In order to be a successful HVAC business owner, you need to know how much money you can expect to make. This article will provide an overview of the HVAC industry, as well as the factors that contribute to the salary of an HVAC business owner. By understanding these factors, you can have a realistic outlook and, as your company grows, find ways to improve your company’s revenue.
HVAC Industry Overview
The HVAC industry is made up of businesses that install, repair, and maintain heating, ventilation, and air conditioning systems. It is a large industry with many different types of businesses. The size and scope of the HVAC industry means that HVAC business owners have a wide range of salaries.
The industry market share is currently divided among a few large companies, with the rest of the HVAC businesses being small to medium-sized businesses. The HVAC industry is expected to grow in the coming years, with an estimated 6% growth rate from 2022 to 2030. This growth will be driven by increased demand for HVAC services, as well as new construction and renovation projects.
Typical services provided are HVAC system installation, HVAC system repair, and HVAC system maintenance.
Average HVAC Business Owner Salary
The average HVAC business owner earns a salary of $50,000 to $90,000 per year. Owners can pay themselves a fixed salary or a percentage of the profits, depending on the legal entity status of the company and the owner’s choice of payment electives. Therefore, this figure can vary, depending on the factors listed below.
Factors that Determine Salary for HVAC Business Owners
There are several factors that contribute to an HVAC business owner’s salary. These include:
Profit Margins
HVAC business owners typically have a profit margin of 20%. This margin can vary depending on the services provided, the equipment used, and the geographic location of the business.
Labor Costs
HVAC business owners typically spend 30% of their revenue on labor costs. These costs can include employee salaries, benefits, and training.
Equipment Costs
HVAC business owners typically spend 20% of their revenue on equipment costs. These costs can include HVAC system parts and tools.
HVAC Services Provided
The type of HVAC services provided by a business will impact the owner’s salary. Businesses that provide HVAC system installation services tend to have higher revenues than businesses that provide HVAC system repair or HVAC system maintenance services.
Geographic Location
The geographic location of a HVAC business can impact the owner’s salary. Businesses in urban areas tend to have higher revenues than businesses in rural areas. This is due to the increased demand for HVAC services in urban areas.
Business Operations Costs
HVAC business owners typically spend 10% of their revenue on business operations costs. These costs can include rent, utilities, and marketing.
Managing HVAC Expenses
In order to maximize the profitability of your HVAC business, you need to carefully manage your expenses. The three largest expenses for HVAC businesses are labor, equipment, and HVAC services.
By understanding these expenses, you can find ways to reduce them. For example, you can negotiate with suppliers for lower prices on HVAC system parts and tools. You can also train your employees to be more efficient in their HVAC system installation and repair work.
Conclusion
HVAC business owners have a wide range of salaries, depending on factors such as type of HVAC services offered, size of the company and the location of the company. By understanding these factors, you can have a realistic outlook, find ways to grow, and improve the revenue of your company, along with your own salary.