Most advice about starting an HVAC company focuses on the easy part: forming an LLC, buying a truck, and getting your first customers.
In this episode of JackQuisitions, Jack Carr breaks down what actually determines whether a new HVAC business survives. From pricing, marketing, and hiring to cash flow, operations, and mindset, he shares the practical lessons every technician should understand before making the leap into ownership.
Drawing from his experience growing a home service company past $8 million in annual revenue, Jack explains why the biggest challenge isn't starting a business—it's building one that can eventually run without you.
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In this episode, Jack covers:
• How to know if business ownership is actually right for you
• The financial plan every new HVAC owner should build first
• How to price jobs correctly and avoid working for free
• The best early marketing channels for generating consistent leads
• When to make your first hire—and who to hire first
• The mindset shift from technician to business owner
• The systems that help HVAC companies grow beyond $1 million
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Follow Jack for More Acquisition Insights
𝕏: https://x.com/thehvacjack
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Breaking $5M Workshop
Join John Wilson and Jack Carr in Akron, OH for a hands on workshop built for home service owners ready to scale past $5M. Get the proven playbook, tour Wilson's operation, and connect with other growth minded contractors. Register here: https://www.ownedandoperated.com/upcoming-events/oao-workshop-breaking-5-million
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Most videos about starting an HVAC company tell you form an LLC, buy the van, and then start running ads. Technically, yes, that is how you open a business. It's also how you accidentally buy yourself a super stressful job, get into a bunch of debt with a truck payment, and have the wonderful privilege of working for 80 hours a week and making less money than you made as a technician. The hard part is not actually starting the HVAC company. The hardest part is surviving the early days. It's surviving the slow season. It's charging enough when you still feel desperate for every single call. It's answering the phones while you're in an attic and it's 120 degrees. It's collecting payment before you leave the driveway. It's hiring before you feel financially ready. And eventually, it's accepting that the skills that made you a great technician are going to prevent you from becoming a great owner. So this is not a motivational speech about betting on yourself. This is the no BS guide. This is what you need before you quit, what the early months actually look like, and which early moves matter. What do you need to change if you want to grow past a million dollars instead of becoming permanently self-employed doing everything yourself? I'm Jack Carr. I'm not originally an HVAC technician who spent 10 years turning wrenches and brazing and opening up a shop and eventually entering the industry. No, I bought my way in and it gave me a different set of problems, right? I didn't have to create my first customers from nothing. I didn't inherit or I inherited my employees. I inherited some overhead and processes and liabilities and customer expectations and plenty of things that looked functional until I actually dug in because I messed up. That's the nice version. I messed up when I bought. So I've been in every position and ultimately I've grown this home service company past $8 million in annual revenue. So I get the perspective of both sides plus acquisitions. I understand everything from diagnostics to marketing to pricing to phones to dispatch to payroll and eventually building a company that does not depend on just me completing every job. And that's the gap I want to help you cross before you
even get started. Before you quit, you need to answer a few questions. First, do you actually want to own a business? It's a lot of pain. It is a lot of sleepless nights. Or do you just not like your current boss? Do not like your current company? Because those are not the same things. A bad employer makes ownership look like freedom, but it's not. It's not. Your old boss is also worrying about the schedule and payroll and complaints and taxes and insurance and marketing and whether the flow phone will ring in slow season. Because when you own the company, all of that, the entire thing becomes your problem. And not only are you responsible for you and your family, you're responsible for every other person you hire and their family. And you still have to fix the air conditioner. You still got to go up in the attic when it's 120 and do all of that stuff. So if you really want higher pay, more control, better culture, go find a better company. Stop listening to this, go find a better company because this is not the way to do it. But if you want to build an asset, if you want to try and build generational wealth and employ people and eventually make money from systems rather than actually doing the work yourself, ownership could be right for you. Second, align your household, your spouse, your partner, maybe you don't have one, maybe it's just your dog. Everybody needs to understand that the income is going to be inconsistent, especially in the beginning, and that your evenings will get interrupted. You are going to be running hero mode in the very beginning. You're going to be going out on calls at 9 p.m. at night because you have to, so you don't get sued. I mean, like that's the name of the game. It will be inconsistent. And hopefully, your spouse has some insurance so that you guys can be on their insurance, et cetera, et cetera. In addition, make sure you save up. Save up not only for you and your family to personally weather the storms and the seasons of not paying yourself. There's been months where I didn't pay myself, three, four months in a row in the early days where I didn't pay myself and I drained savings because I needed the business
