Creating a Simple Social Media Plan to Stand Out In Your Market
Learn how the four “Cs” give you a blueprint for your social media plan.
Preparing for Tax Season: The Do’s & Don’ts
It’s tax time and here are tips to avoid an IRS problem. By Michael
Bohinc
10 The Employee Review: Annual Requirement Or Meaningful Conversation?
Here’s how to approach that annual ritual with confidence.
By Rick Gutenmann
Avoiding Financial Disaster from Underinsurance
A guide to let you know if you’re underinsured.
AIM ACT Rule: Achieving Compliance with Existing Detection Methods
Here’s a Sure-Fire Way to Meet the AIM Rule Without Going Broke. By Marion Lazzarotto, Gary Epright & David Reitz 16 Gratitude: Does It Have A Place In Business?
A touch of thoughtfulness can invigorate your team and improve the business. By Ryan
Kalmbach
18 7 Ways to Improve Your Communication as a Leader Communication is intertwined through everything you do as a leader.
By Lisa Kinney
19 Be Wary of Social Media ‘Fin-Fluencers’
Business owners need to know how to avoid financial con artists. By Keven Prather
20 12 Most Common Financial Statement Mistakes to Fix Before You Sell – Part 4 Get the Insider Take on Mistake No. 6, Negative Accounts Receivable and Mistake No. 7 Negative Inventory.
By Ruth King
5 Editor’s Notebook | Is Working as an HVACR Technician Becoming Glamorous?
Why more people want to be HVACR techs. Tom Perić
4 MRS | Editor’s Choice: People I (Mostly) Admire. Freakonomics co-author Steve Levitt tracks down other high achievers for surprising, revealing conversations about their lives and obsessions.
of Riley Sales
EDITOR’S
CHOICE Management Resource
Shelf
If you want to hear ideas, advice, suggestions and viewpoints from some of the smartest people in the United States (OK, the world), you just have to give a listen to the podcast People I (Mostly) Admire, by Steve Levitt, one of the top economists and co-author of Freakonomics. He touches upon a panorama of subjects ranging from business and science to medicine and trivia. Ultimately, you should listen because it’ll help you think more clearly about everything you do.
People I (Mostly) Admire
Hosted By Steve Levitt
Freakonomics co-author Steve Levitt tracks down other high achievers for surprising, revealing conversations about their lives and obsessions. Join Levitt as he goes through the most interesting midlife crisis you’ve ever heard — and learn how a renegade sheriff is transforming Chicago’s jail, how a biologist is finding the secrets of evolution in the Arctic tundra, and how a trivia champion memorized 160,000 flashcards. www.freakonomics.com/series/people-i-mostly-admire/
WorkLife with Adam Grant
Hosted By Adam Grant
Adam Grant is an organizational psychologist and professor at the Wharton School of the University of Pennsylvania. In his podcast WorkLife, he explores the world of work. Episodes provide insights into improving productivity, collaboration, and wellbeing. He often interviews experts and thought leaders in various fields to discuss strategies for making work more meaningful and effective. The podcast covers motivation, creativity, decision-making, and building positive workplace cultures. www.adamgrant.net/podcasts/work-life/
The Art of Charm
Hosted By AJ Harbinger and Johnny Dzubak
AJ Harbinger and Johnny Dzubak host this thrilling podcast. The Art of Charm focuses on social dynamics, communication, and personal development. While not strictly a management podcast, it offers valuable insights into building strong relationships, effective communication, and personal growth. The hosts discuss topics such as networking, charisma, emotional intelligence, and self-confidence, all of which are essential skills for managers and leaders.
www.theartofcharm.com/podcast/
Drive: The Surprising Truth About What Motivates Us
By Daniel H. Pink
Pink challenges the traditional “carrot-andstick” approach to motivation, arguing that true motivation stems from intrinsic factors like autonomy, mastery, and purpose. This book, from a giant in the field of behavioral economics, should be on everyone’s reading list. You learn how to create a more motivated and productive work environment.
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses
By Eric Ries
This book introduces the Lean Startup methodology, which emphasizes creating and managing successful startups more efficiently and innovatively. Ries outlines principles such as validated learning, iterative product releases, and customer feedback loops to help entrepreneurs build sustainable businesses. It’s an essential guide for anyone looking to start or grow a business focusing on innovation and efficiency.
Gerstner shares his experience when he turned IBM around during the 1990s. He provides a powerful case study about business strategy, leadership and cultural change. The book provides insights into running a business even if your company isn’t a corporate giant.
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BARBARA Kerr VP Operations bkerr@hvacrbusiness.com
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It would appear that becoming an HVAC tech is in vogue. It’s about time and the industry is better for it.
He Skipped College. He’s On His Way to $175,000 a Year.
Recent news coverage suggests this. Several headlines about joining the trades and gaining cachet value are long overdue, as a career in any of the trades have been overlooked for years. For as long as I can remember, the media has plied us with stories about needing a college degree if you ever hoped to succeed, especially from a financial perspective. The implication was that if you didn’t go to college, there was no way you could succeed.
I’m sensing a shift, especially when I read an article in the Wall Street Journal (WSJ) urging people to have a positive and even enthusiastic view of the trades, particularly HVAC. I know things are starting to change.
The article “Why I Skipped College to be an HVAC Tech” contained the subhead “I’m Thinking About a Mortgage Instead of College Loans.” What a surprise to see how a young man penned a well-written Op-Ed on why he was foregoing college and going into the trades.
I wondered if it was a one-shot effort. Then I read a fullpage Philadelphia Inquirer article titled “He Skipped College. He’s On His Way to $175,000 a Year.” This article was about a commercial HVAC apprentice who expects to earn major money early in his career.
I haven’t conducted any research to see how widespread this shift is, but anecdotally, I hear frequently that more and more young people are foregoing college and the military and are giving the trades a serious look. As I’ve discussed, pursuing higher education is strongly correlated with a higher income, and recent research shows that far too many college degrees and majors don’t pay off in the long run.
A recent study from the Burning Glass Institute and the Strada Institute for the Future of Work revealed this fact earlier in 2024, along with other troubling statistics that paint a bleak picture for future college students. While 52% of college graduates work in jobs that don’t require higher education, 75% remain in this situation for a full decade after college.
The above mentioned are the driving forces that point some people toward a different educational model. According to the U.S. Department of Education’s National Center for Education
Statistics (NCES), the average total cost of attendance for firsttime, full-time undergraduate students in the 2022-2023 academic year was about $30,031 per year.
The cost of a college education and lack of job opportunities has the makings of a public relations issue for higher education. The negative view of the trades as a career is diminishing. Make no mistake about it: The HVAC industry needs techs. According to the U.S. Bureau of Labor Statistics, the HVAC industry is short one in four technicians, and if this trend continues, that will grow to one out of two by 2027. The need is there, and the opportunity is there, and it’s my belief that opinions and attitudes are changing.
Now is the time to increase your effort to gain stability for your business with a view to the next five or 10 years. Capitalize on the current wave popularity and partner with trade schools or professional organizations like Explore the Trades.
(We featured their executive director, Kate Cinnamo, in our 20 Questions column in July.)
We will continue to publish articles to help you recruit and retain your staff and spark a few ideas. But like many things in life, starting can be difficult, and now is the time to develop a short- and long-term recruitment plan.
…this isn’t the end of the story. The two articles I previously mentioned generated a significant response. The Philadelphia tech story drew 440 comments, and the first-person article written by the tech in the WSJ garnered 778 comments. These are very impressive numbers. Obviously, these articles touched a nerve.
At the end of the day, some find a challenge and fulfillment in an occupation that requires a degree of physicality. Others would rather sit on a sofa and strengthen their fingers with the TV remote control.
Let’s be blunt. For decades, parents, guidance counselors and the media regarded a trades career as an afterthought. There’s a shift in direction, and this is the first time in a long time to connect with those who are receptive to the new path, aren’t afraid (dare I say, welcome) of a bit of hard work, want to make a comfortable living and start their working career without crushing debt. This is the perfect moment to search for new talent with a favorable prevailing wind. u
CREATING A SIMPLE SOCIAL MEDIA PLAN TO STAND OUT IN YOUR MARKET
BY JEN MCKEE
For many reasons, contractors struggle to get their business on social media. If this is you, some things holding you back probably include not knowing what to post, not having time, not having content, or just having good intentions but not following through. I think most of these come down to just not having a plan. If something is important and needs to be done, you must get it on your calendar and nail down a plan. But how important is social media for your HVAC business?
