HVACR BUSINESS OCTOBER 2022

CONTENTS

FEATURES

6 Will Your Company Support Your Lifestyle in Ten Years?

A comprehensive plan to prepare for a future successful transition

Michael Sauer

10 Climbing the Ladder of Success in the HVACR Field

CEO & Co-Owner of AGS HVAC Services talks about steps to HVACR success

Rachel Sylvain

14 A Celebration of Life Remembering Jim McDermott

We remember a close friend and HVACR Business Editorial Advisory Board Member, Jim McDermott

Terry Tanker

16 Leverage A Tech-First Approach

Closing the labor and skills gap by leveraging tech and analytics

Adam Jaggers

COLUMN

20 A Better Way to Look at Gross Margins

The next step in our profit and loss series – gross margins

Ruth King

22 Preparing Heirs for Their Inheritance

Our resident legal expert shares how to prepare heirs for inheritance

Keven Prather

DEPARTMENTS

5 Publisher's Page Top 5 Keys to Marketing Success

By Terry Tanker

18 Industry News

25 Product Focus

26 20 Questions with Bart Hawley

Owner & CEO of Hawley Heating and Cooling discusses building a business and plans for expansion

NATHAN COKER Operations Manager

FOUR GENERATIONS STRONG. AND COUNTING.

Since 1968, Stanfield Air Systems has been a true family business. Founder Lynn Stanfield passed the company on to his daughter, Sally Allen, and current owner Rex Coker works closely with his son, Nathan, who manages operations. Not surprisingly, they treat all their employees like family, too—including the many interns they’ve permanently hired through a partnership with the local high school. That’s what it means to be Building a Higher Standard.

See how you can become a dealer at amsd.us

REX COKER Owner

THE HVACR MANAGEMENT MAGAZINE

TERRY Tanker

Publisher ttanker@hvacrbusiness.com

HEATHER Langone

Managing Editor hlangone@hvacrbusiness.com

MEGAN LaSalla

Art Director mlasalla@hvacrbusiness.com

BRUCE Sprague Circulation Manager bs200264@sbcglobal.net

BARBARA Kerr

VP Operations bkerr@hvacrbusiness.com

ADVERTISING STAFF

ERIC Hagerman

VP Sales Tel 216-409-3246 ehagerman@hvacrbusiness.com

TERRY Tanker

Publisher Tel 440-731-8600 ttanker@hvacrbusiness.com

BY TERRY TANKER

Top 5 Keys to Marketing Success

Over the last five years and more specifically the last two, I’ve seen a dramatic shift in the expectations of advertisers.

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

The editorial focus and mission of HVACR Business is to pro vide business owners and managers with the very best busi ness management concepts available. Critical topics covered include leadership, management, strategy, finance, sales, mar keting, training, education, staffing, operations, human resourc es, 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.

Copyright©2022 by JFT Properties LLC.

No part of this publication may be reproduced or retransmit ted in any form or by any means, including, but not limited to, electronic, mechanical, photocopying, recording or any information storage retrieval system, without the prior written permission of the publisher. Unauthorized copying may subject violators to criminal penalties as well as liabilities for substan tial monetary damages up to $100,000 per infringement, costs and attorneys’ fees.

This publication should not be utilized as a substitute for profes sional advice in specific situations. If legal, medical, account ing, financial, consulting, coaching or other professional advice is required, the services of the appropriate professional should be sought. Neither the authors nor the publisher may be held liable in any way for any interpretation or use of the information in this publication.

The authors will make recommendations for solutions for you to explore. Any recommendation is always based on the authors’ research and experience. The information contained herein is accurate to the best of the publisher’s and authors’ knowledge; however, the publisher and authors can accept no responsibil ity for the accuracy or completeness of such information or for loss or damage caused by any use thereof.

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HVACR Business (ISSN 2153-2877) Copyright ©2022 is published monthly by JFT Properties LLC,31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039, Phone: 440731-8600. Periodicals postage is paid at North Ridgeville, OH and additional mailing offices. (USPS 025-431)

POSTMASTER: Send address changes to HVACR Business, 31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039.

31674 Center Ridge Road, Suite 104 North Ridgeville, OH 44039

Tel: (440) 731-8600

Web site: www.hvacrbusiness.com (ISSN: 2153-2877)

And, for those of you who advertise a little or a lot, I don’t want you to make the same mistakes that I tend to see with larger B2B national programs. Specifically, wildly unrealistic beliefs that an ad placement or two should and will produce immediate sales. Much of this paradigm shift is related to the internet where the only important metrics are ultra-low cost and high impression rates.

Deliver Ongoing, Consistent Messages That Emphasize Quality.

and when it fits their needs and timing. That makes the consistency and continuity of your messaging essential. You want to be the lead company in consideration when the customer is ready to buy. The HVACR industry has a secret weapon to help bridge this gap — service and maintenance contracts.

4. COMMUNICATION FREQUENCY

1. RESEARCH: UNDERSTANDING YOUR MARKET & THE METRICS

What many advertisers neglect to understand is that they cannot apply one metric to all programs across the board — but they try. The most common — applying eMedia metrics to print programs. This is a one-way road to disappointment and failure. Also, selecting vertical industries naturally, increases cost because waste is reduced. The internet has taught many to expect instant gratification yet eMedia is only a small part of a total communication strategy.

2. THE RIGHT STEPS TO FOLLOW: DISCIPLINE AND FOCUS

Let’s start here because in the age of instant gratification, discipline and focus separate success from failure. Setting the focus on a specific goal or set of goals without deviation in good and bad times is essential for established brands, especially those entering new markets. Discipline is where most programs fall apart. Too many advertisers simply want to jump in and hit a quick home run. It doesn’t work that way. It’s knocking out a lot of singles that build your brand and win customers.

3. CONSISTENT MESSAGING

If there’s one thing that distinguishes great, well-known brands, it’s consistency. It’s about delivering your message consistently to potential customers over time. In the case of many capital goods products, customers rarely need the product you sell at the time that you send the message out. And nothing could be truer than the equipment and services you, the HVACR contractor, sells. Customers and prospects will respond to your brand when they are ready,

Without frequency of communication, programs have no hope of success. Over the years, more research than I can count has been conducted on the importance of frequency to build brands. I won’t engage in the tedium here, but if you would like specifics, let me know and I’ll send you some of the basic research papers published on this subject. For now, just remember that frequency is a key ingredient for marketing success.

5. QUALITY OF PRODUCT OR SERVICE.

This should be common sense but you would be surprised at how many companies don’t emphasize the quality of the product or service they are capable of delivering. This is critical to offset the “I want it now” culture of speed and instant gratification. Poor products and services will trump any marketing message you produce.

In my opinion, the best advertisement ever created was for the business-to-business publishing house McGraw–Hill. A rather gruff gentleman is pictured. The copy reads:

I don’t know who you are.

I don’t know your company.

I don’t know your company’s product.

I don’t know what your company stands for.

I don’t know your company’s customers.

I don’t know your company’s record.

I don’t know your company’s reputation.

Now, what was it you wanted to sell me?

The Moral: Sales start before your salesman makes the call — with advertising.

