HVACR BUSINESS JANUARY 2023

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By Ruth King

THE HVACR MANAGEMENT MAGAZINE

TERRY Tanker

Publisher ttanker@hvacrbusiness.com

HEATHER Langone Managing Editor hlangone@hvacrbusiness.com

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VP Operations bkerr@hvacrbusiness.com

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TERRY Tanker

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Collective Goal Setting: Meeting Benchmarks in 2023

As we embark on this new year, I am reminded that as HVACR owners, you’ve most likely invested a good amount of time and resources, probably more than most small business owners, in determining where to target your collective efforts as an organization.

HVACR Business, founded January 1981, is a monthly national trade magazine serving contractors, mechanical engineers, manufacturers, manufacturer representatives, wholesalers, distributors, trade associations, and others in the heating, ventilating, air conditioning and refrigeration (HVACR) industry primarily in the U.S.

The editorial focus and mission of HVACR Business is to provide business owners and managers with the very best business management concepts available. Critical topics covered include leadership, management, strategy, finance, sales, marketing, training, education, staffing, operations, human resources, legal issues, customer service and more. We are dedicated to helping contractors master these key management skills and provide them with the resources necessary to build strong, profitable companies. Every effort is made to provide accurate information, however, the publisher assumes no responsibility for accuracy of submitted advertising and editorial information.

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Since each department is so interconnected – technicians rely on customer service, sales teams rely on the owner’s vendor relationships, and the entire organization relies on the community and customer patronage – there is never a moment that isn’t reliant on a collective team effort. As such, addressing these efforts and reassessing what is working, can be a key part of continued success. However, since the HVACR industry is so mercurial, literally – it’s controlled by seasonal demands for A/C or heat – the daily goals of the company can often get put aside in place of strong seasonal fluctuation in customer demand. So, although we are in the busy season with winter about to hit its peak in certain areas, the start of the year can still be a good reminder to upgrade your collective company goals and benchmarks.

Time to Set Big-Picture Goals

Indeed, HVACR company owners should always be setting collective employee objectives that include things like strategic planning, expansion, sustainability, maintenance plan upgrades, contract reviews, and performance reviews, but time is precious, and customers call often. So, in the event any of these efforts fall short, it is always a good habit to annually review to ensure that the company staff as a collective, is on the same page and meeting essential benchmarks.

With sustainability, virtual training, and regulatory changes coming this year, it might mean implementing some changes. A look at goals and objectives for your company, done at least once a year as an annual review, is always a best practice.

Below are some pertinent items to grade your company on its efforts and review collective goals as you launch a new year.

Marketing

Is it consistent and aligned in its messaging? Does it still represent the brand? Are the logos everywhere? Does the branding match your fleet? Review the following.

• Ensure that all department goals align with company goals and objectives.

• Break down department benchmarks by implementing team or individual goals, so everyone knows their priorities when it comes to marketing.

• Use Key Performance Indicators (KPIs) and data analytics to help increase accountability of said goals.

• Use incentives to encourage employees to set their own goals.

• Make sure all branding and company messaging are consistent on the website, fleet, sales materials, and in the company pitch.

Performance Reviews

Performance reviews are a collective effort rather than a hierarchal exercise. As a manager, it’s essential to understand that team members will deliver more effectively when expectations are clear, and benchmarks are set in advance with time to be completed. You should be doing regular performance reviews, but before that, review your company’s performance as a whole. Are you delivering these expectations to field technicians and sales personnel? Are expectations clearly stated and benchmarks set in advance? If you need a review, see below.

• Have checklists been created for all team members? Is the messaging clear as far as goals and expectations for their jobs?

• Are you doing performance reviews based on these benchmarks rather than micromanaging on a task basis?

• Do you reward those who are achieving the benchmarks?

• Are there discussions around weakness for those who are underachieving to allow for improvement?

With sustainability, virtual training, and regulatory changes coming to the fore this year, it might mean implementing some changes –even at the local level.

A look at goals for HVACR efforts in all areas, done at least once yearly as an annual review, is always a best practice.

Regulatory Changes Go Into Effect in 2023

Regulatory standards and changes take effect in 2023. Is your company prepared? Let’s review.

• Review these regulatory changes with technicians and the entire team. Don’t assume they all know. Make sure the entire organization is fully apprised of the product upgrades, the impact that these new refrigerants will have on equipment and duration, and the new standards regarding its effect on installation.

• Have all your vendors upgraded their products to align?

• Do you have a surplus of products that are out of compliance? Is there a financial loss?

• Update your balance sheets to reflect inventory loss or changes in product storage.

Sustainability Meets the Mainstream

Sustainability is a big customer “want’ in 2023. Manufacturers in the HVACR industry are ahead of the curve but some contractors have been slower to adapt. Now is the time to get on board, so that you don’t get lost among the competition that is making sustainability a priority. Here is what you can do to prepare.

• Review products that you may be able to substitute with eco-friendly versions. Most companies have upgraded existing products to be more sustainable.

• Update your marketing to highlight your commitment to sustainability if you are already using eco-friendly or energy-efficient systems. Don’t overlook this marketing “selling point” as it is very appealing to some buyers.

So, whether your collective goals involve expansion or a back-to-basics review, or a realization of some necessary change due, start exactly where you are and take small steps. Every effort made now to improve your business and set collective goals for the organization is a positive move in the right direction.

• If you don’t have a plan in place yet to upgrade the organization to include a commitment to sustainability, set a goal to meet certain benchmarks by the halfway point in 2023.

Training & Processes

Recruiting and labor shortages are demanding newer more remote and virtual ways of training. Have you updated your training processes? Here are some tips.

• Virtual training is the word with many growing HVACR companies. Have you done the research? Even if you aren’t ready yet, have it on your radar so that you can attract top talent.

• Are your training processes clearly defined and consistent throughout the company?

• Review your training options. Is the training you have in place working? Are your technicians performing? Do you need to make some progress in this area especially if you are struggling with recruiting? We have written some interesting researchdriven articles on VR. If you need a jumpstart, read the latest. https://www.hvacrbusiness.com/ news/2022/nov/01/top-5-hvacr-techenergy-software-trends-in-2023/

Maintenance Plans

Have you reviewed your maintenance plans lately? If not, this may be a good article to review. https://www. hvacrbusiness.com/news/2019/nov/01/ recurring-revenue-is-your-rocket-fuel/

• Is every technician offering a maintenance plan during a service call? Have you reviewed their performance at appointments lately? How often are customers opting in?

• Do you have the latest mobile technology to streamline this process so customers’ expectations are met at the service appointment and then more likely to buy into maintenance agreements?

• If you are still lacking in this effort, set some benchmarks for the year so that by the end of the year, you have made some progress

Wherever you find yourself in 2023, the good news is you made it through another year, business working and intact, and you are still growing. So, whether your collective goals involve expansion or a back-to-basics review, or a realization of some necessary change due, start exactly where you are and take small steps. Every effort made now to improve your business and set collective goals for the organization is a positive move in the right direction.