Social media can do many things for your business. It’s the culmination of all your other marketing efforts. It’s how you set yourself apart from your competitors. It’s where you get a chance to tell your story and elevate all the other marketing initiatives you’re working on. It’s the
Social media can do many things for your business. It’s the culmination of all your other marketing efforts.
top-of-funnel marketing and the visibility you need to help everything else you’re doing succeed.
Recently, I had a marketing expert reach out to me and ask how we could duplicate the success that another one of our clients was getting with their social media and marketing. We have been working on the organic (nonpaid) social media presence for three years. You can’t duplicate that overnight. Organic social media gets more powerful and more valuable over time. You build your
audience and followers, and you can only do this when you’re actually posting.
But you’re not an art major. You don’t know what to post. And you still need a plan. I’m about to make this easy for you.
The most valuable thing on your organic social media is engagement. Engagement is a lot of things: watches, clicks, likes, comments, shares, saves. Engagement is valuable because it tells the algorithm that the content you’re putting out is interesting, so the algorithm shows it to more people. So instead of taking
a ton of time, you will use your people, dates and phone to easily create your content.
Think of the 4 Cs when you start to think about your social media.
• Commitment
• Calendar
• Content
• Consistency Commitment
What can you commit to for the long term? You can schedule most social media posts, so it’s really about having things to post. Some say that more content is better, and you can make a bigger impact with more content. For our clients, we either post once a day, five days a week
(three static posts and two videos) or 8x a week (Monday-Friday static posts with three videos). We also post stories on Instagram and Facebook, so you could argue that we post more than once a day, but our feed content is scheduled ahead of time, and then we repurpose EVERYTHING.
So, back to commitment, how many hours a month can you commit to social media? That’s what we’re going to start with. Maybe 2 hours a week? Maybe 1 hour a week? Or maybe it’s time to figure out what your time is worth and see if you can find someone to pay less than that to help you.
Calendar
This is where you start to build out your content calendar. Your content calendar’s objective is going to be to get engagement by sharing your team, your brand, and your story. Here’s how you’re going to do that.
Step 1: What important dates are happening in your business this month? Whose birthdays and anniversaries? What specials are you running? When are you going into the community? What trainings are you doing? Start with those dates.
Step 2: What holidays or hashtag holidays are upcoming? Keep the major federal holidays in mind, and look at hashtag holidays. Days like “National Tune-Up Day, National Tradesmen Day, and AC Appreciation Day.” You can ask Google or ChatGPT to help you come up with those dates. Put those in your content calendar next.
Step 3: Next, you’re going to fill in the blanks using the 3S strategy — Show Up, Stand Out, Scale. Some of the above posts will easily fall in there. Here’s more about that:
Show Up: Show up Content is content that casts the broadest net to get in front of the most people. This is typically engaging, sharable, relatable content like memes, quotes, storytelling, newsjacking, celebrations, anniversaries and birthdays. It’s anything that will help attract more people, attract more engagement and increase your visibility.
Examples:
• Photos of your team at a team outing.
• Photos of the owners with the story of how they got started.
• Photos of the homeowner that won your giveaway and a story about it.
The most valuable thing on your organic social media is engagement.
• Photos/video talking about a relevant, upcoming weather issue that will affect the whole community and how they can avoid it.
Relatable memes.
Photos of whose birthday or anniversary it is.
Stand Out
Stand-out content is your thought leadership content that you post to remind people what it is that you do. This is where your educational/ transformational content lies, but there are other ways to position yourself as a thought leader. This type of content reminds your followers what you do, shares easy information that they can use to transform their problems and positions you as the expert in HVAC.
Examples:
• Easy DIY fix.
• Problem -> Solution videos or explanations.
• Pictures or videos of you at conferences or in meetings learning/ training more.
• Pictures or videos of you on the news, on billboards, or on podcasts sharing what you do.
• Any awards you receive.
Scale: This is your promotional-type content. You only need about 20% of your content to be this type of content OR put money on it (turn it into an ad). This content is great when people
Next, start working on your videos. Schedule time and record all the videos you want for the month. Maybe all of your educational content will be video this month, and you need four videos. Take an hour, record them all, and edit them simply by just adding closed captions and a title.
Then, head to a scheduling tool and schedule all of your content. We usually manually post content on TikTok and YouTube to get the most reach, but if that’s not in your schedule, get it queued up. All of the platforms allow you to schedule directly from their desktop versions. You can also use third-party scheduling tools that make it easy to cross-schedule across platforms. I use a tool called Metricool, which I love for scheduling and analytics. The goal is to have a plan and make it easy to execute.
are researching you. It’s great for ads. It’s usually pretty hard to get a bunch of engagement on it. We like to pair it with pictures of people to try to help it get a better reach.
Examples:
• Current offers
• Specials
• Your services
• Testimonials
Content
Now that you have your calendar to start collecting content, get all your videos for the month recorded. Get all the pictures you might need based on the content you want to schedule. Try to use pictures every day and just add a little bit of text to the picture or give more context in the caption.
What do you normally look at on a social media feed? It’s pictures of people. They will always stand out with engagement more than anything else. Your content should always contain pictures of people when possible.
Take your content calendar, go into Canva and create however many slides you have for the days you’ll be posting. Add a note next to each slide that says what day you’re posting and what the post will be about. Then, start adding pictures to all the slides. Sometimes, you’ll need a placeholder for things happening throughout the month, but getting the bulk of this down will make your posting much easier.
Consistency
The most important thing you can do with your social media is to be consistent. A friend said something recently that speaks volumes about how organic social media works and the importance of consistent posting over time. He said, “I’d rather 100 people see 100 of my posts than one million people see 1 of my posts”– Tim Brown, Hook Agency. Think about your own contentconsuming habits. What are you most likely to remember, the 1 million views video you saw or the creator you see showing up on your feed over and over again? Consistency makes an impact; consistency builds community, and consistency is what makes your social media a valuable asset for your business.
Sometimes, getting started is the hardest part. If this is you, I challenge you to start small. Maybe posting once a week, but schedule it out in advance so you get into the habit. I also encourage you to start documenting pictures and videos of everything you’re doing and drop them into a Google file. Every marketing company you work with is going to need pictures and videos, so building that asset will be beneficial for you. u
Jen McKee is the founder of Kee Hart Marketing, a social media marketing agency specializing in organic and paid strategies for contractors. Contact her at jen@keehartmarketing.com or online at www.keehartmarketing.com.
PREPARING FOR TAX SEASON: THE DO’S & DON’TS
BY MICHAEL BOHINC
Every time I sit down to share some guidance or advice for contractors on tax planning, it seems like an idea that was good last year is either not good this year or the tax provision has expired. Having grown up in the industry, I will say that the Internal Revenue Code changes more often and in more detail than our plumbing or mechanical codes we have. So what does that mean? This means, like every other year, that at least some of this year’s advice may be outdated and as stale as week-old bread by the end of 2024.
Here are some things you can do to prepare for your individual and business taxes this year:
• Review a copy of last year’s tax return and have it nearby to reference as you prepare for this coming tax season. Make note of any changes from last
The Internal Revenue Code changes more often and in more detail than our plumbing or mechanical codes we have.
year to this year in: marital status, family status (new baby or adult child going out on their own), work status (new job, retired, unemployed), investments status (i.e. stocks, real estate, house sold) as well as anything else that has changed in your life. The same goes for your business: changes in ownership, sale of the business or assets, and asset acquisitions. Please share these with your CPA or tax professional, as many events may have tax consequences for you or your business that you’re not aware of, even if the event seems small to you.
• Start a folder (paper or digital) for your taxes and tax documents
for this year. Place all your income, expense and tax documents you receive in the mail or electronically in the folder, so everything is in one place and organized for you and your accountant to review. If you’re not sure if it impacts your tax situation, play it safe and put it (or a copy of it) in this tax folder. Your accountant will let you know if it’s needed or not.
• Update your personal identification (Social Security Number, Driver’s License Number), as well as your bank information (for electronic-filing purposes for refunds) if any of it has changed since you filed your taxes last year.
