return on their investment.
As you can see, writing a business plan for your HVAC business can be beneficial both short and long term. Additionally, they’re not unreasonably challenging to create, and the process will help you really think about what it is you aim to achieve. If you follow the steps as they’re described in this article, along with some additional research, you should be left with a solid business plan to give your business an excellent starting point and roadmap for a sustainable and long-term future.
- “A business plan creates 30% greater chance of growth”, Source: https://excellentbusinessplans.com/a-business-plan-creates-30-greater-chance-of-growth/
- “The True Failure Rate of Small Businesses”, Source: https://www.entrepreneur.com/article/361350
- “HVAC market size globally 2030”, Source: https://www.statista.com/statistics/414960/global-market-for-commercial-and-residential-hvac-systems/