HVACR Business September 2019 by HVACR Business

Listen & Learn with Podcasts Pete Grasso 5

Know Your Financing Options Brandon Bolen 11

Proactive vs. Reactive Problem Solving Joel Frederick 14

Inventory is a Bet Ruth King 17

Managing Change Ron Smith 19

Look at Your Office Lease Terry Nicholson 20

HVACRBUSINESS.COM SEPTEMBER 2019 / VOL.14 / NO.9

WORKERS’ COMP INSURANCE: WHAT YOU NEED TO KNOW

ALSO INSIDE » Industry News .........................................................6 Product Focus ............................................................21 20 Questions with Eric Knaak VP Operations for Isaac Heating & Air Conditioning …...................................................... 22

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CONTENTS

SEPTEMBER 2019 / VOL.14 / NO.9

F E AT U R E S

Workers’ Comp Insurance: What You Need to Know

D E PA R T M E N T S

Want to protect yourself and your employees — physically and financially? Here’s what you need to know before buying a worker’s compensation policy. By Hannah Sullivan

Editor’s Notebook

Industry News

Product Focus

Know Your Financing Options Financing the acquisition of another company is actually quite easy, if you do your homework and know what’s available to you. By Brandon Bolen

Proactive vs. Reactive Problem Solving Customers appreciate your quick ability to react to their problem, but what if you could solve them before they called? By Joel Frederick

C O LU M N S

Inventory is a Bet

Managing Change

12 Things to Know Before You Sign a Lease

Track it and count it yearly. Spot check it monthly. Then, if the inventory doesn’t match, dig deeper. By Ruth King

There are so many resources available to help you better yourself and your business. By Pete Grasso

20 Questions with Eric Knaak VP of Operations for Isaac Heating & Air Conditioning in Rochester, N.Y.; Chairman of the Air Conditioning Contractors of America (ACCA)

The definition of the word change is simply this: Moving from a present state of affairs to a future state of affairs. By Ron Smith If you’ve decided to lease your building rather than buy, here’s what you need to know. By Terry Nicholson

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EDITOR’S NOTEBOOK

BY PETE GRASSO THE HVACR MANAGEMENT MAGAZINE

TERRY Tanker Publisher ttanker@hvacrbusiness.com PETE Grasso Editor pgrasso@hvacrbusiness.com MEGAN LaSalla Art Director mlasalla@hvacrbusiness.com BRUCE Sprague Circulation Manager bs200264@sbcglobal.net BARBARA Kerr Executive Assistant bkerr@hvacrbusiness.com

ADVERTISING STAFF EAST COAST/SOUTHEAST JIM Clifford Regional Sales Manager Tel 201-362-5561 Fax 201-334-9186 jclifford@hvacrbusiness.com MIDWEST ERIC Hagerman Regional Sales Manager Tel 216-409-3246 Fax 440-731-8750 ehagerman@hvacrbusiness.com WEST COAST TERRY Tanker Publisher Tel 440-731-8600 Fax 440-731-8750 ttanker@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©2019 by JFT Properties LLC. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, or by recording, or by any information storage or retrieval system, without written permission from the publisher. 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 © 2019 is published monthly by JFT Properties LLC,31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039, Phone: 440-731-8600. 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 Fax: (440) 731-8750 Web site: www.hvacrbusiness.com (ISSN: 2153-2877)

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Listen and Learn with Podcasts

used to listen to music when I’d run. Many runners do. But I can only listen to the same playlist for so long. Sure, I’ve reworked my playlist many times, adding new songs in with my favorites, but it still gets tired after a while. I’ve tried running without headphones, and sometimes that’s nice ... outside, enjoying the world around me as I log miles. Honestly, though, it helps to have a distraction — especially on longer runs. A few years ago, I tried something new and downloaded a podcast to listen to on my run. Let me tell you, that was a big game changer. It started out as a different form of entertainment for me than music. I’d listen to a lively interview or even a fascinating story.

with your business. Do a quick Google search for “Business Podcasts” and you’ll end up with many articles and lists to help you choose the right one. Entrepreneurs on Fire is an award-winning podcast that was founded and presented by John Lee Dumas. The podcast features John interviewing inspiring entrepreneurs to help aspiring entrepreneurs achieve a seamless journey to business success. The Art of Hustle podcast is an informative platform for entrepreneurs and marketers. This popular business podcast was founded by Anthem Salgado, a small business coach and marketing specialist. Each episode provides business advice and training designed to “untangle your to-do list and clear a pathway for new forward movement.”

There are so many resources available to help you better yourself and your business.

As I’d exhausted a couple of the favorite podcasts I’d found, I decided I wanted more. There is no shortage of podcasts out there. It can be a bit overwhelming, honestly, sorting through the myriad topics and choosing one.

As entertaining as the podcasts I was listening to were, I always seemed to learn something new and interesting. I then began to look for more educational podcasts, not simply to listen to on my runs, but also while driving in the car or traveling on a plane. I’m a big believer in always learning. You can never know all there is to know. Podcasts are a great way to continue learning while you do something else. I’m not alone. Many people use podcasts to supplement their knowledge base, including a lot of contractors with whom I’ve spoken. With crazy work schedules, spending time with family and friends — maybe even running or working out — there’s not a lot of time to spend sitting and reading. Remember when Zig Zigler coined the phrase, “Windshield University,” which describes the learning experience one can have as they drive around in their cars listening to books on tape? The wealth of information available on podcasts has taken Windshield University curriculum to a new level. Listening to a business podcast during your commute is a fantastic way to learn something new while you’re on the go. But where do you start? To this day, I still ask for podcast recommendations from friends. Say you want to listen to a podcast that will help you

Rise and Grind is hosted by Shark Tank presenter Daymond John, one of the most prominent names in America’s business landscape today. Each podcast sees John interview leading business figures on issues related to productivity, power and performance. Mixery is a popular business podcast hosted by successful business owner and entrepreneur Andrew Warner. Each episode focuses on different aspects of running a business, from starting a venture to finding a sustainable, purpose-built business. Each episode features a successful and inspiring entrepreneur. And, if you want something that hits a little closer to home, then you should absolutely check out Contractor Cents. In each episode, longtime HVACR Business columnist and industry consultant Ruth King helps you discover ideas, tactics, news and information that matters to your contracting business and you. Just as she does in your monthly column, Ruth’s podcast promises to help you increase productivity, profitability, customer and employee satisfaction. Shameless Plug: Now that you know what a fan I am of podcasts, you can imagine how thrilled I was when Ruth asked me to be a guest on Contractor Cents recently. Usually, I’m the one who does the interviews, but Ruth turned the table on me and we had a great discussion on the latest industry trends. It was a lot of fun and I highly recommend checking out not just that episode, but also the entire Contractor Cents library. Now, get busy listening and learn something new.