to survive. Lastly, understand that the legal gate before spending money on anything else. It's licensing by state, loyalty specific, like the business may need to qualify for individual permits, registrations, insurance, and anyone working on equipment needs to have their EPA 608, etc. etc. So make sure you get all your licensing. And if you're not an industry tech, figure that out. You might have to go work for a company for a little bit, but don't start if you don't have your licensing solved because it's not gonna go past 101 and you've just spent a bunch of money on it. So do not build your business around borrowing someone's licensing either, uh, especially if it's through a handshake. There are situations where you can go buy a business that's already preset and it comes with the licensing great. Still go get your licensing shortly after. Again, not from the industry. I have my plumbing, my HVAC, and my electrical license. I hold all the licenses for my business. Next, now you need to have a business plan. Have some basic one-on-one math skills to understand what numbers you need to hit to survive. So, what does your household need each month? What will you be pulling out of the business? What will the business cost before paying you? How many service calls will that take or installs will that require to get there? And how long can you survive if demand is half of what you expect? I always use half as a great starting point just because it's really easy for the numbers. And then a technician may calculate a job like equipment costs 4,000. I charge 8,000, so I make 4,000. But that's not how that works. That's not how job costing works. You still have to pay for labor, permits, marketing, materials, fuel, merchant fees, 3% for merchant fees right off the bat, insurance, software. Who's doing callbacks? You paying someone to do callbacks? So understanding that gross profit is not net profit, and that net profit is not necessarily cash. Understanding your numbers is so critical before you start. You need to have an idea of what the industry actually does, a realistic KPIs on that. If you're trying to push past five million dollars in your home service business, this is the workshop that I wish I had earlier. September 15th to the 17th of this year, John and I are hosting another breaking five million workshop at his headquarters in Akron, Ohio. We're gonna do a shop tour, we're gonna walk through his business at an extremely high level, and we're gonna give you the playbook on how to break five million dollars. Every single one of these events have sold out, so make sure to click the link below, reserve your spot today, and we'll see you there. Finally, you need to decide on what kind of HVAC company you're starting. Is it gonna be residential service, new construction, light commercial? Like what is it? Because the only wrong answer here is all of it. Each one of those is running a separate company, and you can't do that all by yourself. Pick your customer, pick your service area, pick your core offering and an operating promise that you can fulfill. So, hey, we are going to do residential service. The core offering is we are going to fix and replace HVAC units under five tons and then expand on that. Sweet, you have your business plan, everything's packaged up nicely, and you're ready, you feel like you're ready. You have some money saved, your wife's on board, and you're ready to jump in. My jump happened from buying an existing operation. Yours might be from zero and doing some side work and understanding demand and pricing until it becomes consistent enough that you can leave and then you also have enough capital and a launch date. Whatever path that is, though, make sure that it's planned. You don't want to quit based on a trigger. You don't want to have a terrible Tuesday with your manager yelling at you and you go, ah, I quit. Because that's not planned out. It's not going to put you in the best starting spot possible. You'll be behind the eight ball. So making sure that you plan before your final day, you know who's illegally allowed to perform and supervise work. Is your insurance active? What number will customers call? Do you have a Google business profile up? Are you gonna start? Some of those things take time to actually start to generate calls. A Google business profile is gonna take months to start. So if you have an unseasoned account, it's gonna take a while before it starts going. Who's gonna answer the phones? How are you gonna collect money? Is it what who's your merchant's service? How are you gonna take a credit card? Because all of that requires underwriting and a business plan. Where's the money, which accounts the money gonna go into? This is all extremely important stuff before day one. So you wanna make sure it's planned and not just a pissed off Tuesday that
