A lot of good HVAC techs reach a point where they look at what the company bills for their time and think, "I could do this myself." Sometimes they can. But figuring out how to start an HVAC business is mostly about things that have nothing to do with fixing equipment: a contractor license, insurance that meets your state's minimums, a vehicle and tool budget, pricing, and enough cash to survive slow months.
This guide walks through those pieces in the order you will hit them. Because licensing differs so much from state to state, it uses Texas as a worked example: the state publishes clear, specific rules, and many states follow a similar shape.
Before You Learn How to Start an HVAC Business: Are You Ready?
Start with a reality check. The BLS profile for HVAC mechanics and installers shows that about 68% work for plumbing, heating and air-conditioning contractors and only about 6% are self-employed. Most of the field works for someone else, which means your competitors will be established shops with trucks, phone teams and maintenance-agreement customers already on the books.
The skills that make you a good tech are necessary but not enough. Before you file anything, be honest about these:
- Can you diagnose and close calls alone, with no senior tech to phone? On your own, every callback costs you directly.
- Can you sell? As an owner, you are the comfort advisor, the estimator and the collections department.
- Can you live with uneven income? HVAC demand swings with the weather. BLS notes peak heating and cooling seasons bring overtime and irregular hours; the flip side is slow shoulder months.
- Do you meet your state's contractor experience requirement yet? In many states, this decides your timeline for you.
Step 1: Get the HVAC Contractor License
A technician credential lets you do the work. A contractor license lets you sell it to the public as a business. Those are different things in many states, and the contractor license usually has a much higher bar. (For the bigger picture on how states differ, see our explainer on the HVAC licensing patchwork.)
Worked example: Texas
Texas runs HVAC licensing through the Texas Department of Licensing and Regulation (TDLR). Its air conditioning and refrigeration program page says anyone who installs, repairs or maintains AC, refrigeration or heating systems as a contractor needs a TDLR license, and every company must employ a licensed contractor at each permanent location. The contractor application page lays out the details:
| Requirement | Texas ACR contractor license |
|---|---|
| License classes | Class A: any size unit. Class B: cooling up to 25 tons and heating up to 1.5 million BTU per hour. |
| Endorsements (one per license) | Environmental air conditioning, commercial refrigeration, or process cooling or heating |
| Experience, option 1 | 48 months of supervised practical experience under a licensed contractor within the last 72 months |
| Experience, option 2 | A technician certification held for the past 12 months, plus 36 months of supervised experience within the last 48 months |
| Who documents experience | Your supervisor(s), on TDLR's experience verification form, not you |
| Application fee | $115; license valid for one year |
| Exam | Taken after TDLR approves eligibility; everything must be finished within one year of applying |
| Other | Must be 18+; background check required |
TDLR lists exceptions that can count toward experience, such as an AC&R degree or certificate, a mechanical engineering degree or military AC&R training. Read the current rules yourself before you plan around them.
Plan your exit around your paperwork. Because a Texas supervisor has to sign off on your experience, leaving your employer on bad terms can slow down your license. Gather your verification forms while you are still on good terms with everyone who supervised you.
Do not forget the federal piece
Every state requirement sits on top of the federal one: BLS notes that the EPA requires nearly all HVAC technicians to be certified under Section 608 to handle refrigerant. As an owner, you are also responsible for making sure anyone you hire has it. Our guide to EPA 608 certification covers the types.
Step 2: Insurance That Meets State Minimums (and Then Some)
Some states make insurance a condition of the license. Texas is one: after passing the exam, you file a certificate of insurance, and you must keep commercial general liability coverage in force the entire time you are licensed, from an insurer authorized in Texas. The TDLR minimums:
| Coverage | Class A | Class B |
|---|---|---|
| Per occurrence (bodily injury and property damage) | $300,000 | $100,000 |
| Aggregate (bodily injury and property damage) | $600,000 | $200,000 |
| Aggregate (products and completed operations) | $300,000 | $100,000 |
Treat those as the floor for keeping a license, not a recommendation for how much protection you need. The "completed operations" line matters in HVAC because a lot of risk shows up after you leave: a gas furnace you installed, a condensate line that floods a ceiling, a refrigerant leak. Talk with an agent who writes policies for mechanical contractors about:
- General liability above the state minimum, especially if commercial customers require higher limits
- Commercial auto for your service vehicle (a personal policy may not cover business use)
- Workers' compensation once you hire, under your state's rules
- Coverage for tools and equipment kept in the truck
- Any bond your state, city or larger customers require
Step 3: Map Your HVAC Startup Costs by Category
You will see wildly different startup figures online, and none of them are your numbers. Your costs depend on whether you already own a truck and tools, whether you start solo or with a helper, and how you plan to get customers. Build your own budget with this checklist and real quotes.
| Category | What to price out |
|---|---|
| Business setup | Entity registration, any local business license, a separate business bank account, accountant time |
| Licensing | Application and exam fees, renewals, continuing education |
| Insurance | General liability, commercial auto, tools coverage, later workers' comp |
| Vehicle | Van or truck, shelving, ladder racks, signage, fuel, maintenance |
| Tools and test gear | Gauges or digital manifold, recovery machine and tanks, vacuum pump, micron gauge, combustion analyzer, brazing kit, meters |
| Inventory | Common capacitors, contactors, motors, filters, fittings, refrigerant |
| Software | Scheduling, invoicing and payments; accounting |
| Marketing | Website, business listings, signage, any paid leads or ads |
| Working capital | Several months of personal and business expenses to cover slow seasons and slow-paying customers |
If you are short on tools, remember that running your own calls means you need the gear a senior tech carries, not just an apprentice kit. Recovery equipment and combustion testing gear are the items new owners most often underbudget.
Step 4: Price for Overhead, Not for Your Old Paycheck
The fastest way to fail is to charge what you used to earn per hour. BLS puts the median HVAC tech wage at $29.33 an hour (May 2025). As an owner, that wage is only one slice of what each billable hour has to cover. Add up insurance, vehicle costs, fuel, software, marketing, license renewals, tool replacement, warranty callbacks, and the hours you spend driving, quoting and doing paperwork that nobody pays for. Divide the yearly total by the hours you can realistically bill, then add profit on top.
Two practical rules that help:
- Quote flat-rate where your market accepts it. It protects you from losing money on a job that takes longer than expected and makes the price easier for customers to say yes to.
- Sell maintenance agreements early. Recurring tune-up customers smooth out the slow months and are the first people who call you when something breaks.
Your First-Year Launch Checklist
- Confirm your state's contractor license requirements and your experience count.
- Collect experience verification signatures before you resign.
- Apply, test and get licensed (Texas allows one year from application to finish).
- Form your business entity and open a separate bank account.
- Buy insurance that meets your state minimum and file proof if required.
- Set up your vehicle, tools and starting inventory.
- Choose scheduling and invoicing software before the first call, not after.
- Set flat-rate prices from a real overhead calculation.
- Line up supply-house accounts and get to know the counter staff.
- Start a maintenance agreement program from your first customer.
The Bottom Line
Start an HVAC business only after you have the contractor license experience, the selling skills and a cash cushion. Your state's license and insurance rules set the minimum timeline and cost, so read them first. Texas, for example, wants four years of supervised experience in most cases and a liability policy kept in force the whole time. Build your budget from real quotes, price from overhead rather than your old wage, and treat maintenance agreements as the foundation of the business, not an add-on.