If you do your own taxes or don’t have a relationship with a CPA or tax professional, you can start your checklist of items to prepare for tax season:
• Tax Bracket Management
Look at projected income for this year compared with last year as well as next year (2025). Are you expecting a bonus, raise or distribution from your company? It’ll be important to know what the tax rates are going to be for next year. Depending on the rates, you may want to move income from one year to another to the extent you can do that to lower your potential tax liability.
• Itemized Deductions
The same thing applies here as above in Tax Bracket Management, though
the variance for most taxpayers in their itemized deductions has no significant difference.
• Investments
Gain or Loss harvesting depending on your situation. This means realizing gains or losses (by selling them) on some investments to lower the projected tax liability.
• Retirement Planning
Make a list of your retirement investments and plans if you don’t already have this (hint: you should have it and be tracking it like your other assets and investments). If you’re looking at starting or changing a retirement plan in your company or maybe opening an IRA or Roth IRA account on your own, there are tax advantages and disadvantages to each, so please keep your tax professional informed about these decisions.
• Education Planning
The same listing and strategy for retirement planning holds true for any educational decisions you have made or may be making before year-end.
...many individuals’ and businesses’ tax provisions in the 2017 Tax Cuts and Jobs Act are set to “sunset” or expire at the end of 2025. Those will have a dramatic impact on most individuals and businesses.
Here are a few things you should not do as we head down the stretch of 2024 and into tax season:
• Do not believe everything you hear and see about taxes and tax law changes over the next few months unless the information comes from a CPA or tax professional. While we’ve had a number of last-minute laws and tax code changes passed by year-end, this is an election year, and we won’t truly have any idea what may or may not happen until after all the election results are in for all the federal races (President, Senators & Representatives).
• Do not enter into a significant business transaction or personal commitment until you’ve spoken with your tax professional and understand
the tax implications of making that move. Once something is done, there are very few circumstances where you are allowed to “go back” and treat the move or transaction differently.
• Do not procrastinate in reviewing your tax situation headed toward year end. There’s plenty of time yet in the year to get transactions or events completed that have tax consequences to you or your business. If your CPA or tax professional hasn’t reached out to you yet, be proactive and reach out to them and have a conversation.
NOTE: The accounting and tax professions, like plumbing-heatingcooling-refrigeration-electrical contractors, have a stereotype of being slow or not responding to people looking for help. They also are facing the same staffing and employment issues as in our industry.
One final important point — While we don’t know yet what, if any, tax law changes will be made before year-end, we do know that there will be problems at the end of 2025 if nothing changes right now, because many individuals’ and businesses’ tax provisions in the 2017 Tax Cuts and Jobs Act are set to “sunset” or expire at the end of 2025. Those will have a dramatic impact on most individuals and businesses. u
Michael Bohinc is an accountant in Cleveland, Ohio and owns Keeping Score Inc., a financial management and accounting firm. He is a Premier Business Coach for Service Nation and has been writing for industry publications for over 20 years. He has over 35 years’ experience as the Chief Financial Officer of his family’s plumbing business. Michael is the youngest recipient of the Servant Leader Award. Contact Michael at (440) 708-2583 or mbohinc@ keepingscorecpa.com.
THE EMPLOYEE REVIEW:
BY RICK GUTENMANN
As the year winds down, we turn our attention to year-end financials, holiday plans, next year’s goals, and employee reviews. Ugh. Employee reviews. Why do we hate them so much?
For one, they are time-consuming. We spend hours preparing them while squinting our eyes, furrowing our brows, and scratching our heads. We strain to grade our people on a Likert scale or cobble together a few sentences about strengths and weaknesses.
Second, they’re awkward and cause anxiety for managers and employees. The communication is often directional, overly formal, and may be laden with surprises.
Third, there’s an unwritten expectation that annual reviews come with a pay increase as a rite of passage as opposed to being performance-based.
And fourth, you may already know this, but research indicates that annual reviews rarely produce results. That’s right, they are basically a waste of time.
Why? Because feedback is generally best received when it’s immediate. Not
ANNUAL REQUIREMENT OR MEANINGFUL CONVERSATION?
There’s an unwritten expectation that annual reviews come with a pay increase as a rite of passage as opposed to being performance-based.
days later. Not weeks later. And certainly not months later. Yet, there we are, saving up a year’s worth of feedback for the annual review when it is unlikely to have much impact. To compound the ineffectiveness, most don’t generate an action plan or a follow-up plan.
We meet. We talk. We go through the motions. We file the report. Then it’s back to business as usual. See you next year!
What if we took a whole new approach and turned this exercise from a mundane waste of time to a vibrant and meaningful meeting that resulted in a common understanding, personal enlightenment, an action plan, and a follow-up mechanism? Even better, what if these meetings were so enjoyable, effective, and impactful that you and your direct reports looked forward to them? Perhaps you would schedule them twice a year, quarterly or even monthly.
This year, consider a new approach. Follow these eight steps to maximize the impact of your employee performance reviews.
STEP ONE: Free up the dialogue. Remove the formality and top-down communication of the meeting and focus instead on a casual two-way discussion. Be prepared to ask questions and then LISTEN to your employee. As a rule, airtime should at least be split evenly. The best practice would be to talk only 20% of the time and actively listen 80%.
STEP TWO: Review the position description together to determine if the description and expectations match the work. If not, agree to make the necessary adjustments in the description or the actual work.
STEP THREE: Have the employee describe their contributions to the business. Give them a chance to tell you about the value they bring to the business. Let them brag a little. Listen to determine if those efforts align with the company’s mission, vision, and values. You may need to nudge them a little if they are not. Many employees are overly humble, so you might need to boost them with honest and positive feedback. Let them know you’re noticing their good work.
STEP FOUR: Have the employee identify professional “weaknesses” – what we now refer to as “opportunities” for improvement. This might include time management, delegation, listening skills, and confidence. Mutually determine which two opportunities will have the biggest impact on performance over the next 90 days and make them a priority. Brainstorm some action items to help the employee address the concern and assign deadlines for each. Only after the employee has shared their opportunities should you add your observations to the
list. After all, there may be a glaring blind spot that you need to address. Be sure to support your feedback with two or more examples.
STEP FIVE: Discuss long- and short-term business goals. These are measurable, high-impact goals that will move the needle significantly. Check that they align with the company’s vision, mission, values, and strategic initiatives. Again, choose the top two for each and develop action plans for all four. Don’t forget to include deadlines.
STEP SIX: Lead a discussion around the employee’s career aspirations. This is a great opportunity to provide some skills training or encourage attendance at a workshop or conference. Look at the upcoming calendar, find the training and development opportunities, and get registered. This might turn into a homework assignment. A good staffing plan provides budget dollars for these types of activities.
STEP SEVEN: Open the floor for any thoughts or observations about the company. This might include the direction of the company, your vision for the department, employee rumblings, comments on company culture, suggestions for how you can better manage the team, ways to improve communication. This is basically an open forum. You may have to massage this conversation by asking questions in these areas and showing genuine interest and openness to the feedback. By demonstrating good listening skills, you invite employees to have a voice, encourage participation, and, in turn, make them feel valued. This goes a long way toward getting company buy-in and increasing retention.
STEP EIGHT: Tie everything together, document the conversation with a one-page professional development plan, and schedule a follow-up meeting. Key items include:
• Two professional development goals focused on professional opportunities for improvement.
• Two measurable short-term business goals focused on immediate impact in the near term.
• Two measurable long-term business goals focused on meaningful impact over several months or a year.
What if we took a whole new approach and turned this exercise from a mundane waste of time to a vibrant and meaningful meeting …
• One career development goal with an eye toward long-term career advancement.
Each goal should include measurables, supporting action items, scheduled checkpoints, and calendar deadlines. Go ahead and schedule the followup meetings before you conclude the Employee Review. Write up the plan together and make a copy for each of you.
With these eight steps, you are sure to get better participation and a more meaningful outcome from your annual employee review. Here are a few best practices and variations you should consider.
• Keep the meeting between 60 and 90 minutes.
• Make the best use of meeting time by having the employee prepare answers or comments to the review questions or discussion items ahead of the meeting. You should do the same. Not everyone thinks well on the moment, and you want both parties to spend quality time ahead of the meeting on these subjects.
• A 360-degree feedback report will yield additional valuable feedback. But be sure to screen the responses for inappropriate or hurtful comments.
• In all subsequent meetings, make sure you revisit documents from previous meetings. This is a good follow-up practice and a chance to measure progress and reinforce gains and wins.