HVACR BUSINESS SEPTEMBER 2019

INDUSTRY NEWS » Trane Unveils Building, Community Investments in Tyler

Neighborly Awards Women in the Trades Scholarship

TYLER, Texas — Trane, a leading global provider of indoor comfort solutions and services and a brand of Ingersoll Rand, held a celebration of its business, social and environmental sustainability. Mayor Martin Heines and other community dignitaries joined Trane business leaders, customers and employees to:

WACO, Texas — Neighborly, the world’s largest franchisor of home service brands, has announced the Fall 2019 semester recipients of the company’s Women in the Trades (“WITT”) Scholarship. These latest recipients were each awarded with a $1,500 scholarship that will go toward the pursuit of a degree from an accredited technical or trade school for future service professionals.

• Celebrate the high-performance, energy efficient Trane and American Standard HVAC products manufactured in Tyler • Cut the ribbon on a $5.3-million renovation to the facility to modernize its offices and showroom, and create a space for its new dealer diagnostics center • Present three grants from its charitable foundation to further children’s education, workforce development, and economic mobility in Tyler Trane unveiled its efficient renovated space and new Nexia dealer diagnostics center, which enables HVAC dealers and contractors to remotely monitor and diagnose HVAC performance and efficiency. The investment creates a healthy, comfortable, and aesthetic workspace, and makes the site a destination for customers. “This is a celebration of our commitment to customers, employees, and our community,” said Ted Crabtree, integrated supply chain leader for Trane Residential HVAC and Supply. “As a major employer in the area, we are excited to make these investments in our facility. They help to make this a great place to work, and create a showplace for customers and partners.” The Tyler building investments and donations are in line with the company’s 2030 Sustainability Commitments, which it announced last month upon accepting the World Environment Center’s 35th Annual Gold Medal for International Corporate Achievement in Sustainable Development. >> IngersollRand.com/2030

Honeywell, Sanhua Partner to Commercialize R-466A MORRIS PLAINS, N.J. — Honeywell has joined forces with Sanhua, a leading global manufacturer of HVACR controls and components to commercialize Solstice N41 (R-466A) for use in existing and new HVAC applications. R-466A is a nonflammable and lower global-warming-potential (GWP) refrigerant designed to replace R-410A in stationary air conditioning systems. “We specifically designed Solstice N41 to solve industry challenges and comply with regulations; this will be a revolutionary solution once it is ready for adoption later this year,” said Chris LaPietra, VP and GM, Honeywell Stationary Refrigerants. “This partnership with Sanhua reaffirms our commitment to delivering a safe, energy efficient and environmentally sustainable alternative to R-410A.” Once commercially available in late 2019, Solstice N41 will be the first A1* nonflammable, lower GWP R-410A replacement offered for stationary air conditioning systems. All other reduced-GWP alternatives proposed to date as R-410A replacements are flammable, increasing risk to homeowners and contractors. Solstice N41 also offers a GWP that is 65 percent lower than R-410A. “The nonflammability attributes of Solstice N41 make it a game-changer for the HVAC industry,” said Huang Ningjie, vice president and chief scientist of Sanhua Holding Group. “We have achieved significant progress on qualifications of HVAC critical components for use in air conditioner refrigerants using Solstice N41, and the assessment is expected to be completed within this year.” N41 significantly reduces the need for additional design and eliminates the need to incorporate any sensors typically required for minimizing flammability risk. Early results also indicate this nonflammable, lower GWP alternative to R-410A will eliminate the need for specialized contractor training for flammability mitigation.

Launched in 2012 by Neighborly Brand Ambassador Dina Dwyer-Owens, Neighborly’s WITT scholarship program has awarded more than $59,000 in collective scholarship funds to a total of 48 female recipients to-date. “Every semester, I am amazed by the passion these applicants have for pursuing careers in their chosen service trades, and the scholarship recipients for the fall 2019 semester were especially noteworthy in this regard,“ said Dwyer-Owens, who also sits on the Neighborly Board. “Year after year, our scholarship recipients go on to grow into expert leaders in their respective fields, and I look forward to seeing how this semester’s three recipients apply their scholarships toward their own undoubtedly bright futures.” Fall 2019 recipients include: Eshe Vicario-Robinson, Kitchener, Ontario, pursuing a career in plumbing; Robin Kendziorski, Hazel Park, Michigan, pursuing a career in HVACR technology; and Alyssa Bruer, Wantage, New Jersey, pursuing a career in horticulture. The WITT scholarship is designed to provide financial support to further the technical education of women 18 and older through funding that covers tuition, books and/or related fees. Funds can be applied to an accredited trade or technical institution or certification program in the United States or Canada for specialties including: HVAC, plumbing, electrical repair, glass repair and replacement, appliance repair, fire and flood restoration, painting, landscaping, residential cleaning or handyman services. Candidates are evaluated based upon financial need, previous work experience and their passion for their chosen industry. >> neighborlybrands.com/about-us/women-in-the-trades/

Danfoss Partners with Master Distributor BALTIMORE — Danfoss announced its new partnership with master distributor Motors & Armatures, Inc. (MARS), wherein MARS will serve all HVACR wholesalers throughout North America with the sale and support of aftermarket Danfoss products for air-conditioning and refrigeration applications. MARS, which is headquartered in Hauppauge, New York, has distribution facilities near St. Louis, Missouri, and in Mississauga, Ontario, and more than 65 representatives throughout the US and Canada. MARS will stock Danfoss components and compressors for air-conditioning and refrigeration applications, and begin servicing regional and independent wholesalers immediately, with plans to begin supporting Danfoss’ existing wholesale partners by early 2020. “We look forward to partnering with MARS, which for more than 70 years has been exclusively focused on distribution,” said Joel Eggart, sales director – indirect sales, Danfoss Cooling. “We believe MARS will help us strengthen our distribution channel and, most importantly, to serve wholesalers throughout the region with the same reliable technologies they have come to expect from Danfoss.” >> danfoss.us

>> honeywell-refrigerants.cn

HVACR BUSINESS SEPTEMBER 2019

www.hvacrbusiness.com

BUILDING A HIGHER STANDARD. ONE DEALER AT A TIME. SETH MCGINNIS Owner

DANE MCGINNIS Owner

American Standard is all about doing what’s right for our customers. But we can’t do it alone. That’s why we created the Building a Higher Standard distinguished dealer award, to honor those dealers who have the same commitment to their employees, customers, and communities. Congratulations to Classic Heating & Air of McKinney, Texas, for being one of four outstanding 2019 winners. See how you can become a dealer at amsd.us

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WORKERS’ COMP INSURANCE: WHAT YOU NEED TO KNOW

Want to protect yourself and your employees — physically and financially? Here’s what you need to know before buying a worker’s compensation policy.