Until your customers and prospects can answer these simple questions about your brand, you’ve got more work to do to build it. u

now for a future successful transition

BY MICHAEL SAUER

It’s estimated that only 6% of lower middle market1 HVACR business owners who are considering selling their business in the next 10-15 years, will get their desired business valuation to financially provide for the lifestyle that they and their families deserve.

Sadly, this means that no more than 7,080 of the estimated 118,0122 HVACR business owners in the U.S. will have put in the necessary investment and structure

Before we jump into what actionable steps you can begin to implement today to begin improving the valuation of your business, let’s first determine what your financial end goal is to be able to reverse engineer it from there.

to create a company that financially supports their goals well into retirement.

ACTIONABLE STEPS TO IMPROVE VALUATION

Now, before we jump into what actionable steps you can begin to implement today to begin improving the valuation of your business, let’s first determine what your financial end goal is to be able to reverse engineer it from there.

To accomplish this, you need to determine what annual income you would need if your business was no longer paying for some of the perks that you’ve been able to previously receive from being a business owner (e.g., payments for your cell phone, internet, truck, boat, 5th wheel, “client” dinners, “client” visits, etc.).

Let’s say for purposes of this exercise, you’ve determined that you need to have an annual income of $150,000.00. Next, we need to determine how much you need to have in investments/savings to be able to generate this income annually in perpetuity if you wish to leave a legacy for your family as well. Next, to meet your legacy objective, we need to assume a reasonable rate of return you can expect on this investment. The generally accepted rate of return has been 4%. So, let’s assume that for purposes of this exercise, that is close enough. To determine what investment would generate an annual return of your needed $150,000.00/year, you multiply that number by the inverse of that assumed rate of return (e.g., 1/.04 = 25). Thus, if you were able to generate a return of at least 4% each year, you would need a minimum

of $3.7M in investments. Note, that this is the minimum amount that you would need after you’ve paid capital gains taxes, business broker fees, CPA fees, legal fees, and all of the applicable business fees.

For simplicity purposes, let’s say that under your situation if you sold your business for $5M, this would leave you with the required minimum investment we just calculated. Next, you need to have a semi-formal or formal third-party business valuation done on your company. For purposes of this example, when you get your business valuation back, you are going to receive a determination of your company’s overall financial performance

which will either be based on your EBITDA (earnings before interest, taxes, depreciation, and amortization) or your (e.g., sellers) annual discretionary earnings (“SDE”) which is a calculation of the total financial benefit that a single full-time owner-operator derives from a business on an annual basis. In addition to this number, the business valuation analysis will also include a multiple, which will be applied to the calculated EBITDA or SDE.

For example, if your business had an EBITDA of $1M and a 2.5X multiple, this would mean that you could expect an offer from a prospective buyer of approximately $2.5M for your business.

And in this example, this indicates that you have a $2.5M shortfall to your goal. The good news is that you have three options of places where you can increase your EBITDA/SDE, multiple, or both. See the table below.

As demonstrated in the table, a business owner could achieve the targeted business valuation of $5M by focusing exclusively on increasing their company’s profitability to double their EBITDA/ SDE or work to improve the company’s efficiency, structure, processes, and procedures to increase the predictability of the income. This would cause a prospective buyer to increase the multiple amounts offered. Alternatively, those business owners who opt to focus on both factors can see an exponential increase in their business valuation (e.g., $10M instead of $5M), which would allow the business owner not only to provide for their immediate family but potentially create a legacy for all future generations.

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continued from page 7

IMPROVE YOUR COMPANY’S BUYER OFFERS

Improvements in a company’s EBITDA/SDE and improving predictable income (which increases the buyer’s offered multiple and/or both), require the business owner to proactively invest in the right areas of the company. In addition to the business owner’s commitment to implementing these improvements, it also requires an investment of time to train existing personnel, find new members of leadership and management, and enough devoted to transitioning the business to run without the daily involvement of the business owner. The north-star concerning whether your business has met the minimum threshold of being ready is you. As the sole-business owner, you should be able to go on a threemonth vacation while the business continues to run smoothly and increase profitability. And as a general timeline,

business owners who are truly dedicated to focusing on this should expect to improve their profitability by 50% in the first two years, 3X their profitability in the first three years, and 5-7X their profitability in the first five years.

If you are interested in finding out how your HVACR company ranks nationally in the eight distinct areas that potential buyers use to value a business, and you want to learn what actionable steps you can take to immediately begin improving them, take this free 10-minute assessment available at https://bit.ly/3byq83U or scan the QR code now.

Now that you know what your future could look like, it’s time to go and get it! u

HVAC business owners who are interested in creating a legacy, by creating a company that can provide financial security for themselves and their families in perpetuity, work with Michael Sauer, Scorpion's Certified Master Business Coach. www.linkedin.com/in/ certifiedmasterbusinesscoach

The north-star concerning whether your business has met the minimum threshold of being ready is you. As the sole-business owner, you should be able to go on a three-month vacation while the business continues to run smoothly and increase profitability.

BUILDING ON A LEGACY. FOCUSING ON THE FUTURE.

Presenting a collective brand family of mini-split and VRF products.

What does this mean to our distributors and contractors? All Halcyon products will now be referred to as AIRSTAGE H-Series, and all VRF products will remain AIRSTAGE V-Series and J-Series. With exciting things to come, AIRSTAGE takes on a much broader meaning, embodying a more unified product line, bold new thinking, dynamic product performance, and a commitment to innovation, sustainability, and electrification. From a strong brand, comes an even stronger promise for the future.

CLIMBING THE LADDER OF SUCCESS IN THE HVACR FIELD

Creating Big Goals on the Path to Success

BY RACHEL SYLVAIN

Managing an HVACR team can be rewarding but also challenging at times. To thrive in our industry, business leaders need to possess a unique combination of technical mastery and an understanding of management best practices.

As a co-owner of a family heating, ventilation, and air-conditioning business, you might say I’ve seen it all. My team and I have learned from the challenges we’ve faced, and I’m thrilled to share we’re now in a very good place. We have

a loyal roster of clients, and Bryant has named our company one of its top North American dealers for four consecutive years.

But this article isn’t an advertisement for us. The content I’d like to share is designed to help you successfully manage and expand your HVACR business.

PRIORITIZE CUSTOMER SERVICE

We have committed to putting the customer first and that promise has served us well. In addition to delivering a top-quality product and excellent service, we prioritize good communication. What does this mean? As an HVACR owner, it means rather than making excuses, aim instead to lead, motivate, and inspire those you serve.

Here are some strategies to consider:

Invoicing software can help you manage your billing even more efficiently. In addition to earning more money faster, you’ll be able to spend less time invoicing and more time focusing on your core business.

In simple terms, make the effort to communicate. Though we have mastered this and fortunately do not see problems often, we experience the occasional roadblock. In these cases, we are forthright with our customers and transparent about what it will take to install the HVACR systems they deserve.

To strengthen your business, we encourage you to do the same thing. Make customer service a priority, and your community will take note. Two-way communication is always appreciated, with opportunities for customers to leave a review, reach out via email, or respond to a survey – it is not only essential for business, but the feedback tells the story.

