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Startup an Air Conditioning & Heating Business

October 24th, 2018 No comments

startup an air conditioning heating business

Do you have a strong desire about starting a business on repair of air conditioning? Are you in need of a heating and air conditioning business layout? Or have you been considering about starting out a HVAC business or are you still trying to get more information or maybe still running a feasibility study?

If your answer at this point to the above question is Yes, then you are at the right place because the basic information needed to kick start your desired HVAC business will be provided in this article.

One thing usually incorporated into different construction types are air conditioning systems be it private or business buildings. In spite of its complications, a HVAC business can be properly managed with the appropriate knowledge of the business basics.

The Heating Ventilation and Air conditioning HVAC business is known to be a highly lucrative one in popular demand. As a specialist in HVAC, your basic task involves the installation and repairs of HVAC systems and making ventilation ducts. With the proper skill and best service to offering clients, a HVAC business is a household business which can be started and grown into a very lucrative business in high demand.

One of the numerous advantages of kick-starting a HVAC business is that it can be managed as a part time business coupled with your full time job but you might need to resign your full time job as soon as the order starts flowing in.

Also, note that you might not need to acquire an additional office space if you have the required space in your home to store your tools and equipment.

The required capital to start is relatively low but most of the needed capital will be spent on purchasing the required tools and equipment that are needed. Fairly used equipment can be used from onset which can be later upgraded when profits have been made from the business. Now that that has been said, let us go through the required steps needed in starting a HVAC business.

Sample Business Plan Template – Establishing a HVAC business.

What is required to go into the HVAC business?
Adequate experience is recommended by Heating Repair Las Vegas.   That experience must be obtained from working at an HVAC company so to gain the required technical skills needed to run the business.

The HVAC business is a very risky one which involves complete adherence to the safety rules in equipment handling and personal protection. Therefore, it is essential to get the required training and experience before starting a HVAC business.

Get Certified
You should be certified if have been working in a HVAC company before establishing your own but a certification would be required if you are just starting out in this line of business. The North American Technicians Association is the association for issuing certifications to HVAC business owners and specialists where the North American Technician Excellence Certification will be issued to you. This certification will be requested by some organizations before some contract work can be sublet to your company.

Build a Business Plan
A new business plan will be required for your new HVAC business. Analyze all the essential equipment and how the capital to start the HVAC business will be gotten. The cost of acquiring the equipment, the mode for executing your business idea, the marketing and sales strategy and your plan for expansion should be outlined in your business plan. All other information that will be of guide throughout the business should also be included.

All the basic steps needed to develop the business, including the capital requirement, the purchase of the equipment should be contained in the business plan. Questions like if the business will be run from home or from a rented workshop should also be answered. And finally make sure to figure out how the business will be advertised.

Capital Requirements
How much is need to start? According to ICE Air Conditioning & Heating AC Repair in Las Vegas, a heating and air conditioning business can adequately be started with just about $20,000 to $50,000. Most capital would be needed for the purchase of the required equipment, truck, tools and for the advertisement of the business.

It would be better and easier if you have savings that can cater for the startup expenses or friends and family members who can sponsor the business. However, a bank loan can be taken to take care of the startup expenses of the business in the event these two options are not available.

Register your Business
Before your business can function as a legal entity, appropriate registrations would have to be carried out. A business name should be firstly incorporated at the Bureau for Company Registration which is in charge of registering companies. All necessary requirements and formalities needed in incorporating a business should be found on their various websites.

There may also be the need to submit an application for a business license which is different from business registration. The business license allows the operation of your business in the state. A tax identification number (TIN) which can be gotten from the internal revenue service is likewise a minor registration that can be done.

Business Insurance
Liabilities that occur from accidents or carelessness of a business owner whilst carrying out the business operations are covered by the business insurance. Just like in all other business ventures, accidents are bound to happen during operation or services. Therefore, a basic insurance package should be gotten to cover the business from any liabilities that may occur.

You might be expected by most states to purchase a license before they can allow you function as a HVAC contractor where the requirement of obtaining the license will depend on the type of state where you practice. However, it is a general requirement that you have had up to two and a half years working experience in a HVAC company before you can establish on your own. A liability insurance and worker’s compensation insurance must also be obtained for your business.

Purchase Equipment
A motor van s an essential tool that you will need that will help move your workers and equipment around. Most of the equipment you will use to work are usually heavy which makes a van very important in moving them around.

Other tools that are needed include electrical wire stripping tools, Pressure gauge, Ducts and Tube connectors, pliers, Hand tools, screwdrivers, wrenches, leak detectors, ohm meters, air and gas measurement equipment, and other important supplies like sockets, wirings, duct tape, and thermostats. Other working tool such as the pumps, combustion analyzer, capacitor tester, pressure gauge, gas analyzer duct tape and so on are also needed.