you quit. You don't need a 50-page business plan, but you do need a practical operating plan. Your first year is gonna feel a lot less like being a CEO and more like being a technician and a supervisor and a dispatcher and a collection ARAP person and warehouse runner and recruiter. That's normal. Here's what I would focus on the next 30 days build the boring foundation. Build the plane while you're flying it. It sucks. It sucks. I used to wake up at 4 a.m., plan the day out, go to work for 10 to 12 hours, come home, stay with my kids for two hours, and then once they went to bed, I'd work until 10, 11 p.m. sending invoices and doing all of the paperwork from that day. It sucks. That's all that needs to be generated while you're running in the early days. And then keep your money separate, right? Business is not personal money, and personal money should not be business money. Garbage books create incorrect taxes that'll give you headaches and open you up to a ton of liability. Also, define a tight service area. Wide territory feels like, hey, I'm gonna get more opportunities. Unless your opportunity is guaranteed and worth a lot of money, keep it tight. In practice, this means less windshield time. It means less wasted fuel, less poor density dispatching, and less late arrivals to piss off early customers. The tighter you can keep this within reason, the better it's going to be for you and your business. You need to start creating these minimal viable options. You need the professional phone number so people have somewhere to call. You need the reliable call answering. Who's answering it? Is it you? Are you answering the phone while you're selling something to a homeowner? Because that's not reliable. But what you do need is something that can solve some of these existing problems day one. And the phone is gonna be one of the most critical, obviously, because a lead you pay for that goes unanswered is not a marketing problem, right? That's not, hey, I'm having trouble getting leads. It's I'm having operational failure. Like you're paying for 10 calls and you're only running two of them. It sounds simple, but like when you're actually running a business, it's not. It's not gonna work as a growth system. And then now you're getting calls, starting to run jobs, they're in your service area. Sweet. Pricing is perceived as high because as a technician, you know what you pay for that motor and you know what the motor gets installed for. And yes, there's bad big businesses out there, but your price needs to cover labor, material, overhead, warranty risk, customer acquisitions, and profit. And if you're not building that in, you're not pricing right. So you're gonna be running around and busy, busy, busy, but you're not gonna be making any money. The customer pays for availability, they pay for the training of your technicians, they pay for the tools you buy, they pay for your insurance and convenience and correct diagnostics and warranty. They have to pay for the services. So you need to build a price book, but not like a guy in a van. You need to build it like a company that works in the understood overhead that costs. If you're doing things just because, hey, I want to make $500 on top of this install, you are underpricing and going to work yourself out of a business. You need to also review this price book regularly. Don't underprice jobs by a ton to win reviews because what you're gonna find really quickly and talk to any business owner in the industry, low price attracts the customers who often remain price sensitive. And you can't build a business like that. You can maintain yourself as a job for a while, but you will burn out. You got your phone number, you understand your pricing, you built a price book out for yourself. Where are my leads? Where are my leads? And unless you're massively skilled in marketing or just super lucky, you're going to have slow months where the phones just don't ring, especially in the beginning. And what I want to challenge you on is don't go out there and create 10 marketing channels. You need one to three. You need to get good at those marketing channels, understand them and understand how to convert those leads, and then you need to track them. So you can start with referrals, obviously. Understand how to maximize your Google business profile so that you SEO search engine optimization when people type in, hey, repair HVAC near me, that you show up. And then I'd probably try one or two lead aggregators. Try Thumbtack. People, I'm gonna lose some people right there, I'm gonna be, eh, Thumbtack doesn't work, Angie's doesn't work, blah blah blah. They all work, you just don't know how to run them. We make hundreds and hundreds of thousands of dollars off of each of those at a six to eight X multiple of ROI, and it's because we know how to run those systems, so you need to build those systems on the back of Thumbtack. Understand that hey, on Thumbtack, I'm gonna be going up against two other contractors. You have to call them within 20 seconds. So, like, that's how you make a lead aggregator work. You need three or four channels, doesn't matter if it's Yelp, doesn't