TRAIN YOUR WORKFORCE

Technicians are the lifeblood of any HVACR company. This means you need to equip them with the tools they need to succeed. Rather than cramming your training into a day or two, endeavor to go deeper. Have each new technician

shadow an experienced one before diving headfirst into their role.

Comprehensive training can help take a well-qualified team member to the next level and the same thing applies to professional development. Offer plenty of options for learning, from technical training to career-related training to sales role-play. Encourage technicians to advance internally and let them see the value in the other department positions.

Ultimately, these opportunities will inspire your technicians to stay loyal to the company. Try to make a point of encouraging growth for the best results. Because here’s the truth: The happier your workforce is, the more satisfied your customers will be.

ELEVATE YOUR COMPANY CULTURE

A strong HVACR team culture goes beyond training. It also involves competitive wages, trust, and communication — again — open and honest feedback. On the off-chance, if one of your techs makes a mistake or takes longer than expected, communicate that issue immediately. Offer support when you can and then give the employee the chance to get it right the next time.

Similarly, you can strengthen your company culture by listening to your technicians when they come to you with feedback. If they have thoughts on the condition of their vehicles for instance, or frustrations involving the occasional customer, hear them out.

The best teams are those whose members feel comfortable being honest. There’s a caveat, though: You need to practice empathy and kindness when the feedback isn’t necessarily something with which you agree. One way to do this is to listen openly. And a simple act of kindness might be planning quarterly company outings. Show your workers you value them, and you will build a welcoming work community as a result.

INCENTIVIZE WORKER PERFORMANCE

Rewarding your top-performing techs is a wonderful way to show your employees that you care, and an added benefit, it will likely increase worker retention. A small investment in your team (beyond the company outings mentioned above) can boost your productivity by a long shot.

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a priority, and

community will take note.

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Incentivizing performance is a great place to start. You might reward team members who upsell their installs the most or offer praise to those who receive the most positive feedback from customers or give a lunch gift card to the one who signs up the most clients for long-term maintenance agreements.

Also, a reminder – these incentives don’t have to be monetary. They can be, but many technicians also appreciate perks, i.e. more vacation time, or internal recognition at the company luncheon. You can experiment, of course—but don’t underestimate the power of incentivizing your team.

FINE-TUNE YOUR MARKETING

Successful HVACR businesses need to connect with their target audience to grow. You’ll want to revisit your marketing plan on an annual basis to

make sure you’re finding the right people. Social media and email marketing are solid digital tools. However, don’t forget that in our industry, about 60% of leads come from repeat business and referrals. Word-of-mouth can go a long way, so make sure your marketing plan also focuses on the existing valued clients.

For newer clients, note that your website precedes you. Keep your content clear and concise—just thorough enough to inform readers, but not so long that visitors get bored or confused. Follow search engine optimization (SEO) best

practices, and emphasize quality over quantity.

IMPROVE YOUR INVOICING

No one wants to spend all their time collecting outstanding invoices. While the unfortunate truth is that some customers will pay you late from time to time, this doesn’t have to be the norm. HVACR companies can increase their earnings simply by improving their invoicing strategy.

From where we’re standing, if you aren’t organized about the way you bill

your customers, your invoices are more likely to slip through the cracks. Creating a system for sending invoices on site, and then following up quickly with reminders, will help you collect what you deserve.

Invoicing software can help you manage your billing even more efficiently. In addition to earning more money faster, you’ll be able to spend less time invoicing and more time focusing on your core business.

STRENGTHEN YOUR SCHEDULING

Scheduling issues are the bane of any HVACR company’s existence. I know it, you know it, and your customers certainly know it. This can be tough to navigate, however. You don’t want to rush your technicians. At the same time, you don’t want huge lags between bookings either.

Route optimization is the solution. You can either invest in route optimization software (this is a lifesaver

From your customers to your vendors and partners, HVACR is a collaborative industry, founded on a love of the systems that people need to live safely and comfortably in their homes.

for businesses that send crews all over the map each day), or you can simply take more time to organize each day’s service calls.

Making lists, or even pinning locations on a map, can help you navigate distances and traffic. If you have multiple crews, this will help you determine whom to dispatch where. If you’re a smaller operation, this same strategy will help you organize your bookings based on proximity.

UNDERSTAND YOUR WHY

Above all, you need to understand why you’re in this business. From your customers to your vendors and partners, HVACR is a collaborative industry, founded on a love of the systems that people need to live safely and comfortably in their homes.

The friends, family, and colleagues who make up my team are a huge part of my why. There are other partners and

From your customers to your vendors and partners, HVACR is a collaborative industry, founded on a love of the systems that people need to live safely and comfortably in their homes.

stakeholders involved in the projects we take on as well. I know that I’m in this business because I enjoy the work my team does and the customers we serve.

I’m not preaching – your why does not need to be the same as mine. We’re all different people from diverse backgrounds, and that’s part of what makes this industry so special. But whatever your reason, I do encourage you to consider what HVACR means to you.

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Rachel Sylvain is CEO and Co-Owner of Westport, Massachusetts-based AGS HVAC Services. For details on how to grow your HVACR business, please contact her at rachels@agshvacservices.com. Visit agshvacservices.com for more information.

A CELEBRATION OF LIFE

Remembering Jim McDermott

BY TERRY TANKER

It is with a heavy heart that I learned today and share with all of you, the passing of a colleague, a brilliant advisor, and a cherished friend, Jim McDermott. In addition to the enormous impact that he made on the HVAC industry, he was also instrumental in helping me launch HVACR Business. While we are all saddened to lose such a giant and a dear friend, I am reminded today that it is more appropriate to

celebrate the man and a life well-lived, rather than dwell on the loss, however great it is.

A towering figure in the industry, he was also generous with his time and advice, always there to help. I am sure I

speak for many of my colleagues when I say, he was instrumental in my success. He was a brilliant advisor to me as he was to countless others. To understand the scope of his impact, you must understand how far-reaching his influence has been – it spans 50 years and several generations.

MCDERMOTT OVERSAW A GREAT PERIOD OF EXPANSION IN HVAC McDermott began his career in

He was a brilliant advisor to me as he was to countless others. To understand the scope of his impact, you must understand how far-reaching his influence has been –it spans 50 years and several generations.

Photo credit: Jim McDermott

editorial at The Air Conditioning and Refrigeration Business magazine in 1965. As the industry began to evolve, McDermott understood the newly placed importance on service, and after becoming a publisher, he changed the magazine name to Contracting Business. This was a critical crossroads that changed the idea of HVAC companies and their value propositions and paved the way for industry growth and expansion.

Said Matt Michel, CEO of Service Roundtable, at the time of Jim’s retirement, “Jim McDermott is a towering figure in the HVAC industry. From his editorial platform, he oversaw one of the greatest periods of service innovation the industry has seen.”