BY HANNAH SULLIVAN

orkers’ compensation insurance is a form of coverage that protects business owners and their employees should they get injured or fall ill due to work-related activity. Getting injured on the job could include hurting your back from lifting heavy machinery, getting wounded by a sharp tool or suffering from a shoulder injury due to repetitive motion. Job-related illnesses could include sickness from inhaling harmful chemicals.

If you have employees, many states require you to have workers’ compenstation insurance. medical bills, as well as funeral expenses in the unfortunate event you or an employee die. If you or an employee requires time off work to recover, lost wages will be supplemented.

COVERAGE

Employers’ liability, a component of workers’ compensation insurance, protects your business financially from claims regarding negligence or an unsafe work environment.

With a workers’ compensation policy, you will not have to pay for medical costs resulting from a work-related injury out of pocket. Your policy will cover the

Should an employee file a lawsuit, attorney’s fees, settlements, and other court costs will be covered by your workers’ comp policy.

HVACR BUSINESS SEPTEMBER 2019

ELIGABILITY All businesses are eligible for workers’ comp. Whether you’re a one-person operation with no employees, or a large company with dozens of employees, this type of coverage is recommended to keep you and your business safe. Business entities eligible for workers’ compensation: • Sole proprietors • LLCs • Partnerships • S-Corps • C-Corps

WHY? If you want to protect yourself, your employees and your business physically and financially, you need workers’ comp coverage. Without this policy, if an accident occurs, you will be held responsible. You will have to take money from your business or your personal pocket to pay for your or an employee’s injury. Paying for workplace accidents can be very costly. Having to pay for damages out of your personal or your business account can potentially put you out of business. With workers’ compensation insurance, you (and your business) will be financially protected.

REQUIREMENTS You may be required to have workers’

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compensation insurance by the state, or by the party that is hiring you. Whether the party hiring you is a general contractor or a homeowner, they may require you to have a Certificate of Insurance in order to work for them. Many hiring parties mandate proof of insurance to take the liability off of themselves. If you have employees, many states will require that you have workers’ compensation insurance. Sometimes there are minimum requirements, however. For example, if you work in Alabama and have fewer than five employees, you are not required to have workers’ compensation insurance. Just because you’re required to have coverage because you have employees doesn’t necessarily mean you’re required to have coverage for yourself. Some entities have the option to exclude themselves from coverage, which would lower their insurance premium. Keep in mind, however, just because you’re not required to provide workers’ compensation insurance for your employees doesn’t mean you will not be responsible in the event of an employee injury. Employers are almost always held liable for their employees. If you have employees and do not have coverage, be prepared to foot the bill if someone gets hurt.

HEALTH & ACCIDENT INSURANCE When you think about getting hurt, two insurance coverages often come to

COVERAGE COST

If you have employees and do not have coverage, be prepared to foot the bill if someone gets hurt. mind: Workers’ compensation insurance and health insurance. But having one, and not the other, can be tricky. If you have workers’ comp, but end up tripping on the sidewalk and fracturing your ankle outside of work, your workers’ comp policy would not pay the damages. You would need health insurance to cover a personal medical expense. The reverse is also true: If you get hurt on the job, your health insurance may not pay the medical bills. To be compensated for work-related injuries, you would need a workers’ comp policy. While workers’ comp coverage is limited to accidents that occur while working, accident insurance provides you 24/7 protection on or off the job. Regardless of whether or not you have health insurance or workers’ comp insurance, this policy helps pay medical and non-medical expenses that result from an accident. Accident insurance stays with you — so even if you change jobs, your policy remains the same. The great thing about this coverage is that its month-to-month, with no commitment. And, accident coverage is very affordable, less than $20 per month.

TYPES OF WORKERS’ COMP INSURANCE It depends on what you do, where you live and how many employees you have. If you are a one-person operation with no employees, you may only need a minimum premium workers’ comp policy, commonly referred to as a ghost policy. Ghost policies are essentially the most affordable form of workers’ compensation on the market. They provide the owner their Certificate of Insurance, while excluding them from coverage. This makes it easy to get hired, and helps you save money. Some ghost policies are combined with a bonus accident policy, which provides 24-hour accident coverage. If you’re a larger operation, a traditional workers’ comp plan may be the right fit for you. And, you would likely opt to be included in coverage. Regardless of whether or not you include yourself in coverage, your employees will be covered either way. Workers’ compensation is all about managing risk. Not sure what type of workers’ compensation insurance is best for your business? Speak with an expert to learn about what level of coverage is right for you.

Workers’ compensation insurance rates depend on many factors. The minimum premium (which is the lowest price available) for many states is $750 for an independent contractor. Workers’ comp rates also depend on what you do, where you live and how many employees you have. Because this form of insurance is based on payroll, the more employees you have, the greater the cost of your insurance policy. If you’ve had workers’ compensation insurance previously, your MOD (which is based on your loss history) will also play a factor in determining workers’ comp cost. Workers’ compensation policies are audited at the end of each year to make sure the premium (price) is correct. Basically, you’re charged a premium at the beginning of the period based on your estimated payroll for the year. The audit double checks that the estimate was correct and adjusts it accordingly. Think of it as a good thing: you end up paying exactly what you should. Nothing more and nothing less. u

Hannah Sullivan is the co-founder of Pogo Insurance, an online agency that specializes in workers’ compensation insurance for contractors. For additional information, visit pogo.co.

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HVACR BUSINESS SEPTEMBER 2019

TECHNOLOGY

YOUR FAVORITE THERMOSTAT IS OURS TOO! An energy-efficient ComfortBridge™ communicating system connects with any 24-volt thermostat.

Imagine having to inventory only one thermostat for your business. It’s possible today. Moving the communicating control board out of the thermostat and securely mounting it inside a gas furnace or air handler allows a ComfortBridge technology system to connect to a 24-volt thermostat. This off-the-wall thinking helps you to reduce your thermostat inventory and lets a homeowner keep their new smart controls, and more. ComfortBridge technology was designed and engineered exclusively for Goodman® and Amana® brand high-efficiency HVAC systems. For more information contact your local distributor or visit www.comfortbridge.com

The Cool Cloud™ app allows you to connect wirelessly to connect wirelessly to an HVAC system with ComfortBridge technology. Now you can connect, configure, and diagnose from your connected phone or tablet. For additional information visit www.coolcloudhvac.com or ask your local distributor.