Management Resource Shelf

Adopting a Growth Mindset

If you recall taking the leap of faith that is required when starting a business – whether you own a small or mid-sized HVACR business – then you know that certain resources like peer advice and learning tools can be crucial at every stage. Many of our most successful guest authors have referenced books and advice that helped immensely and allowed them to achieve real growth and achievement for their HVACR businesses. But you don’t have to go through each article to find references, with our Management Resource Shelf, we have done the sifting for you… and we’ve added a couple of podcasts as well. The following are our recommendations for the best books and podcasts on adopting a growth mindset for HVACR owners. Here are our recommendations for January 2023.

101 Dumb Financial Mistakes Business Owners Make… And How to Avoid Them

Ruth King

Ruth King is well-known as “The Profitability Master” and a prolific business author. King is the author of Profit or Wealth? Simple Rules for Sustainable Business Growth and her latest book released on Amazon this month, “101 Dumb Financial Mistakes Business Owners Make… And How to Avoid Them,” is a must-read. King is also HVACR Business’ resident financial columnist. A giant in the HVACR industry, she is passionate about helping small business owners get profitable and stay profitable.

As the owner of Business Ventures Corporation, which began operations in 1981, King coaches, trains, and helps contractors and others achieve real business growth objectives. www.ruthkinghvac.com/ruths-books

Build and Grow Your HVAC Business: How I Turned $274 into a Multi-Million

Greg McAfee

Dollar Company

Build and Grow Your HVAC Business is for any service business owner or integrator who desires to take their business to the next level, whatever that level may be. According to the author Greg McAfee, there are a few elements that he believes can help with your success:

• Developing a strong desire to take care of a customer

• Swallowing your pride and relying on others who are smarter and/or wiser

• Be thankful for every sale you make and every new customer you acquire

• Have faith in God and rely on Him.

Never forget where you came from!

Says McAfee, “It doesn’t matter who you are, where you came from, or which market you are located. With integrity, determination, and tenacity, you can achieve your dreams.”

www.amazon.com/Build-Grow-Your-HVAC-Business/

A TO Z Residential HVAC Service Business Book Mastering a Thriving Business

Wendell Bedell

Celebrated author and creator of many programs which help HVACR business owners obtain the best-of-the-best-practice information about operating a residential or commercial HVACR service, retrofit, & replacement business, Wendell Bedell, is a master in the space. The Club's eBook and training classes have helped thousands of residential and commercial HVACR service businesses grow exponentially. You can use the processes right out of the book or order MS Office versions and customize them to your unique business requirements. The “A TO Z Residential HVAC Service Business Book” is a terrific manager reference guide for choosing the right direction for your residential or commercial HVACR service, retrofit, & replacement business. www.joinhvacsuccess.com

Your Next Five Moves: Master the Art of Business Strategy Patrick Bet-David

Both successful entrepreneurs and chess grandmasters have the vision to look at the pieces in front of them and anticipate their next five moves. In this book, Patrick Bet-David translates this skill into a valuable methodology that applies to high performers at all levels of business. Whether you feel like you’ve hit a wall, lost your fire, or are looking for innovative strategies to take your business to the next level, Your Next Five Moves has the answers.

https://store.valuetainment.com/products/ signed-your-next-five-moves-hardcover

The Growth Vault Podcast

One of the top HVAC podcasts is The Growth Vault Podcast with Joshua Latimer. Latimer teaches tens of thousands of home service business owners like you how to grow a profitable 7 figure business. Every week, he delivers systems designed to help you gain mastery over Marketing, Admin, Production, and Sales inside your company. As Latimer states, he “opens up the vault so you can finally take hold of the life and business you deserve. There is only one thing between where you are today and where you want to be and that is the growth you’re willing to endure.”

www.thegrowthvault.com/josh-latimer

ControlTalk Now

Eric Stromquist and Ken Smyers, from Controltrends.org and the ControlTrends Awards, host this smart HVAC podcast for listeners who want episodes and topics on Building Automation Controls, Building Sustainability, and Smart Buildings Industry. Eric, who is the owner of Stromquist & Company, and Ken Smyers from the DMS Controls Group are both major distributors of HVAC and Building Automation Control systems including Honeywell, Siemens, and Johnson Controls. Working in the field daily, they are experts on smart building, green systems, and more energy-efficient HVAC products. Listen for the latest on building automation control trends and HVAC and building automation control systems.

www.podcasts.apple.com/us/podcast/ controltalk-now-the-hvac-and-smart-building/id908832109

TIPS TO MOTIVATE YOUR TEAM AFTER THE HOLIDAYS

Creative ways to avoid a post-festivities holiday slump

BY HEATHER LANGONE

We all know that HVACR staff and field technicians are your most valuable assets when it comes to keeping your customers satisfied. Without an enthusiastic and productive team, your productivity and profitability would plummet. But just like businesses, people also suffer through ebbs and flows when it comes to personal motivation. We’ve all heard of the Monday Blues. And, there is a reason why Wednesday has been nicknamed hump day – it’s halfway to the weekend. When it comes to the holiday season, it can be even more of a challenge to keep your team motivated and in the flow with so many days off and work interruptions. While it might be acceptable for some

For technicians, you might offer a commission structure or added PTO, after they receive a designated number of positive reviews at service appointments, or as a reward for the most sign-ups for maintenance plans and long-term contracts.

types of businesses to slow down a bit right after New Year’s, in the HVACR industry – a seasonal and demandbased industry – the winter months are when your team must be extra-spot-on. So, after all the downtime and overindulgence in food and drink, how do you keep motivation and productivity at peak performance levels? Believe it

or not, a simple pep talk, like, “OK, the holidays are over. Let’s get back to it,” isn’t always the best strategy. And while holiday bonuses do go far to demonstrate appreciation for your team and have been shown to result in an increase in productivity and loyalty, not all company owners can afford the extra expense right now.

What are some extra steps you can take to assure that your team is at its best and ready to roll right now – not in a couple of weeks when everyone feels a bit more settled – and ehem, just in time for Valentine’s Day?

Here are a few creative ways to motivate your HVACR team and avoid the dreaded holiday slump.

1. Offer Short and Long-Term Incentives to Kick Off the New Year

After your team has returned from vacation and recovered from all the holiday parties – this is a great time to convene to inform the entire team of

new incentives. There is nothing like receiving an incentive of an extra few days PTO, or a paid commission structure, or even a gift card, to get an employee back in the flow at the start of the year. Studies show that employees who can accrue vacation time and sick time are more likely to stay committed to their work. According to the Society for Human Resource Management (SHRM), one study (https://www.shrm.org/ resourcesandtools/hr-topics/employeerelations/pages/workers-taking-morevacation-.aspxore) People Are Taking Time Off, and That’s Good for Business (shrm.org) found that 78% of managers agree that vacation time improves employees' focus. If you can do it, it is the perfect time to offer these creative PTO incentives to the highest-performing team members who meet certain benchmarks.

For technicians, you might offer a commission structure or added PTO, after they receive a designated number of positive reviews at service appointments, or as a reward for the most sign-ups for maintenance plans and long-term contracts. And, for sales and CSR, offer incentives for new customer sign-ups or sales quotas. If your company cannot afford to add PTO or commissions, offer a gift card, or a dinner for two at a local restaurant.