OUR FIRST HVACR BUSINESS EDITORIAL ADVISOR

My personal and professional experience with Jim was no less impactful. He was my mentor at Penton Media. After spending 37 years in various leadership positions there he retired. Several years later when I called upon him to help me launch HVACR Business, he didn’t hesitate to say yes. His excitement was palpable. For me, I knew there was no better person with whom to consult – after all he had helped shape HVAC contracting and engineering space since the late 1960s and had seen it all. His knowledge wasn’t limited to one segment of the industry either. It spanned multiple industries — contracting, engineering, distribution, and manufacturing. With his help and guidance, I knew HVACR Business would be a success. Today, it would be an understatement if I were to oversimplify and say, “I am grateful to the man who helped change the course of my life in business.”

At the start, we went right to work. He was ready to get to work and as he was often wont to do, was ignited by the challenge. Together, we wrote the business plan which became the bedrock for HVACR Business. Once the blueprint was complete, we went about recruiting other industry leaders to write for and advise us. Within weeks, Ron Smith, Ruth King (still a columnist to this day), and Jackie Rainwater were added to the team.

When we first began, we talked on the phone weekly, Jim in North Carolina,

and me in Cleveland. He’d expound on one topic after another, all editorial ideas that he felt we should be executing. The information was delivered with such fervor, I simply could not transcribe it fast enough. As a result, we invested in a VOIP phone system. Jim would call with an idea (or three or four) and I’d simply press one button and every detail was recorded — no pen in hand. After he retired again, our calls became less frequent and centered more on golf and family.

Refrigeration Institute (AHRI), Heating Air-Conditioning & Refrigeration Distributors International (HARDI); and the three leading HVACR publications — Air-Conditioning, Heating, Refrigeration (ACHR) News, HVACR Business, and Contracting Business.

As I said at his retirement celebration, if you look back over the past 50 years, you’ll find no one who made more of an impact on the HVACR industry than Jim McDermott.

coordinator for multiple, key industry, and coalition events.

With the advent of new technologies, and as the HVACR industry continued to develop, McDermott embraced the change, advocating for and educating all of us on the importance of ongoing training and development. Again, there is no measuring the impact that had on the development of new roles, expanded career paths, and, ultimately, more successful contracting businesses.

Over his career, McDermott held leadership roles at Penton Media where he was the Group Publisher for the Mechanical Systems Group which included eight different publications. Jim also held executive positions at Penton Media’s Quality and Training group, Penton Custom Media. Jim was also an advisor to SocialTract, the HVACR industry’s first blogging service, and later served as an advisor for the Content Marketing Institute.

“The greatest contribution he made to our industry was when he, recognizing the adversarial relationship between manufacturers, distributors, and contractors, took the initiative to do something about it,” said HVACR legend Ron Smith. “He started arranging several major dialogue meetings of great contractors with major manufacturers.”

In no way is it hyperbole when I say, it is rare to meet a person with such deeprooted industry experience, expertise, and a passion for the business, who also has such a willingness to help the next man in line. That was Jim. Some might call him a mensch. Many have called him a mentor. But over the years, Jim was more than that to me — I was lucky enough to also call him my friend.

For those of you who did not know Jim – and for this readership, that number is probably low – upon his retirement, eight different contractors, manufacturing, distribution, and media organizations joined together to celebrate him. These included the Air Conditioning Contractors of America (ACCA), The National Comfort Institute (NCI), Service Roundtable, Air-Conditioning, Heating, and

MCDERMOTT SINGLEHANDEDLY FOSTERED DIALOGUE AMONG COMPETITORS

Notwithstanding my own personal and professional experience with my friend, McDermott worked tirelessly to foster positive working relationships among so many air-conditioning and heating contractors, manufacturers, and distributors, and consistently acted as

Today, help me celebrate the man, the mentor, a colleague, and my dear friend, Jim McDermott. Jim, you will be greatly missed. u

LEVERAGE A TECH-FIRST APPROACH

BY ADAM JAGGERS

The skilled trades industries are aging. Fewer skilled workers enter the trades every year and more and more are retiring or nearing retirement age.

The challenge facing field service employers in this unprecedented market isn’t just a simple labor shortage. The growing knowledge gap that has been revealed may prove, over time, to have more significant consequences for the industry than the well-documented labor gap.

THE KNOWLEDGE GAP VS. THE LABOR GAP

It’s not just labor hours that are being lost as this current generation of experienced workers heads toward retirement. The loss of accumulated wisdom and institutional knowledge as experienced workers leave the field is exacerbating the labor shortage and

is already having a profound impact on providers and their customers. With retirement rates poised to cascade in the coming years, many contractors fear that significant declines in quality, service, and productivity are on the horizon.

INTANGIBLE SOFT SKILLS TO CLOSE THE SKILLS GAP

Over the course of a 30- or 40-year career, skilled workers accrue a vast amount of useful information and knowledge. There are, of course, essential technical skills required for the job. But many other forms of knowledge and

expertise aren’t as easy to measure:

These are just a few knowledge-based skills, that an employer can leverage:

• Soft skills necessary for successful interaction with customers and colleagues

• Institutional knowledge about the industry and local service areas

• Diagnostic abilities that depend on intimate familiarity with a range of products and brands

Formal training for field service professionals typically happens once or twice a year in a highly structured

format. While that method has its place, employers can find more sustainable results through a continuous on-thejob, informal education. Accumulated specialized knowledge is often the result of mentor relationships and on-the-job experience.

SHARED EARNED KNOWLEDGE

Sharing earned knowledge from generation to generation ensures continuity. It also plays a key role in a company’s productivity. Younger workers benefit from the lessons senior employees have already learned, helping them avoid costly errors. Informal mentor relationships also support and reinforce formal training, enhancing the value of an investment in ongoing education opportunities.

In the absence of shared knowledge and experience, service companies operate with less efficiency.

The challenge facing field service employers … isn’t just a simple labor shortage. The growing knowledge gap that has been revealed may prove more significant.

Close the Skilled Labor Gap in HVACR

There is a range of potential negative impacts:

• Younger workers may take longer to advance their skills.

• Younger workers, frustrated by their lack of progress, may leave the industry, amplifying the labor shortage and skills gap.

• Experienced workers are expected to serve as in-house support, spending more time training green techs than out in the field.

• Experienced workers may feel overworked, reducing their effectiveness in the field.

• Overall team morale declines. Retention and recruiting suffer.

service industry. Empowering field techs with tools driven by data, analytics, and artificial intelligence appears to be a reliable strategy for contractors to successfully adapt to the chronic challenges of the employment market. Optical character recognition (OCR) technology, for example, allows field service techs to instantly capture equipment and service data that can be accessed by other members of their team or on future jobs.

Minimizing the disruption and volatility that too often define the industry’s relationship with talent in a turbulent economic climate, can be an important way for contractors to build a competitive advantage. Tech-enablement technology has a crucial capacity to help

Helping Contractors Get the Job Done

Since

• Customer experience declines, resulting in lost revenue and lack of growth.

Unfortunately, there is no immediate solution to the acute shortage of skilled trades workers. However, contractors don’t have to simply watch valuable earned knowledge leave their companies as their most experienced technicians retire or pursue other options in the latter stages of their careers.