Market your Services
The last part of the article involve how your services can be advertised to as many people as possible. Offering pro bono services to friends and family are some of the methods you can advertise your HVAC business where the services of your HVAC business will be passed across to other people who are in need of a few repairs and maintenance.

Construction companies in your area can also be contacted or partnered with. Other mode of advertisement that have proven to work wonders are printing of flyers and posters and so does word of the mouth. These provided steps when establishing a HVAC business have been tested and proven to work wonders. But nonetheless, in order to build a successful business, you must ensure to be creative and innovative.

Businesses Need Money To Grow. Is Venture Capital Right For You?

July 11th, 2011 Comments off

The goal of every business is to be successful in their efforts and continue to grow. However, they often come to a crossroads where they are going to have to invest more money if they want to experience growth and additional profits. It may be money needed for new equipment, a larger building, or a number of other items that can be found to keep a business operating at its very best.

Many business owner’s turn to venture capital in order to finance the such ventures for their business. This is a type of loan that comes from a private investor rather than a traditional lending institution. The lender offers the necessary cash and in return they receive shares of ownership in the business.

They often ask for 2% of the profits during the time it takes to repay the funds as well so venture capital lending can be very profitable. In addition you will still be paying the principal balance and the interest on it. However, this 2% is to cover their risk on such an investment.

Business owner’s may have no choice but to look into venture capital options if they are considered to be too high of a risk for a traditional lender to offer them the funding they need. It could be due to the business being new, the business owes too much money to other lenders, or they have a poor credit history that traditional lenders can’t accept.

There are also times when a business needs funding in order to purchase items that aren’t tangible. Since the lender can’t use them as collateral they find the venture to be just too high of a risk. Some common items that may be involved are software programs for operating computers in the business and research that is necessary for the business to successfully grow.

However, it is important to realize that venture capital may not be a good option for your particular business and financial needs. You are going to have to be able to present information that shows there is a very high chance that your business will be quite profitable if you are allowed to access the funds necessary for your business to expand.

Keep in mind that your information also has to show that these additional earnings will be evident in the allotted time frame. In most instances the investors of venture capital will give you a minimum of three years and a maximum of seven years for that growth to occur and be profitable.

Venture capital should always be a last resort when all other options of securing funding have failed. In those instances it can be a very valuable tool which can decide whether you get the funding you need to expand your business or not. It is estimated that more than $6 trillion in loans under the category of venture capital take place each year in the United States. The process is available in many other countries as well but not nearly to the same extreme as in the United States.

Raising Venture Capital? Seeking Angel Investors?

August 3rd, 2009 No comments

Start-Down.com helps companies learn how to raise capital and a valuable resource for entrepreneurs seeking capital to start up a new business.

Venture capital firms usually require a high rate of return on their investment (20%+ per annum) and finance provided to the business is typically in the range of $500,000 to many millions of dollars.

An angel investor generally wants less control of your company and a slower return on investment, however the criteria for investment are likely to be similar. Angel investor groups are great sources of private capital and frequently invest angel money into new companies.

It follows that both venture capitalists and angel investors are looking for capital growth and revenue increases and evidence that your business can deliver continued growth over time, to provide a return on investment.

The current venture capital market is rebounding nicely, from the past setbacks of the “dot com bubble” and “real estate bubble.” Venture capital remains a viable source of funding for startups, which are able to deliver the necessary growth that investors are looking for. Past events should certainly not discourage entrepreneurs who have genuine winning ideas and business plans from looking for funds.

How to Raise Venture Capital

January 21st, 2009 No comments

by Neil Patel on January 21, 2009

venture capital

Raising venture capital isn’t the easiest thing to do. With my first software company, Crazy Egg, my business partner and I spent 6 months doing a dog and pony show in front of 21 venture capitalists and none of them were willing to give us money.

We thought we had everything venture capitalists (VCs) wanted. We had a unique product that solved a pain in the market, there was a lot of good buzz about us in the blogosphere, our user base was growing, and we even had paying clients. To take it one step further, people talked about how our product was so good that Google should buy it. And on top of that I had well-established relationships with VCs such as Guy Kawasaki. 

So why didn’t Crazy Egg get funded? Crazy Egg wasn’t an idea that had the potential to be sold for anywhere near 100 million dollars. The business model that VCs have is that they convince rich people to invest in them and they take that money and invest it into a handful of companies. The majority of those companies will fail, but a few will end up selling for large sums such as 100 million dollars. The money that they make from the companies that sell usually covers their loses and the money they owe their investors.

