HVACR BUSINESS APRIL 2022 by HVACR Business

APRIL 2022 / VOL.17 / NO.4

JUST HOW POPULAR IS AMERICAN STANDARD?

93%

of American Standard dealers are satisfied with our product quality.

81%

of people eat chocolate.

AMERICAN STANDARD: MORE POPULAR THAN CHOCOLATE. It’s hard to get everyone to agree on something—but we’ve come close. American Standard’s proven quality, ease of use and customer satisfaction make it easy for dealers to love—and sell.

American Sandard received a 93% product quality satisfaction score among current dealers in a proprietary Dealer Brand Health Study conducted by Trane Technologies in 2019. Chocolate habits were reported by Statista in 2019.

See why it makes sense to sell us more at

amsd.us/numbers

Why Should Customers Do Business with You? Terry Tanker 5

Stop Underpricing Your Repair Tickets Wendell Bedell 10

Commercial Refrigeration: Finding a Regulatory Path Forward Jennifer Butsch 14

How Playing the Long Game Could Help Build Wealth and Success Keven Prather 20

HVACRBUSINESS.COM APRIL 2022 / VOL.17 / NO.4

BEST PRACTICES MAKE BEST COMPANIES

Beat The Competition & Avoid The Trap Of Mediocrity ALSO INSIDE » Ruth King: Calculating HVAC Maintenance Price Plans for Two or More Systems..........................................18 Product Focus ................................................................ 21 20 Questions with Talbot Gee, President and CEO

of HARDI (Heating, Air-conditioning & Refrigeration Distributors International)....................................................22

Page 6

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CONTENTS

APRIL 2022 / VOL.17 / NO.4

F E AT U R E S

Best Practices Make Best Companies

Director of Conditioned Air, business mogul, and author of, Invest Your Heartbeats Wisely, Theo Etzel, examines the art of the imperfect process of developing best practices for your business and its continued growth. By Theo Etzel

Stop Underpricing Your Repair Tickets

Commercial Refrigeration: Finding a Regulatory Path Forward

D E PA R T M E N T S

In this month’s publisher’s page, Terry Tanker urges you to do some business growth inventory. Ask and answer the important question: Why Should Customers Do Business with You? By Terry Tanker

Remember that 90% of any repair success is what you and your work delivery staff bring to the job. Only 10% of a successful repair is the parts you selected to complete the job. By Wendell Bedell Emerson’s regulatory affairs director takes an in-depth look at the emerging regulatory changes in commercial refrigerant technologies. By Jennifer Butsch

21 22

C O LU M N S

Calculating HVAC Maintenance Price Plans for Two or More Systems

How Playing the Long Game Could Help Build Wealth and Success

Publisher’s Page

Ruth King teaches you how to calculate HVAC maintenance price plans for two or more. By Ruth King

Products 20 Questions with Talbot Gee President and CEO of HARDI (Heating, Air-conditioning & Refrigeration Distributors International)

Keven Prather, popular monthly columnist, provides a guide to long-game planning that bridges where you are today to your eventual goals for long term wealth and success. By Keven Prather

r o f New22! 20

Coming Soon: SMART Refrigerant Charging The testo 560i Digital Refrigerant Scale with Intellegent Valve Kit Testo April 2022 AC Half Page HVACR Business Ad.indd 1

For more info visit: www.testo.com

3/22/2022 4:26:25 PM

RECOGNITION • SUCCESS • REWARD

FLE ST ET DE E T SIGN CON

ENTER BY APRIL 22, 2022! hvacrbusiness.com/topsintrucks hvacrbusiness.com/topsintrucks

THE HVACR MANAGEMENT MAGAZINE

TERRY Tanker Publisher ttanker@hvacrbusiness.com HEATHER Langone Managing Editor hlangone@hvacrbusiness.com MEGAN LaSalla Art Director mlasalla@hvacrbusiness.com

ADVERTISING STAFF ERIC Hagerman National Sales Manager Tel 216-409-3246 ehagerman@hvacrbusiness.com TERRY Tanker Publisher Tel 440-731-8600 ttanker@hvacrbusiness.com

BRUCE Sprague Circulation Manager bs200264@sbcglobal.net BARBARA Kerr VP Operations bkerr@hvacrbusiness.com

HVACR Business, founded January 1981, is a monthly national trade magazine serving contractors, mechanical engineers, manufacturers, manufacturer representatives, wholesalers, distributors, trade associations, and others in the heating, ventilating, air conditioning and refrigeration (HVACR) industry primarily in the U.S. The editorial focus and mission of HVACR Business is to provide business owners and managers with the very best business management concepts available. Critical topics covered include leadership, management, strategy, finance, sales, marketing, training, education, staffing, operations, human resources, legal issues, customer service and more. We are dedicated to helping contractors master these key management skills and provide them with the resources necessary to build strong, profitable companies. Every effort is made to provide accurate information, however, the publisher assumes no responsibility for accuracy of submitted advertising and editorial information. Copyright©2022 by JFT Properties LLC. No part of this publication may be reproduced or retransmitted 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 substantial monetary damages up to $100,000 per infringement, costs and attorneys’ fees. This publication should not be utilized as a substitute for professional advice in specific situations. If legal, medical, accounting, 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 responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof. Subscription Rates: Free and controlled circulation to qualified subscribers. Non-qualified persons may subscribe at the following rates: U.S. and possessions: 1 year $48; 2 years $75; 3 years $96; Canadian and foreign, 1-year $108 U.S. funds only. Single copies $8. Subscriptions are prepaid, and check or money orders only. Subscriber Services: To order a subscription or change your address, write to HVACR Business, 31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039 or call (440) 731-8600; or visit our Web site at www.hvacrbusiness.com. For questions regarding your subscription, please contact bkerr@hvacrbusiness.com. 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)

www.hvacrbusiness.com www.HVACRBUSINESS.com www.hvacrbusiness.com www.hvacrbusiness.com

PUBLISHER’S PAGE

BY TERRY TANKER

Why Should Customers Do Business with You?

lthough there’s plenty of solid marketing advice available on how to build, increase, and sustain profitability, business owners continue to struggle with one question, “Why should I do business with you?” It can be a difficult question to answer for some because no marketing guru can answer it better than you can. If you know your business and have a clear vision, then you must also know your why.

WHAT VALUE DO YOU BRING? As the company leader, the onus is on you to be able to show the value you bring to customers. Understanding that customers have choices, are you prepared to deliver a clear, concise answer as to why customers should choose you over competitors? Are your employees clear on that value proposition as well? If this hasn’t been articulated as part of your company culture and integrated into your brand mission, then I predict if you were to pose this “why” to staff, most would struggle to answer.

down into abbreviated versions to illustrate how they translate into real-world value for customers. *Below are a few of the best examples from the speech: 1. Wendy’s – “The mission of Wendy’s is to deliver superior quality products and services for our customers and communities through leadership, innovation, and partnerships.” Guy’s version – “Healthy fast food.” 2. FedEx – “When it absolutely, positively, has to be there overnight.” Guy’s version – “Peace of mind.” 3. Nike – “Just do it.” Guy’s version – “Authentic athletic performance.”

Business Owners: Know Your Why

Following are generalized responses: • • • • • •

We have great people and products We service what we sell We’re the best at what we do We’ve been in business for decades We employ experienced and trained experts We care about customers

The answers seem obvious because they are. What company doesn’t claim to have experience and care about customers? However, nothing about the responses sets the tone for the brand. Dig deeper until you can confidently answer the why. The answer sets the foundation for your company’s culture and represents all that you project to your customers. As the owner, you effectuate the vision for your entire company. Knowing and sharing the “thing” that sets you apart from the competition, will define your value proposition. Start by answering these key questions: • Why did you start the company? • What were your goals and have you met them? • Does what you do make a difference in people’s lives? • How does your company make a difference for the customer? I’ve had numerous conversations about this with editorial advisors like Jim McDermott, Wade Mayfield, and a former columnist, Guy Kawasaki. Kawasaki explains it well in his speech, “The Art of the Start” in which he first lists wellknown company brand missions. Then he whittles them

YOUR VALUE PROPOSITIONS ARE DEFINED. NOW WHAT?