A technician-first strategy that prioritizes field workers can help contractors optimize and stabilize the vast banks of skill and experience shared among veteran team members. Focusing on earned knowledge and implementing tools that help them catalog accumulated experience, can enhance operational efficiency and productivity in the field, and help young workers in a challenging industry, develop more quickly while making fewer mistakes.

Prioritizing field techs is a proven method to help contractors improve the job experience for their most valuable workers and maximize customer experience, accuracy, and efficiency.

The emergence of tech-enablement technology solutions presents a unique opportunity to transform the field

service teams document and catalog a tech’s experience on every job.

Collecting and indexing essential job data and applying powerful real-time AI-driven analytics and insights, allows contractors and their teams to streamline workflows and boost productivity. As a result, younger technicians are equipped with tools that help them operate with unprecedented effectiveness, while more experienced techs are relieved of the support roles, they too often find themselves in.

The key to a tech-enablement approach is simply starting with a technician’s perspective. We should be guiding our decisions on the curb-to-curb experience of people on the front lines of our industry, not ideas from previous decades about what their roles should be. u

Some of the best and hardest-working HVAC contractors rely on proven RLS press technology to help them get the job done right, and more efficiently. But don’t take our word for it. Check out the members of our #pressgang on Instagram – those shown here and so many others – to see how RLS press fittings give them valuable benefits like these:

Connects in

seconds

hazards

Adam Jaggers is the Chief Technology Officer at XOi Technologies with a history of working in the Enterprise Software industry. Skilled in Big Data technologies, leading software engineering and devOps teams with Agile Methodologies, and Machine Learning Techniques. https://xoi.io/

The emergence of tech-enablement technology solutions presents a unique opportunity to transform the field service industry.

ECM Technologies Lands $2.1M. City of Phoenix Contract Right Out of the Gate

The company’s game changing ThermaClear™ HVAC treatment dramatically reduces buildings’ carbon footprints, saving thousands of dollars in operating expenses and electricity cost

Phoenix-based ECM Technologies has been awarded a $2.1 million City of Phoenix contract for up to 12 million square feet of conditioned space after running numerous, highly successful, long-term pilot programs over the past four years in the Valley. The company’s proprietary ThermaClear™ radically extends the life and efficiency of HVAC systems with one treatment for the entire lifespan of the equipment, resulting in dramatic carbon footprint reduction and substantial energy savings, up to 15% annually. The company has treated over 12,000 tons of HVAC equipment to date, servicing more than four million square feet of buildingconditioned space. All makes and models of major HVAC equipment types have been successfully treated, ranging from one-ton mini-splits to 2,000-ton, water-cooled chillers.

ECM Technologies’ pilot programs used single ThermaClear treatments on a variety of buildings including Phoenix Art Museum, Phoenix Sky Harbor Airport, Arizona State University, Signature Flight Support, ISS Facilities Services, and Transwestern (Miami). Savings results were demonstrated at every pilot property location and validated by third-party, independent professional engineers and analysts.

The typical ThermaClear payback period ranges from 24 to 36 months and results in HVAC electricity consumption savings of 10 to 15% annually. Only one treatment is needed for the life of the HVAC system and is backed by a full warranty for the remaining useful life of the equipment.

https://ecm-technologies.net

Malco Products, SBC, Announces 2022 HVAC Trade-Pro of the Year Winners

Malco Products, SBC, one of the nation’s leading manufacturers of high-quality tools for the HVAC trade (Heating, Ventilation, and Air Conditioning), today announced the winners of its annual HVAC Trade-Pro of the Year Award program. The 2022 HVAC Trade-Pro of the Year Award recognizes and celebrates outstanding, experienced HVAC professionals who are dedicated to the industry and on-the-job safety, as well as giving back to their communities. The program recognized five top HVAC contractors and technicians from across the U.S.

Each of the winners will receive a Malco tool kit valued at $1,000, awarded by their local distributor. Nominations for Malco’s 2023 HVAC Trade-Pro of the Year program will open in February 2023.

As a strong supporter and advocate of careers in the trades, Malco donates significant quantities of in-kind products and apparel annually to a variety of skilled trade education programs, competitions, and events across the country, including high school, post-secondary technical and apprenticeship programs, regional apprenticeship contests, and SkillsUSA state and national conferences. Malco also coordinates the “Head of the Class” Student Recognition Program that partners with education programs across the country to recognize high-achieving students and entire graduating classes in the HVAC/sheet metal, building construction, and autobody repair fields.

www.malcoproducts.com.

Baltimore Aircoil Company to Showcase Innovative Condenser Technology at RETA 2022

Baltimore Aircoil Company (BAC) will showcase innovative commercial and industrial refrigeration solutions at RETA 2022 – The Refrigerating Engineers and Technicians Association National Conference, taking place November 8-11, 2022, at the Peppermill Resort Spa Casino, Reno, NV, Booth #216. Highlighted in the booth are the Vertex™ Evaporative Condenser, TrilliumSeries™ Adiabatic Condenser, TriArmor® Corrosion Protection System, and CXVT Evaporative Condenser with optional ENDURADRIVE® Fan System.

BAC’s Strategic Accounts Manager Dave Anderson will deliver a Hot Point presentation titled “What’s Keeping YOU Up at Night? A deep dive into condenser reliability” on Tuesday, November 8th from 1:45 – 2:45 pm.

Stop by Booth #216 to learn about how the Vertex Evaporative Condenser offers maximum uptime with easy and safe accessibility. It also offers the lowest total cost of ownership with the lowest installation, maintenance, and operating costs. Installation costs are reduced by 30 percent compared to other equipment on the market, in part by the industrial-grade rigidity of the unit and alignment of the upper section to the lower section in less than 15 minutes per cell. Water volume is also reduced by the unique basin design, saving on water and chemical costs.

www.BaltimoreAircoil.com

Poppy Health Releases Results from Pilot with Primary.Health on Indoor Air Safety Monitoring for Schools

The pilot results showcase the importance of air monitoring for airborne illnesses Poppy Health, providers of the world’s most advanced Air Monitoring system for indoor air safety, today announced the completion of an initial pilot project in partnership with Primary.Health, a provider of software and services for large-scale testing and vaccinations, to test indoor air at California schools. During the pilot, Poppy’s Air Monitoring System was deployed by Primary. Health across four schools in the Bay Area over five weeks between May 9 and June 17, 2022. The goal of the pilot was to leverage indoor health data gathered by the Poppy system to determine if existing COVID-19 testing protocols were efficient in mitigating the spread of the illness in schools. Results from the pilot show the potential for classrooms to be safer for students and educators if ventilation performance is measured, indoor air safety is appropriately monitored, and corrective measures are taken based on the actionable insights delivered by the Poppy system.

The Poppy system used in the pilot provides quantitative air clearance data and diagnostic scanning to reveal how virus particles move through the air in each room, exposing hotspots and transmission pathways that pose a great risk. The pilot allowed Poppy to measure ventilation performance against California state guidelines; evaluate the effectiveness of current ventilation mitigation investments and provide a plan on how to improve and address issues.

https://www.poppy.com

BY RUTH KING FINANCE

A Better Way to Look at Gross Margins

If you just look at your gross margins on your monthly profit and loss statement without analyzing the gross margin data, you might get lulled into a false sense of security. Monthly gross margins and year-to-date gross margins reported on a profit and loss statement, don’t tell the whole story.