Now if you failed at raising money, like I did, it doesn’t mean you should quit. Just because someone tells you “NO” the first time, it doesn’t mean they won’t say “YES” in the future. For example one of the venture capital firms I pitched Crazy Egg to was True Ventures. Although True Ventures said no to Crazy Egg, 6 months ago they invested in a company I co-founded called KISSmetrics.

The Venture World

Before you go out and start raising money, there are a few things you need to know:

  1. Venture capitalists don’t want to hear about ideas; they want to see your company lunched before you ask them for money. If you weren’t willing to put the time and money into launching a beta version of your company, why would they want to give you money?
  2. VCs aren’t the smartest people out there, but it doesn’t mean they are dumb either. Don’t blow smoke in front of their face or else they will call you out on your bullshit. Be honest every time they ask you question and if you don’t know the answer, it’s OK to say that you don’t know.
  3. There are 3 different types of capital you can get: early stage, expansion capital, and buyout capital. Before you start your dog and pony show, make sure you know what type of capital you are going after.
  4. If you are trying to raise a few hundred thousand dollars, you are better off pitching angel investors. Most VCs tend to shy away from investing small amounts of capital.
  5. Business plans are bullshit. You may think they are great but I haven’t seen a VC ever read a business plan or fund a company based off of one. I could be naive, but I think they would rather have you spend your time on launching your company compared to writing a 30-page document.
  6. People are scared to give money to people they don’t know. If you don’t know any investors you better start getting to know them. You can easily do this by reading and commenting on their blog or by striking up an email conversation with them. Or you could ask your friend or lawyer if they can introduce you to a VC (good lawyers know a ton of VCs).
  7. In most cases VCs are using other rich people’s money to invest in companies and not their own. This means that they have a boss. So if you hear horror stories about companies getting screwed by them, it isn’t the VC who is being mean. They have to cover their ass as well.
  8. Make sure a 5 year old can understand your business model. If you can get a 5 year old to understand what you are doing, then a VC will understand what you are doing.
  9. There are 2 types of investors out there, the first can just provide you with money and second can provide you money and knowledge. The second type of investor is called a strategic investor; ideally you should only take money from a strategic investor.
  10. If you are looking to raise a few million dollars or more, you usually won’t get it all from one venture capital firm. You will have to get money from multiple VCs, but the good news is they believe in the herd mentality. This means that if one VC sees that another VC is interested in giving you money, then they too are naturally interested in giving you money.

The Deck

Now that you understand how the world of venture capital works, you will need to create a power point presentation (also known as a “deck”) that you can use to pitch VCs. Here is an example of a good deck:

When you’re creating your deck, make sure it includes the following:

  • Mission statement – a simple sentence that explains what your company is about and what you are going to do.
  • Team – you need more than a one-person team if you want money. If you can’t convince people to join your company before you get venture capital, you won’t be able to convince a VC to give you money.
  • The problem – creating another me too company won’t do any good. Make sure there is a pain your business can solve that others have not.
  • The solution – don’t just go into how you are going to solve the problem you talked about in the previous slide, show it. You should include some screenshots of your product, even if they are rough.
  • Competition – even if you don’t think you have competitors, you do. List out your closest competitors and talk about how your solution is different.
  • Market size – go into detail on how big the problem is. How many people are experiencing this problem? How are you going to go after those people?
  • Business model – you have to make money sooner or later. If you don’t have a strong sense of direction on how you will make money, list out the possibilities.
  • Marketing – how are you going to go to market? You need a clear plan of act. Make sure you don’t say something stupid like you are going to get on TechCrunch and thousands of people will then come to your website. TechCrunch is a great site, but that isn’t a marketing plan.
  • Financing – how much money do you need and why? Unexpected things usually happen, so make sure the number is large enough to account for them.
  • Milestones – if someone gives you money they will want to know when they will see something more tangible.

After your presentation is over, you are going to get bombarded with questions. There is no way you can be prepared for all of the questions. Just be honest and have faith in yourself. If you know your business like the back of your hand, you shouldn’t have any problems. The most common questions I have been asked are:

  1. Why do you want to raise money?
  2. Why should I give you money?
  3. What makes your product or service different than your competitors?
  4. What is stopping your competitors from doing what you are proposing?
  5. What would you do if you weren’t able to raise any money?

Conclusion

Guy Kawasaki once said that the probability of an entrepreneur getting venture capital is the same as getting struck by lightning while standing at the bottom of a swimming pool on a sunny day. No offense to Guy, but I think your odds are much higher than that. It doesn’t matter what skin color, age, or education you have. All sorts of people have raised money and you can too.

From what I can tell the entrepreneurs that are the most successful in raising money tend to be scrappy, quick learners, cheap when they need to be, and most importantly know how to execute.

Best of luck!