After answering the question of why a customer should choose you, what’s the next step? Engage your employees. Get them involved. An interesting thing happens when employees grasp the true meaning of the company. They begin to understand their role. When employees have pride in their work, it shows. Then, when customers ask why they should do business with your company, brilliant soliloquies will flow effortlessly.

HELPING CONTRACTORS MASTER CRITICAL BUSINESS TECHNIQUES… As the owner of this company, I hope this article has added value for you and starts you thinking about the clearly defined communication development strategy necessary around this simple, yet important question, why should a customer do business with you? At HVACR Business the answer resides in our own mantra: We aim to help contractors master critical business techniques for success. If I’ve added any mastery techniques for you, or if you see the value in this service, please take the opportunity to renew your subscription here: https://www. hvacrbusiness.com/subscription-center.html We appreciate your continued support and business. Lastly, we promise to disseminate information that allows you, the HVACR business owner, mastery over critical business techniques. Or as Kawasaki might say… the HVACR roadmap to success. *Note: Here is a link to an updated version of Guy Kawasaki’s speech https://www.youtube.com/watch?v=U8EVD739BxQ A worthy listen for any competitive business owner interested in getting better. The “mantra” portion starts around the 10-minute mark. HVACR BUSINESS APRIL 2022

BEST PRACTICES MAKE BEST COMPANIES Beat The Competition & Avoid the Trap of Mediocrity

‘Perfect Practice Makes Perfect’ BY THEO ETZEL

ince Lombardi, the late, great Packers’ coach is often misquoted as having said: “Practice makes perfect.” The real quote attributed to him is: “Practice does not make perfect. Only perfect practice makes perfect.” And, while perfection is typically unattainable, putting into action best practices that point us in that direction, can be a true game changer in succeeding in our markets and against our mediocre competition.

HVACR BUSINESS APRIL 2022

Adopt the idea of best practices as a company mantra, and you’ll be the one in an enviable position both in the industry and the market, able to ride the wave of any economy, able to avoid mediocrity, and continuously strive to be better. The process of finding, reviewing, developing, and implementing best practices for a business is just that, a process. The

first question that must be asked is: “Is it worth the time, risk, investment, and effort to put this process into motion?” If

you can answer this question with a “yes,” then you have begun to answer the “why” you believe it to be important for the company. One of the more valuable lessons learned in recent years, is that customers are getting harder to acquire and just as hard to retain. And they should be. They expect businesses to deliver their goods and services in as an efficient and cost saving manner as possible, delivering the greatest value. Aiming to be mediocre, is in reality, even if not intentionally, a give-up business model with temporary www.hvacrbusiness.com

comfort at best. As a business owner you must avoid the trap of complacency – the fastest route to mediocrity. Continuous improvement and a goal to be the best in your market, is the only road to surviving and thriving in this supply-interrupted economic landscape.

While perfection is typically unattainable, putting into action best practices that point us in that direction, can be a true game changer in succeeding in our markets and against our mediocre competition.

ADOPTING BEST PRACTICES MAKE IT A COMPANY RULE With the recent disruptions in supply delivery and consistent staff shortages, many business leaders are taking on more and more daily responsibilities. While it’s admirable to devote more attention to detail, typically a good thing, it can also limit the creativity and macro-choices that are available to us. As a leader you must always adopt the goal of best practices and think in terms of the big picture. It is essential for company growth in the long term. If we only look down when we walk, we will miss other, possibly better paths to our destination. Examining alternate methods and programs for the company even amid new obstacles in a post-pandemic climate, will produce choices. When weighed against the status quo, as long as we remain aligned with the company goals, this commitment to growth will lead to innovative solutions and long-term profitability.

BEST PRACTICES THAT ALIGN WITH YOUR BRAND

GREAT LEADERS ARE GREAT STORY TELLERS A warning – implementing a best practices process in your company will mean changes are inevitable. And, change is not always comfortable. Methods, procedures, and even staff may be subject to being turned upside down during the process. As my friend and colleague, Greg Johnson, says, “A few eggs are going to be broken.” If a best practices culture does not exist in the company today, it may be an uphill battle initially. The biggest enemy of change is “but we’ve always done it this way.” Therefore, explaining why it is necessary to become a market leader is going to be critical to your success. Great leaders are great story tellers. They paint pictures for people that inspire folks to want to be better. This ability to lead and inspire is very necessary when undertaking a large initiative that breaks the status quo. Pursuing best practices will push you and everyone around you out of the current comfort zone – a good thing. Being open to other ways of doing things, opens the door for the process to begin. Sometimes, www.hvacrbusiness.com

in your community who come with alternate points of view that cross industry boundaries. I belonged to two groups, both a mix group, made up of noncompeting HVACR leaders from across the country which met twice annually, and a CEO group in my community. Again, this was a noncompeting group and we met monthly. Both groups were solely dedicated to developing, discussing, sharing, and examining best practices for our respective businesses. Both groups performed a complete business review with very revealing results. As a consultant, I have also reviewed businesses to offer constructive suggestions and modifications to their current methods. No matter which role I’ve been in, I have always come away with new ideas for my own company. Certainly, whether being reviewed or reviewing, causes a certain amount of discomfort. But comfort is the partner of mediocrity. Discomfort can be positive when it causes necessary change to occur. It disrupts the status quo and that leads to growth. I’ve written before that change for change’s sake is ridiculous and only disruptive. However, change for the purpose of improving the person or company, is worthwhile and wholly necessary.

and probably more times than not, getting to a best practices position requires a change in personnel. Not everyone will share your vision or understand why change needs to occur. The only way to be the best company is to have the best people in the best positions. Mediocre people deliver mediocre results. The hardest realization, and the largest hurdle for a leader, is to acknowledge the fact that not everyone in the company will make it as best practices are put into place. The impetus for change comes down to one thing. The discomfort of a failing business must be more uncomfortable than the comfort of a second-rate business. Enough so that it moves him or her to change and seek better, and eventually, best practices. The thought of accepting mediocrity must be more than unsettling. It must feel like a compulsion to change.

DISCOMFORT IN BUSINESS LEADS TO POSITIVE CHANGE Looking inward and being willing to objectively assess your business, is the first step to being able to look outward and make positive change. Observing current procedures and asking how we can improve them, even if it is just one or two aspects of the system, sets in motion the best practices pursuit. Ask your staff to review how they do certain tasks currently in their daily work life. Have outsiders come in as well, to observe your operation. Different perspectives bring a slew of different views, questions, and comments. Two key points are worth mentioning here: industry resources such as ACCA Mix Groups and consultants, help to bring an extra set of “industry eyes” with which to view your company as well as noncompetitive business leaders

Many times, the new best practice that culminates from these meetings, is an amalgam or a modification of the current practice, within an implemented program at another company. Discovering another procedure and thinking it will fit perfectly into your organization without doing any tweaking, is a bit unrealistic. Your organization is unique and to get the most out of a change that is made, it must align with the basic, good foundation of your company. It is up to you and your team members to tailor it to your market, goals, and corporate culture. It’s easy to put people within an industry in the same room and have them find many common subjects on which to speak. This also happens to be true of business leaders from diverse backgrounds and a variety of industries. There are more similarities of experiences and challenges in business than there are differences. Just describe a situation (try personnel for a quick response) and then ask the question, “Has continued on page 8

HVACR BUSINESS APRIL 2022

continued from page 7

anyone else had to deal with that?” Most people have had experience with whatever you’ve described, or something so close that it’s applicable. You begin to hear different ways in which the situation was handled. This leads to the realization that there may be a better way to deal with your challenge in the future. Conversely, you may share an idea that someone else picks up, and makes an incremental improvement in his or her business as well.