2. Reward Training Progress

Training is an investment in your employees. But it’s also an investment in the future of your company. Unmotivated recruits struggling through lackluster training, isn’t the best foundation for success. To avoid a holiday slump or interruption in the flow of training, especially for new recruits, reward them for training progress. Since online HVAC training (http://interplaylearning.com) technology can now monitor employee training performance, you can offer an incentive as the recruit meets certain training benchmarks. This also shows value to the new guys since they can’t take part in contract sign-up incentives. You can also offer training as the actual incentive. Perhaps you have employees who want to grow from field technician to management, or CSR to field technician, offer a training jumpstart for anyone who wants to take advantage of it. You can allow them one day or a few hours per day while working in their present position. Again, this shows employees that you appreciate their

efforts, and it goes miles to interrupting a lack of motivation after time off. It can be especially effective now since many people set personal career goals at the start of the year. If an employee is feeling a lack of growth, this can be the push they need – but again attach it to an incentive or add it as a reward for performance.

3. Inspiration Leads to Motivation

Sometimes, all it takes to motivate a team is an inspiring leader. If you believe in the goals ahead, and you can deliver that message in a way that inspires your team to get behind that messaging, then that is half the battle to interrupt a holiday slump. Perhaps you can share a video from a philanthropic event that you were able to attend or donate to because of the success of the team over the past year. If so, directly connect the company’s productivity to your ability to donate and change lives. Example: You show a video from a visit to St. Jude’s Children’s

Hospital and then remind the team, “So, let’s double our efforts this year so we can help these kids again.” Or you might offer to match. For instance, for every five hundred dollars extra that the team brings in, you might offer to donate a percentage to St. Jude’s Children’s Hospital again or a local charity that the entire company can get behind. But inspiration doesn’t need to involve money. You can have a meeting where you thank each team member for being the best part of the company and then read some of the top testimonials from the year – show the employees that they matter. Or you can have an employee celebration breakfast. But make it all about the employees. Inspire them to keep doing the great work they have been doing and thank each member of the company as you kick off 2023. Or just offer a tips box. Let every employee write down one amazing thing about working in the company, and one suggestion for change, and keep it anonymous. Read them off at the morning meeting and

promise to review all the suggestions. If your employees are feeling low after a slump, it’s a great way to inspire plug-in, and take a collective morale temperature check.

4. Part-Time vs. Full-Time Employees

Many HVACR organizations rely on part-time and contingent workers to fill gaps in their employee scheduling – a common practice for most HVACR owners as it allows them to scale their capabilities during the peak and shoulder seasons. Although these workers may not be considered full-time employees, don’t discount their contribution to your organization. They are still considered the front line of your company and affect your customer retention. If you think your company team – a team inclusive of all types of employees – needs an energy or morale boost

Sometimes, all it takes to motivate a team is an inspiring leader.

If you believe in the goals ahead, and you can deliver that message in a way that inspires your team to get behind that messaging, then that is half the battle to interrupt a holiday slump.

post-holiday season, the disconnect may be in the lack of clear communication and expectations. Sometimes all that’s needed is a clear set of expectations or a review of expectations, and a chance for your employees to meet performance benchmarks based on these expectations. If you are hoping to inspire motivation and avoid a slump, designating one day where you schedule induvial team member meetings (group meetings) to reassess expectations and set 2023 benchmarks, can be all that’s needed to reset. But particularly when it comes to part-timers who may not always be there but only work on-call or to fill a gap, they may often fall through the cracks or be excluded from team expectation meetings. Be sure to include every employee – whether a part-time or fulltime employee – in this expectations day.

5. Lead by Example!

The last tip is simple in theory but requires taking some personal inventory. Is your team lacking motivation? Does

If

the moral seem so-so? Whether it’s a slump due to the holidays or not, you may need to look to leadership for the fix. There is an old (rather strange) saying – water seeks its own level. Figuratively, it means people tend to become like their associations. If you are a leader and you aren’t motivated or feel blah about business, your team will pick up that attitude. If you are an HVACR owner or high-level executive, you set the example. And there may be no one to inspire you or offer an incentive. If you can’t find motivation, look to your team and recognize the great ones with a handshake or a personal visit to a field service appointment to tell them how great they are doing. Give what you lack, and soon, you will be back in the flow. u

Heather Langone is Managing Editor at HVACR Business Magazine. For questions or comments email: hlangone@hvacrbusiness.com

6 Common Field Service Roadblocks That Waste Time and Slow Contractor Growth

BY LEON WEISS

Efficient use of time is critical in field service. Customers don’t want to wait on repairs, installation, or preventive maintenance. Technicians who can deliver service quickly and effectively keep their lives on a schedule, and help contractors earn their trust — which, in the long run, translates to customer loyalty and repeat business. In addition, contractors depend on the productivity of their techs in the field. Accurate, efficient service is fundamental to success. As critical as good time management is, small changes can make a big difference. Almost any business owner can achieve immediate meaningful results by improving workflows and processes to solve the biggest and most common time wasters.

Here’s a closer look at six ways field service professionals lose time and accuracy, and how data-powered technology solutions designed to center and enable techs can prevent them and help service businesses grow.

1. Manual tasks and data entry: Manual processes are one of the biggest time sucks for technicians in the field. Whether it’s entering the make, model, and serial number of an HVACR unit or writing out a descriptive summary to communicate the scope of work to a client, these tedious tasks extend a technician’s time on site. Also, manual data entry increases the risk of errors in documentation. Technology solutions that arm techs with automated workflows and optical character recognition (OCR) capabilities streamline the service process and eliminate the risks associated with manual data entry.

2. Searching for support on the job: For new field service technicians, many lessons can only be learned through experience. Traditionally, new field service technicians might learn many of their skills by shadowing a more experienced tech — not the model for operational job site efficiency. Proper training and realtime support enable even new techs to

commit to best practices, reducing risks on every single call.

Too often, qualified techs who want to solve an issue on their own find themselves losing precious time sifting through online search results. Not only do they lose time searching and reviewing the results, but the so-called solutions they find may also be inaccurate, leading to callbacks and customer credits or refunds. Instead, technician enablement tools empower teams in the field by putting thousands of hours of earned experience, trusted resources, and collective wisdom right at their fingertips.

3. Calling for help and second truck rolls: When working on a complex repair or intricate piece of equipment, it’s not uncommon for an onsite technician to call in for feedback or additional support to get the job done. While this is a useful step toward accuracy and efficiency, it adds time to any job. If the technician is playing telephone tag or has other obstacles to real-time communication, it can introduce additional opportunities for errors to enter the job.

Contractors can prevent these delays and mistakes by investing in proactive technician training tools that enable live, interactive video support that saves technicians and customers valuable time. Technician-focused technology that can index and analyze data from data plates is also an excellent solution to having to roll a second truck. With the aid of that specific type of technology, technicians have immediate access to answers — manuals, diagrams, and job history based on the serial or model number of the unit they are working on.

know and understand the technical details of their HVACR, plumbing, or mechanical equipment. This lack of understanding can lead to a lengthy decision-making process if there’s also a lack of transparency regarding the work a technician is recommending.

4.

Missing service

sales opportunities on the job: With cloud-based technology, a technician can efficiently gather information about the unit, capturing photos and videos to send out to a customer/sales team in real-time—quite literally showing a customer that their piece of equipment is ready to be serviced. Generating this level of transparency validates everything that a technician has communicated to the customer, making upsells seamless.

Additionally, using OCR technology, when a technician snaps a photo of a data plate, the make, model, and the serial number of the unit are automatically indexed. Any information uncovered from that indexed data— issues from anywhere in the world — the technician will be alerted to look for those problems, be proactive, and upsell their service.

