People working in the HVAC business know that inventory management can be a complicated beast. With technicians scattered across service areas, visiting homes, offices, and industrial facilities, it’s easy for things to slip through the cracks. And if even a single critical component is missing or unavailable, entire jobs grind to a halt.
For this episode of Secret Life of Inventory, we wanted to put a spotlight on the HVAC industry to help any struggling business owners get their inventory in check. We also go over some advice to any aspiring entrepreneurs looking to start an HVAC business of their own.
This article is only a quick rundown of the podcast conversation. To ensure you don’t miss out on anything we discussed, be sure to check out the full episode below.
The Critical Role of HVAC Inventory Management
Unlike many traditional goods-based businesses with fixed locations, HVAC companies deal with technicians scattered across multiple job sites.
Each technician will have varying levels of inventory in their service vehicles, and if even one component goes missing, the entire job can come to a halt. This will lead to frustrated customers, wasted time, and lost revenue.
The solution? Proper inventory management from day one. This includes:
- Setting up reorder points for critical components.
- Establishing a mobile jobsite workflow where each truck acts as a mini-warehouse.
- Using inventory software that provides real-time tracking across multiple locations.
Best practices for HVAC inventory management success
Conduct regular cycle counts
We get it; everyone hates cycle counts. But the truth is, they’re the foundation of proper inventory management, even if you’re using software. The secret is to split up the workload. Don’t try to count everything in your HVAC business all at once. Instead, break it into manageable sections: count truck one on Monday, truck two on Tuesday, and the warehouse on Wednesday. This approach keeps your business running while ensuring accuracy.
Set reorder points
Components are the lifeblood of HVAC work. Set specific reorder points for critical items. For example, when you hit 10 fan coils left in stock, it’s time to order more. These reorder points should factor in lead times and safety stock to ensure you never run out, even during unexpected demand spikes.
Implement a mobile jobsite workflow
This is where HVAC inventory management gets more sophisticated than your average workflow. You can set up each service truck as a separate location in your system, essentially turning each truck into a mini-warehouse. Technicians would then transfer stock from a central warehouse hub, as needed. This approach minimizes warehouse space requirements while ensuring technicians have what they need on-site.
Leverage historical data for demand forecasting
Past performance is the best predictor of future needs. If you sold 25 AC units last August, plan for at least that many this year, plus factor in business growth. You may have grown 25% since last year, so order 30-35 units with some buffer for unexpected demand.
How real-time inventory software can help
Of course, what we mentioned above is easier said than done. But that’s where the right inventory software comes into play. Real-time tracking reduces the risk of stockouts and the likelihood that technicians return to the warehouse for a component only to find someone else has already taken it earlier in the day.
Quality inventory management software for HVAC businesses should offer:
- Real-time tracking across all locations (trucks and warehouses).
- Mobile app functionality for technicians out in the field.
- A built-in barcode system.
- User access controls for different team members.
- Automated reporting for advanced demand forecasting insights.
- Integration with accounting software like QuickBooks Online & Xero.
The key is choosing systems that work together. When your inventory software integrates with your accounting platform, you eliminate double data entry and reduce errors.
How to start your own HVAC business
The HVAC industry is growing at an astronomical rate. If you’re an experienced HVAC technician, you may be thinking about starting an HVAC business of your own to capitalize on this growth. If you’re considering this route, here are some things you should consider:
- Get the paperwork in order – Before you even think about your first customer, you need to handle the paperwork. Start by researching the legislation in your region and registering your business correctly. Most areas require specific certifications and licenses for HVAC work.
- Choose a speciality – The HVAC industry breaks down into three major sectors: residential, commercial, and industrial. While it might be tempting to be a jack-of-all-trades, specializing in one area will serve you better in the long run.
- Create a comprehensive business plan – This includes calculating startup costs for trucks, warehouse space, components, equipment, and payroll. Don’t overlook competitor research at this stage. It might feel awkward, but calling around for quotes from other HVAC businesses is perfectly legitimate market research.
- Build your team – Finding the right technicians goes beyond technical competency. Your team members are the face of your company and will interact with customers in their homes or businesses. You need people who are not only skilled with tools but also excellent with people.
The path forward
Starting an HVAC business requires careful planning, proper legal compliance, smart specialization, and robust systems for managing both inventory and customer relationships. But the industry’s growth trajectory makes this an opportune time for experienced technicians to become their own bosses.
Success comes from balancing technical expertise with customer relationship. With proper preparation and the right systems in place, your HVAC business can thrive in this expanding market.
Ready to dive deeper into HVAC inventory management and how to start your own HVAC business? Watch the full episode of Secret Life of Inventory for comprehensive insights on building and scaling your HVAC enterprise.
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