Not everyone will share your vision or understand why change needs to occur. Mediocre people deliver mediocre results. The hardest realization, and the largest hurdle for a leader, is to acknowledge the fact that not everyone in the company will make it as best practices are put into place.

Understanding that an area of the business is ripe for change and actually having a change occur, are two different things. Having my business reviewed and then filing the review in the filing cabinet would be a big waste of time for all involved, not to mention expensive for multiple reasons. Both groups to which I belonged held its members accountable for the changes they had agreed to implement. This is a best practice for each of these groups. Accountability to your peers is a great motivator for business leaders. It is the constant nudge to move you out of your comfort zone towards continuous improvement.

PRIORITIZE IDEAS AS YOU MOVE TOWARD BEST PRACTICES

HVACR BUSINESS APRIL 2022

Increasing business with the best tools and for all the right reasons, leads to growth, profitably, and customer loyalty, all of which seems like a truly best practice to me. u

Theo Etzel grew up in Coral Gables, Florida and attended Stetson University. He graduated with a major in Economics and a minor in Finance.

Fact: Leaders need pushing too. We each act as a mentor to one another.

It is worth pointing out that if you attend a conference or seminar or have a business review and come back with 44 great ideas, your staff will experience terminal frustration and confusion if you attempt to implement all of these ideas at once. You may have caught the passion for change, but all your staff will see is the new work and procedures that will have to be put into place. Prioritizing the ideas you glean from others, and methodically putting them into practice, is the best way to get those practices adopted. As the best practices process becomes more routine, the changes tend to become more incremental in nature and not as overwhelming as in the beginning. Properly done, your key people will develop an eye and ear for best practices from other businesses. They will develop organic innovations within, and begin to look at situations with a more creative perspective. Again, it’s up to you and your management team to prioritize new ideas and discuss them in-depth

able to ride the wave of any economy, able to avoid mediocrity, and continuously strive to be better. The reward – customers are attracted to the best companies and they will deliver the best kind of review: brand loyalty. When customers are loyal, that means they have chosen to spend their hard-earned dollars with you and not the company down the street.

as a way to forecast any unintended consequences prior to their adoption. Finding and implementing best practices inside your company is all a part of a continual dedication to improvement. Over time, you may discover that what was once a best practice, may no longer be the best practice today. The fundamentals upon which a business is built typically don’t change rapidly. However, the tools we use to conduct the running of the business often do change more quickly than we would like to admit. The obvious area in which we see this is occur is in technology, especially as it affects all businesses. Another area is in labor relations with our people. Time has changed the expectations of benefits and the level of engagement and the manner of engagement of our entire staff. Staying competitive, keeping up with change, and getting

out in front of those changes, requires us to constantly look for better ways to run our businesses. Best practices implementation allows companies to evolve, grow, and remain competitive.

THE REWARD FOR THE BEST COMPANIES IS CUSTOMER LOYALTY Taking your company to the next level by adopting best practices, is an intentional decision. It will involve some pain, time, trial and error, personnel adjustments, an open mind, and your discipline, to see that ideas are executed and implemented to the point where they become habits. Then, as the shampoo bottle says, wash, rinse, and repeat. Keep the process going. Adopt the idea of best practices as a company mantra, and you’ll be the one in an enviable position both in the industry and the market,

Theo was CEO of Conditioned Air, in Naples, FL, for 23 years. In that time the company grew from $2.7 million in revenue to $55 million in sales. He stepped down as CEO in June of 2018 and is currently a partner and Director of Conditioned Air, now a $60+ million, regional organization in the residential and light commercial HVAC markets. Conditioned Air employs nearly 400 full-time workers, and has branch hubs in Ft. Myers and Sarasota. In 2015, Conditioned Air recapitalized with Gemini Investors out of Boston, MA and continues its organic and strategic acquisition growth plan. In 2010, they received the ACCA National Residential Contractor of the Year award. In 2011, Conditioned Air was awarded the Uncommon Friends Foundation Business Ethics Award for their commitment to Integrity in their business practices. Theo was inducted into the Junior Achievement Hall of Fame in Collier County and named a Man of Distinction by the Collier County Champions for Learning. He and his company are heavily involved in the community through a variety of organizations. Theo is the author of the book, Invest Your Heartbeats Wisely, released in April of 2016. The book focuses on practical, philosophical, and principled leadership concepts for business and life.

www.hvacrbusiness.com

STOP UNDERPRICING HVAC REPAIR TICKETS

Underpricing your HVAC repair tickets is problematic even if it brings in business. BY WENDELL BEDELL

nderpricing your repairs is hurtful to you, but it is also hurtful to your company and its people. Many contractors will always charge more for their services than you. There will always be contractors out there who charge less than you. Many contractors think it is all about bidding low even when there is no competition on a no heat or no cool call. Most likely, this is why when we look at the statistics for the average contractor in terms of net profit before taxes, the numbers range from only 2.3% net profit before taxes. This means that 97.7% of all contractors have catastrophic cash flows. We are losing contractors with roughly 85%

HVACR BUSINESS APRIL 2022

• Custom skills

Your repair pricing must be based on the value you bring to the job to be profitable. going out of business within the first five years of starting the company. Our distributor partners say that another 10% goes out of business every year going forward. 1

GET PAID FOR THE 90% OF THE VALUE YOU BRING TO THE JOB Your repair pricing must be based on the value you bring to the job to be profitable. When a customer pays you for a job, they pay for the work to be completed and

your expertise, experience, and work delivery processes and resources. Remember that 90% of any repair success is what you and your work delivery staff bring to the job. Only 10% of a successful repair is the parts you selected to complete the job. Therefore, they pay for the value you and your people bring to the job, such as:

• Professionalism • Work ethic • Dedication to excellence • Integrity • Tools & resources • Work delivery processes & forms • Licenses • 24/7 warranty management • Safety & liability protection • Insurance coverage

• Knowledge • Experience

Statistics from CFMA.org and the Census.gov

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Getting paid fairly for your expertise, experience, and work delivery resources is the key to profitability sustainability. According to most economics textbooks, our service price rates are determined by supply and demand, just like any other price. We supply technically trained labor, and consumers demand it, creating a market for our trade labor. We recommend that you use this 3-steps process to determine your flat rate per-hourly sell rate.

A repair warranty reserve is customer protection against unforeseen labor or material defects. STEP #1 - DETERMINING YOUR FLAT RATE REPAIR HOURLY TRUCK AND TRAVEL COSTS Most contractors use a flat per trip charge for repair work. Some use this method while using zones for different distances from the home office (e.g., 15 miles from office (Zone A) = ½ hour round trip plus truck charge). To calculate the hourly truck and the per-mile fuel and maintenance costs, refer to the model illustration. The result from this calculator means that for every hour the technician or installer is onsite to a job with a service vehicle, they must charge $36/per hour.