5. Inventory and extended lead times on parts and materials: With 94% of companies on the Fortune 1000 list seeing supply chain disruptions, the service industry is now facing equipment and parts shortages on top of the growing labor shortage. With lead times for receiving specific parts and materials at an all-time high, one of the best ways to save time and complete a job faster is to perform remote diagnostics before a technician makes a trip on-site. Utilizing a remote video communication tool can help counteract extended lead times by allowing technicians to survey sites and diagnose problems ahead of time, and order the necessary parts and equipment sooner.

6. The customer decisionmaking process: In field service, most customers aren’t trained to

Today’s tech-savvy customers expect more than just words when facing a highcost repair or replacement. They want to see visual evidence — the laboring compressor that is wheezing away or the water dripping below the unit. Utilizing technologies that provide customers a complete visual overview of the state of their equipment and quoted or performed work is one of the fastest ways to keep them informed and build trust, which helps expedite the current decision-making and ensure more informed, efficient decisions on future projects.

If these time-consuming tasks and roadblocks are consistent challenges to efficiency and productivity, consider techenablement technology solutions that can streamline all stages of field service, from diagnosing issues to decision-making. A tech-enablement approach means simply starting with a technician’s perspective. The curb-to-curb experience of the hard-working people on the front lines of field service should drive workflows from the start of a job to its completion. By delivering essential job data and real-time AI-driven analytics, contractors and their teams can streamline workflows and see immediate improvements in productivity and financial performance. When technicians in the field have the powerful tools they need to operate efficiently and accurately, they’ll spend less time on support, inventory, upsells, and data entry. And they can help you become the employer of choice in your market. u

Leon Weiss is the chief financial officer for XOi Technologies, a provider of technician-first smart technology that empowers commercial and residential field service teams to drive productivity, elevate customer experience and help close the skilled labor gap.

As critical as good time management is, small changes can make a big difference. Almost any business owner can achieve immediate meaningful results by improving workflows and processes to solve the biggest and most common time wasters.

BUILDING YOUR CUSTOMER LEADS WITH WEATHER & CONSUMER DATA

BY KEITH SNOW

Consumers are growing more comfortable with personal data collection, but it also means they’re expecting much more in return when it comes to marketing and advertising.

Personalization is now table stakes –and 76% of consumers report feeling frustrated when they don’t get it.

HVACR businesses can finely tune their marketing efforts and deliver on these expectations by leveraging a combination of available weather and consumer data. When used together, they heighten the relevance, focus, and efficiency of campaigns and deliver better results for every dollar spent.

Although it’s more possible than ever to collect customer information, it’s not uncommon for HVACR businesses to have minimal or missing details about their customers. Many databases contain only names and addresses. For truly data-driven marketing, a greater level of detail and insight is necessary.

Tune Into Your ‘Perfect’ Customers

On the surface, it may seem that every homeowner in your service territory should be an advertising target, but the reality is, only a percentage will be the right fit for a specific product or service at

any given time. Focusing on those “right fit” segments should be rooted in data, not feelings or memory, to make the most of your time and investment.

Although it’s more possible than ever to collect customer information, it’s not uncommon for HVACR businesses to

have minimal or missing details about their customers. Many databases contain only names and addresses. For truly datadriven marketing, a greater level of detail and insight is necessary.

HVACR companies can enrich their customer data by leveraging the wealth of information available through national consumer databases. This information is collected, aggregated, analyzed, and updated often at least monthly by reputable providers such as national consumer credit and data companies. Their information is synthesized from a variety of credible sources such as public records, census data, aggregated credit information, publications, self-reported surveys, retail transactions, and digital

data. Through these national consumer databases, an HVACR business can obtain information on 95% of the U.S. population.

Starting with very little, it’s possible to quickly develop a rich customer picture that includes many pertinent details such as demographics, income, education, life stage, property data, messaging styles, preferred media channels, financial insights, and purchase behavior. This information can be layered on top of an HVACR business’s sales data to develop detailed personas of “ideal customers” and then grouped for the type of product or service, when they prefer to purchase, on what channels to reach them, and their preferred messaging styles.

Use Anticipated Weather Events to Make Timely, Relevant Connections

It’s said that timing is everything and there is a special significance to this adage in the world of HVACR marketing. The seasonal and cyclical nature of the business means staying in sync with who needs what, and when.

This can go much deeper than simply marketing products and services by season – it’s possible to use real-time weather conditions to drive perfectly-timed campaigns. Savvy HVACR businesses are using specific anticipated weather forecasts and events to connect with their ideal customer personas at precisely the right moment.

Here’s a use case showing how your business might apply this.

Scenario 1: Let’s say in this scenario, your customer database analysis, and enrichment, revealed that first-time Millennial homebuyers who bought homes older than 15 years had the highest percentage of a/c service requests in the past two years.

When the weather forecasts predict more than four days above 85 degrees over an extended period, a digital advertising campaign can be automatically triggered to launch ads targeting consumers in your service area who fit this profile. The ads will appear on the websites on which these “target buyers” are already browsing.

And, because your research revealed that this audience is price-conscious but favors local businesses, your message can include a special offer and tailored messaging that helps your business stand out and connect on the points most important to this population.

With a deep understanding of your customers and their purchase behavior and searches, under specific weather conditions, you can make every marketing interaction more intelligent, meaningful, and effective. Personalization at scale is a powerful way for HVACR businesses to put data to work in a way that adds value for your customers and your business. u

Keith Snow is the president of B2E Data Marketing, which provides data-powered marketing campaigns to the home services industry. The data scientists at B2E help HVACR businesses leverage consumer and weather data to target ideal customers with personalized messages influenced by their unique preferences and weather-related behaviors. Learn more at marketing.b2edata.com/ home-services

HVACR companies can enrich their customer data by leveraging the wealth of information available through national consumer databases. This information is collected, aggregated, analyzed, and updated often at least monthly by reputable providers such as national consumer credit and data companies.

PERFECTING YOUR PRICE BOOK

How Does Your Residential Sales Presentation Look?

BY WILL MERRITT

Pricing jobs for residential HVACR businesses can be a daunting task these days. Do you keep it old-school with a handwritten quote, or do you go with the modern laptop approach? I’ve seen both be effective in our industry. The handwritten template may be better received by older consumers. They may feel it is more genuine and less slick. On the other hand, the slick computer program may be more impressive to the savvy buyer. Let’s break it down from the buyer’s perspective first.

What Does the Consumer Want?

First and foremost, you would not be quoting the price for a new HVACR system for them if they did not need a new one. People don’t casually shop for a new heating and air system. It’s not like looking for new furniture or a new automobile. It is needs-driven. The customer would not be calling you if their system worked! Our job is to make it easy for them by solving the problem. Let’s dive into how we can achieve that!

Identify Your Customer and Their Needs

Ask the proper questions to your potential new customer and find out what they want and deliver it. The following

The customer would not be calling you if their system worked! Our job is to make it easy for them by solving the problem.

questions can help you narrow down your specific customers’ needs.

• How long do they plan to be in this home? Are they planning on selling?

• What is their current level of comfort? Ask for specifics like; “hot and cold spots”, “humidity problems”, “reliability”, and “energy costs”.