Last month I gave you the reason why graphing monthly and trailing data is important. Only by graphing the data can you see what is happening with your business on a long-term basis. With consistent analysis, you can spot minor issues and take care of them before they

become major crises.

Your gross margin graphs can vary from month to month, especially if your business mix changes (i.e., performing

frequent maintenance or having more project/replacement work than service work month-to-month). The trailing graphs should be close to a flat line.

Below are the monthly and trailing gross margin graphs for a sample contractor.

MONTHLY GROSS MARGIN

It can be difficult to assess the condition of the company with the monthly data graph because of the different mix of business activities each month. Gross margins go up and down depending on whether there was more service work or more replacement that month or maintenance work in another month.

To accurately determine if the gross

It can be difficult to assess the condition of the company with the monthly data graph because of the different mix of business activities each month.

To accurately determine if the gross margin is consistent, look at the trailing data graph.

margin is consistent, look at the trailing data graph.

TRAILING GROSS MARGIN

Gross margin data is fairly consistent on a trailing basis which means that the company is pricing properly and its productivity is consistent.

If your company’s gross margin is increasing, it may be that:

• Not all the direct costs for revenues you have produced are in the correlating month (you have what I refer to as financial statement fruit salad)

• Your labor is more productive than in the past (i.e., more revenue producing/billable hours)

• You are selling at higher prices – or have raised your prices for the same cost

• You are producing more work at a higher gross profit

• Your work is not consistent – you have different revenue streams at different gross margins. Some months you have more work in higher gross margin areas and some months you have more work in lower gross margin areas

• You don’t have inventory on your balance sheet. A higher gross margin means that you sold the parts that were part of the inventory. Or you bought less this month and used inventory

• The company counted a sale as revenue without performing the work for that sale. Sales and revenue are different. Revenue is that portion of the sale that is performed in the month. Revenues should match the cost of goods sold each month for consistent gross margins

If your company’s gross margin is inconsistent, it may be that:

• The company has a financial statement fruit salad (see above definition)

• Product/service pricing is not consistent (that’s not necessarily bad)

– there are different revenue streams at different gross margins. Some months there is more work in higher

Make sure your gross margin is consistent on a trailing basis. If it is increasing or decreasing, determine why and then, if necessary, fix the problems now before it leads to a financial crisis.

gross margin areas and some months there is more work in lower gross margin areas

• Inventory is not accounted for on the balance sheet

• The company is counting sales as revenue

• The company has performed a lot of warranty or callback work where there is an expense and no revenue for the warranty or callback work

If your company’s gross margin is decreasing, it may be that:

• Your material costs have increased, and you haven’t raised your prices accordingly

• Your labor is not as productive as it should be or has been in the past (you have less revenue-producing/billable hours)

• You have direct costs for work that have not been billed yet (financial statement fruit salad)

• Your work is not consistent – you have different revenue streams at different gross margins. Some months you have more work in higher gross margin areas and some months you have more work in lower gross margin areas

• You bought more inventory than you used in the month (you account for inventory as costs of goods sold)

• The company had costs of goods sold for sales that were considered revenue when the sale was made

• The company has performed a lot of warranty or callback work where there is an expense and no revenue for the warranty or callback work

Make sure your gross margin is consistent on a trailing basis. If it is

increasing or decreasing, determine why and then, if necessary, fix the problems now before it leads to a financial crisis. 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 770-729-0258.

PROVIDED BY KEVEN PRATHER, CFBS EXIT PLANNING

Preparing Heirs for Their Inheritance

Inheriting money comes with plenty of benefits. From being less worried about paying for life’s necessities to enjoying the luxuries affluence can bring, inheritors often find that many of life’s key stumbling blocks are no longer in their way.

That said, inheritance doesn’t automatically mean a worry-free life. On the contrary, inheriting wealth can create unique challenges and conflicts. A windfall can be the root of significant problems for your heirs—and therefore for you too.

Consider some of the inheritancerelated issues that often crop up among ultra-high-net-worth (UHNW) individuals—those people with a net worth of $500 million or more—and how they tend to address these issues. Their strategies can potentially inform your action plan as well.

TRANSFERRING WEALTH

Experience has proven that many wealth creators want to pass on some of the fruits of their labor, to their children and other loved ones. However, doing so, involves several considerations, including:

• Addressing Financial mattersThe aim here is to be tax-efficient in transferring wealth. For instance, different tax strategies are available to mitigate the intergenerational loss of family wealth.

• Ensuring heirs will be smart about the money - A major concern of UHNW wealth creators is that inheritors will misuse the wealth they inherit. Often the notion of being given control over a large amount of money vs. making wise decisions regarding the windfall, do not always align.

• It’s not just the wealth creators who are concerned about the

ability of heirs to manage their inheritances—it’s often the heirs as well. It can be easy for inheritors to mismanage their fortunes, and we find that many inheritors recognize that potential problem. As such, means heirs must prepare themselves for the day when they receive the inheritances and be at least partially informed and ready with a strategy for moving forward.

MONEY’S IMPACT TODAY

A good starting point for understanding how inheriting wealth

might affect heirs’ lives in the future, is to see how money impacts them today.

Heirs should consider answering the following questions:

• Is wealth a source of terrific possibilities, a source of horrific problems, or some combination of the two?

• How is money affecting your life now?

• Is wealth the cause of serious relationship problems? If so, what and with whom?

• To what extent do you define yourself by your family money? What would happen if the money vanished?

In addition to answers to the above questions, parents should assess the ability of their children to manage their inheritances before making legacy decisions. A question to ask: If my children are not up to the task, what steps should I take to ensure that they are capable and will not waste their inheritances?

Chances are, there will be a range of analyses among heirs in terms of their abilities to intelligently and prudently handle significant wealth. That simply means that different heirs will probably need different wealth education approaches to best handle their inheritances.

Not surprisingly, there are many different ideas about how best to teach heirs to manage money. For example, some professionals strive to educate heirs on the intricacies of wealth management. However, we find that most inheritors are not interested in these types of details.

TEACHING HEIRS RESPONSIBILITY

An approach we find much more effective across all types of inheritors is to focus on how to be responsible for their wealth. This means giving them a good understanding of the bigger picture. By knowing what they want to achieve financially and being attuned to what is going on with their money, they can make more informed decisions.

One important aspect of being responsible for their wealth is giving heirs the ability to effectively select and work with professionals such as lawyers, accountants, and wealth managers. Part of that means empowering heirs to know how to avoid the “pretenders”— professionals who may want to do a good

A good starting point for understanding how inheriting wealth might affect heirs’ lives in the future, is to see how money impacts them today.

job for their clients but lack the requisite skills. Pretenders can be detrimental to heirs’ financial well-being.

IDENTIFYING PREDATORY BEHAVIOR

More problematic—especially if heirs receive significant sums—is the possibility of being exploited by predators, grifters, and the like. Significant wealth is a magnet for all manner of financial predators, so having the skills to identify such people before they do harm is a necessity for most inheritors.