• Discussions around pay increases are much easier when you have timely and frequent performance reviews with measured results.
• If you are conducting quarterly or monthly meetings, you can consider breaking up the eight steps and focusing on two or three at each meeting.
• A quarterly meeting cadence is recommended. A monthly cadence is even better. A semi-annual cadence is acceptable but not ideal. Reviewing performance only once a year is better than no review but is ineffective at delivering timely feedback.
• Feedback should be ongoing, twoway, and developmental to maximize its effectiveness.
• Management Action Program’s (MAP) golden rule of feedback: Focus on the Problem, not the Person. I hope this begins a much improved and meaningful employee review process. While the discovery and discussion portions are highly beneficial, the accountability piece drives action, feeds personal and professional growth, and delivers high-impact business results. If you’re struggling in this area, let’s talk
about it. I’d love to get your feedback or hear about your success with this new format. By the way, MAP has a great Professional Development Plan template. You can download it from HVACR Business magazine’s Download Center. u
Rick Gutenmann is a senior consultant with the Management Action Programs. Contact him at rkgutenmann@mapconsulting.com.
AVOIDING FINANCIAL DISASTER FROM UNDERINSURANCE
BY TYLER PETERSON
The temperature inside our homes and offices can make or break our day off by just a few degrees, and our peaceful retreat, for example, becomes one of distress. As the protectors of comfort, productivity, and even safety, HVACR professionals are the unsung heroes of winter and summer. With a projected annual market increase of 7.4% annually through 2030, this burgeoning sector offers opportunities for heating, air conditioning, and refrigeration experts to expand or start their businesses.
For many, the prospect of entrepreneurship, which offers the autonomy to choose projects and the satisfaction of being one’s own boss, can be exciting. However, HVACR business owners – whether just starting out or 10 years in – often underestimate the risks of running their own business.
Business owners often overlook insurance. A survey by Hiscox USA, a leading small business insurer, finds that 75% of small businesses in the U.S. are underinsured, leaving them financially and legally vulnerable if an issue should arise.
Why do 75% of small business owners have insufficient insurance coverage?
The answer most commonly lies in confusion about the types of insurance
Before purchasing or renewing insurance, research the specific needs of your industry, consult an insurance expert, or use online tools to educate yourself on necessary coverage.
coverage and misconceptions about the necessity of insurance. Additionally, business owners often aren’t aware of the true extent of financial risk that owning a business exposes them to. Understanding these factors is crucial for addressing the widespread issue of underinsurance among small businesses.
1. Lack of Knowledge
The Underinsurance Survey revealed that a staggering number of small business owners lack basic knowledge of insurance policies. Seventy-one percent do not know what a Business Owners Policy covers, while 83% cannot accurately describe a General Liability (G.L.) Insurance policy. Coverage is very important for companies in the HVACR industry.
Before purchasing or renewing insurance, research the specific needs of your industry, consult an insurance expert, or use online tools to educate yourself on necessary coverage.
2. “One and Done” Mentality
Business owners often treat insurance as a “one and done” checklist item. In reality, insurance should grow along with the business; coverage for a business in its first year may look very different for the same business in its fifth year. Reviewing policies every two years is critical to ensure they match the company’s evolution.
3. Coverage Misconceptions
Insurance is often the last thing on their priority list for business owners who don’t have enough time in the day for all the activities that their role demands. Some may be too busy to learn why insurance is important or may be trying to save money by opting out of a policy. Others may incorrectly believe that if they have Workers’ Compensation or G.L. Insurance, it covers anything and everything. While
these policies protect against claims of bodily injury and the G.L. policy even extends to claims alleging damage to someone else’s property, they do not cover the business from claims of faulty workmanship, providing incorrect advice, missed deadlines, or personal injury from libel and slander. Without the proper coverage, these professional mishaps or wrongdoings can lead to financial disaster.
Professional Liability (P.L.) Insurance, also known as errors and omissions, offers coverage for companies facing allegations of negligence in the performance of professional services. For example, a .L.P.L. policy would offer protection for an HVACR contractor who recommends a system that later isn’t fit for the purpose for the building, resulting in significant and costly delays to a project.
How Can I Determine If My Business Is Underinsured?
Learning about different types of insurance can be daunting, but the cost associated with underinsurance can be even more daunting. Just as it’s critical to understand a business’s changing needs when evaluating the overall financial picture, it’s the same with insurance protection. You can take small steps to help match insurance to your business.
1. Examine Your Blind Spots
As a business grows and evolves, changes to the company can lead to different insurance needs. Ask yourself the following questions to properly evaluate changing business needs:
• Has the company grown in the past year? Have I increased revenue, hired more employees, contractors, or subcontractors, or added new products or services?
The size of a business has implications for insurance coverage. As you welcome more employees or celebrate revenue growth, a company’s risk profile increases.
• Since the last review, have I purchased new property or offices, rented new space, or acquired tools critical to the business?
If you have acquired new offices, equipment, or essential tools like computers, this often necessitates updated coverage to safeguard these assets. Business owners can protect property and equipment through a Business Owners Policy, which also encompasses General Liability insurance coverage.
• Does the company employ freelancers or contract workers?
Businesses can be held liable for issues caused by these workers, such as incorrect advice or property damage.
2. Honesty Is The Best Policy
The age-old saying still reigns true. Being honest with your insurance agent about the good, the bad, and the ugly is the best way to gain the right-size coverage for your unique business.
3. Meet With An Expert
When it comes to shopping, we all have our own personal preferences on how we buy something. Whether you prefer to purchase in person, over the phone, or on a website, there are multiple ways to chat with an insurance professional who can assess your business and offer advice on what coverage is needed.
The responsibility of ensuring homes, businesses, and public spaces have adequate heating and cooling systems and keeping excess water and dangerous gases out of living areas comes with a significant amount of liability. Ensuring your HVACR business is adequately insured is not just about compliance— it’s about safeguarding your livelihood
and your trust. By staying informed, regularly reviewing your policies, and understanding the full spectrum of coverage your business needs, you can mitigate risks and focus on what you do best: providing exceptional service to customers. u
Tyler Peterson is the Head of Professional Risks at Hiscox USA, a leading insurer for more than 600,000 U.S. small businesses, independent contractors and others, and oversees the Hiscox Professional Liability offerings. With over a decade of experience, she has developed insurance products for customers around the world and currently serves customers across the Professional Services, Healthcare, Technology, Media, and Construction sectors. Connect with Hiscox at their https://www.hiscox.com/ or https://www.linkedin.com/company/ hiscox-small-business-insurance/.
PIONEERS IN HYDRONIC SOLUTIONS
WITH EXISTING DETECTION METHODS AIM ACT RULE: ACHIEVING COMPLIANCE
BY MARION LAZZAROTTO, GARY EPRIGHT & DAVID REITZ
The American Innovation and Manufacturing Act (AIM) rule authorizing the Environmental Protection Agency (EPA) to manage climatedamaging hydrofluorocarbons (HFCs) focuses on refrigerant management and the mandatory use of automatic leak detection (ALD) to reduce environmental impact. It is likely your company may not yet have a solution in place to meet the new rule. While these regulations will affect you, don’t panic. Despite the changes and market complexities, compliance can be achieved by complementing your existing portable or previously installed direct leak detection system with an indirect method. This approach is an efficient,
Take a simplified approach: ALD management and an improved maintenance program, which can save you money, help the environment, and enable you to meet the new requirements.
high ROI solution that allows you to utilize your current setup while making a modest investment at a lower cost, using both methods. While direct detection ensures the protection of personnel and can help locate leaks, indirect detection monitors the entire system 24/7, giving detailed visibility of refrigerant levels and system performance.
Some consultants may advocate significant capital investments, including
a major refrigeration equipment remodel, to use natural refrigerants. At times, this large investment is warranted. With AIM Act regulations that limit supply, we are already seeing a phase down of HFCs production and consumption, which is facilitating a transition to new refrigerants that can lead to significant carbon savings. But when it comes to effectively reducing the overall use of HFCs, it doesn’t matter what type of refrigerant you use, so long as you’re using ALD as part of your
refrigerant management. With ALD, you can detect leaks up to 60 days in advance, allowing you to address them before they escalate or cause product loss. Therefore, a complete overhaul of your existing refrigerant management system is not necessary in many cases. Instead, take a simplified approach — ALD management and an improved maintenance program, which can save you money, help the environment, and enable you to meet the new requirements.