• Do they have allergies?

• Are they concerned with energy costs?

• Have they added on to their home or plan to in the future?

Over time you can perfect your price book by deciding who your customer is. Also, just a tip – if you can determine quickly what personality type you are dealing with, this can have a huge impact on your closing ratio. DISC profiling is a unique way to identify how your potential new customer thinks and what presentation will most appeal to this type of customer.

Example: Homeowner “A” wants to be given options to choose from, and

homeowner “B” may want to be led down the correct path with one defined option. DISC profiling or similar methods will help you identify the type of customer you are presenting to, and it will ultimately lead to better closing rates and higher sales! Send this information to all your sales and tech people and do regular sales and presentation role-playing at meetings. Eventually, if everyone is clear on who your customers are, and how to profile customers to increase sales, you should be able to refine and hopefully perfect your price book to align.

Pricing the Job

For the longest time, our industry treated each job as its own. What I mean is each job was engineered on every quote. You determined the size and efficiency, the materials needed, and the labor required to complete the job. These were added up and presented to the consumer, typically days after the first visit to the consumer’s home. There does not need to be a lag in close time or invoicing anymore, not with digital and

mobile options. But whether you work with a handwritten proposal or a digital presentation, both options can have real value, depending on your customer. Still, you should close the deal when it’s most needs based. Remember my first statement, “The customer would not be calling you if their system worked!” Solve their issue expediently.

The Hand-Written Proposal

This method still has value in today’s high-tech world! I have witnessed very large HVACR contractors using this method with a high degree of success. The contractor knows their pricing by size and efficiency. They simply fill in the blanks on the proposal while at the consumer’s home. This method tends to work very well when heating and air companies let their service technicians sell. Certain types of more traditional, older homeowners identify with the service tech because they are more “honest” and “trustworthy” than the “polished” salesperson. The secret here is to KEEP IT SIMPLE!

Laptop or Mobile App Presentation

This type of presentation is becoming more of the norm in the HVACR industry today. It looks professional,

can easily present options, and is easy to keep pricing up to date. These sales presentation programs and apps are visually appealing to the consumer’s eye. And they make it easy to close and see everything right there, with no excessive paperwork. Also, the digital presentation can make your company stand out compared to the competition.

Examples of sales presentation software include:

• Housecall Pro www.housecallpro.com/features/ estimating-software/

• On Call Air www.oncallair.com/

• Service Titan www.servicetitan.com/features/ pricebook-pro

• Opportunity Manager www.opactive.com/content/ opportunity-manager%E2%84%A2

• HVAC Bizpro www.entsellingsolutions.com

Advantages of Digital Presentation:

• Trust: You can build the system and price right in front of the homeowner. It can build trust with your buyer. Here’s what I mean: If they want to add an accessory or increase/decrease the efficiency of the system being proposed; it’s done right in front of them!

• Saves Time: Gone are the days of engineering every job!

• User Experience: It is easy to make changes to your proposal in a matter of seconds. Example: The consumer likes the idea of a variable speed indoor unit but doesn’t want to spend the extra money on the variable capacity outdoor unit. You can make the change on the fly!

• Access & Transparency: Today’s digital presentation software gives you the ability to email it to the customer, automatically saves your presentation, and keeps an accurate account of the customer information and materials needed for the job.

• Follow-up: Today’s software allows for timed or automatic follow-up.

• Financing: Most programs today, include a financial component, which immediately presents the financing option to the consumer.

This leads us right into one of the most important pieces of a residential HVACR presentation today……FINANCING!*

Offer Financing

As you perfect your price book, you will want to look at the option of adding financing. I often ask contractors today. How many jobs are you financing? You would think the number would be substantially high, but in all reality, many say, “10-15% of our jobs.” That number always shocks me. We live in a society where monthly payments are the norm, yet much of our industry underutilizes residential financing! I hear companies say, “We don’t get asked about financing very often.” The rule of thumb in the residential retail business is to offer it upfront. Derrek Hofrichter, a coach and trainer for Service Business Evolution, an organization dedicated to helping contractors succeed in business, offers the following advice on financing.

We don't have a set KPI specifically for this, but historically contractors that are struggling with selling systems and having the margins be where they need to be, are financing below 30% or even much less like 15% to not at all. The largest, most successful contractors we work with are almost always over 65%.

Consumers today live on monthly installments or financing. Ask yourself, what looks less threatening to a homeowner who just had their heating system condemned with a cracked heat exchanger? $12000.00 for a new HVACR system or $289/month?

Let’s look at the benefits of offering financing:

• Historically offers a higher closing percentage

• Higher ticket values

• Higher efficiency systems sold

• More accessories sold

• More extended warranties sold

The lesson here – everyone wins, the heating and air contractor closes more jobs, and the consumer gets higher value and comfort from their new system.

The Low Price Rarely Wins

The roots of our industry stem from residential new construction or RNC. How do you win these jobs? Offering the lowest price is not always the best long-term solution for success in the Add-On Replacement or AOR business. Consumers are looking for value. The average homeowner purchases HVACR two and a half times in their life, so the purchase of a new heating and air system is few and far between. The consumer doesn’t know what it costs today. Most are shocked by the amount of the investment. Consumers want to make their purchase count. Let’s face it, replacing your home’s heating and cooling is one of the most expensive investments for homeowners. But how does the lowest price look to a consumer – psychologically? It looks like that’s not the best product or value.

Let’s look at this from the consumer’s eyes, you are Mr. and Mrs. Homeowner X, and your system is down and needs to be replaced. You decide to contact three different local contractors.

Contractor A: System price of $15000

Contractor B: System price of $12000

Contractor C: System price of $8000

All three are quoting similar products with similar efficiencies.

What has been taught to many consumers? The general rule for most is to get three estimates. Do research. Now, those estimates can be delivered, in most cases, in minutes, with the immediacy of online quotes. However, you are perfecting your price book, not begging for the job. So, let’s look at the average customer’s shopping behavior. What do most people do? They look at three estimates and then go with the one in the middle. The thought here is that the consumer perceives the low-price contractor as having left something of value out of the job, or they are desperate. How can the higher-priced contractor be almost double?

Take the Time to Sharpen Your Tools

Today’s consumer is very savvy. Take

time to sharpen your presentation skills, upgrade your invoicing and tools – maybe add digital options if not eliminate paper proposals, and know your customers. And to help you do that, in addition to the presentation links above, I’ve added various software links for services that offer differ functionality and may also be peripherally helpful when perfecting your price book. Bonus – I’ve cut down on your research time and divided them into categories.

Management/chat software options include:

• Podium www.podium.com

Job management software for tracking jobs, materials, labor, and costs which may also help when refining and perfecting your price book. See the following links:

• Sim Pro www.simprogroup.com

• Successware www.successware.com

• ECI Software www.ecisolutions.com

• Routezilla www.routezilla.com

Management coaching, consulting, and training to drive profit and growth:

• BDR www.bdrco.com/about/

And finally, a call tracking service for dynamic insertion call tracking:

• CallRail www.callrail.com

Remember: as it pertains to presentation and proposals, first identify what type of customer you are presenting to, determine their needs, and deliver the proposal quickly. It will help you close more jobs at higher ticket values. Over time, if you follow all these best practices, you will have the perfect price book for your business. u

Will Merritt is the managing partner at Effective Media Solutions in Charlotte, NC. He has more than three decades of experience creating marketing solutions for business owners. For more, visit http://myeffectivemedia.com or email will@myeffectivemedia.com.