STEP #2 - DETERMINING YOUR FLAT RATE HOURLY TECHNICIAN COSTS You want to be able to hire the best available journeyman-level technicians so you can maximize service ticket opportunities. A journeyman is a technician skilled in all aspects of the residential HVAC tradecraft. This person would be considered competent to work in residential HVAC as a fully qualified technician for repairs, system fixes, enhancements, and replacement work. Your pricing system must enable you to hire the best. Using a labor cost rate lower than a new hire journeyman would require adjusting your price guide to recover the higher technician cost. If you do not

LINE#

DESCRIPTION

RATE

Technician/Installer Paid 40hrs per week x 52 weeks Hours

2,080

Paid Number DAYS holidays

Paid holiday hours = 8 days X 8 hours/day

Paid Number DAYS vacation

Paid vacation hours = 10 days X 8 hours/day

Paid number DAYS sick

Paid number sick hours = 5 days X 8 hours/day

Net available hours = 2080 paid hours less (64 hours holidays + 80 hours vacation + 40 hours sick pay)

1,896

Billable Efficiency = Going from January 1st through December 45% 31st the average onsite hours 3.6 hours ÷ 8 hours paid/day

Billable hours = 45% Billable Hours x 1896 Net Available hours

853

Truck Expenses

Expense Items

Truck Purchase Price

$34,000

Standard Van 5-Year Annual Loan/Lease Payment

$6,800

Insurance Annual Payment

$1,900

State Registration Fee

$225

State Inspection Fee

$89

Truck Mileage Annually

35,000

Miles Per Gallon

Gas Cost per Gallon

$4.53

Total Fuel Annual Expense = 35,000 Miles ÷ 8 MPG X $4.53

$19,818

Cost Per Oil Change

$68

Number of Changes

Total Cost Oil Changes Annually (Line 20 X Line 21)

$340

Repair & Maintenance

$1,500

Cost Per Cleaning & Detailing

$229

Number of Cleaning Year

Cleaning & Detailing Annually (Line 24 X Line 25)

$458

Total Truck Expense Annually (Lines 12+13+14+15+19+22+23+26)

$31,130

Billable Hours (Line 10 above)

853

Break-Even Truck Expense Per Hour (Line 27 ÷ Line 28)

$36

continued on page 12

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HVACR BUSINESS APRIL 2022

continued from page 11

DESCRIPTION

RATE

Journeyman level technician pay per hour

$30

This calculator below is used to derive your unique company and local area technician hourly pricing rate for your upfront flat-rate pricing guide.

Insurance expense benefits

24%

Total direct labor expense per hour (Line 1 x Line 2)

$37.20

Total hours available

2,080

This example contractor requires $335 per on-the-jobsite billable hour. The customers do not see this hourly rate since each itemized repair price ranges from a fraction of an hour to multiple hours to complete, and add repair parts with mark-up.

Paid 10 DAYS vacation hours

Paid 8 DAYS holiday hours

Paid 5 DAYS sick hours

Net available hours (Line 4 – (Lines 5+6+7))

1,896

Average annual billable efficiency

45%

Billable hours (Line 8 x Line 9)

853

Breakeven labor billable hour ((Line 4 ÷ Line 10) x Line 3)

$91

Truck Expense Per Billable Hour (See above calculation)

$36

Breakeven labor & vehicle cost per billable hour (Line 11 + Line 12)

$127

Target gross profit margin before service agreement discount

55%

Target hourly sell price (Costs ÷ (1 - 55% = 45%))

$335

Billable man day (Line 15 X 8 hours/day)

$2,680

change for your higher technician labor cost, you will lose money on every call.

STEP #3 - DETERMINING YOUR REPAIR WARRANTY RESERVE COSTS A repair warranty reserve is customer protection against unforeseen labor or material defects. Some repairs fail during the warranty period. We use a mark-up on part(s) after local sales tax costs to cover repair call-backs. Low-cost parts require a higher warranty reserve mark-up to protect you from a call-back deduction coming out from your retained earnings.

LINE#

The recommended warranty reserve mark-up levels:

PARTS MARK-UP $0.00 - $9.99 ................................... X 5.0 $10.00 - $49.99.............................. X 4.0 $50.00 - $99.99 ..............................X 3.0 $100.00 - $199.99.......................... X 2.0 $200.00 - $499.99........................... X 1.7 $499.99 and above........................ X 1.5 NOTE: Even warranty repairs require a mark-up to cover any post-repair call warranty labor and material reserve. When calculating warranty reserve on warranty calls, you should mark up the parts using the above warranty mark-up level. Then remove the actual cost of the parts from the price.

Example Fan Motor & Cap Repair Ticket Costing To the right is an example client repair ticket for replacing a run capacitor and fan motor pricing using the above best practice pricing method:

HVACR BUSINESS APRIL 2022

Getting paid fairly for your expertise, experience, and work delivery resources is the key to profitability sustainability. 1. Diagnostic/Service Fee = ½ hour of my labor rate (or capped at 80% of the local market) 2. Run Capacitor Replacement = ½ hour replacement, plus cap parts cost after tax paid at the counter of $15.32 3. Universal Fan Motor Replacement = 1-hour replacement, plus multi-fit fan motor after sales tax paid at the counter of $110.12 4. Start-up Test & Verify per Manufacturer Startup Spec. = .75 hour

Example Fan Motor & Cap Repair Ticket Upfront Pricing • Diagnostic/Service Charge = (.5-hour X $335/hour = $168) but due to local area market pressures reduced to $99 • Run Capacitor Replacement Price = (.5-hour X $335/hour=$168) + ($15.32 X 4= 61.28) = $229.28 • Universal Fan Motor Replacement Price = (1-hour X $335/hour=$335) + ($110.12 X 2= $220.24) = $555.24

5. Total Upfront Repair Price

• Recommissioning & Safety Test = (.75-hour x $335/hour) = $251.25

6. Service Agreement Discount Option – 15% off the total ticket if the consumer signs up to a monthly service agreement

• Total Upfront Repair Price to Customer = $99 Diagnostic/Service Charge+$229.28 Cap +$555.24 Motor +$251.25 = $1,134.77

• Service Agreement Discount Option 15% = ($1,134.77 Total Ticket X .15 Service Agreement Discount Option) = -$170.22 BUSINESS GROWTH NOTE: The 15% discount off the total repair ticket and a monthly service agreement option is proven effective to close 85% of non-service agreement repair customers to a service agreement. Our client contractors find that the higher the repair ticket price, the higher the discount, resulting in the higher service agreement close rate. u

Wendell Bedell, President of Grow My HVAC, CEO of the HVACPro Mastering a Thriving HVAC Business podcast show host, and author of the excerpts from his newly published eBook entitled A-Z Book on Residential HVAC Business designed to help you maximize your thriving HVAC service and replacement Business. If you’d like to discuss this or other business concerns, you can reach Wendell at 800-240-2823 or email him at wendell@hvacpropodcast.com.

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FluoroFusion Next-Generation Natural Refrigerants FluoroFusion is your one-stop-shop for all your refrigerant needs

R-290

Propane

R-600a

Isobutane

14oz (400g) net weight per cylinder

12 cans and one piercing valve (p/n PV-14) per case

DOT Certification DOT-2Q

Typical Applications Include Domestic refrigerators and freezers Ice cream/Commercial freezers Commercial refrigerators Beverage dispensers Dehumidifiers Heat pumps Small air conditioners Mobile Home and R/V Appliances FluoroFusion Hydrocarbons are ready to address the issue of climate change. As the phasedown of High-GWP refrigerants continues, our Hydrocarbon refrigerants are ready to meet the challenge, as more equipment is designed to use natural refrigerants. Hydrocarbons are naturally non-ozone-depleting, have a GWP of ~0, and come backed by FluoroFusion’s Quality Assurance.

FluoroFusion Specialty Chemicals™ Hydrocarbons FluoroFusion Specialty Chemicals™ provides the highest quality hydrocarbons and refrigerants. We’re your one-stop-shop for all your refrigerant needs. Isobutane (R-600a) and propane (R-290) are EPA SNAP approved for household refrigerators, freezers, and combination refrigerators and freezers Meets or exceeds AHRI-700 specifications Free shipping when combined with other refrigerant purchases WARNING: For professional use only! R290 and R600a are highly flammable refrigerants and should only be used in equipment in which it is specified.