Connect. Configure. Diagnose.

www.ComfortBridge.com ComfortBridge technology is engineered exclusively for high-efficiency Goodman and Amana brand heating and cooling systems. Our continuing commitment to quality products may mean a change in specifications without notice. © 2019 Goodman Manufacturing Company, L.P. Houston, Texas · USA www.comfortbridge.com

KNOW YOUR FINANCING OPTIONS Financing the acquisition of another company is actually quite easy, if you do your homework and know what’s available to you. BY BRANDON BOLEN

ccess to loans can be difficult for many businesses, particularly for service-based companies such as HVACR contractors. Luckily, there are accessible lending options available today. Most banks seek collateral to approve a loan request, therefore HVACR contractors are often left with limited or expensive lending options due to the lack of available assets to be used as collateral. For example, the opportunity to acquire another residential HVACR service company presents itself to an ambitious owner who turns to his local bank to inquire about a loan to purchase this company. The bank will typically ask 10 percent to 25 percent cash down to buy the business and for the deal to be secured by collateral. If the business is being sold for

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Knowing the financing options available as a business owner gives you the opportunity to plan appropriately for growth by picking and choosing the best available financing options for your business. $1,000,000, that is a significant amount of cash being used as the down payment, one which can eat into seasonal cash reserves. The company being acquired might only have six or seven vehicles in the way of hard assets with the rest of the value coming from the customer lists, brand equity and cash flow. In this example there are not enough hard assets to meet the collateral requirements. The bank’s approach in this example ultimately leads to an impasse and the only option available to buy the business is if

the seller is willing to hold a seller note. If the seller is unwilling to do so, then there is a good chance the acquisition doesn’t take place at all.

A BETTER WAY There is an option available, however, where the approval of the loan is focused on the profitability of the business, resume and character of the owner that makes this $1,000,000 acquisition approvable without needing to be fully secured by collateral. Knowing

the

financing

options

available as a business owner gives you the opportunity to plan appropriately for growth by picking and choosing the best available financing options for your business, whether that is a line of credit, a long-term bank loan or a commercial mortgage. The most advantageous lending option for HVACR service companies is a Small Business Administration government guaranteed loan using the 7(a) program or what is more commonly referred to as an SBA loan. Banks that know how to use the SBA program can offer owners the opportunity to leverage their personal experience, personal character, business profile and cash flow of their HVACR service company to obtain a bank loan to grow their company in a variety of ways. continued on page 12

HVACR BUSINESS SEPTEMBER 2019

continued from page 11

An SBA loan is a loan administered by the United States Small Business Administration that enables banks to lend to small businesses up to $5,000,000 through one or multiple loans until a business has reached their SBA limit. A contractor that applies for an SBA loan is not borrowing directly from the government. Instead, the SBA guarantees (insures) bank loans to small businesses that meet the SBA’s size criteria for that industry. This guarantee allows banks to lend to businesses where the emphasis of approval is on the resume and character of the owner, as well as the business’ ability to repay existing and proposed debt, as well as paying the owner a comfortable salary to maintain their personal lifestyle. The emphasis of approval is not on collateral. SBA loans can be used for a variety of reasons including;

When used at the right time, long term debt can be used to elevate your business to the next level or allow you to transition into retirement. • Finance an Ownership/Partner Buyout • Purchase an Existing HVAC Business • Purchase Business Real Estate • Finance Construction/Expansion of Business Real Estate • Working Capital • Equipment • Refinance Debt The goal of the program is to provide financing to small businesses throughout the United States to enable them to maintain and grow their companies to provide services to the communities they serve, as well as opportunities for increased and sustained employment.

NOT SO SMALL BUSINESS Although the term used is small business, many service contracting

businesses that use this program are worth millions of dollars. These are not “small businesses” and are quite valuable providing many employment opportunities for the local community. The revenue size criteria for a service contracting business is $15 million or less, but even if your company is doing more than that, there is an alternative size standard under which you can qualify for an SBA loan. The most apparent benefit of an SBA loan is the lower hurdles to bank approval by focusing on the cash flow coverage of the business versus collateral coverage. If you are an experienced owner with a profitable business looking to expand, an SBA loan can be the right option for your business.

MANY BENEFITS An SBA loan also offers several other benefits that are improvements upon what conventional bank loans may provide. The down payment requirements for business acquisitions and real estate purchases are much more attainable than conventional bank loans and allow businesses the opportunity to expand without a large amount of cash injected.

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HVACR BUSINESS SEPTEMBER 2019

The same can be said for first time buyers, like an employee or partner considering buying out the retiring owner of the company they work for. Terms are generous, up to 10 years on a loan for a business acquisition or working capital and up to 25 years for one involving real estate. Any loan with a term of 15 years or less has no prepayment penalty, which means you can pay down your loan as quickly as possible.

business and can allow you to grow your business operations while also paying back the SBA loan. There are no covenants that will restrict your business’ growth as long as the loan is paid back as agreed. A covenant is a condition in a loan that requires the borrower to fulfill certain conditions or doesn’t allow the borrower to undertake certain actions. An example of a loan covenant may be reducing the amount of dividends or distributions per year, but an SBA loan does not have any financial covenants. Many banks may offer SBA loans, but may not be adept at handling the paperwork or truly understanding the variables and parameters involved in SBA financing. When seeking an SBA loan, it is important to know if the bank understands the SBA program to leverage the opportunity of an SBA loan to its maximum for your business. When used at the right time, long term debt can be used to elevate your business to the next level or allow you to transition into retirement and understanding the options available to your business is an important part of managing your business strategy. Knowing the terms of a loan and the different variables that go into a bank’s decision will enable you to plan accordingly and make the right financing decision for your company when necessary. u

Brandon Bolen is vice president of the Service Contractor lending team at Live Oak Bank, where his team focuses on providing long term business financing to HVACR, plumbing and electrical service companies throughout the United States. In SBA fiscal year 2018, Live Oak Bank was the No. 1 SBA 7(a) lender by volume with over $1.4 Billion dollars originated. You can reach him at brandon. bolen@liveoak.bank or visit liveoakbank.com.