Even if the assets are in trust, heirs are better positioned if they understand how the trusts are set up and what they intend to accomplish. In this way, heirs can better ensure what is going on in the trust and what are the correct federally regulated processes.

HAVING THE RIGHT TEAM OF PROFESSIONALS

Increasingly, wealthy families are making concerted efforts to teach future inheritors how to evaluate and oversee the work of the professionals they will rely on.

Additionally, there may be a need to discuss money and self-esteem issues— as new wealth can produce feelings of anxiety and even worthlessness among some inheritors. Delving into ideas that help separate people’s wealth from their overall sense of self can help foster a more comfortable relationship between an inheritor and their inheritance.

LESSONS FOR ALL OF US

Of course, you don’t have to be anywhere near the UHNW level of affluence to benefit from getting your heirs ready to receive an inheritance from you someday.

The key is to get going long before the day comes when assets transfer. Encourage heirs to think about their views, values, and attitudes toward money and wealth—and how those might change if their bottom line suddenly had additional zeros. Particularly, make sure to help them understand some financial basics and smart ways to size up any professionals they may encounter down the road.

Armed with self-awareness and a strong foundation of financial knowledge, your heirs can potentially get the most from their inheritance. 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.

www.TacoComfort.com

ECOER

The ESI Series variable speed inverter heat pump is one of the industry’s most innovative and efficient systems, with ratings up to 20 SEER and 10 HSPF. With Ecoer’s patented technology, the 20 SEER heat pump automatically adjusts itself while maintaining constant and consistent speeds to avoid temperature swings. Rigorously tested for long-lasting durability, you can be sure this system will hold up against inclement weather or extreme conditions. This unit provides comfort while running quietly (as low as 56dB–that’s a whisper).

» https://www.ecoer.com/

JOHNSON CONTROLS

NiJohnson Controls debuted its new Sabroe HicaHP heat pump family at ChillVenta, in Germany on October 11th- 23rd, 2022. The Sabroe HicaHP delivers up to 25 megawatts in heating capacity using a high-capacity screw compressor. The new Sabroe HicaHP (high-capacity heat pumps) family of products portfolio includes six modular, industrial heat pump products designed to decarbonize in various applications ranging from district heating to data centers, and battery manufacturing sites to food processing plants. The new Sabroe HicaHP family of products is the result of intensive, pioneering research.

» https://www.johnsoncontrols.com/ da_dk

RHEEM

The new Rheem®15 Ton Resolute™ Heat Pump – A proven sustainable option for meeting decarbonization and electrification goals – delivers 13.6 IEER and 3.3 COP, meeting DOE 2023 requirements. Designed with the right mix of premium features to maximize reliability, comfort, and value, Resolute™ products are a great choice for new construction and replacement projects. Standard single-point wiring and hinged panel access make the product easier to service and install, while technologies like Rheem’s removable blower assembly with VFD deliver on efficiency.

» https://www.rheem.com/group/ rheem-heat-pumps-classic-series-singlestage-rp15/

TACO

System M is the ideal solution for homeowners who want to reduce their carbon footprint while increasing their indoor comfort. System M is a radically innovative air-to-water heat pump system that provides comfortable, efficient heating, cooling, and plenty of domestic hot water to homeowners without the use of fossil fuels — so it doesn’t create CO2. This complete, packaged system is simple to install, simple to operate, and a simply unique solution for low-carbon heating and cooling. Simply put, System M is a Milestone. System M also enables the addition of even more comfortable heating and cooling options, like radiant floor heating, towel warmers, or integration into a central cooling system.

» https://www.tacocomfort.com/ product/system-m/

TESTO

The Testo 550i - Testo digital manifold gauges help to fulfill all refrigeration measurements. With your refrigeration manifold, digital measures better, and now Testo offers a whole new range of digital manifold gauges including the Testo 550i – the first fully digital manifold gauge. In addition to expert knowledge, it is above all precise measurement values which are needed for the comprehensive evaluation and correct regulation of a refrigeration plant, air conditioning system, or heat pump. And it is here that the digital refrigeration measurement technology from Testo has for years proven its worth.

» https://www.testo.com/en-US/ products/manifold

TRIMBLE

SysQue v9.3, Trimble’s software for MEP detailers and fabricators, includes significant and innovative enhancements. The most important among them is speed: Benchmarking indicates up to 340% improvement in modeling speed. Sheet metal detailers can now enjoy digital modeling workflows optimized for productivity, allowing users to stay closer to “New” model speeds throughout the life of their projects. Add to that, new content and updates that allow users to model more complex installations such as multi-trade rack cages and Vertical Duct Banks, and it means MEP detailers and fabricators can utilize their Revit Families (RFAs) and work confidently and with unparalleled speed.

» https://trimble.com/vdcproplus

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QUESTIONS

with BART HAWLEY

1. What is the most memorable concert you've ever attended?

It was the Bonnaroo Music and Arts Festival in Tennessee. I went to the very first year of the festival. That was the most memorable!

2. Do you golf?

No, my wife wants to start golfing, but I've never gotten into it.

3. What's the best thing about owning a business?

There is no cap on how far I can go. My business has the potential to grow as big as I want it to be – there is no cap on what we can do. It depends on how much work I want to put in.

4. What was the last family weekend trip you took?

We like to go to the top of Topsail Island in North Carolina. Topsail Beach. It’s very laid back and relaxing. We rent a house and hang out oceanfront. It’s a great place to take the family.

5. Do you have a favorite sports team currently?

Yes. I am an Atlanta Braves fan. I'm not a good fan necessarily. But that's the team I claim.

6. How did you get into the HVACR industry?

I was eighteen and had no idea what I wanted to do. But HVAC companies were always hiring in the classifieds. I'd look at the newspaper weekly and there always seemed to be jobs. I enrolled in a technical school and the rest is history.I started as an installer and gained experience. Eventually, I decided it wasn’t what I wanted to do for the rest of my life. I got to the point where I thought, “I want to grow a company, so I don't have to do all the labor myself. So, I started reading books. I read The E-Myth, which kickstarted it all. It completely put me into a business and growth mindset. Listen, I still feel like I'm winging it much of the time. But we grew even in 2020 which was validating. I tell every company if you're still here, then that's a good thing.

7. What did you learn in the first year as the CEO that sustains you still today?

Yes, I learned quickly that as I moved up the ladder. I needed to train my replacements. Most of the people who work here didn't have any heating and air experience when they started. If I no longer wanted to do the installs, I needed to train another guy to do it. That's how I grew.Today, I spend maybe 10% in the field and the rest of my time is as CEO.

Start management training now. Teach others and learn all you can. At Hawley Air, it’s constantly evolving. We try not to get stuck, thinking, “I already know the right way.” Companies don’t grow that way.

I’m at a point where I have managers I feel confident in. My goal over the next year is to move completely to a space where I am managing managers.

9. Do you have a training system in place?

Yes, but it's, it's a work in progress. So, we have a manager's daily, weekly and monthly checklist. That's kind of our guideline for training. It outlines tasks that each position needs to be doing daily, weekly, and monthly. I have several managers overseeing it all.