For more information please contact your master distributor or visit fluorofsion.com/refrigerant-sales

COMMERCIAL REFRIGERATION:

FINDING A REGULATORY PATH FORWARD

Final and proposed rulemaking accelerate refrigerant transition in U.S. commercial refrigeration BY JENNIFER BUTSCH, REGULATORY AFFAIRS DIRECTOR AT EMERSON

or the past several years, commercial refrigeration stakeholders in the United States have been closely monitoring regulatory efforts to phase down the use of high-global warming potential (GWP) hydrofluorocarbon (HFC) refrigerants. The unsettled regulatory climate has made it difficult for food retail companies to plan for compliance and select next-generation refrigeration strategies. However, as we move into 2022, it appears that the regulatory

HVACR BUSINESS APRIL 2022

Many companies have already begun their lower-GWP refrigerant transition and have been seeking regulatory guidance to help inform their long-term refrigerant choices to implement their sustainability goals. picture is coming into clearer focus. Many companies have already begun their lower-GWP refrigerant transition and have been seeking regulatory guidance

to help inform their long-term refrigerant choices to implement their sustainability goals. Others may be taking first steps on their sustainability journeys and monitoring these emerging regulations to better

understand the potential impacts on their organizations. Let’s take a closer look at the refrigerant rulemaking and proposals that are helping these companies to forge a path forward as they transition to lower-GWP refrigerant technologies.

AIM ACT ESTABLISHES FEDERAL HFC LEGISLATION The American Innovation & Manufacturing Act (AIM Act) was signed into law in 2020, granting the federal

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government the authority to regulate HFC refrigerants in three primary ways via the Environmental Protection Agency (EPA). 1. Phasing down HFC supplies by reducing their production and consumption over a 15-year period. These supply- side restrictions began on Jan. 1, 2022, requiring a 10% reduction in HFC production and consumption through 2023. Per this HFC phasedown schedule, an additional 30% reduction will take effect between 2024 and 2028 — with 70% and 80% reductions needed by 2029 and 2034, respectively. Not only are these phasedowns expected to drive up the price of HFC refrigerants as supplies decrease, but they also signal the end of a high-GWP HFC era in commercial refrigeration. 2. Establishing sector-based approvals and HFC restrictions that facilitate transitions to next-generation refrigerant technologies. HFC-use restrictions would help specific sectors to transition more quickly away from higher-GWP HFCs while providing additional flexibility for those who may need more time. A key aspect of this effort includes the EPA’s authority to support the demand for lower-GWP refrigerants by approving new alternatives per sector-based application guidelines. Industry experts expect the EPA to issue new guidance along these lines in 2022. 3. Regulating HFC management by establishing standards for the management of HFCs in servicing and repair processes, such as: lowering leak rate thresholds and requiring proper recovery of “used” HFCs for purification and resale (aka reclaim). This would allow for an efficient transition from HFCs in accordance with reductions in production and consumption schedules. Previously, the EPA had created Section 608 to govern these best practices, some of which were invalidated per a 2017 court ruling. Industry insiders expect the EPA’s revised HFC management rulemaking could build off the Section 608 framework. Note: Even if the leak repair and maintenance requirements of Section 608 are currently not enforced for HFCs, an effective leak repair and maintenance program

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and Refrigeration Institute (AHRI) and the Natural Resources Defense Council (NRDC) — and stakeholders have asked for states to be consistent in their approaches. Most would prefer that our industry adopt a unified federal approach, rather than managing a patchwork of state-led initiatives.

Although the AIM Act permits individual states to create their own environmental regulations, many are awaiting federal guidance for the use of refrigerants in commercial refrigeration.

EVOLVING SAFETY STANDARDS FOR FLAMMABLE A3 AND MILDLY FLAMMABLE A2L REFRIGERANTS For several years, the governing bodies that regulate the safe use of refrigerants in the U.S. have been evaluating the prospect of increasing charge limits in the flammable A3 refrigerant propane (R-290) and an emerging class of mildly flammable A2L refrigerants. In 2021, the Underwriters Laboratories (UL) approved the second edition of its UL 60335-2-89 standard, which included higher charge limits that would expand the potential uses of R-290 and A2Ls in commercial refrigeration.

is still generally recognized as an industry best practice. Other beneficial provisions of Section 608 — including the certified technician program and the refrigerant recovery and reclamation rules — are still in effect.

CARB RULEMAKING TAKES EFFECT The California Air Resources Board (CARB) continues to lead the way on the HFC phasedown in the U.S. After several years of collaboration with state and HVACR industry stakeholders, CARB’s proposed rulemaking became final in late 2021 and went into effect on Jan. 1, 2022. This rule establishes HFC phasedown requirements for new facilities and includes a company-wide provision for food retailers operating with a fleet of existing stores within California. New facilities — Installation of new refrigeration systems containing more than 50 pounds of refrigerant are required to use refrigerants with less than 150 GWP. Existing facilities — Installation of new systems are subject to company-wide, fleet GWP reduction targets by 2030, as

compared to their 2019 baselines. CARB offers two paths to compliance for new systems in existing facilities: 1. Weighted-average GWP (WAGWP) reduction < 1,400 GWP by 2030, where WAGWP is the sum of the total refrigerant charge of every system greater than 50 pounds in every store in California 2. Greenhouse gas emissions potential (GHGp) reduction by 55%, where GHGp is the sum of the total refrigerant charge of every system greater than 50 pounds in every store in California multiplied by the GWP values of the refrigerant types in use In new stationary air conditioning equipment, refrigerants with a GWP greater than or equal to 750 will be prohibited, starting in 2025. Although the AIM Act permits individual states to create their own environmental regulations — such as those pursued by U.S. Climate Alliance states — many are awaiting federal guidance for the use of refrigerants in commercial refrigeration. Industry organizations — such as the Air-Conditioning, Heating,

R-290 charge limit increases With a long-held maximum charge limit of 150g, R-290 has primarily been used in smaller, self-contained units that don’t need large refrigeration loads. Designing larger-capacity, R-290 based refrigeration equipment has required the use of multiple R-290 based compressors or condensing units. The updated UL standard raises the charge limits on these commercial standalone displays based on whether they have an open or closed design: • 500g maximum charge limit in open appliances (without doors) • 300g maximum charge limit in closed appliances (with doors or drawers) From an application design perspective, these higher charge limits will help to increase system capacities while capitalizing on R-290’s high efficiency and low-GWP rating (GWP = 3). Ensuring the safe use of A2L refrigerants Mildly flammable A2L refrigerants have also been identified as low-GWP alternatives for complying with emerging refrigerant regulations. Because of their potential flammability, to date A2L refrigerants have been used globally in relatively continued on page 16

HVACR BUSINESS APRIL 2022

continued from page 15

small refrigeration architectures, such as: self-contained systems, indoor/outdoor condensing units (OCUs) and distributed systems. Per the recently updated UL 60335-289 safety standard, new A2L charge limit guidelines have been established for self-contained and remote refrigeration systems. For self-contained equipment, charge limits are determined on whether equipment is open or has doors or drawers. Degrees of flammability will vary among different A2L refrigerants, so it’s important to calculate charge limits based on the specific A2L characteristics. For example, since R-454C has a lower flammability limit (LFL) of 0.291 kg/m3: • A closed-door case can be charged with up to 2.33 kg (5.1 lbs.) of R-454C. • An open case with R-454C can be charged with up to 3.78 kg (8.3 lbs.) of R-454C.