matter where it is, just you have to get those and get very good at them. I'd be careful with property managers, I'd be careful with working with warranty companies or general contractors just because they can create some volume, which it feels good, but they're lower prices, slower payments, and less control. Don't let one of these lead sources either own your schedule. You need to track each and every single lead. Where does it come from? Was it answered and booked? Did the appointment run? And did we make any money on it? So that's the ROI I'm talking about. How much did I pay for it? How many did we get? And what am I making from this? Because owners will say, I need leads, I need leads. When the problem is that nobody answered the leads that are already bought. And for every five minutes that that lead sits in your voicemail, booking chances are reduced by like 350 plus percent. Now protect that cash. The biggest part is that the business checking balance is not your income. Your income, the business income, they don't touch. You will rob your business in your future if you start buying yourself personal things. End of story. I've seen so many businesses die because the owner wanted to have a boat and wanted to have an F-250. Like, it's not your personal checking account. You the business is its own entity, and what it pays you is your entity. We're running this business 30 days, 60 days, 90 days has passed, a season's past, we made a little money, we're feeling good. We have some reserve in the business
checking account. We're noticing, hey, we're doing too well. So we need to hire our first person. And you should attack the hiring bottleneck based on your own skill set. If you are an excellent top-tier technician, but like, hey, I don't understand, like, I can't answer the phone. That's where you need to hire. You need to hire administrative support, you need to hire call center support to do the warranties and to get AR and to pay AP. So that's where your first bottleneck is. You need to ask where the company is losing the most money. Where's the most value derived from? Is it gonna be missing demand or uncompleted work? The key here is just don't hire based on ego. You need to hire based on bottleneck. Recruit before you're desperate, right? You're gonna start to feel it, and that's the only way I can describe is you're gonna feel like, hey, I'm overworked, I'm overworked. And it'll always come in the summer. But if you wait till then, and in the middle of summer when you're overworked, you know the deal. Everyone's already working for someone, everyone's busy and everyone's making money. So you're not gonna get a technician in the middle of summer. So you need to hire before, and you need to start thinking about that even before that, because you're competing for technicians with better established companies, more security, and who maybe have been there for a few years. So it's time for you to have to think about like what is your story? Are you gonna be offering better pay? Are you gonna be offering better work-life balance, unlimited time off, no nights, no weekends? What is going to drive a someone who's working for a big corporation who's secure, knows they're gonna get leads next week to come to a little bit less secure business, a newer business, and work for you? So there's lots of ways to do it. Write a nice thing on Indeed, come up with something from the heart, literally, why are you better? And for me in the beginning, it was a lot of work-life balance and better pay. We would give tons of time off, we would not work nights and weekends, and we would offer better pay. So, yeah, you give up a little security, but you get the triple thread of a better life. You got some momentum, you're feeling better, and you need to start working on changing your mindset. And it's really hard. This first leap, this first step change is extremely hard because hero mode works very well in the beginning. You answer every call, you run every job, you solve every problem, you work nights because no one else will. And that intensity may get you from zero to half a million, six, seven hundred thousand if you if you're lucky, but that behavior will suffocate the company later because at some point you're not building those muscles, you're not building those systems like, hey, how do I have someone answer the phone calls so that I can work on other stuff? How do I have technicians run the call so that I can work on other stuff that's revenue generating and growth generating? So, how do I make the company produce the same results without depending on me? And that's all in documentation and handling. You're creating checklists and building pricing standards and reviewing callbacks and training technicians on how to communicate and holding weekly operations meeting. It's all the stuff that you probably don't want to do, and you probably are gonna start to feel guilty, at least I did. When you're not in the field, field work looks super productive. I can measure my own revenue that I'm making. But sitting in the office reviewing calls and recruiting and studying numbers, it feels like sometimes you're avoiding real work. But once the demand exists, it's completely backwards. The highest value work you can do is fixing the systems that affect every technician in your company rather than completing one more