January 9, 2026
Tom Howard walked into Las Vegas and immediately did math that most of his competitors had never attempted. He calculated the total addressable market for residential HVAC in that city, identified the theoretical maximum market share a single company could realistically capture, and set his goals accordingly. That exercise changed everything about how the Fetch-a-Tech team thought about competition, growth, and opportunity. Here is how to do the same for your market.
Why Most Trades Companies Set Goals Wrong
Most business owners set revenue goals by looking at last year’s revenue and adding a percentage. “We did $3 million last year; let’s grow 20% to $3.6 million.” This approach is better than nothing, but it is completely disconnected from the actual opportunity available in your market.
Tom’s perspective is that in most markets, trades companies are competing almost entirely against themselves — not against each other. Ken Goodrich, arguably the most successful residential HVAC operator in Las Vegas history, ran Goettl to over $50 million in revenue. In a market Tom estimated at $1 billion-plus in residential HVAC alone, that is under 4% market share. There are 1,700 HVAC companies in Las Vegas, and the biggest one has less than 4%.
When you understand those numbers, the conversation shifts completely. You are not fighting competitors for scraps. You are capturing a tiny fraction of an enormous market.
The Market Share Calculation: Step by Step
Tom walks through the exact methodology. Start with population. If your service area has one million people, divide by the average household size for your region (approximately 2.3 people per household in most U.S. markets). That gives you approximately 434,000 households.
Next, determine what percentage of those households you actually want to serve. If you are an HVAC company that does not service apartments, and you are in a hot climate where nearly every home has air conditioning, you might use 66%. That gets you to about 287,000 target homes.
Now estimate the replacement cycle. In a hot, inland climate, Tom uses 17 years as the average lifespan of an AC system. Divide 287,000 by 17 to get approximately 16,900 system replacements per year in your market.
Multiply by your average installation ticket. If your average is $20,000, the total replacement market is roughly $338 million per year.
Most brands in competitive markets max out at about 25% market share. Multiply by 0.25 to find your theoretical ceiling: approximately $84 million in installation revenue annually.
Add service revenue (Tom uses 25% of installation revenue as a rough estimate), and you begin to see the total addressable market for a well-run residential HVAC company in a city of one million.
What This Math Does to Your Goals
Running this calculation for the first time is often a humbling and energizing experience simultaneously. Humbling, because most operators discover they are capturing a tiny fraction — often less than 1% — of the available market. Energizing, because it reveals that the constraint on growth is almost never the market. It is operations, lead generation, and sales conversion.
For Tom, this math meant that going into Las Vegas was not about competing with Goettl. It was about capturing a slice of a market so large that even a well-funded category leader had barely scratched the surface. His goal was not to beat anyone. It was to execute well enough to earn a significant slice of a billion-dollar pie.
Run this calculation for your market. Post it somewhere visible. Let it recalibrate what you think is possible.
Using Market Data Strategically
Once you understand your total addressable market, you can use it to set genuinely ambitious but realistic goals, to benchmark your marketing spend against actual market size rather than just year-over-year comparisons, and to make the case to your team that there is enough business out there to make everyone successful.
Tom also notes the importance of running this calculation before entering a new market or considering a significant expansion. Going into Las Vegas, he ran the numbers. Going into Sacramento, he ran them. Every geographic expansion decision was grounded in an understanding of the market’s actual capacity.
He also offers an important caveat about smaller markets: if your city has 50,000 people and one other contractor, realistic market share calculations change significantly. In a very small market, one well-run company might capture 40 to 50% of all service calls. In a large metro, 5% would be extraordinary.
The Bottom Line
Before you set your next annual revenue goal, do the market share calculation for your service area. It takes less than an hour and will fundamentally change how you think about growth potential, competitive strategy, and marketing investment. Most trades businesses are not limited by the market — they are limited by the belief that the market is smaller than it actually is.