Offering the lowest price is not always the best long-term solution for success in the Add-On Replacement or AOR business

PROVIDED BY KEVEN PRATHER, CFBS

5 Aspects of Strong Goals and the Consequences of Missing Them

Setting goals is a catalyst for success, especially if you’re planning for the future of your ownership and the success of your business. The strongest goals tend to have five aspects that help you guide the process of achieving them. In other words, when you set goals, you want to set SMART goals:

Specific Measurable Accurate Realistic

Time-limited

Let’s look at how each of these aspects can help you create goals that let you plan for the future of your ownership more successfully.

Specific Goals Inspire Action

Though it can be challenging, setting specific goals allows you to act on them. Consider the difference between a vague goal and a specific goal.

Vague goal:

I want to retire in about five years, around the time I turn 65.

Specific goal: I want to retire on my 65th birthday.

These goals may seem like they’re saying the same thing, but they aren’t. Vague goals are harder to achieve because they’re easier to push off. Setting vague goals is also like trying to hit a constantly moving target.

Specific goals give you something tangible to aim at. They can also motivate you to start acting sooner, rather than later. Sometimes, business owners hesitate to set specific goals because they aren’t sure how they’ll achieve them. However, you’re much more likely to make progress toward achieving goals when you have a good idea of what you’re pursuing. When setting specific goals, it’s important to remember that you can (and should) revisit and adjust them as necessary.

Specific goals aren’t necessarily written in stone. You can change them. Setting specific goals helps you focus on why you’re pursuing the goal, how you’ll act on it, and what happens as you act on it. Vague goals often get lost in the ether.

Measurable Goals Keep You on Track

When your goals are measurable, you give yourself a baseline to determine your success. Saying “I want enough money to retire comfortably,” isn’t a measurable goal because it doesn’t tell you how much you need and why or how you define “comfortable.” And if you don’t know how to measure your goal, it’s nearly impossible to determine how close or far you are from achieving it.

Instead, a goal such as, “I want to sell my business for $15 million on this date in five years” is measurable. It gives you a number you want to achieve, and a timeframe in which to do it, and encourages you and your advisors to focus on doing things that help you achieve it.

Accurate Goals Minimize Surprises

Many business owners underestimate how much money they’ll need to retire with financial security. Some business owners believe that they’ll need less money in retirement than they did while they owned their business, which is rarely the case. Instead of relying on gut feelings about what you’ll need, a stronger strategy is to accurately determine what you need. Some of the best ways to do so are by working with professionals who can analyze your financial and business needs objectively.

Consider this example. You think you

need $3 million to retire comfortably, based on what you assume you’ll spend and how long you’ll live. So, you sell your business for enough money to get you $3 million after taxes. After a few years, you realize that you can’t do all the things you wanted because you don’t have enough money. You consider starting a new small business, but now you cannot. You want to continue to travel as you did before, but also cannot. While it’s true that you achieved your goal, it turned out that your goal was inaccurate, which didn’t let you retire as comfortably as you wanted. Accuracy applies to matters beyond financial security. For instance, you may realize that protecting your employees and maintaining company culture is more important than getting the absolute most money possible. Unless you can accurately assess the goal you want to achieve, and why you want it, it can be extremely difficult to pursue those goals effectively.

Realistic Goals Mitigate Disappointment

It’s important to strive for the best, but it’s just as important to be realistic with your goals. Unrealistic goals can stifle progress or make it impossible to even start pursuing your goals.

For example, picture a business owner who thinks he can sell his business at any time because he believes the business is worth $5 million. Annual revenues have only topped $1 million one time, and he makes all the big decisions himself. When he discovers that no one will give him even close to $5 million unless he continues working at the company (but not as the owner), he gives up, thinking that if it’s not worth $5 million now, it never will be.

When your goals are realistic, you will be motivated to pursue them and stick with them even when obstacles arise. Realistic goals can still be ambitious, but they should also be attainable. Otherwise, it’s too tempting to just give up.

Time-Limited Goals Keep You Moving

Goals with deadlines keep you moving forward because they require you to reach certain milestones by a set time. This is especially important for business owners. As an owner, daily responsibilities can fill your schedule quickly. That often leaves you little to no time to focus on longterm goals.

When your goals have a deadline, it forces you to focus on what you must do to achieve your longer-term goals.

“I don’t have time for that” becomes an invalid excuse, which can motivate you to dedicate the necessary time to pursue your longer-term, bigger goals.

So, we encourage you to pair your SMART goals with some form of accountability – write them down, talk about them with your most trusted advisors, and give yourself rewards or consequences for goals that are achieved or missed. Bringing others into your SMART goals planning can increase your chances of success.

We strive to help business owners identify and prioritize their objectives for their business, their employees, and their family. If you are ready to talk about your goals for the future and get insights into how you might achieve those goals, we’d be happy to sit down and talk with you. Please feel free to contact us at your convenience. u

Keven P. Prather is a registered representative of and offers securities and investment advisory services through MML Investors Services, LLC. Member SIPC. Call 216-592-7314, send an email to kprather@financialguide. com or visit transitionextadvisors.com.

Setting specific goals helps you focus on why you’re pursuing the goal, how you’ll act on it, and what happens as you act on it.

WHAT DO CONTRACTORS NEED TO KNOW ABOUT HVAC AUTOMATION & 5G?

BY EMILY NEWTON

The 5G network is gaining prominence worldwide and will undoubtedly impact HVACR automation opportunities and consequently, smart systems installations. Here’s a look at what contractors in this space should know about what’s ahead.

5G Rollouts are Happening Slower than Clients Expected

Clients interested in immediately getting 5G-related solutions when investigating new HVACR products may find little-to-no options in terms of products that have gone through

extensive real-world testing. That’s because many of the possibilities remain in the early stages of development.

While it’s true that 5G and automation advances mean that internal HVACR automation, including fleet GPS apps will get faster and smarter, keep in mind, the decision to make automation upgrades does not only refer to your internal

systems and the respective impact. Automation and 5G upgrade requests are increasing in scale based on customer demand for residential smart applications as well as requests for commercial building upgrades. It’s important to educate yourself while you have time so you can be a more valuable resource for clients. What you will likely learn is that

the 5G rollout is not moving as quickly as once predicted.

One example is the partnership between Siemens Smart Infrastructure and Qualcomm Technologies Inc. The goal for this pairing is to see how well a private 5G network works1 for running smart HVACR technologies. The tests will occur on a proof-of-concept 5G infrastructure developed within a Siemens facility in Illinois. However, development is still ongoing. According to Qualcomm, the team intends to prove every step of the 5G customer adoption journey, from system design to integrating connected devices into cloud-based solutions. The takeaways from this real-world experience

Automation and 5G upgrade requests are increasing in scale based on customer demand for residential smart applications as well as requests for commercial building upgrades.

in the test facility will undoubtedly become valuable for contractors who want to help their clients upgrade their HVACR automation systems.

5G Automation & Automation Upgrades Require Planning

For any HVACR contractors’ customers who want to upgrade to 5G technology once it’s available, they should do intensive planning first.