HVACR BUSINESS APRIL 2022

Industry organizations — such as the Air-Conditioning, Heating, and Refrigeration Institute (AHRI) and the Natural Resources Defense Council (NRDC) — and stakeholders have asked for states to be consistent in their approaches. Most would prefer that our industry adopt a unified federal approach, rather than managing a patchwork of state-led initiatives. In remote or field-erected systems, UL 60335-2-89 supports R-454C charge sizes up to 75.7 kg (166 lbs.) per circuit.

immediate action to mitigate flammability risks. In human comfort applications, similar UL standards are also in place.

Per the UL 60335-2-89 standard, remote A2L systems must be designed with requisite safety strategies and mitigation measures to keep gas concentrations below flammable thresholds. This includes the ability to detect refrigerant leaks at various points of the refrigeration circuit — from the compressor to the condensing unit to the case — and then take

Safety standard updates set the stage for wider approvals The UL 60335-2-89 second edition update is only the first step in a larger series of regulatory approvals needed to enable higher charges of R-290 and the use of A2Ls in U.S. commercial refrigeration. The following supporting regulatory

and policy changes will also need to be approved: • EPA Significant New Alternatives Policy (SNAP) approval of specific A2L refrigerants and increased R-290 charge limits • ASHRAE 15 safety standard update for refrigeration systems • Model code updates in the upcoming code revision cycle, such as: Uniform Mechanical Code (UMC), International Mechanical Code (IMC) and International Fire Code (IFC) • State and local building code updates Industry stakeholders are optimistic that the ASHRAE 15 update and EPA SNAP approvals (for at least some A2Ls) will yet take place in 2022. Although the next model code update is planned for 2024, select states have legislated or adopted provisions of the safety standards directly into their building code updates to allow for the use of all EPA-approved

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substitutes. Thus, our industry could begin to see some A2Ls used in late 2022 or early 2023, with more widespread use expected in 2024. In the meantime, installing an A2L-based refrigeration strategy would typically require the approval of local authorities having jurisdiction (AHJ), such as fire marshals and/or building inspector

PLANNING FOR THE NEXT GENERATION OF REFRIGERATION TECHNOLOGY As the regulatory picture continues to emerge in 2022, stakeholders now have more certainty to make plans for their next-generation refrigeration strategies. At Emerson, we’re developing a wide range of refrigeration technologies that will help companies comply with emerging regulations, meet their sustainability objectives, and choose a path forward that aligns with their long-term operational preferences. If you’re a potential owner or operator of a next-generation refrigeration system, it’s important to understand the

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If you’re a potential owner or operator of a next-generation refrigeration system, it’s important to understand the performance characteristics and safety considerations of these emerging alternative refrigerant technologies.

performance characteristics and safety considerations of these emerging alternative refrigerant technologies. Whether you’re evaluating carbon dioxide (R-744), propane (R-290), lower-GWP HFCs or new A2L alternatives, Emerson can help you to select the most optimum technology for your application and your future. As always, if new regulatory developments unfold in 2022, Emerson will be here to keep you informed of the implications. u

Jennifer Butsch has been involved in regulatory affairs across multiple industries for more than 16 years. In her current role as Emerson’s regulatory affairs director, she is responsible for managing activities related to codes, standards and regulations. She actively participates in several industry organizations, including AHRI and ASHRAE. Jennifer earned a bachelor’s degree in biomedical engineering from Wright State University and a master’s degree in business administration from the University of Phoenix.

HVACR BUSINESS APRIL 2022

FINANCE

BY RUTH KING

Calculating HVAC Maintenance Price Plans for Two or More Systems

hen pricing maintenance plans for additional (second and third) home heating and cooling systems, you should know as a business owner, it is not merely about cutting your maintenance price for the first system in half. Why? Simply put, unless you plan on performing only half the maintenance on the additional systems, you must charge for the full-service work you plan to provide. The only fee you should ever be leaving off the plan for additional systems, is a travel expense.

When pricing maintenance plans for additional home heating and cooling systems, you should know as a business owner, it is not merely about cutting your maintenance price for the first system in half…you must charge for the full-service work you plan to provide. STEPS TO SETTING UP A MAINTENANCE PRICING PLAN FOR ADDITIONAL HVAC SYSTEMS As a heating and cooling home contractor, you must make certain assumptions

when setting up price points for your business. It is the only way to remain competitive and profitable. Below are some reasonable assumptions that can and should be included in your maintenance price plans for additional systems maintenance.

HOME HVAC SYSTEM 1 Sample - Assumptions: • Total time for heating and cooling maintenance service is 4 hours, including travel. • The technician hourly rate is $20/hr. • Overhead cost is $30/hr. • Material cost is $5 • SPIFF is $10 per system. • Net profit is $5/hr.

Sample Price Plan for the First System: • • • •

Labor: $80 Overhead: $120 Materials & SPIFF: $15 Profit: $20

Price: $235 As you see, I based this on a $5 net profit per hour estimate because your maintenance plans must at least break even. At $5 an hour, you will have some breathing room when you hire a technician who earns more than $20 an hour while performing maintenance during the slower season.

ADDITIONAL HOME HEATING AND AIR SYSTEMS The only expense not included in additional systems maintenance pricing, is

HVACR BUSINESS APRIL 2022

travel. Let’s go on a reasonable assumption that travel is one hour of the four hours, keeping in mind that each maintenance visit is 30 minutes.

ADDITIONAL HVAC SYSTEM MAINTENANCE PRICING Sample - Assumptions: • Total time for heating and cooling maintenance service is 3 hours. • The technician hourly rate is $20/hr. • Overhead cost is $30/hr. • Material cost is $5. • SPIFF is $10 per system. • Net profit is $5/hr.

Sample Price Plan for Additional Systems: • • • •

Labor: $60 Overhead: $90 Materials & SPIFF: $15 Profit: $15

Price: $180 Based on reasonable assumptions for a two-system home, the price to your customer is $235 plus $180 (or $415 total).

CONTRACTORS: HOW TO REMEDY UNDER-PRICING FOR HVAC MAINTENANCE VISITS Now that you know how to formulate a set of price plans for the first and additional systems maintenance, you might need to correct any erroneous underpricing from the past. What do you do if you have been charging only half-price for additional systems? Raise the price. Do nothing else before you raise the prices. You may lose clients. It’s an almost inevitable possibility. If you feel like that may be a concern however, try reaching out to your customers first. How do you explain the price increase to your existing maintenance customers with two or more systems? 1. Recognize the inevitability that you will lose some maintenance customers when you raise prices. www.hvacrbusiness.com

Accepting the discomfort of this business growing pain, is the only way to grow your business and increase profit moving forward. Based on experience, even the most loyal customers will try to find a cheaper solution. However, if they walk away, remember unprofitable customers aren’t a true loss. If they are maintenance customers and they aren’t contributing to the profitability and growth of your business, they are no longer good for your business.

Technicians and staff members, if they are smart, will recognize and empathize with the fact that the company can’t continue to lose money. It won’t be good for business and may in fact affect their own employment. Once they understand the reasoning behind the price increase, they will accept it and be loyal to the brand. As a

home heating and cooling contractor, your brand and your team reps also act as your best calling card; this is especially important if in fact technicians and staff are looped into discussions regarding upcoming price increases for future additional HVAC home systems maintenance. 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.

2. Send your customers notice of the price increase. This is best achieved through an email or telephone call. My personal tip: Allow a customer to renew their maintenance plan for an additional year if they agree to renew by a certain date. After that, and in subsequent years, the price will revert to the new rate. Many customers will renew early. Put these added funds into a savings account. You may need them as you are performing the maintenance over the next year. 3. Consider implementing monthly recurring billing. The increase is less of a shock for customers who pay monthly. Based on the previous example, if you had been charging $117.50 for the additional system, the customer’s maintenance price would be $352.50 annually or $29.38 a month for a two-system home. Then, if you were to raise the price for the additional system to $180, the maintenance price would be $415 a year or $34.58 per month. An increase of about $5 a month which is much easier for a customer to digest. Note: When you send the notices out to customers, be sure to mention the monthly price payment plan.