Balloon payments are not allowed with SBA loans, which means your loan is paid back over the course of 10 years and at the end of 10 years, it will be paid back in full. This means that your monthly payments are reasonable amounts that do not constrict the cash flow of your

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HVACR BUSINESS SEPTEMBER 2019

PROACTIVE VS. REACTIVE PROBLEM SOLVING Customers appreciate your quick ability to react to their problem, but what if you could solve them before they called? BY JOEL FREDERICK

n the air conditioning & heating business, the majority of our services are heavily tied to reactive problem solving. Whenever customers call us with a need, it is our job to react and solve. More often than not, customers are coming to us in a time of crisis. When they reach out to us they’re usually looking for us to fix an immediate problem they are dealing with — the heating is out, a thermostat is broken, the AC won’t start, etc. In our industry, we are nearly always reacting to client problems as they arise and quickly solving a need. The reactive method does please the customer and being able to efficiently solve reactive problems will earn your business a positive reputation. But what if you could solve problems before customers had to call you?

A proactive focus pleases the customers and can be very profitable. Or even, if you could anticipate issues before they even became aware of them. What if we could optimize our time in the field and, in turn, make our work more efficient? This proactive customer focus pleases the customers and can be very profitable. So, what are some proactive things we can do to help our customers? How can we reach out and anticipate needs instead of waiting for the phone to ring to help solve a reactive problem?

ONGOING COMMUNICATION Setting up recurring check points in the customer’s service experience is key. Identify key time frames that would be ideal for your customer to hear from

HVACR BUSINESS SEPTEMBER 2019

you again. Then set a plan to keep communication flowing. A few days after service: Following up with a phone call after a service appointment can go a long way. It’s an unexpected touch point to verify that the service met their expectations.

company is there for them and to keep your business top of mind. Annually: Often customers won’t need our services for a long period of time before they call us again. Consider sending an annual holiday card or springcleaning reminder. Just like your dentist sends check-up reminders, your business can send annual HVAC service reminders.

SOCIAL MEDIA PRESENCE

If something needs to be corrected, this is the chance to make it right and keep this customer. If everything went well, this extra touch can help you leave a lasting positive impression.

Use Facebook, Instagram and Twitter to create an on-going relationship with your customer. Posting daily content that is either useful or entertaining will keep potential customers and return customers engaged with your brand.

3-6 months after service: A few months out, send out a friendly check in. This can be a phone call, email or mail piece. The goal for this touch point is to simply remind the customer that your

Your customers will continue to build trust and reliance in your company’s expertise and you can use these social media channels to proactively recommend services.

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Also use social media to educate your customers. By posting insightful content, we help alert them to signs to look out, teach them how to evaluate their system’s health and provide useful tips that they can use in between regular maintenance check-ups. If you can educate the customer on base-level knowledge of how to care for their own units, we encourage better upkeep and possibly save ourselves some time in an emergency call down the road.

REWARD CUSTOMER LOYALTY Loyalty programs reward customers and offer incentive to continue service with your business. Offering special discounts and deals to reward and thank long time customers allow for new opportunities for new business. Proactively reach out with offers for services in between client appointments. Get ahead of the game by offering essential services, such as routine maintenance and other necessities, to encourage regular upkeep.

Proactive customer service doesn’t just aid in keeping customers you have pleased. By turning your customers into brand advocates, it becomes a marketing tool that drives new business. Not only does this create a positive relationship with the customer, as they are getting a discounted service, but also makes efficient use of your business’s time. Fixing smaller issues that are caught and fixed during a regular maintenance call are easier and less time consuming than larger issues that could have been solved more simply.

ANSWER COMMON QUESTIONS A great and easy way to please customers is by offering solutions to common questions in easy to find and easy to understand language on your website. Providing the convenience of questions

answered online relieves customers from having to email, call and search all over the internet to find the answer. With information available that easily solves their issue we create a very convenient solution for our customers.

now is a valuable method that can lead to positive growth for your company. u

As president of Quarter Moon Plumbing & AC, Joel Frederick leads a great team that has been committed to serving the San Antonio community and surrounding Texas areas for over thirty years. Joel actively supports his community and dedicates much of his free time to volunteerism and service work. For additional information about Quarter Moon Plumbing & AC, visit quartermoonplumbing.com.

Going the extra step to even host webinars or blog posts detailing instructions for common do-it-yourself fixes. Proactive customer service doesn’t just aid in keeping the customers you have pleased. By turning your customers into brand advocates, it becomes a marketing tool that drives new business. Investing a little extra time and resources in a proactive customer service approach

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HVACR BUSINESS SEPTEMBER 2019

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FINANCE

BY RUTH KING

Inventory is a Bet

rofitable contractors do two things extremely well: Manage labor and manage inventory.

Labor management looks at billable hours for field personnel and the productivity ratio discussed in last month’s column (Review Timely, Accurate Financial Statements Each Month, pg. 18). Inventory is a bet. Companies bet their hard earned dollars that when they purchase a part, equipment, or other materials that the company can sell what has been bought. Look in the company trucks and in the warehouse to see if good or bad bets were made.

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Track it and count it yearly. Spot check it monthly. Then, if the inventory doesn’t match, dig deeper. Inventory is a double-edged sword: residential companies must have stocked trucks to take care of customers’ needs immediately.

balance sheet until the count at the end of the year. This is NOT a good way to track inventory:

Commercially, customers are generally willing to wait to replace parts unless it is a critical part for a hospital, computer room or plant. In these cases, temporary heating or cooling is brought on site until the required part has arrived.

A smaller contractor used this method of tracking inventory. At the end of the year, when he counted it, the difference was $10,000. This $10,000 was additional material expense that affected his bottom line — the company earned $10,000 less than he thought.

First, the company has to track inventory. I’ve seen it the same value on the

Another larger contractor didn’t count inventory for two years. The warehouse

was “the wild, wild west” with field personnel taking what they thought they needed for jobs. When it was finally counted, the inventory value was $250,000 less than the value on the balance sheet. The company lost a quarter of a million dollars in value instantly. How could that be? Because $250,000 in two years was $125,000 per year; $2,403 a week, or $13.74 per day for the 35 crews and technicians who touched inventory every day. It’s easy to damage, lose or take an extra $13.74 per day to jobs and customer homes. continued on page 18

HVACR BUSINESS SEPTEMBER 2019

continued from page 17

Track it and count it yearly. Spot check it monthly. Then, if the inventory doesn’t match, dig deeper. How much is too much inventory?