Advice during the upgrade consideration includes:

• Plan the financials – what is the budget solely dedicated to the 5G rollout?

• What features should the 5G-enabled HVACR system include?

• Will the deployment occur in an existing building or one under construction?

• Does the client want to do a smallscale trial before the full rollout?

• Clarifying the answers to these questions ensures everyone will be on the same page.

Existing HVACR Automation Solutions Highlight the Possibilities

Contractors can remind customers who are curious about what to expect from 5G. Highlight the possibilities by explaining what smart HVACR systems can do. The improved network will make any current advantages even smarter and more apparent. For instance, a smart thermostat can save money on energy bills. But it can also “understand” the users’ preferences. These kinds of perks are especially welcome in smart buildings with dozens or even hundreds of people working in them.

Other highlights of automation and smarter 5G rollouts include effects on the climate. A January 2022 report from Accenture shed light on how 5G rollouts could collectively help the United States reach its 2025 climate change mitigation targets. The coverage examined several areas, including smart buildings and the energy sector. It suggested that 5G use cases in those two areas, could achieve the equivalent of taking 72 million cars off the road2 each year in carbon dioxide reductions.

The examination of 5G in smart buildings and energy sectors studied factors like commercial HVAC controls, energy management systems, and greenpowered microgrids.

However, the advantages of connected HVAC systems go beyond sustainability. They also let people enjoy better visibility and improve their maintenance strategies. Some commercial systems collect statistics and send them to remote technicians. Having that data in advance improves service calls because providers often have a good idea of the problem before arriving to investigate further.

Integrating Technology Into Buildings Requires Forethought

Now that people are becoming more aware of HVACR automation solutions, they’re increasingly considering them when assessing their annual budgets. The 5G network’s latency is as low as 1 millisecond, making it 50 times faster than 4G. That improvement results in faster communication, particularly when integrating the cloud.

However, HVACR professionals and others working on a smart building conversion must collaborate to assess whether the facility is ready for the upgrade or if it needs some changes first. Some places have legacy equipment that will work alongside 5G-enabled platforms or machines. Therefore, one of the first things to determine is how to make those assets communicate with each other – integration.

Mapping out the physical design of the 5G infrastructure3 will help prevent complications. A successful deployment requires the placement of antennas and cables throughout the building. Many telecommunications companies use specialized platforms to determine which areas of a city or community would have the best 5G coverage (towers can impact this coverage area). Aspects like tree cover and densely packed structures can negatively impact the network’s performance, as well as rural vs. city location.

HVACR contractors should suggest that building owners and managers do the same before deploying a smart building and consider any relevant questions.

• What infrastructure upgrades must happen so 5G meets a client’s expectations and specifications?

• How will a smart climate-control system link to a supporting building management platform?

Notably, any clients interested in smart buildings must also realize that the switch to 5G connectivity won’t happen all at once. Technologies running on the 4G and 5G networks will continue existing alongside each other for many years.

Professionals Should Educate Themselves A bout 5G Specifics

As interest in HVACR automation exploded, it required technicians to expand their skills and capabilities regarding new products and installation options. The increasing pace of 5G rollouts worldwide is similar because it will reshape how these professionals do their jobs and engage with clients.

Anyone working in the HVACR sector should assess how likely they are to assist with 5G-related installations in the future. If you are assessing, consider whether it’s worth the time to enroll in 5G-related training courses.

Nokia Bell Labs offers a professional certification program in industrial automation. It discusses how the 5G network is an essential enabler for many technologies that are now becoming more common in smart buildings and other commercial environments.

That’s just one example of a continuing education option that HVACR contractors may find interesting when taking steps to educate themselves. Even though the course material spans outside their daily work, such certifications could make contractors more relevant to the companies and clients that hire them.

The 5G Network Will Unlock Automation Potential

5G rollouts and network tests are still in the early stages. More people are beginning to understand how this technological advancement could enhance their lives and businesses as efforts gather momentum. The low latency and fast connection speeds associated with 5G make the network particularly suitable for artificial intelligence and the Internet of Things (IoT).

However, the 5G network will also enhance HVACR automation opportunities, making it easy to keep buildings comfortable and energy efficient. The more preparedness HVACR business managers and contractors do now, the better they can anticipate and meet customers’ needs. u

Emily Newton is the Editor-in-Chief of Revolutionized (www.revolutionized. com), an online magazine discussing the latest industry innovations and trends.

1 Qualcomm, (11/22), ‘Light Reading’

Qualcomm, Siemens test 5G in HVAC systems, https://www.lightreading.com/private-networks/ qualcomm-siemens-test-5g-in-hvac-systems/d/ d-id/782039

2 Accenture, (1/22), ‘Accenture Newsroom’

5G-Enabled Technologies Could Solve for One-Fifth of U.S. Climate Change Target by 2025, https://newsroom.accenture.com/news/5g-enabledtechnologies-could-solve-for-one-fifth-of-us-climatechange-target-by-2025-new-study-finds.htm

3Moho Fahim, (1/2020), ‘RE Journals’

https://rejournals.com/why-walk-when-you-can-justteleport-how-to-get-your-building-5g-ready/, Why walk when you can just teleport? How to get your building 5G-ready.

For any HVACR contractors’ customers who want to upgrade to 5G technology once it’s available, they should do intensive planning first.

BY RUTH KING FINANCE

Do You Abdicate Financial Responsibility for Your

Over the years I’ve seen some really dumb financial mistakes that contractors and other business owners make. These mistakes are compiled in my upcoming book, 101 Dumb Financial Things Business Owners Do and How to Avoid Them. Some of you will recognize the stories…and possibly, how you rectified the problems.

Dumb Financial Mistakes to Avoid

Over the next 12 months, I will reveal some of the dumbest. I know you won’t make these mistakes especially after I reveal them. By avoiding these potential problems you’ll have fewer heartaches, fewer sleepless nights, and a more profitable business.

This month I write about one of the biggest mistakes: abdicating the responsibility for the financial part of your company.

The Biggest Financial Mistake A Business Owner Can Make

If you are like most business owners, one of your first hires was probably a person who answered the phone, did the books, and performed other office duties. Your thought, “I hired a bookkeeper. Now I don’t have to worry about the books anymore.”

Indeed, you can delegate responsibility for the day-to-day bookkeeping activities. However, you must retain financial oversight and review. It’s your business. Abdicating the entire financial responsibility of your company is a mistake. You must oversee all of it, including financials.

How Would You Grade Your Financial Scorecard?

Your financial statements are your scorecard. You must know what these

Company?

In the old days, we had to wait until our bank statements came through snail mail so the 15th of the month, or later, was the norm. Now you can get your vendor statements and see your bank statements every day online. No more excuses!

Abdicating the entire financial responsibility of your company is a mistake. You must oversee all of it, including financials.

statements reveal about your finances. This requires some time to learn what they mean. While it’s much easier than learning to read a wiring diagram, I am sure the first time you saw a wiring diagram you probably had no clue as to what it meant and how to use it. However, you needed to know it so you studied and learned with the understanding that it would be a vital part of your business success.

The same is true for financial statements. The first time you see financial statements you will not understand them. I’d advise you to study and learn because financial statements are also critical to your success.