Indirect Methods
Complement Your Existing Solution
An Indirect leak detection method is often used in combination with direct leak detection methods to provide a comprehensive approach to
leak management. These two methods complement each other effectively. Direct methods, such as room controllers, (also known as fixed detectors), analyze the presence of refrigerant in the air to detect a leak, whereas portable detection is used for on-site leak detection. In contrast, indirect methods rely on permanent level measurement and the monitoring of operating data. By combining physical measurements with operating data, the system learns the normal operation of the plant and establishes a reference level. These algorithms use this reference level along with the data on pressures and temperatures to detect leaks and alert operators 24 hours a day, seven days a week. Indirect ALD and proactive remote monitoring solution analyzes the system’s performance or environment and indicates a potential leak before it becomes a problem. This method will then be used to check that the level remains stable, i.e. that the leak has been repaired, and that there is no other leak that was not identified during the on-site leak search.
Indeed, direct methods are effective for locating leaks, but come with certain limitations. They require numerous sensors, each of which needs to be calibrated, installed, and maintained. These methods are also difficult to use outdoors or in drafty room conditions, which can distort the analysis. While this approach enhances safety and helps in pinpointing leaks, it does not provide information on the size of the leak, the quantity of refrigerant lost, or whether there are additional leaks. Furthermore, if a leak occurs in an area without a sensor, it may go undetected. Also, while manual detection is the only way to determine precise locations of leaks, it’s timeconsuming and costly. In conclusion, relying solely on direct methods, which prioritizes safety for systematic leak detection, can lead to a false sense of security or become expensive to operate.
IoT-enabled Real-time Monitoring
Indirect leak detection examines the system over time by taking snapshots at different intervals and comparing it
Some indirect leak detection methods also have a web app with a centralized dashboard and alerts.
to a learning period. Continuous 24/7 monitoring helps identify changes that may indicate a leak. As data is collected, it determines whether the volume within your tank is being affected, indicating that you are losing refrigerant. When a leak is detected, the system verifies it and sends an alarm, with indications of the severity of the leak, to help refrigeration professionals prepare for their intervention. They have access to a monitoring interface with historical level curves, prompting you to take action. The algorithm is the critical component in detecting all leakages. It allows you to be proactive and react immediately. And it does so quickly, avoiding product losses. For example, it will detect slow leaks that are hard to detect. Let’s face it, when cold room temperatures rise, it’s already too late.
Indirect Leak Detection with Web Platform
Some indirect leak detection methods also have a web app with a centralized dashboard and alerts. This dashboard can be managed by your administrator, who can have secure user access. Based on real-time data, they can make factbased decisions instead of guessing as to where a leak might be. This is important because you can prioritize interventions
the first leak is detected. ALD methods allow you to comply with regulations, save money, improve plant performance, and make a huge environmental impact, and more.
An Impact Calculator on Matelex’s website offers an estimate of both the financial and environmental impact of your current leak management system by simply inputting the type of refrigerant you’re using, how much you’re paying for it, what your leak rate is, and the number of sites. It will calculate how many pounds of CO2 the environment will have to absorb from your installations per year and will display the amount of money in loss of refrigerant and what the pounds translate to in CO2-equivalent.
depending on the level remaining in the reservoir and therefore the potential risk of production stoppage. As a result, maintenance efficiency is improved, and technicians’ work is simplified. They can concentrate on existing leaks, and no longer waste time with comprehensive leak checks, without knowing whether there really is a leak. This is overall a better plan that’s manageable.
Investment Consideration and Determining How Much Your Current System is Costing You and the Environment
One important consideration when investing in an indirect (or direct) leak detection system is to understand the strengths and effectiveness of the ALD technology that you are purchasing. This is to say not all indirect ALD solutions are the same; some questions to ask 1) how sensitive is the system to leaks, 2) will the technology work on all refrigerants and does the company have experience in your industry 3) what is the install process and do you need to modify for different installations?
ALD methods offer a strong return on investment for companies under six months and sometimes less, as soon as
So do the math and take note of the requirements: Installation of ALD systems on commercial refrigeration and industrial process refrigeration appliances installed prior to the effective date of the final rule with a charge size of 1,500 lbs. or more comply within one year after the date of final rule publication. Those same appliances installed on or after the effective date of the final rule with the same charge size comply within 30 days of appliance installation. u
Marion Lazzarotto, Marketing and Customer Experience, Matelex
Gary Epright, US Technical Advisor, Matelex
David Reitz, US Business Development and Strategic Partnerships, Matelex
Matelex, based in France and now running U.S. pilots, has developed award-winning technologies for managing commercial refrigeration systems. With more than 4,000 installations historically worldwide, the company has demonstrated a 5 percent global leak rate for its customers, much lower than industry averages. Currently, its patented products are responsible for supervising 1,200 stores. In terms of CO2 equivalent emissions, that amounts to 1,649,274 metric tons being monitored. Owners and operators of commercial refrigeration systems are benefiting from this new technology.
GRATITUDE: DOES IT HAVE A PLACE IN BUSINESS?
BY RYAN KALMBACH
Last year at Thanksgiving, we started a new family tradition: a Gratitude Jar. Everyone wrote one to three gratitude notes, each expressing appreciation for another family member. During Thanksgiving dinner, we took turns reading these notes out loud and guessing who wrote them. This simple act created an environment of love and appreciation, making us feel even more connected.
Gratitude is at the top of our mind at Thanksgiving when we are eating turkey with our families, but who has time for gratitude in today’s fast-paced, competitive business environment? We need to focus on results, right?
Benefits Of Practicing Gratitude
Our bodies are incredible drug-making machines. When we practice gratitude, we produce our own drugs:
• Oxytocin: Known as the “love hormone,” oxytocin helps deepen relationships and reduces blood pressure.
• Dopamine: Enhances mood and reduces pain.
• Serotonin: Also enhances mood and reduces pain.
Gratitude helps build trust and a stronger team.
Practicing gratitude can also reduce the stress hormone cortisol and activate the parasympathetic nervous system, which helps the body rest and digest.
Here are seven scientifically backed benefits of gratitude. Gratitude ...
1. Opens the door to more relationships.
2. Improves physical health.
3. Improves psychological health.
4. Enhances empathy and reduces aggression.
5. Helps you sleep better.
6. Improves self-esteem.
7. Increases mental strength.
Gratitude in Business
OK, that is great, but how does gratitude relate to business?
Decades ago, business owners operated in a “buyer’s market” regarding employees. There were more available workers than there were jobs, giving business owners more control. Employees were treated as numbers - “You get paid to do a job; just do it.” However, the roles have reversed. Today, employees have a
choice of where to work. I often hear business owners lament that “it’s hard to find good people these days.” True. For this reason, and because I philosophically believe it’s the right thing to do, we must create an environment where people want to come to work—a place where employees feel valued and empowered to reach their full potential.
For our company, our passion is to help every life we touch achieve their full potential, and we want to be the best place any of our team members will ever work. We codify this in what we call the Johnstone Supply Orion Group Life:
• Love what you do.
• With people you enjoy.
• Being compensated appropriately.
• Where I am recognized for making an impact.
• Opportunities for growth and development.
• With time for other passions.
Gratitude relates to “with people you enjoy” and “where I am recognized for making an impact.”
With People You Enjoy
Gratitude helps build trust and a stronger team. In Patrick Lencioni’s Five Dysfunctions of a Team, the foundation of a strong team is “vulnerability-based trust.” Expressing gratitude makes us vulnerable and authentic, which in turn leads to stronger bonds and trust between individuals. When we are grateful for the people in our lives, we are more likely to trust them, and in turn, they are more likely to trust us.
Business success is a result of strong relationships and high-trust teams. From Lencioni, “Not finance. Not strategy. Not technology. It is teamwork that remains the ultimate competitive advantage, both because it is so powerful and so rare.”
Where I Am Recognized For Making An Impact
The common zeitgeist is that Millennials and Gen Z want lots of participation trophies. While I don’t believe this is true, I do believe that everyone wants to be recognized for their contribution. Expressing gratitude is a way of recognizing employees for their contributions.