First, look at the spread between current ratio and acid test lines. If the two lines are parallel, then the company is usually using inventory well. If the two lines are getting wider apart, then inventory is building up.

Second, if inventory days are increasing, this should be a warning sign that either a seasonal stocking order has been placed or excess inventory is being purchased. Here are seven procedures to put in place so that inventory becomes less of a bet:

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1. Lock up the warehouse! Eliminate warehouse supermarkets where field personnel can take whatever they want for a job or their truck. Lock up refrigerant and service parts separately. If materials are taken out of the stock room, what was taken is recorded (most simply) on a piece of paper and transferred to that technician’s truck stock. 2. Bar code. Barcoding software has become inexpensive. Barcoding easily tracks what material comes in and out of the warehouse and what material is used on jobs and service calls. 3. Use purchase orders for all materials. If the equipment/materials are ordered for a sold job or service, then these materials never hit inventory. They go directly to material expense. At the end of the month, make sure the inventory was received (packing slips should be attached to the purchase orders) and matched with the vendor invoices to ensure the company is paying the proper price for materials. 4. One person is responsible for all inventory. If multiple employees on equal levels have access to inventory, then responsibility for accurate inventory is impossible. 5. If a service technician goes to the parts house for a part, the purchase order for that part is made part of the service ticket. If the materials are used from his truck, these materials can automatically be transferred out of inventory to material expense through industry software. 6. A material sheet for jobs is required. Inventory can be pulled for each job and be ready for the crews to take it to the job. Or, for multiple day jobs, it can be delivered to the job site. 7. Materials not used on the jobs are returned to the warehouse with a return material sheet. Make sure your company places good inventory bets. u

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HVACR BUSINESS SEPTEMBER 2019

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 call 770-729-0258.

www.hvacrbusiness.com

LEADERSHIP

BY RON SMITH

Managing Change

here’s an old saying: “The only constant is change.” In today’s fast-paced world, the expression certainly seems to be true. Most everything changes and, often in a short period of time, changes again.

My definition of the word change is simply this: Moving from a present state of affairs to a future state of affairs.

Wouldn’t it be great if there were a proven method of managing change? Well, it may surprise you to know that there is a well-tested and proven method and I’m going to share it with you. Many years ago, when I would leave town and attend a conference of contractors, shortly after returning to my company I would often announce that we were going to make a change. Eventually, it got to when I went away some of my coworkers would say “The boss is out of town, I wonder what idea he will come back with this time?” Leaving town for conferences was not the only way I was prompted to introduce change. I also traveled throughout the country visiting other contractors and, being an ardent reader, I always read all of the HVACR trade magazines. Here are two questions for you:

THE FORMULA There is a well proven formula for managing change and when I’ve applied the formula, change always resulted with little trouble. If I forget to use the formula (which is infrequent) I always wish I had used it.

to perform service calls on a new flat rate system rather than how they are now doing it on an older time and material method, this is what I do:

1) Do most people quickly embrace or accept change or do they seem to inherently resist change? I don’t know the numbers of embrace/accept versus resist, but I’m convinced that more people resist rather than embrace/accept.

It means the Cost of Change equals Model times Process times Dissatisfaction.

Just above the right end of the line I write the phrase “FUTURE, Flat Rate.”

2) If asked to do so, how would you describe change? When I ask this same question to a room of people, many of them when describing change find themselves using the word change when attempting to describe it.

The COC side of the formula could mean many items, including lower coworker morale or even coworker turnover. If we manage the M x P x D side of the formula properly, we minimize or even eliminate many of the potential costs.

Below the horizontal line, on the left side, I write the word Dissatisfaction, below the horizontal line on the right end I write the word Model and below the horizontal line on the middle I write the word Process.

My definition of the word change is simply this: Moving from a present state of affairs to a future state of affairs.

Here’s an example of how the formula can be used. If I am in a large classroom of HVACR contractors, teaching them how

Next, and this is very important, I carefully describe the Model … what it will look like when our company is fully

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COC = M x P x D

First, I draw a horizontal line across a large whiteboard and just above the left end of the line I write the phrase “PRESENT, T & M.”

operating its service department on a flat rate system. I’ve determined that one of the major sources of coworker’s resistance to change is us not carefully describing what things will look like when the change is fully implemented. Without the explanation, to us it may be a change, to the coworkers it may be a mystery. Next, I carefully describe the Process … what needs to happen and who does what in order to move from T & M Service to Flat Rate Service. And, here is how you can gain coworker buy-in on it: Ask them for their advice and any ideas they may have in accomplishing the process. You may now be wondering this: “Ron, how about the Dissatisfaction portion of the Managing Change formula?” If I have done a good job of fully describing both the Model and the Process the Dissatisfaction takes care of itself. After getting a change fully in place and working I’ve actually had coworkers approach me and ask the question “Why didn’t we do this before?” This means that they have embraced the change. Good luck now on your future managing of change! u

Ron Smith entered the HVAC industry in 1961. He has been a contractor, franchiser, consolidator, consultant and author, and has founded or acquired and managed 17 companies. He is recognized by many as basically inventing the HVAC residential retail business. He still consults with contractors and distributors and has released three books, HVAC Spells Wealth, “More & New” HVAC Spells Wealth and HVAC Light Commercial Service Agreements, along with a nine-disc audio CD set of HVAC Spells Wealth. Contact him at 470-253-8502 or 615-974-9589, or visit ronsmithhvac.com.

HVACR BUSINESS SEPTEMBER 2019

STRATEGY

BY TERRY NICHOLSON

12 Things You Need to Know Before Signing a Lease

here are a lot of reasons why a contractor should personally buy a building and have the business they own pay them rent. A compelling case could also be made, however, that there are a lot of reasons that a contractor should never own a building. This isn’t a discussion of the merits of either option. This lesson is for you if you have decided to lease your building rather than buy a building. Here are 12 things you need to know before you sign on the dotted line.

LENGTH OF LEASE The first major decision you have to make is the length of lease you are willing to sign. Most lessors will either want a five or 10-year lease. To determine the appropriate length of lease, it’s important to refer to your strategic business plan to identify your future needs. It may sound silly when you’re in need of a location for your business today, but you have to take a look into the future to ensure your lease doesn’t limit your success. How much revenue will you be producing? How many people will you employ? Decide what you need today and tomorrow in a building.

