HVAC has a brutal and useful clarifying force that most trades lack: seasons. A new shop gets tested by its first July and its first January, and the owners who survive both did the unglamorous setup work before the phone started ringing. This guide is that setup work, in order, written for the installer or service tech who already knows the trade and needs the company around it.
The honest caveat up front: state and local rules decide most of the licensing and insurance specifics, and any guide quoting exact requirements without knowing your state is making them up. Where it varies, this guide says who to ask. One requirement, though, is federal and universal, so we can start there.
The licenses, starting with the federal one
If you or your techs handle refrigerants, EPA Section 608 certification is required by federal law, everywhere in the United States, no state exceptions. It is the one credential in this trade nobody gets to skip, the exam is widely offered, and supply houses will ask for it. If you are reading this as a working HVAC tech you likely already hold it; if not, it is the first box to check.
Beyond 608, most states license HVAC contracting through some version of the apprentice-to-journeyman-to-contractor ladder, with documented experience and an exam at the top. Some states run a dedicated HVAC classification, others fold it into mechanical contracting, and a few leave licensing to cities and counties. The only reliable source is your state's contractor licensing board: search it directly, read the classifications on the official site, and plan from what it actually says. While you are there, note what the board requires you to print on advertising, because Google's verification will ask for the same things later.
The company, the bank account, and the accountant
Before the first invoice: an LLC or similar entity, an EIN from the IRS (free, online), and a business checking account with a hard wall between it and your personal spending. An accountant who works with contractors earns their fee twice in year one: once on the entity and tax elections, and once when equipment purchases and vehicle costs meet depreciation rules you should not be learning from forums.
Name the company something a homeowner can spell after hearing it once on a bad phone line, confirm it is free in your state registry, and check the domain before the wrap goes on the van.
Insurance for a trade that touches gas, power, and attics
The standard stack: general liability, commercial auto, a contractor bond where your state or city requires one, and workers' compensation once you employ anyone, which in many states means from the first hire. HVAC work touches electrical, fuel gas, and rooftops, which insurers notice; a commercial agent who handles mechanical contractors will quote the real numbers for your state in one call. Treat the premium as a permanent line in the monthly math below, because that is what it is.
Price for February, not for July
The seasonal shape of HVAC revenue is the number-one financial trap for new shops. July can make an owner feel rich exactly long enough to be broke by February. The defense is arithmetic done in advance.
- Derive your hourly floor from your own costs with the method in the hourly floor, then let the hourly rate calculator do the division. The floor has to carry the truck, the insurance, and you, across the whole year, not across a heat wave.
- Find your monthly break-even in billed hours and treat it as the month's starting line.
- Price repeatable work (capacitors, condensate lines, standard changeouts) from a book, and genuinely unknown work on the clock. The argument between the two models is mostly religion; flat rate without the religion is the honest version, and flat rate vs T&M is the short course.
- Maintenance agreements are the classic HVAC answer to seasonality: spring and fall tune-ups smooth revenue and put you first in line for the changeout when the unit dies. Price them to be worth doing, not as a loss leader you learn to resent.
July hides pricing mistakes. February finds them. Set the rate for the year, then let the heat wave be upside instead of life support.
The first truck and the equipment question
You know the daily loadout already; the trap is capital. A reliable used van, recovery equipment, gauges, a vacuum pump, and the hand tools you actually use will run the first year. The bigger question is inventory: new shops tie up cash stocking parts a supply house twenty minutes away already stocks. Buy velocity parts, run supplier accounts for the rest, and let profit, not the startup loan, buy the nice-to-haves.
Winning the first no-cool calls
The channels that work for a local mechanical trade are boring and mostly free at the start, which is good news for a new shop's budget.
- A complete Google Business Profile with real photos, honest service areas, and your license details where your state requires them displayed. The Google Business walkthrough covers what completeness actually means.
- Local Services Ads charge per lead and verify your license and insurance before running you, one more reason the paperwork sections came first. Mechanics in the Local Services guide.
- Realtors, property managers, GCs, and the supply-house counter: the people who already trusted your work before there was a logo. Most first-year revenue in this trade is referral wearing different hats.
- Answer the phone. In a no-cool July, the first shop that picks up wins the job. This sounds too simple to write down and decides more revenue than the ad budget does.
A day that survives the first heat wave
A heat wave is a dispatch stress test: every call is an emergency, the schedule reshuffles hourly, and the shops that keep their promises are the ones whose system was not one person's memory. At one truck, memory works. The moment it stops working is documented in the whiteboard problem, along with a vendor-neutral one-week migration plan for when you are ready.
Buy software with a method, not a demo feeling: how to choose field service software is the seven-question version, and what to demand from software is the checklist that works in any vendor's demo. For calibration on honest pricing: Thorbis is $99 a month per company with unlimited people and usage billed on top, posted publicly, currently pre-launch with a waitlist while the operating loop is finished in the open. Hold us to the same checklist.
Frequently asked questions
What licenses do I need to start an HVAC business?
EPA Section 608 certification is federally required for anyone handling refrigerants, everywhere in the US. State contractor licensing varies: most states require a licensed HVAC or mechanical contractor on the books to run the company, with experience and exam requirements set by the state board. Read your state board's official classifications before planning around any secondhand answer, including this one.
How much does it cost to start an HVAC company?
The paperwork stack (license, entity, insurance, bond) typically lands in the low thousands; the van and equipment decisions dominate the rest. Starting with a used van, essential recovery and diagnostic equipment, and supply-house accounts instead of deep inventory keeps the number far below the financed-everything version, and customers cannot tell the difference.
Can I run it solo at the start?
Many owners do, through the first year or more. The honest constraints are after-hours calls and the seasonal crush: solo means July belongs to the business. Hire when you are profitably turning away work, verified against the break-even math, not when you are merely tired.
How do maintenance agreements fit a brand-new shop?
They are the trade's seasonality answer and worth offering early: two visits a year, priced honestly, sold at the end of good service calls. They smooth the shoulder seasons and make you the incumbent for the eventual replacement. The discipline is pricing them as real work, not as a discount program that quietly eats your winter.
The short version
608 in your pocket, the state license path read from the official source, entity and bank account before money moves, insurance quoted by someone who knows contractors, a rate derived for the whole year, a used truck plus supplier accounts, the boring channels done completely, and a dispatch system that outlives your memory before the first heat wave proves the point.