Theft often happens when you stop paying attention to the financial part of your company. It’s easy to become complacent – you develop trust with your bookkeeper. But while you focus your attention on the parts of your business you like doing, i.e., taking care of customers, dealing with sales and operations, and other non-financial activities, things can go missing.

Here are three financial oversight processes:

1. Review your bank accounts online daily. This takes less than 5 minutes, and you can do it from almost

anywhere in the world. See if anything odd is happening with the account. Look at the deposits and withdrawals, especially ACH withdrawals. Ask your bookkeeper questions if things don’t look right. When you do, you put your bookkeeper on notice that you are paying attention. Embezzlers steal through cash and materials. Paying attention to cash makes it harder to steal.

2. Review your financial statements monthly and know what they mean. Do the ratios and graphs that look at your financial trends. (These ratios and trends were covered in 2022). Ask questions if things don’t look right. Again, this puts your bookkeeper on notice that you are paying attention.

You should receive a profit and loss (P&L) statement and a balance sheet by the 15th of the following month. Be clear that you won’t accept excuses for late statements. It’s the bookkeeper’s responsibility to produce timely, accurate financial statements.

You can’t take care of minor issues that appear on a statement that is three months old. The minor issue has probably become a major crisis in those three months.

3. Along with the financial statements, you should review an aged accounts receivable and accounts payable report. If the aged receivables don’t match the amount of the receivables on your balance sheet or the aged payables don’t match the accounts payable amount on your balance sheet, something is VERY wrong!

Ask questions and find out what is going on. Many times, embezzlers use journal entries in the accounts receivable or accounts payable module and don’t go through the normal journals.

As much as you may not like reviewing financial statements, it is your responsibility. Your bookkeeper does the day-to-day entries and prepares the statements for you. Look at them. Analyze them. If you make this a consistent practice, you’ll spot minor issues and be able to take care of them before they become major crises. Then you can make good business decisions based on accurate financial data. u

Ruth King has more than 25 years of experience in the HVACR industry and has worked with contractors, distributors and manufacturers to help grow their companies and become more profitable. Contact Ruth at ruthking@hvacchannel.tv or at 770729-0258. The official publication date of my book (when it will be available on Amazon) is in 2023. But if you would like an advance copy, before the official publication date, go to: bit.ly/3FuYgIU if you want to order the book.

DAVID GARRISON Owner

UNITED THEY STAND. UNITED THEY THRIVE.

Since its founding in 1972, Garrison & Garrison Heating & Air has suffered hardship on a level unimaginable to most—losing four owners (and family members) between 1999 and 2016. But through all of this, David Garrison and his team have sustained a flourishing business. By building their business around their employees, they are honoring the legacy of those who came before—and truly are Building a Higher Standard.

See how you can become a dealer at amsd.us

with RYAN KALMBACH 20QUESTIONS >>

1. What was your childhood ambition?

I wanted to be some sort of international business “titan” – who knows what that meant! I absolutely knew that I would NEVER work in the family business at Johnstone Supply. I wanted to make my own mark on the world.

2. What is your favorite website?

Alltrails. I love to hike and Alltrails is a great resource to find new hikes wherever I am in the world.

3. What would people be surprised to know about you?

People would be surprised to know that I meditate daily.

4. What was your last big purchase?

I am currently booking a 10-day family adventure to explore the Chiapas region of Mexico. My next big purchase will be college for my two children.

5. Where did you get your career started?

My career truly started when I moved to Appleton, WI to take over and reopen a failed Johnstone location there. My four years as branch manager in Appleton were truly formative for my career.

6. What is the first thing you do when you get to the office?

I do my “Power Hour” from the office: read, journal, meditate and plan the day. I wrap it up by putting my shoes on (like Mr. Rogers) and going around the office giving out high-fives.

7. How did you become involved with Johnstone / Orion?

As a kid in the family business, I was making coffee and working in the warehouse. I left for college and never planned to work in the business. After college, I ended up living back at home and my parents offered me a job at Johnstone to make some money while I figured out what to do with the rest of my life. They highly recommended that I work since I now needed to pay them rent. Over the course of many conversations with my parents, I expressed my desire to make my mark. We agreed to find an opportunity away from the existing business for me to cut my teeth on. A year after working in the business, I moved to Appleton, WI to take over the failed store there.

8. What’s the largest challenge managing a dozen locations?

We grew from 6 to 12 locations on May 1, 2023, so integration is the key right now. We have incredible leadership and management teams. When we have the right people in the right seats managing the business is fun and easy. My focus right now is ensuring our teams at all 12 locations feel connected and on board with our vision and goals.

9. What is the largest opportunity for Johnstone / Orion in 2023?

Our theme this year with the merger is “Forward Together”. Our biggest opportunity is to leverage the collective strengths and knowledge of our 125 team members across 12 locations. We have a 2-year initiative to build out a world-class employee experience. Our goal is to be the best place anyone will ever work. One key piece of this is leadership training and development is the belief that great leaders are key to a great company. The biggest business opportunity we see is electrification. In 2022, we began to put a tremendous focus on heat pumps, and we will double down on this effort in 2023. We have drastically increased our heat pump inventory. Our Fresno and Sacramento Training Centers offer a comprehensive list of classes to get our contractor customers up to speed with heat pump technology.

10. What are you and your team doing to manage the pending refrigerant change?

We have an amazing training team and Training Center. Starting this fall, we will begin training classes and online webinars to address the pending refrigerant change.

11. What aspect of managing do you enjoy the most?

My passion is to inspire people and teams to achieve their best, to achieve more than they thought possible. I love helping our people to grow and enjoy the time I’ve spent coaching and mentoring our team.

12. What do you regard as your most significant business achievement?

Helping people on our team to grow, whether that is within their current role or to move up within the organization. I am also quite proud that we were awarded the Member of the Year award by Johnstone Supply in 2017.

13. What motivates you?

Helping our people and our customers to grow.

14. How do you motivate others?

I think positive energy is infectious. I aim to spread positive energy throughout our organization through in-person interactions, text messages, video messages, emails, postcards, smoke signals – whatever it takes.

15. What aspect of leading the organization is most satisfying for you?

Watching individuals and the team set challenging goals that push their limits and then watching them achieve these goals.

16. What business advice has served you well over the years?

“Get out of the car.” There is a great story here that we don’t have time to tell. The point is, stop thinking and just get out there and do it. Jump In.

17. What is your management philosophy?

I am a control freak but have learned and am learning to “let go” – give our team the space and freedom to make decisions. We implemented EOS starting in 2017 and have since migrated to the Pinnacle Operating system. This guides the structure and philosophy of how we manage the company.

18. What are the three business principles that guide you?

Change occurs at the speed of accountability. It’s all about the people. Decisions are made at the lowest level

What is the most exciting thing happening at The Orion Group right now?

Our Training Center. The biggest challenge facing our industry is the shortage of skilled people. We can quickly create new technicians and installers for our industry.

You provide a lot of training tools for contractors – even branding and marketing support. How can they take advantage of what you offer?

Our passion is to help our customers to grow their businesses. We aim to make it easier for them to do business. We have a big focus on training through our two training centers. This includes technical training and business training. We believe that when we help our customers win, we win too.

Publisher Terry Tanker sat down with Ryan Kalmbach, CEO of Johnstone Orion Distribution with twelve locations and 125 employees. The two discussed entering the business, and motivating employees on the value of training, and opportunities for 2023.

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