UNDERSTAND LEASE TYPES If you know what kind of lease you want, it may help narrow down the search. Generally, there are 5 types of leases. Gross Lease: One fee covers all lease costs. Modified Gross Lease: You pay a lease fee but you will have other expenses that you are responsible for that are negotiated between you and the landlord. Single Net Lease: With this lease you will pay a lease fee to the owner, plus you are responsible for all property taxes. Double Net Lease: With this lease you

Regardless of what the realtor and landlord tell you, if that conflicts with something in the lease, what is written will almost always be the deciding factor should you end up in arbitration or in a suit. pay a lease fee, plus you are responsible for the taxes, utilities and insurance for the occupied space. Triple Net Lease: This is similar to the Double Net Lease in that you pay a lease fee plus the taxes, utilities, and insurance, but you are also responsible for the maintenance of the building.

WHAT’S INCLUDED? It’s important that you have a complete understanding prior to signing a lease to avoid a misunderstanding after the fact. Find out what your costs are outside of the rent, and who is paying for things like utilities, cleaning services, building maintenance, trash pickup, etc.

parking space for your staff ’s personal vehicles and your company vehicles. If it’s a shared parking lot, are there a number of assigned spaces?

BUILDING OWNERSHIP Make sure you learn everything you can about the building’s ownership. Who owns it? What is their reputation in the community, and their business reputation?

FORMER TENANTS Who were the last two tenants? Why did they leave? The research may be time consuming, but in the long run, you’ll be glad you did your due diligence.

SUBLET AND ASSIGNMENTS

If the landlord owns multiple properties in this area, or if your business will share the building, who is responsible for common area maintenance?

If the potential exists that you may sell your business prior to the lease expiration, ensure the lease allows you the ability to sublet or assign the lease.

You need to evaluate what these “extras” are going to cost you, and if your business can afford those additional expenses at this time.

GROWTH BUYOUT CLAUSE

DRIVE BY TRAFFIC

Should your Strategic Business plan call for aggressive growth over the next few years, it is wise to negotiate a growth buyout clause.

Does the building have advertising impact power via traffic. Consider the number of vehicles, pedestrians and bicycles that pass by the building daily.

This clause would allow you to terminate the lease prior to expiration, because you have outgrown the building, by paying the landlord a predetermined amount.

If the building has substantial traffic, it may be worth paying more per month than an isolated industrial building with a lower lease amount.

You don’t want to overpay for a lease, but you also don’t want to be trapped in a lease that stymies the growth of your company.

PARKING

If you are convinced the building is a place that you could see your business in for

It’s imperative that you have adequate

HVACR BUSINESS SEPTEMBER 2019

many years to come, it may be wise to ask for a right of first refusal from the owner should they ever place the building up for sale. This allows you to enjoy the benefits of leasing, but also provides you the opportunity to acquire the building in the future.

RENEWAL You would also be wise to negotiate an auto renewal clause with predetermined lease rates in the future. This protects you from huge lease price increases in the future.

PALE INK TRUMPS MEMORY Remember, you are signing a legal document. Regardless of what the realtor and landlord tell you, if that conflicts with something in the lease, what is written will almost always be the deciding factor should you end up in arbitration or in a suit. If a verbal commitment is made, get it in writing. Be a smart business owner and set your business up for success by thinking ahead, educating yourself, and making sure you understand every aspect of the lease prior to signing your name to the dotted line. That’s how you set your company up for success and how you become a moneymaking machine. u

Terry Nicholson is chief success officer and leading HVACR expert at PRAXIS S-10, the fastest growing success college for contractors. Visit praxiss10.com for additional information.

FIRST RIGHT OF REFUSAL

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PRODUCT FOCUS »

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Bacharach’s new MVR-SC controller is designed to seamlessly pair with MVR-300 refrigerant monitors to provide real-time status of refrigerant leaks throughout a facility.

Greenheck’s EM-30 backdraft damper series is now AMCA Licensed for Air Leakage and Air Performance. Designed to open by air pressure differential and close by gravity, backdraft dampers can be used as exhaust or intake dampers.

Ingersoll Rand has launched Oxbox, a new line of affordable, durable residential heating, ventilation and air conditioning (HVAC) equipment for single- and multifamily replacement and homebuilder markets in North America.

The EM-30 is a vertical-mount horizontal airflow backdraft damper for pressures up to 10 in. wg and velocities up to 3500 fpm. Greenheck EM-30 series backdraft dampers comply with the energy code requirements in ASHRAE Standard 90.1 and the International Energy Conservation Code (IECC).

Oxbox is a new brand endorsed by Trane that offers options for customers seeking affordable HVAC. The Oxbox portfolio includes air conditioning units, heat pumps, air handlers, coils, packaged units and furnaces that will be sold through new distribution.

REHAU announces the addition of 26 fittings to its EVERLOC+ compression-sleeve fitting system that is engineered for safe, long-term plumbing and hydronic piping connections in residential, multi-family and commercial projects.

The MVR-SC eliminates the need to integrate VRF leak detection into a BAS controller and the related custom programming expense. By implementing a hybrid Ethernet serial network the MVR-SC simplifies the Modbus integration, provides fast response for fault detection and troubleshooting and is quickly deployed in any size facility. >> mybacharach.com

>> oxboxhvac.com

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The innovative connection technology is designed for use with REHAU RAUPEX crosslinked polyethylene (PEXa) pipe in up to 2-inch diameter. Offered in polymer and lead-free brass, EVERLOC+ compression-sleeve fittings are designed with four sealing edges and textured PEXa sleeves that grip tightly over both the pipe and fitting. >> everlocplus.com

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The only tool on the market that lets contractors press black steel pipe between two-and-a-half and four inches, the new RIDGID Press Booster for use with Viega MegaPress XL Jaws and Rings, builds on the power of the RIDGID RP 340, attaching to the tool to multiply its output for fast connections on larger diameter pipe.

Spectroline’s GLO Seal fluorescent dye with sealant pinpoints the exact location of all leak areas and seals AC&R micro-leaks from the inside.

Verizon Connect delivers accessible workforce management solutions with the introduction of Verizon Connect Field Service Dispatch. Field Service Dispatch makes it easy for dispatchers to efficiently schedule and communicate job information to technicians and customers throughout the day, in near-real time.

The newly released YORK Sun Choice rooftop units from Johnson Controls deliver value from project start to finish. The 15-27.5 ton units exceed Department of Energy 2018 guidelines by up to 25 percent and already surpass future DOE 2023 part-load standards by almost 10 percent to reduced energy consumption and operating costs.

Verizon Connect Field Service Dispatch works with the Verizon Connect Reveal platform to combine vehicle location data and technician status to help operations managers make faster, more informed decisions and provide better service, all from a single application.