Shawn Achor wrote in Big Potential: How Transforming the Pursuit of Success Raises Our Achievement, Happiness, and Well-Being, “Praise creates what I
call a ‘virtuous cycle’ — the more you give, the more you enhance your own supply. When done right, praise primes the brain for higher performance, which means that the more we praise, the more success we create. And the more successes there are, the more there is to praise. The research I’ve been doing over the past five years shows that the more you can authentically shine praise on everyone in your ecosystem, the more your potential, individually and collectively, rises.”
How To Practice Gratitude In Business Meetings
Our Leadership Team has rituals that we use at the start and end of each meeting to harness the power of our brains and bodies to improve our relationships and our meetings.
At the start of each meeting, we each share a personal and professional “best.” This is similar to engagement specialist Clint Swindall’s concept of “Tell me somethin’ good.” This puts us in a positive, problem-solving frame of mind as we start the meeting. It serves as a frame-interrupt from whatever chaos and challenges we may have been dealing with as we change gears and begin our meeting.
Take the time to regularly practice gratitude and watch as your business and relationships flourish.
At the end of each meeting, we share something we are grateful for. This could be related to the team, to the business, or in our personal lives. This, of course, helps to trigger all the scientific benefits we already shared and create stronger bonds and relationships between us. No matter how complex or contentious the meeting is, ending the meeting with gratitude allows us to end on a positive note. It also requires a bit of vulnerability to truly share what we are grateful for, which helps us build vulnerability-based trust.
Be a Good Finder
Be a good finder and “catch” people doing extraordinary things. Often, we feel it is our role as managers to point out what people are doing wrong. Positive recognition is even more powerful and motivating. Small gestures with employees can go a long way. Recognize them by:
• Sharing verbal appreciation. Remember TSP: Truthful, Specific, and Positive.
• Sending a thank you card. How often do we receive real mail these days? Mailed cards are memorable.
• Texts, video messages, and calls are also great ways to show appreciation for employees.
Who is someone in your life who played a pivotal role at a crucial crossroads? During a Connection Hike with Bart Foster of BusinessOutside, we discussed this question. Bart then challenged us to find a quiet spot and record a selfie video thanking that person for the impact they had on us. Then, send the video to the person. Many find this challenging to do, but the positive impact on both the sender and the receiver is enormous.
Conclusion
As we enjoy our turkey dinners, it’s a great time to reflect on how gratitude can be more than just an annual practice. Gratitude is more than just a pleasantry; it’s a powerful tool that can transform
your life and your business. By fostering a culture of gratitude, you can build stronger relationships, improve employee satisfaction and create a more positive work environment. This leads to greater business success. In today’s competitive landscape, where employees have the choice of where to work, creating an environment of gratitude can be a critical differentiator that sets your business apart. Take the time to regularly practice gratitude and watch as your business and relationships flourish. u
Ryan Kalmbach is the CEO of Johnstone Orion Distribution with 12 locations and 125 employees in California. He has more than 20 years of experience in operating a family distribution business. The core passion at The Orion Group is to partner with its customers and employees to help them to grow. Contact Ryan at https:// www.powerofjsog.com.
7 Ways to Improve Your Communication as a Leader
BY LISA KINNEY
We all know great leadership is an essential element for success in any organization. Being a great leader, however, takes intentional and effective communication. That’s because communication is at the heart of all relationships, and it’s only with strong relationships that a leader can build a team that’s willing to do what it takes to achieve collective goals.
Based on data from more than 300 industry companies, we know that employees rate communication as one of the top areas needing improvement in their workplaces. And while communication is a common challenge for business owners in the trades, it’s entirely possible to improve. Here are seven tips to help you improve communication as a leader.
1. Foster A Positive Work Culture
Promote a supportive and celebratory workplace environment and consciously make space to celebrate the wins. So often, our communication as leaders focuses on what isn’t working well or where someone’s falling short. If you only focus on the negatives, your staff won’t want to see you coming or to hear from you. You can turn this around by delivering positivity and getting excited about what’s going well in the business. Show appreciation by recognizing and rewarding achievements to boost morale and motivation. Employees love feeling recognized and valued for their efforts.
Communication is intertwined through everything you do as a leader.
2. Be Approachable
Make yourself available for conversations; encourage open feedback and authentic conversations. It’s good to show vulnerability. It does not equal weakness – it shows strength and can create trust and a true connection with your staff. When your employees trust you, you strengthen your culture.
3. Be Open to Feedback
To improve and grow as an effective communicator, listen and respond to constructive criticism. Everyone has blind spots and limitations. Doing this takes humility and the aforementioned vulnerability. Don’t just listen to feedback – actively seek it out and encourage people to share with you so that you can learn more about yourself and your company’s culture. It won’t always be easy to hear what others are sharing, but the fact that you are open to feedback will go a long way toward opening lines of communication with your staff. Model what you need from your employees.
4. Listen Actively
Encourage open communication by paying attention to and acknowledging what your team members are saying. First and foremost, be present. When someone comes to you asking to talk, remove all distractions. Put your phone away, close your computer, and close the door if necessary. Giving someone your undivided attention shows them they matter and helps you be 100% focused on what they’re saying. Be an
active listener by asking open-ended questions. Consider writing down what you’re hearing and refer back to it later. Also, ensure you’re hearing feedback correctly by repeating back what your employees have said to ensure you didn’t miss anything. Show genuine interest in their thoughts and opinions. And don’t forget to watch for the nonverbal communication coming at you from the person across from you; you can learn a lot from body language.
5. Provide Clear Expectations
Remember, clear is kind. Clearly communicate goals, responsibilities, and feedback to help your team grow. People want to be part of a winning team and to win. They need to know what’s expected of them. Expectations are not only specific to KPIs and goals – they’re specific to behaviors. Make sure your team has a solid mission and vision statement to rally your team around and get excited about as they come to work each day. Core value statements are a phenomenal way to communicate expectations of behavior. They are the foundation of your culture; through them, you can create the culture you need within your business by communicating.
6. Empower Your Team
You’ve hired amazing people. It’s time to allow them to thrive by trusting them to do their best work without your intervention. If you have clear
expectations and authentic conversations at your company, give your employees the freedom and resources to make decisions and take ownership of their work. If you allow employees to take the lead, you’ll be amazed at the growth you’ll see in your people and your business. True leaders help others see their own potential.
7. Lead by Example
Make sure your team knows how you define success for yourself. Share your leadership principles with them. The principles should define what’s important to you and what you expect from others. Knowing your principles will help your team know what to expect from you as a leader and to understand you. When you are a leader, people are always watching you, so it’s critical for you to embody integrity by acting in alignment with your own leadership principles and the company’s core values.
Communication is intertwined through everything you do as a leader. If your employees are asking for better communication, take inventory of how you’re sharing information with them. Ensure that you align your entire leadership team with the messages going out to ensure you’re sharing similar information. You can track your communication as a leader. Every day brings new opportunities to practice. u
Lisa Kinney has more than 15 years of experience supporting business leaders with all aspects of talent management, and she specializes in helping to create engaging workplace cultures.
PROVIDED BY KEVEN PRATHER, CFBS
Be Wary of Social Media ‘Fin-Fluencers’
Online social media personalities increasingly want to tell you what to do with your wealth. The rise of these financial influencers—“finfluencers”—has had a big impact on how some people get information and advice about financial markets today.
• Most Millennials and Gen Zers get their information about investing from social media rather than from brokerages or financial advisers, according to the North American Securities Administrators Association.*
• CEG Insights research shows that one of the top reasons people follow fin-fluencers is for personal finance advice.**
You should be paying attention because fin-fluencers may have captured the attention of many people around you— from your heirs to your parents.
Pros And Cons Of Fin-Fluencers
In general, there’s something positive to be said about what fin-fluencers do: making financial insights more readily available, in formats (such as well-shot videos, social media posts, and podcasts) that prompt people to pay attention to important topics they might otherwise ignore.
The challenge is that the information and advice offered via social media fin-fluencers may be just as likely to be incorrect, inappropriate or even predatory as it is to be helpful. Fin-fluencers present specific risks that you don’t commonly find among many other sources of financial advice. Consider:
1. Lack of expertise. Posting financial advice on social media doesn’t require financial experience or even much in the way of financial knowledge. It’s true that some fin-fluencers work or previously worked in the financial services industry in some capacity—but that alone doesn’t mean they are experts on the topics they
Fin-fluencers present specific risks...
discuss online. What’s more, many finfluencers lack any industry experience or credentials at all.
