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With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Custom Business Plan
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2017

HVAC Contractor SWOT Analysis

 

Strengths

 

Heating and air conditioning systems are in need of continuous repair and replacement from time to time. Even in times of economic recession, people require HVAC contractors in order to ensure their homes and businesses are properly heated and cooled. This is especially important for retail businesses. When economic conditions are strong, HVAC contractors are able to generate significant incomes from the installation of new systems in conjunction with real estate developers. The barriers to entry for a new HVAC contracting business are moderately low. Most people, after a proper apprenticeship, are able to acquire the licensure they need to operate as an HVAC contractor. The startup costs for a new contracting business are also moderate, with the minimum required capital being around $50,000. Most HVAC contacting businesses are initially funded with $100,000 to $150,000. Small business loans are easily to obtain given the high gross margins and tangible asset base of the business.

 

Weaknesses

 

The operating costs of a HVAC contracting business are moderate. The primary expenses faced by these businesses are primarily related to payroll and insurance. Additionally, in all markets there are usually several mechanical engineering and HVAC contracting firms competing for the same business. This is the primary weakness faced by these businesses.

 

Opportunities

 

For most owner-operators of HVAC contracting companies, the quickest way to expand operations is to hire apprentices that can complete work on behalf of the business. While this is expensive, the returns on investment can be substantial. Additionally, many HVAC contractors establish specialized divisions in order to provide services to real estate investment firms. Finally, many of these businesses develop ongoing relationships with property management firms in order to generate a continuous stream of income from their services. Ongoing contracts can substantially boost the valuations of these businesses while providing regularity of income.

 

Threats

 

Outside of competitive issues, there are limited threats faced by an HVAC contractor. However, it is imperative that contractors remain on top of the changing technology that is being used in conjunction with new housing developments. Companies that do well in this market are able to quickly integrate new products into their contracting service architecture.


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