A lightweight design and direct replacement footprint offers ease of installation for both new product and retrofit applications to reduce up-front costs. The design includes independent circuits to help avoid full unit shutdowns and a lead-lag compensator for exceptional reliability.

MegaPress XL makes connections in less than 25 seconds, saving time and enhancing efficiency. Simply attach the booster to the end of the RP 340, press the trigger on the tool three times, and you have a secure press connection. Hard-to-reach angles are a breeze with an actuator that can rotate 180-degrees on the press ring. >> ridged.com www.hvacrbusiness.com

GLO Seal is concentrated and perfect for fighting corrosion problems, making it a robust find-and-fix solution for AC&R systems. Use GLO Seal for 24/7 leak detection and HVAC preventative maintenance. It’s able to pinpoint micro-leaks with exclusive, OEM-Grade dye formula. The concentrated dye ensures all leaks are found. >> spectroline.com

>> verizonconnect.com

>> york.com/sunchoice HVACR BUSINESS SEPTEMBER 2019

20QUESTIONS >>

with ERIC KNAAK

We sat down with Eric Knaak, vice president of operations for Isaac Heating & Air Conditioning in Rochester, N.Y. and current chairman of the Air Conditioning Contractors of America (ACCA). Eric discussed learning to be a leader, educating the industry and staying humble. 1. Can you tell us about your background? I spent four years in the Marine Corps, and when I got out I didn’t really know what I wanted to do. My father, actually, at the time, worked here at Isaac Heating & Air Conditioning. He was a supervisor for the commercial installation group, and he got me an interview with Jim Isaac. Had my father not worked here, I don’t know what I’d be doing. 2. What did you do when you were first hired? I worked in our new homes division installing HVAC systems, ductwork and gas lines in new homes. I actually worked directly with Ray Isaac when I first started. He, of course, is the company president now. 3. What was your progression in the company? I worked in the new homes division for about six months, and then I asked to go into commercial installation. I did that for a few years when they asked me to be a warehouse manager. After about a year, I asked to be a residential service technician. After about five years as a service technician, I was brought into a management cycle back in 1996. 4. What was that transition like? It was very trying in the beginning. My previous leadership experience had been as a squad leader in the Marine Corps. In the military, it’s pretty straightforward — you said to do something, people did it. There was no debate and no questions. That’s the way the Marines get the job done. But, obviously, in the civilian sector that did not work the same. 5. How long did that adjustment take? It took me a good couple of years to make that adjustment to the point where I was becoming more effective as a leader. Early on, I was a manager-director … directing people. I’ve learned over the years that leading people is a lot different than directing people. And it’s hopefully evolved enough to the point where I’m much more effective than I was 25 years ago. 6. What kind of resources helped you develop? There was definitely trial and error. I think you learn best when you’ve had the opportunity to make the mistakes and learn from them. We like people to learn by trial and error, but as managers we’re there to guide them. Ray is a student of leadership, and he was developing his skills at the same time that I was, but he would help guide me. 7. Did the company invest in your leadership? Yes. They saw enough in me to send me to some leadership coaching, some professional development courses and things like that early on in my career. I’m very appreciative of, and I still continue today. I’m in Vistage, which is an executive leadership organization. The company continues to invest in my leadership and development.

HVACR BUSINESS SEPTEMBER 2019

8. What is Isaac’s philosophy on education? We are big believers in training development on the technical side, as well as the professional and personal development side. We’ve had a formalized program going back to around 1998 called Isaac University. We have two full time instructors, we have a classroom and we have a 2,000 square foot lab space. We’ve got 119 employees that are signed up and set up to begin their training classes in the fall. 9. Has that helped with recruitment? It definitely has helped us. We still have openings, but we are bringing people up, training and developing them. We’ve got 85 people right now that wouldn’t be here if we didn’t have the boot camp program. So it’s been extremely successful. 10. Is it difficult to invest in training and then see someone leave? We’ve got so many young people now that are looking to try different things that they come and they go. We end up training some technicians that are pretty darn good. And because of that, some are getting lured away financially. It’s just part of the battle. 11. You’re still willing to make that investment? Here’s what it comes down to: We’re better off training people and maybe losing some than if we kept them and didn’t train them. It also provides an emphasis on the part of our leadership team to make sure that we’re evolving and creating a culture to retain people. 12. How important is company culture? Our people and our culture, really to us, are primary over the work that we do. It’s just heating and air conditioning. That’s what we’re doing. It’s nothing major. We want to create an environment where people want to be here because they feel compelled to be here. They want to be part of something that gives them opportunities that they might not have realized. We’re big proponents of being involved in the community.

13. What’s your management style now? It’s evolved. I like to be hands off and allow our managers and leaders to make decisions and to make the mistakes the same way that I did. I’ve learned that, as a leader, once we give you thoughts or opinions, it seems like a lot of people will start to shut down because you’ve already said what it should be. 14. What’s the most rewarding part of your job? Helping others to achieve more than they would have ever done on their own. To see someone who came here with no experience take on a role where they are enjoying what they do, they’re financially where they want to be, walking in with a smile … that’s really what it comes down to. 15. What’s the best advice you’ve ever received? It’s not advice, but it is something that I’ve made part of my life. There is a Tim McGraw song, “Humble and Kind,” and some of the lyrics in that song go like this: “Don’t take for granted the love this life gives you; When you get where you’re goin’; Don’t forget turn back around; Help the next one in line.” I believe in giving back, I believe that everyone deserves an opportunity. 16. What’s new with ACCA this year? One of the things the board of directors and the executive committee wanted to do was put together a formalized strategic plan. Having that plan has been one of the best moves we’ve made, because now we have a lot of direction and guidance. 17. What’s the most important part of the plan? Membership. And it’s not just about having more members, but the increased, engaged membership allows us to have a stronger voice as an industry. It’s important that the voice of the contractor be heard. 18. What’s the biggest benefit to joining ACCA? We want to make sure that we are the source for our industry, for the contractors, to be able to get the answers to those questions that they have, because there are so many challenges today. 19. How does a contractor get the most out of membership? One would be to go to the website, because there is a tremendous amount of information on there. Everything from white papers, to training information and more. Secondly would be to attend either our annual conference in the spring, or our fall meetings, which this year is going to be in Dayton, Ohio. Finally, get involved in a MIX Group. MIX Groups are one of the biggest game changers that ACCA has to offer. 20. What are your personal goals as chairman? I want to be sure the items in the strategic plan are fully implemented. So having the plan, but not having it fully implemented, it doesn’t do us any good. www.hvacrbusiness.com

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