2. Conflicts of interest. Fin-fluencers who promote certain segments of the market or even specific investments may be getting paid to do so by one or more companies that stand to benefit from those recommendations.
3. Lack of regulation. You may never know about a fin-fluencer’s lack of knowledge or conflict of interest because they’re not required to follow the same rules, laws and regulations as professionals such as financial advisers.
4. Popularity over quality. Finfluencers’ typical goal is to create as large an online community of followers and “likes” as possible—as more views of their videos can help them earn higher adgenerated revenues. This drive to build a big audience can mean fin-fluencers make comments and give advice to get lots of attention rather than deliver high-quality, useful ideas.
Ultimately, these problems can add up to an online world that’s a target for scammers and manipulators.
Assessing The Fin-Fluencers
Not all fin-fluencers are fraudsters, of course—but the risk of getting bad or inappropriate advice for your situation is high enough to merit extreme caution. Consider the following action steps:
1. Check credentials. Do the finfluencers have the required expertise to hold court on the topics they’re discussing, or are they “just regular people” using their “common sense”? Of course, even professionals with great expertise can make mistakes—but having a strong financial knowledge foundation can make those mistakes less likely to occur.
2. Watch for red-flag words and phrases. Promptly ignore any fin-fluencer throwing out terms like “guaranteed,” “can’t lose,” or “a surefire winner.” No one can predict the future direction of investments with such certainty, so anyone who tells you they know what the future holds is lying. Similarly, watch out if the person creates a big sense of urgency—noting, for instance, that you need to buy a product or service right now, or you’ll miss the opportunity. Another red flag: The fin-fluencer trashtalks “mainstream” professionals such as advisers or accountants and claims to have the “real” insights you won’t get anywhere but this person’s YouTube videos.
3. Dig into their performance history. When fin-fluencers highlight their previous investment recommendations that paid off big, do some digging. If they’re showing you red-hot returns that occurred over a very short period, look out to see if the investment cratered soon afterward. You can also do online detective work to see whether the person made several bad predictions that they are burying or failing to mention.
4. Know what you’re being pitched. Some fin-fluencers focus on broad-based personal finance topics like financial literacy and budgeting/debt management and talk about big-picture concepts. Others zero in on specific products or market segments, often recommending (even hard-selling) specific investments. Think carefully about whether the finfluencer aims to educate you or motivate you to buy something. And if it’s the latter, watch out for those red-flag words noted above.
5. Focus on information, not personality. Fin-fluencers often share stories of their path (to financial success and financial freedom) in hopes that
you’ll feel personal connections that build trust. That’s fine. Just remember to focus on the quality of the information they’re giving rather than how much you might like them, see yourself in them or aspire to be like them.
Ultimately, the best financial advice will reflect your own values, wants, needs and so on. Fin-fluencers, who by definition target a mass market audience, simply can’t provide insights tailored to your personal situation. While they can potentially expose you to new and interesting ideas, it’s crucial that you—or your parent, child or grandchild who encounters these online personalities—approach those ideas with a healthy dose of skepticism and ensure the next step is to do more homework rather than act impulsively.
* Source: North American Securities Administrators Association, “Informed Investor Advisory: Finfluencers,” August 2022.
** Source: CEG Insights, Navigating the Future of Wealth Management Tech, 2023.
ACKNOWLEDGMENT: This article was published by the VFO Inner Circle, a global financial concierge group working with affluent individuals and families and is distributed with its permission. Copyright 2024 by AES Nation, LLC. u
Call Keven Prather at (216) 5927314, send an email to kprather@ financialguide.com, or visit www. TransitioNextAdvisors.com. Keven P. Prather is a registered representative of and offers securities and investment advisory services through MML Investors Services, LLC. Member SIPC. www.sipc.org. OSJ: 1956 Carter Rd., Suite 200 Cleveland, OH 44113. (216) 621-5680 TransitioNext Advisors® is not a subsidiary or affiliate of MML Investors Services, LLC or its affiliated companies. These firms and their representatives do not provide legal or tax advice. Consult your attorney and/or accountant for such advice. CRN202502-123456
BY RUTH KING FINANCE
12 Most Common Financial Statement Mistakes to Fix Before You Sell – Part 4
Whether you are planning to sell your business to family, employees, or outsiders, you must show a potential buyer clean, accurate financial statements.
There are 12 common financial statement mistakes that you must avoid. I’ve written about operating your business on a cash basis rather than an accrual basis, a profit and loss statement date that doesn’t match the balance sheet date, a balance sheet that doesn’t balance, a negative gross profit, and negative cash. This month, I’ll write about the final two current asset mistakes.
Remember, to present your company well, you must have clean financial statements showing that your company is growing in profitability.
Mistake #6: Negative Accounts Receivable
It is unlikely that you have negative accounts receivable on your balance sheet.
Negative accounts receivable means that many customers have overpaid, and you owe them a refund.
You might have a few customers who have overpaid by a few cents or a few dollars. It is very unlikely that your entire customer base has overpaid their bills.
How do you get negative accounts receivable on your balance sheet?
Generally this happens when you do not have customer deposits set up in the current liabilities section of your chart of accounts.
Your salesperson makes a sale and gets a deposit for the work to be done. You enter the deposit into your software. It is programmed to look for an invoice for this job. When it doesn’t see one, it is programmed to record the deposit as a negative accounts receivable –your company got money for work you haven’t done.
You must map out the program differently. With the customer deposits current liability account, the software is programmed to record that money received as a deposit against future work — a current liability rather than an inaccurate accounts receivable balance.
Then, when your company does the work and creates the invoice, the customer receives an invoice showing the deposit and the
remaining amount due.
Every week, when your bookkeeper produces your weekly cash flow report, she should print out an accounts receivable aging report. Look at this report. Make sure there are no large negative balances. If there are, then your accounts receivable is inaccurate.
You need an accurate report of the monies owed to your company. A negative accounts receivable value prevents you from knowing the total amount of money you can expect. Without knowing your true accounts receivable, it is impossible to accurately plan cash flow and know the true financial health of your company.
Mistake #7: Negative Inventory, No Inventory, or Inventory is the Same Value Each Month
If you have a negative inventory balance, this means that you have phantom inventory! It is impossible.
Generally, this happens when your bookkeeper doesn’t enter materials that were bought for inventory. Then, the decrease in inventory is taken as the materials/equipment are used for jobs. Soon, you have negative inventory.
It is important to identify materials bought for future use (i.e., inventory) and materials
bought directly for use on a job (i.e., cost of goods sold material expense). Those materials bought for inventory are accounted for as the cost of goods sold when they are used on a job.
Our industry has inventory. If you don’t have inventory on your balance sheet, or it is the same number all the time, a potential buyer knows that your company does not have accurate financial statements.
You might ask, why do I need inventory on my balance sheet? If you don’t have inventory on your balance sheet or the same inventory value each month, then your profits are lower based on the value of your inventory. You don’t know if you have accurate pricing or gross margins. And you definitely don’t have an accurate bottom line. Even more important, if you plan to sell your business and inventory is not on your balance sheet, your purchasers won’t tell you your profits are lower than they should be.
If you have $100,000 in inventory, you’ll receive $400,000 to $600,000 less for your business than you should receive. If you have $200,000 in inventory, then you’ll receive $800,000 to $1.2 million less than you should receive.
Is receiving a million dollars less than you should receive worth NOT putting inventory on your balance sheet?
Accounting for inventory is easy after establishing a process. However, if it has never been there, putting inventory on your balance sheet is a discussion you should have with your CPA because of the tax implications. Remember that profits in previous years have been lower than they actually were, and this has affected your income tax reports. 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.
