Varied climatic conditions in recent times and people’s need to maintain a stable temperature inside their house or office have contributed to the bloom of the HVAC industry. In fact, the HVAC market was valued at 136.3 billion USD in 2021 and is expected to expand rapidly.
So, are you pumped up to help people keep their home interior comfortable and also save money with energy efficiency? But you want to know what profit you will reap as a business owner.
We have come up with a blog to clear out your doubt regarding how much HVAC business owners make.
But what are the factors that affect the HVAC business owner salary? How to boost the business profit? Do you have such questions? Then sit back, and read this complete article.
We have got you covered with all such questions. Even if you are already in the business and aren’t sure how to grow your HVAC business profit margins, this article will be a big help.
Now without any ado, let’s get into the article and clear your doubts.
- A Complete HVAC Salary Guide For 2022
- How Much Do HVAC Owners Make in The US?
- How to Boost Your HVAC Business Profit Margin by Enhancing Revenue?
- Factors That Affect the Salary of HVAC Business Owners
A Complete HVAC Salary Guide For 2023
First, we get an idea about how much HVAC business owners make and then dive into the section to learn how to increase the HVAC business profit margins.
How Much Do HVAC Owners Make in The US?
HVAC businesses incur various tasks such as installing, repairing, replacing, and maintaining HVAC equipment. This highlights that business owners must meet different expenses on equipment costs. The average business owner’s salary in the HVAC industry depends on the business size, location, and years of experience.
So, you may get this question if a new business owner in the HVAC industry can make a profit despite all the expenses. According to some studies, these new business owners received around 5% of the total net profit or up to 50 percent of the net profit after taxes.
Based on these factors, HVAC business owners or contractors earn between $67,573 to $209,355. In this, the HVAC contractor’s high pay ranges from $98,585 to $461,700.
Overall, it is highly recommended for business owners to have a take-home salary of at least 10 to 15 percent.
How to Boost Your HVAC Business Profit Margin by Enhancing Revenue?
1. Increase your marketing budget
If your HVAC business has good traction initially and you receive referrals and leads naturally, it’s well and good. Your referrals are your loyal customers, and you will have a market. But how long will this continue?
After a point, the leads count graph can go south, and you won’t be discovered all the time. High competition exists in this field, and if you don’t start marketing your business, you are missing out on huge.
So, we recommend improving your marketing approach and increasing your marketing budget. This helps boost your income, and the more people know about your company and services, the more leads are generated.
You might own a website for your business, start posting relevant blogs, do SEO and make it rank in the top spots of the search engines. Besides this, promote your business activities on social media.
Send emails to potential clients or targeted audiences. Tell them about your company and the discount or offer that has rolled out. These things can gain the attention of your target customer. Even if half the leads you get via marketing convert, you can make a profit.
If you own a small HVAC service business, gradually increase your marketing budget to make your brand widely known and make an impression on ideal customers’ minds. The right marketing strategy will greatly impact your HVAC business revenue.
2. Automate HVAC operations
Spending your precious time doing tiny business tasks is a bootless errand. When the world is progressing with automation using technology, why should you be left behind?
So, automate your HVAC operations. You can invest in HVAC business management software to ensure your business gets automated correctly.
Now you get the next question, what operations must be automated?
Managing your business is highly challenging as it entails different tasks such as dispatching, invoicing, scheduling, etc. But when you streamline your business tasks with automation, you can save time and effort and feel less stressed handling multiple works. Meanwhile, you can turn your focus on other aspects of your business and help it grow in terms of revenue.
3. Increase the pricing of your services
Though it seems easy, in reality, you can’t just increase your service pricing without proper research. If you change your pricing abruptly, then you will face the risk of losing clients.
So, what analysis must be done? Let’s check about it now.
Whether you charge hourly or flat-rate pricing, you may lose existing customers.
Ask yourself these three questions:
How is your brand progressing so far?
If you are best known for providing quality service, you can naturally expect a pay hike from your clients.
Signs if your brand is a healthy one:(Video) 2023 Growth Strategies for Your HVAC Business
- You get referrals consistently
- You retain existing customers
- Your website shows up in the top 3 spots on Google for HVAC companies
- You have a higher rating on search engines than other companies.