EDUCATE YOUR HVAC TEAM – THEY ARE THE FRONT LINE OF YOUR BUSINESS Lastly, always educate your team about the price increases as well as the reason for the need to do it. Explain the changes to your technicians and office staff. If they understand the need for the increase because you had been losing money, they will more likely act as a loyal frontline representative for your business if and when any small talk of price or price increases, comes up with customers. In the running example we have been using, explain the numbers to the entire team. Demonstrate to your workers that you have been losing $62.50 ($180-$117.50) on each customer who has two systems in their home.

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www.TacoComfort.com

HVACR BUSINESS APRIL 2022

PROVIDED BY KEVEN PRATHER, CFBS

EXIT PLANNING

How Playing the Long Game Could Help Build Wealth and Success

M long game.

any extremely wealthy people have a much better handle than others on a key concept of success: the

The long game means having a concrete vision of your ideal future down the road — years or even decades from now — and taking specific, carefully considered action steps at every stage along the way to maximize your ability to get there. Unfortunately, we find that most people don’t effectively plot out their financial futures, or lay out a clear and actionable path to follow. As a result, people often come up with scenarios that are as unrealistic as they are attractive — fantasies that stand little chance of becoming reality. The upshot: It’s probably time to honestly assess how well you’re doing at both creating a detailed vision of your ideal long-term future and acting in ways that consistently move you toward that result. That’s true whether you’re trying to get wealthier through investing, earn a higher salary or retire on your terms. These guidelines can help you get on track!

START AT THE END Always work backward from your desired end result. This big-picture thinking starts with creating a vision of the ideal future you want (for yourself, your family and so on). Vision — a term some find to be New Agey — is a powerful tool that can be used to motivate, unify and inspire. As you develop a vision for your future, you start to gain an understanding of why you do what you do. Such clarity can be extremely motivational. Well-conceptualized end goals have a number of benefits, including: • Keeping you highly motivated • Helping you concentrate your actions productively

HVACR BUSINESS APRIL 2022

The long game means having a concrete vision of your ideal future down the road — years or even decades from now — and taking specific, carefully considered action steps at every stage along the way to maximize your ability to get there. • Helping you focus on the processes and activities that really matter and avoid distractions • Helping you stay on the path as times get hard Next, think about the specific obstacles that could prevent you from reaching those specific goals. Say you’re a business owner. Specific hurdles that might get in the way of your target revenue or valuation goals might include outdated systems you have in place. Or perhaps you have a goal of building your retirement dream home in another state. Your obstacles might include a lack of adequate wealth or liquidity, or even health-related challenges. The things that seem to oppose our goals are actually the raw materials for achieving them. Thinking about obstacles in this way is extremely liberating. If your obstacles are closely tied to the results you said you wanted to achieve, you suddenly have the keys to overcoming them.

PLOT OUT INTERMEDIATE GOALS AND PLANS As part of your long-game path to your end goal, you will need to specify intermediate goals. These are stepping-stones on your way to the end goals. You’ll also need to delineate well-thought-out plans that will enable you to achieve the intermediate goals that push you toward your end goal. In short:

Intermediate Goals + Thoughtful Plans = End Goals

Example: If you want to become seriously wealthy, you need to specify exactly what that means to you. It might be a net worth of $10 million or $20 million (or much more). This is your financial end goal. Now, you need to determine how you are going to get there. One possibility is to establish and grow a business. A successful business then becomes an intermediate goal. There also may be other intermediate goals (such as finding and working with a high-caliber wealth manager) that will help you accomplish your financial end goal.

EXECUTE YOUR PLAN Perhaps the biggest challenge of playing the long game well is execution. But face it: You’ve got to act on your plan or you’ll make no progress. Set specific goals and milestones to begin the work of making your vision a reality. Choose the broad strategies you will use to reach each goal. Identify the tactics for implementing each strategy. Once these tactics are clear, decide on actions to execute each tactic. Ensure that each action is specific and achievable, and set a target date for completion.

THE IMPORTANCE OF PERSEVERANCE Perseverance is central to a good long game. As with most meaningful and largescale endeavors, great results are unlikely to happen quickly. You need to be willing and able to stay the course for quite some time, as most successes are built on

incremental achievements — that is, on attaining your intermediate goals. Of course, life has a way of pulling us in all sorts of directions. Perseverance becomes much easier and more productive when you keep your end goals, your intermediate goals and the plans to get there top of mind. Doing so can help you avoid being overwhelmed by immediate circumstances.

REMAIN FLEXIBLE The advice that you should stay on track and persevere through challenges comes with one big caveat: You can’t be rigidly locked into a plan. Flexibility is vital as you navigate inevitable changes in your life and the world at large that impact your vision, your goals and your course of action. But to constructively adapt, you need clear goals and the processes to achieve those goals. Without them, you risk overreacting to challenges and veering too far off your desired course.

A ROAD AND A ROAD MAP In the end, long-game planning builds a bridge that links where you are today to where you want to be down the road. To get the most out of your efforts, remember a few key tenets of success — start with the end in mind, develop intermediate goals that propel you forward and execute with focus. With these ideas and your selfcreated road map to guide you, you can put yourself on the road to an ideal future. 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 www.TransitioNextAdvisors.com for additional information.

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PRODUCT FOCUS »

ALLIED AIR ENTERPRISES

BROAN-NUTONE

DAIKIN

HITACHI AIR

The LYNX 18 Inverter Heat Pump is adaptable with a wide range of AHRIrated system matches and is compatible with most conventional 24-volt thermostats. QuickLink Inverter Technology uses intelligent algorithms to deliver a performance fit and fine-tuned temperature control with a wide range of indoor equipment in its class. Allied says two units cover the same application range as up to seven conventional heat pumps. The pump has ratings up to 18 SEER and 10 HSPF and five operating modes for a balance of comfort and energy efficiency.

Broan-NuTone’s Overture is a fully automated, cloud-connected, whole-home indoor air quality system that monitors and optimizes air in the home using three models: a room sensor, a wall control, and a smart plug. The product requires no external hub or additional equipment and monitors the quality of air and automatically turns on the connected supply and exhaust ventilation when air qualities are low. The system can be managed through a mobile app and allows users to see live snapshots of a home’s indoor air quality, individual rooms’ air quality, and historical data.

Environmentally conscious and energy efficient, Daikin Emura, is engineered to perform every season and provide year-round comfort with seasonal efficiency up to A+++ for heating and cooling, resulting in smaller environmental impact and energy savings. Using R-32 refrigerant, known in the industry for its lower Global Warming Potential (GWP), is synonymous with high efficiency and simplifying reusability whilst maintaining and improving on the standards set by the previous generations of refrigerants. The Daikin Emura is available across all Daikin Flagship stores and partners in Central and Eastern Europe as of April 2022.

Hitachi Mini-Split Systems employs the latest technologies across the product line to maximize comfort and ensure healthy indoor air technologies which include: an intelligent human sensor system to monitor and respond to the environment to provide continuous comfort; innovative FrostWash technology that removes bacteria, mold, and virus to ensure clean indoor air; and a dehumidification mode that controls temperature and humidity levels. Hitachi Mini-Splits Residential ACs feature vector DC inverters to achieve high performance energy efficiency.