PRODUCT FOCUS »
JOHNSON CONTROLS
Johnson Controls Residential & Light Commercial has launched its Refrigerant Detection System (RDS) Calculator within the Ducted Systems Solutions mobile app. The calculator is designed to help users determine the need for refrigerant detection systems based on specific conditions such as space dimensions and the amount of refrigerant being used. The patentpending RDS Calculator prompts users to answer a few questions about the job. Once submitted, the calculator provides an immediate report summary that says if it recommends an RDS to ensure the application complies with current standards.
www.johnsoncontrols.com
SYSTEMAIR
Systemair’s Geniox air handling units offer high flexibility, wide applications and intelligent controls. The Geniox units can handle airflows from 440 to 65,000 CFM and are easy to configure, control and operate. It needs minimum energy use, has a durable design, and a #HygienicByDesign option available for the entire range. It also offers the Systemair Access Controls system with wireless communication. Their modular design is based on standardized sections that fit seamlessly together – making numerous configurations possible. www.systemair.com
MARLEY ENGINEERED PRODUCTS
Marley Engineered Products, has expanded its line of Infrared Radiant Heaters. Silent operation is a hallmark of Marley Engineered Products ThermaZone series heaters. With no moving parts or fans, these heaters deliver whisper-quiet warmth, making them ideal for environments where noise disruption is not an option. Incorporating all the benefits of the ThermaZone, the ThermaZone Thin® offers a slimmer, modern design that lends luxury appeal to high-end patios and restaurant spaces. This model provides more heat per square inch, making it perfect for crowded commercial and residential applications. www.marleymep.com
WAGO
WAGO’s updated 750-1632
Proportional Valve Module (PVM) is a compact, high-performance solution that offers improved response time, superior precision, and better diagnosis. Features include a large current range, a minimal width of just 12 mm, and the capability to have two single coil valves or one dual-coil valve controlled either unidirectionally or bidirectionally, offering high repeatability. This PVM provides a small footprint, configuration over a network, reduction in system components and engineering, as well as fewer wiring and commissioning hours. www.wago.us
RIDGID
RIDGID’S micro CA-25 Digital Inspection Camera features a 17 mm aluminum imager head with four ultrabright LED lights, bringing superior image quality to its 2.7” Color LCD Screen. It also features Video Out for transferring live images to external devices and 180° Digital Image Rotation for getting upright images. Included with the micro CA-25 in a hard shell plastic case are a hook, magnet, mirror and RCA cable.
www.ridgid.com
STEFFES
Steffes recently showcased its 500-gallon Origin system with advanced capabilities. The Origin system reduces the complexity of applying hot water heat pumps for domestic water systems. It provides storage to ensure the building doesn’t run out of hot water, often reducing the need for heat pump redundancy. It also supports rightsizing systems with the proper balance between hot water generation capacity and hot water storage capacity. Another advantage is that it reduces an installing contractor’s risk with repeatable, packaged products that deliver “plug-andplay” functionality on the job site.
www.steffes.com
WEIL-MCLAIN
Weil-McLain® has introduced the new Simplicity™ high-efficiency combination gas boiler. The Simplicity boiler features a 95% AFUE energy rating that reduces energy consumption and increases savings on homeowners’ heating bills, an insulated stainlesssteel firetube heat exchanger with a vertical “self-rinsing” orientation and a removable polypropylene collector base that prevents corrosion caused by acidic condensate to help ensure a long service life. An air inlet silencer provides whisper quiet operation, and a touchscreen display with user-friendly controls makes installation and navigation easy for contractors and homeowners.
www.weil-mclain.com
YORK
The YORK® LX SERIES SPLIT SYSTEM HEAT PUMPS is an advanced, inverter-driven modulating technology that delivers enhancedefficiency 17.75 SEER/10.0 HSPF performance and may qualify for utility rebate. It offers reliable operation with a robust compressor proven in our extreme environment. A demand frost feature ensures reliable cold-weather operation by minimizing heat pump operation, removing frost on the outdoor coil far more effectively than timed methods. The LX Series’ long-lasting, powder coat paint provides a durable, automotivequality finish that looks great, even after years of outdoor exposure. The durable steel extruded louver coil guards provide protection against coil damage.
www.york.com
with MIKE RILEY 20QUESTIONS >>
Editor Tom Perić sat down with distributor Mike Riley, President of Plymouth Meeting, PA-based Riley Sales. Mike, who is known for a sense of humor and flamboyant summer shirts (regardless of the season), talked about taking over the family business, how to grow the company and how to handle supply chain issues.
1. What kind of car is in your garage? 24’ Lincoln Aviator. Nice ride.
2. What makes you completely relax? When I’m in the mood, I slip into a sensory deprivation tank for 90 minutes. Laying in 12 inches of 98-degree water that has 1,000 pounds of salt, in complete darkness, it makes your body buoyant; the water is the same temperature as your body. You can’t hear, feel, or see anything. It lets your mind go places you never knew it could.
3. What is your background that most people don’t know about?
I was an underwear model. A good gig.
4. If you weren’t in the HVACR business, what would you be doing? I’d still be a model on the senior circuit.
5. What prepared you to take over as president of Riley Sales?
I grew up in the business with my father, Tom, and we just did what we felt was right for our employees and customers. No formal business plan, just get the products to the customers when and where they want them. Work hard, stay busy. “Shift!” … That means find the next gear and get the job done. One year, we got a Christmas card from Z and M Sheet Metal, one of our duct suppliers. It was signed Joe Zivic, Founder and CEO, Scott Zivic, President. A week later, my dad comes in with some paperwork for me to sign making me the President of Riley Sales. I said if I’m President, what are you? He replies, “Founder. There can only be one Founder!” He loved that title. I asked if I had any new responsibilities or perhaps a nice raise with my new title. “Nope, but you’re doing a hell of a good job!” That’s how I became President of Riley Sales.
6. What is the size of Riley Sales?
We have nine locations supplying eastern Pennsylvania, southern New Jersey and northern Delaware.
7. What was your biggest success in the business?
Helping to start Blue Hawk, the largest HVAC cooperative in our industry. Blue Hawk ensures that hundreds of independent distributors across the country can compete, thrive, and prosper today and in the future. We work together to help each other succeed.
8. What was your most memorable failure?
I have made a lot of mistakes. Mistakes that have cost us profit and growth opportunities. Failure to me means giving up. I have never given up in business.
9. What is the secret to your business growth?
Hiring well, promoting from within, giving the team goals, believing in them, giving them assets to achieve those goals and getting out of their way.
10. Where do you hope to be in five years?
Enjoying life in the USA where the cities are being rebuilt from the inside out. Where manufacturing and industries that went offshore are returning to America and building factories that provide well-paying jobs with excellent benefits and opportunities for equity shares in their company for their employees. Corporations that have their share prices rise on profitability as well as their customer and employee satisfaction, not by beating a Wall Street analysts’ quarterly prediction. Where the city housing stock in our country is being replaced with affordable, energy-efficient homes built by developers and contractors that support American, independent, construction supply distributors.
11. How would you describe yourself in 10 words or less?
A fun-loving person that you can trust.
12. What’s the best part of operating your company?
Helping my employees and customers grow and become successful.
13. What’s the worst part of operating your company?
Being taken advantage of by people that you trusted.
14. If you had to do it over again, what would you do differently?
Nothing. I’m having a good time. Maybe one more
15. If you have a vexing business problem, who do you call first and why? I will go to my management team first. Also, I belong to Vistage, a CEO peer group organization. Our group helps each other out with issues, gives suggestions and holds each other accountable. If I’m still perplexed, I ask my mom. She helped start the business with my dad, though she was never made Co-Founder.
16. As a wholesaler, what one message would you give to every contractor who walked through your door?
You have found your HVAC home. No need to go anywhere else. Count on us and we will supply you with everything you need to be successful. “If we don’t have it, you don’t need it!” One of the Founder’s slogans.
17. When giving advice to someone entering the industry, what would you say?
Stay small and profitable. Treat and pay your team well. Bank some profits for those tough years that will come. Know when to shut down when you are at home so you can spend time with your family.
18. What’s your business philosophy? Dream Big, trust yourself and your team, and Shift!
19. What role does communications play when dealing with manufacturers or customers?
We have transparent communications with our manufacturers and our customers as to what the lead time and product availabilities are. By having the facts, we can manage our inventory and our customers’ expectations. They need to schedule their jobs and communicate with their customers. No BS.
Supply chain issues are affecting every company. How are you managing this?
Be loyal to your vendors and customers. Don’t constantly beat up your suppliers for every last nickel, don’t shop and drop manufacturers and constantly change product lines. They will respect that and keep product coming to you rather than the distributors who beat them up all the time. In turn, make sure you have product for your loyal customers. Know what projects that your customers have coming up and make sure you have them covered. Most importantly, honor relationships.
Leading approval rates that help bring in higher ticket sales and more customers We support how you do business: integrated into ServiceTitan®, Payzer ® and PowerPlay®
Help drive leads via homeowner communications, Synchrony Marketplace and in-home and online consulting expertise
Second-look financing options that help cover more of your customers