If the above conditions apply to your HVAC business, you need not lower your pricing. Because you have a brand value and have the top spot among other HVAC businesses in your area, it’s okay to charge higher or increase your pricing after a certain period.
Is your sales team effective? If your answer is yes, on a scale of 1 to 10, what’s the rating?
Can your sales team spot out if you are charging high or low? If yes, they are effective. If not, you must consider more training for your sales team or get suggestions from industrial experts.
Are you breaking even?
If you aren’t sure if you gain profit in your HVAC business, figure out your break-even point.
Follow the below-given method to calculate the break-even point for any HVAC job:
- Add monthly costs for running a business and divide the total by the average number of HVAC jobs you do per month.
- Estimate how much time each job will require and multiply it by the hourly labor cost of your HVAC techs and other staff. Also, include the additional benefits you offer.
- Calculate the material costs and HVAC equipment required to do the job.
Now total these numbers to calculate your break-even point. When you have the break-even point, find a factor in your desired profit margin and markup costs accordingly.
4. Enhance customer experience
If your customer is happy, it positively impacts your business, making you happy. According to Hubspot’s survey on customer satisfaction, 89% of companies with above-average customer experiences reap better revenue than their competitors.
So, always prioritize your customer satisfaction.
Now, what should you do to enhance customer satisfaction?
It’s simple, know what your customers want and fulfill their expectations. Even small actions such as arriving on time, prioritizing repair works, and communicating clearly with the customers can create a good impression on your company.
You also send the customer the technician’s details who will be doing the job and notify them when they will arrive. Happy customers will share your positive experience, and you may get more referrals via word of mouth.
Factors That Affect The Salary of HVAC Business Owners
The average salary of HVAC business owners varies based on some factors. So, in this section, we shall discuss the factors that affect the salaries of HVAC business owners.
Location: HVAC services aren’t highly needed in all the states. So, where you operate your HVAC business impacts your earning potential. For instance, HVAC business owners in Alaska earn more than in other states because of high demand, and the per capita income is also high. So, the pay is also high.
Type of HVAC services: Is it a residential service or commercial service? The latter gives you higher earning potential. Because you will be dealing with huge projects, the pay is also big. For instance, commercial ventilation and air conditioning cost more than other HVAC works.
Business size: If it’s large and well-established, naturally, the profit will be high, and the business owners can get good profit than small business owners.
Handling surprise expenses: You can never predict how expenses would pop out, which the business owner must handle, and rarely, their salary be compromised during unfortunate situations.
Frequently Asked Questions
What is a good profit margin for HVAC?
The average net profit is about 2.5% to 3.5% for the HVAC industry. As a business owner, if you want to cross margins close to 10 percent or higher, then make sure to plan well. Calculate your track job and overhead and know the net or gross profit for each department. Analyze them and make changes if needed to make the HVAC business’s profits.
Where does HVAC make the most money?
When compared to other US states, Florida is among the top states for HVAC technician jobs. Here, the hourly wage payment for HVAC tech is $21.85. Next comes California, Texas, and New York.
How to scale my HVAC business?
To scale your HVAC business and make it profitable, make sure to follow these tips:
- Use HVAC online software solutions to increase customer focus.
- Enhance customer experience with advanced technology.
- Market your HVAC business with the right strategies.
- Obtain more online customer reviews.
How big is the HVAC market?
The HVAC market in the US is expected to grow by a CAGR of 5.6% between 2022 to 2030. This is because the demand for HVAC systems is increasing, providing a wide range of business and employment opportunities for US citizens.
We hope now you have an idea of how much HVAC business owners make. The HVAC industry comes with huge opportunities not just for business owners but also for HVAC technicians. When starting your HVAC business, your salary and profit margins won’t be impressive. But with time and years of experience, your brand will start growing, so your salary and profits will increase.
Besides this, it is important to carry out practical strategies to grow your business. The basic thing is marketing. Just because you get inbound leads doesn’t mean you must not market your business. Lead generation is important to keep your business thriving, so marketing is crucial. Also, the more you engage with existing and current customers, the more chances your HVAC business will grow. So keep all these tips in mind and start your HVAC business.