» www.alliedair.com

» www. broan-nutone.com

» www.hitachiaircon.com/us/products/ mini-split-systems

» www.northamerica-daikin.com

KEEN HOME

METUS

RECTORSEAL

RUSKIN

Keen announces the new Ecovent Whole Home System. The Ecovent Whole Home System is even more eco-conscious than previous room-to-room product offerings. It offers a fully integrated system that gives you complete control of your rooms, replacing 80% of your home’s vents. The new system is an upgrade from the starter kit and gives buyers more control, more options, and safer IAQ control.

The intelli-HEAT Dual Fuel System from Mitsubishi Electric Trane HVAC US connects with any thermostatically controlled furnace and empowers homeowners with a gas furnace to improve their home’s comfort and uses an energyefficient, all-electric heat pump as their primary heating source. During periods of extreme cold, intelli-HEAT may switch to the gas furnace as needed based on capacity and economic balance points using its intelligent switchover function. Available Hyper-Heating The intelli-HEAT can be controlled with third-party thermostats or Mitsubishi Electric control options.

RectorSeal® announced the release of the IAQ3 strategy offering an extensive line of products, including Dust Free whole home solutions, which are designed to improve the air quality of indoor residential and commercial environments. The compact, duct mounted designs target indoor air quality problems through a home’s HVAC system. Dust Free offers a wide array of active filtration products that help remove symptoms caused by dust, pollen, mold, dander, and other air particulates as they pass through a ducted, forced-air HVAC system. Features: No ozone generation, effective against odors and VOCs, and auxiliary power port to power an additional 24V Germicidal UV-C light.

Ruskin has introduced the EME5625 MDE – a Miami-Dade-approved, winddriven rain resistant stationary louver. This newly-designed model meets enhanced protection building requirements for structures, including office buildings and schools, in high-velocity hurricane zones. With a high free area of 55%, the 5-inch-deep extruded-aluminum vertical louver is mechanically fastened, offering greater strength and improved performance over Ruskin’s previous Miami-Dade-compliant model, the EME5625MD.

» www.keenhome.io/collections

» www.metahvac.com

» www.ruskin.com

» www.rectorseal.com www.hvacrbusiness.com

HVACR BUSINESS APRIL 2022

20QUESTIONS >>

with TALBOT GEE

Publisher, Terry Tanker, interviewed Talbot Gee, President and CEO of HARDI. HARDI connects HVACR Leaders with essential resources, management tools, and supports wholesale distribution. The two discussed understanding your organization’s why, making difficult changes for long term progress, and the importance of a strategic plan. 1. As a bourbon connoisseur, which is your most cherished bottle? I’m more of a tequila guy (thanks, Frank Meier) especially when it’s cold out. I love a nice pour of Elmer T. Lee over a big rock.

2. Where did you find it?

Hard to find! You gotta have your feelers out or a solid “in” with a good liquor store.

3. What’s your hidden talent?

After 12+ years of being a “Lax Dad” for my three daughters, I’m a solid amateur lacrosse coach. This proud papa happily boasts three bad-@$$ lacrosse players with one heading to play division one in college next year, and two more to follow.

4. What would people be surprised to learn about you? Despite it being an essential part of my job, I don’t love large groups. I keep a small inner circle.

5. What makes you smile?

Watching others succeed – a team member, family, colleague, friend – other’s success energizes me.

6. You joined HARDI in 2006, how has the organization changed?

The environment and role of trade associations has changed. HARDI’s remained ahead of the curve anticipating and positioning for changes. We excel at anticipating and delivering on requests.

7. You became CEO in 2010. What did you want to change?

My predecessor, Don Frendberg, recruited me to be his successor. After successfully leading us through the Great Recession, he handed over the reins two years earlier than planned. My priority was to assemble a team of subject-matter experts and fill the team with talent and expertise. While it’s a work-inprogress, this has been perhaps the greatest key to HARDI’s growth.

8. How did you accomplish that?

It was difficult. We had great staff who served members well but did not possess unique expertise nor aligned with a new, pro-active approach. This exposed my blind spots around education and training. It took three tries to identify the right skill set and talent, to redesign and relaunch what is now HEAT.U.

9. Did you make significant changes during your first two years? We restructured into a departmental approach around the new SME’s and created a performance management model, perhaps the largest bonus incentive pool for any organization our size.

HVACR BUSINESS APRIL 2022

10. What has been the most significant management challenge you’ve faced over the last 12 months? In 2021 HARDI’s leadership team committed to responding to feedback that our internal communications needed to improve. We restructured staff and team meetings and focused on implementing tools so everyone could see the association’s progress on key performance metrics. This year my 360 review revealed we’d successfully improved communication. However, collaboration and empowerment were not as strong. Those will be areas of focus in 2022.

11. How would you describe your management style?

Ha! A work in progress… a dangerous combination of impatience and ADD. I’ve worked daily to temper it. I have high expectations of our team. However, I strive to reward achievement through compensation and incentives. We offer a flexible work environment and encourage employees to maintain a nice work/ life balance.

12. As CEO of HARDI what is your most important job?

Strategic vision and resource allocation. A HARDI’s CEO is responsible for the ownership and execution of the strategic plan which is overseen, approved, and refined by HARDI’s Board of Directors.

13. What is the largest challenge facing the distribution network this year? Strategic vision and resource allocation: In 2019 HARDI revamped its governance model which added pressure on management to build and execute HARDI’s strategies so the Board of Directors could serve more in an oversight and correction context while maintaining a focus on running their own businesses. Although we’ve nearly tripled the size of HARDI’s budget since 2006, resources are constrained. My second greatest responsibility is making sure those limited resources are devoted to the most impactful strategic initiatives. Everything, especially team dynamics and culture, flow from those two things. It’s essential we win in those areas far more than we lose. That, in a nutshell, is my job.

14. What is the HARDI management team focusing on in the second half of 2022? We’ve launched a content series to help distributors get more than 26% of contractors to offer financing options because system sales will be more challenging and there will be confusing noise in the industry data by then.

15. What messaging is HARDI focused on this year?

2022 is about getting back to basics and the blocking and tackling of distribution execution. Demand needs to be created, value differentiated, and flawless execution if we are to repeat 2021’s volumes and share gains.

16. What legislative issue is HARDI working on?

Not much happening legislatively, but we’re challenging the US EPA in federal court over the ban of non-refillable refrigerant cylinders and excessively burdensome refrigerant tracking and reporting regulations. HARDI established a Legal Defense Fund in anticipation of future challenges to regulations.

17. What’s the best advice you’ve received from a member?

Surround yourself with people who know more and ensure team members know the “why” of your organization.

18. How do you communicate effectively with your membership?

Perhaps our greatest advancement for exclusive, member-only content is reflected in our revamped website. Individuals within our member companies have personal log-ins and set their own content preferences to create a uniquely curated web content experience. HARDI is a content-driven organization. We strive to provide members with relevant content that can’t be found elsewhere. We value our relationships with publications such as HVACR Business. Contractor-focused, it offers important insight into our members’ customers. We eagerly reference resources such as yours in our analyses to our wholesale distributors.

19. How do you ensure things don’t get lost in translation?

Start with the conclusion and key points. Explain the details for those who want to learn. The fewer words the better, and like with our internal communications, start with the “why” or the “what’s in it for me”.

20. How do you measure success for the HARDI?

Membership and engagement. Continued consolidation prevents membership alone from telling the full story. Engagement is the next most important metric by which we measure success. We use an internal dashboard to match individuals’ interests and responsibilities with resources and engagement opportunities. Revenue, net contributions to assets, and asset growth round out our major KPIs.

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HVACR BUSINESS APRIL 2022

Articles inside

Commercial Refrigeration: Finding a Regulatory Path Forward

Best Practices Make Best Companies

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Calculating HVAC Maintenance Price Plans for Two or More Systems

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