10. Is there a difference in the industry before 2020 and now?

I’d say, no. We’re in full 100% growth mode. We didn't see any decline and have been growing about 60% annually over the past two years. Growth can be tricky, but we’ve been growing steadily. Growing too fast can be detrimental. This is a topic that is always top of mind for me.

11. How have you been affected by the supply shortages?

Except for a few hiccups, waiting a bit longer than we should for equipment, it hasn’t been a hurdle.

12. Where do you see your company in the next three years?

We hope to be in the $15 million a year range in three years. That's our goal. It’s doable. If we keep our 60% growth rate, we should meet that.

13. Who was your mentor?

I didn't have one, but over the past three years now, I've been a part of a group called BDR, which stands for Bill Business Development Resources. This past month, I joined

14. Do you think mentorship is important?

I do. I try to pass along the knowledge that I’ve learned. I was a high school dropout. If I can do it, anyone can. I want to be a good mentor. I'm trying. I'm trying.

15. Would you say you are a demanding boss?

No, I don’t think so. I do try to push people to be here, to do their best. But I think everybody that works here would say, I'm, I'm not demanding. But I would say, while I have a bit more of a laid-back management style, I try to take the initiative to start having one on one conversations with people. I feel like that's been successful.

16. How important is being a part of the community to the success of your business?

We have made such an effort to be a part of the community. We run events at Christmas. And we have a crisis ministry. It’s for kids who have been taken from their parents and are in foster care. As we grow we try to look for ways to give back. It’s not only important for the community but it lifts spirits internally as well.

17. How do you overcome the recruiting challenge that so many owners face? It's still a challenge. It's been tough. Up until recently, it was hard to attract top talent while competing with larger companies. But what has worked as I’ve said, is not relying on experience or training. I’d rather bring in good people and train them, from the bottom up. And that’s what I have done. We have hired people with zero experience and trained them the way we want it done. It has served us well.

18. What are your plans for continued expansion?

We're shooting for the stars.

19. Are you planning to stay local or would you like to grow nationally? Right now, my mindset is local. But in the next couple of years, I would like to acquire some other companies in surrounding cities.

20. Do you have your eyes on companies now, or should I check back in six months?

I have some companies…some ideas in the back of my mind. We’re still honing our processes, but I feel like we're getting very close to the point where I will be ready to open up another branch or acquire another smaller company. That’s the dream…or part of the dream anyway.

Heather Langone sat down with Bart Hawley, Owner and CEO of Hawley Heating and Cooling. They discussed how he grew the company from the ground up to its current roster of 20 employees. He shared thoughts about his management style, the importance of giving back, and big plans for expansion and acquisition over the next five years.

8. What advice would you give to a new CEO in HVACR?

Don't Fall Off

In developing a new Sales Operating System for Nexstar Network, Chris Hondl knew a step-by-step approach was key to help members reach the summit of success.

Imagine you’re a mountain climber who’s about to tackle Mount Everest for the first time. As a professional, you understand the enormity and risks of such a daunting adventure.

By Chris Hondl, Sales Coach, Nexstar Network

You begin to prepare for the challenges, which include sub-zero temperatures, potential storms, low oxygen, carrying the right gear, and treacherous terrain. The part that makes you feel apprehensive is the bridges – the precarious metal ladders tied together – that an advance team of sherpas will lay out to help you cross the ravines.

You’ll be crossing those ladder-bridges wearing an oxygen mask, spiked boots, layers of clothing, and goggles that restrict your vision, all while carrying weighted gear. How will you walk across the bridges safely?

Most likely, you’ll tackle the treacherous ladder-bridges one step at a time, until you reach the other side. One step at a time. Just like every other challenge in life that comes your way.

In sales, the goal is the same as in mountain climbing: we must get from one point to another, and we must do so one step at a time. A multitude of issues could topple us at any minute. We might struggle to maintain a positive attitude in the slow season, or to handle a difficult customer situation, or to juggle material and product delays. Yet many salespeople try to jump from the first rung of their sales process ladder directly to the sale. Sometimes they make it, but often they stumble and miss the sale. The most frustrating thing is watching a customer that actually wants to buy, but who holds back when they feel pressured to jump too quickly to the other side.

In 2020, Nexstar Members asked for a sales operating tool that would enable them to chart their business success step by step. In 2022, we are poised to deliver.

The journey began when Nexstar invested in hiring me, the organization's first dedicated sales coach to lead the development of a Sales Operating System specific to our members' needs. The process has required many steps, and getting here has involved conversations with more than 400 members, in-depth analysis of competitive sales systems, refining an ability to scale the offering to member shops of all sizes, and now the launch of a proprietary sales resource complete with tailored content to guide our members.

I'm thrilled to say that step by step we've arrived at this monumental point in time. And we know our members' ability to reach their summit of success is closer than ever before. If you are interested in learning more about the many benefits of Nexstar membership, including our Sales Operating System, please contact us at info@nexstarnetwork.com.

Chris Hondl brings years of sales training and expertise to serve Nexstar Network members. Most recently, he led the development and launch of the organization's new Sales Operating System. Contact him at chrish@nexstarnetwork.com or 651.314.3846.

in big with Westinghouse

Our growing roster of high performance single and multi-zone HVAC systems is cause for celebration.

Our lineup of indoor and outdoor units includes a wide variety of the most popular sizes and styles, all with high-end features that provide exceptional value. Now you can offer your customers ceiling cassette, horizontal ducted and wall-mounted indoor units, as well as multi-position air handling units. Plus, all Westinghouse zoned systems are backed by extraordinary support. Get in the zone every time with this winning roster!

For more information on how you can become a Westinghouse distributor, please contact Sales@WestinghouseAC-USA.com. www.WestinghouseAC-USA.com

PATENT PENDING, DR SMART TECHNOLOGY

Featuring an advanced, direct duct air path design, the BrushBeast DR is the future of the air duct cleaning industry. This newly designed direct drive system has eliminated pulleys and has an auto-stop feature which helps reduce tension and extra wear on drive cables. The DR is also equipped with 4 speed rotation settings to allow you to have more control over the machine and cleaning applications. Choose from 250 RPM, 325 RPM, 400 RPM, or 500 RPM.

POWERFUL, ENERGY SAVING VACUUM MOTORS

Upgraded to include direct drive motors, the BrushBeast DR uses less energy but produces more power. When compared to the original BrushBeast, the DR produces 20% more vacuum power and uses 20% less energy. When compared to the Rotobrush aiR+, the DR boasts a shocking 105% more vacuum power.

Rotobrush is the only air duct cleaning equipment manufacture that features a removable pod. The signature removable pod allows operation by a single technician and can easily be carried into an attic, basement, or crawlspace. Paired with the SpeedTray Carrier, the portability and power of the BrushBeast DR is unmatched. Magnets on the front of the carrier allow you to easily attach your brushes while built-in holders house your vacuum accessories, drill, and fogger. Easily carry everything you need and access is within arm’s reach. 1-800-535-3878 | sales@rotobrush.com | www.rotobrush.com

SMARTER, BEASTIER, & MORE POWERFUL!