repair. Sometimes you're gonna have to, right? That's this is theoretical versus practical. Sometimes you will have to run out into the field, but the faster that you can build the system so you don't have to, the better and the more real your company becomes. So the goal is to replace yourself intentionally. The goal is not to know nothing about the operations, it's to see the operations through the numbers, the meetings, the standards, the KPIs, and your competent employees. Here's how you get past 1 million. The 1 million number sounds enormous when you're starting. I mean, it's roughly what, $83,000 per month, $19,000 per week. But if you break it down, and you should, that's 70 replacements at $10,000 on average would give you $700,000 and then another 600 service and maintenance calls on average with a $500 average ticket. That'll produce another $300,000. So there's your million. And the numbers are going to vary by market, service mix, residential, commercial, etc. But the point is that you need to reverse engineer the revenue into jobs, capacity, and close rates because then the goal is a simple mathematical problem. The revenue is not the scoreboard itself. A million-dollar company where the owner works the entire time, has no cash, underpays everyone, and performs free warranty work on Saturday, that's not successful. It's not successful for you, and it's not successful uh as a company in general. But if you're managing like a weekly scoreboard of calls received, how many calls were answered, how many were books, how many appointments did you run, what is your average service ticket, how many replacement opportunities did you have, and what was the close rate on that? And then gross profit. What's your gross profit? You don't need 15 metrics. You need a handful where that explains revenue and where cash or or um money is leaking. Because past a million, growth depends on less on personal hustle and more on recruiting technician productivity, install capacity, call handling leadership, financial controls, and you gotta fix the largest constraint. You can't focus on all of them. You gotta measure the results, fix the largest constraint, move to the next one. Here's some big watch outs. What I would not do. Keep your fleet small and cheap. The name of the game is to reduce overhead as much as possible so you can funnel back into growth. You'd be surprised what you can do. We have 1718 now. We run all of our HVAC service out of Ford Mavericks, and everyone will tell you it's not possible. We do it. We do it very, very well with very limited callbacks or very limited parts runs. You have to be strategic about where your money is going. I would not rent a giant office. It A, customers don't care. B, technicians might, but it's more important that you're protecting overhead early so that you can focus on growth than having a nice fancy office or even nice fancy things in your office. Maybe a uh contractor's garage, 1500 square foot, is a great starting spot for a thousand, fifteen hundred bucks a month. I would not offer 24 hour service without the staffing and the pricing to support it, because you'll end up just pissing off your customers or burning out your technicians. We did that early on as we we offered 24 hour service, burnt out some early texts that we had because they were tired of running all day, every day. I would not partner with someone simply because they had a license. Protect your partnership agreements early on. If you can get your license yourself, partners can be great or they can be the end of a business after you hit huge growth metrics. And then I would not depend on one lead source, right? Lead sources can change. Google changes its algorithm. Yelp might change how it presents you to customer after you get one bad review. Have a few lead sources, monitor them closely, and always be on the lookout for more if there's potential for them to do better. Don't charge hourly. I would never, ever, ever in residential, charge hourly. In commercial, yes. In residential, it's a flat rate fee. That's the only way to grow. There's not a single 10 million, 15 million dollar plus company out there that in residential only service that is doing hourly. I would not assume being busy means the company is healthy. Some of my worst financial months or my busiest months because things fall through the cracks and you lose money. You lose money on marketing, you lose money on your service pricing, you lose money somewhere because you're so busy and you assume everything's going well, and that's the wrong mindset. And I would not run even think about getting into this business if you think that the big guys, the big companies in your area are the bad guys. Sorry, sales and revenue new generation are the goal. You are a business. The overall is this is a business focused on revenue and sales. End of story. If you think changing out an old R22 system is still worth saving, you're not ready to run your own company. You're not doing what's best for you, you're not doing what's best for the company, and you're not doing what's best for the homeowner. This is the no BS version to a million dollars from starting. That's the real transition. It's not employee to self employed, it's technician to owner. If you like what you heard, if this helped you out whatsoever, like, comment, subscribe below, and next time.
