VCD-Series
Features
• Accepts traditional 24VAC thermostats for convenience and advanced control options
• Wired programmable control included
• Optional electric resistance heat kits
• Multi-position air handler
Up to 17.4 SEER2
Six models to choose from 18,000 to 60,000 BTUH
FEATURES
6 Improve Your Community-Giving and Experience the Benefits
Giving back not only has a social impact but it can be good for business.
By Mark Swepston8 Cultivating a Thriving Customer Base: Strategies for Sustainable Growth
Edward McFarlane offers comprehensive advice and action steps to grow and sustain your customer base.
By Edward McFarlane11 Survey Says - Homeowners Aren’t Prepared for Costly HVAC Emergencies
A Homeowners’ Survey on HVAC Maintenance Plans reveals valuable sales information.
ByWilliams Comfort Air, Additional Editing by Heather Langone
15 Use “Locally Owned and Operated” to Your Advantage!
“Locally owned” can be a big advantage when marketing in the home service industry.
By Will Merritt17 Team Building Tips to Prepare for the Busy Season Part 2 of the Series
More team-building tips to help your company be prepared for the busy season.
By Justin CarrolCOLUMNS
19 The Urgency of Planning & Realistic Timelines
Prather shares more on the urgency of planning and how to create realistic timelines.
By Keven Prather20 Negative Accounts Receivable or Negative Loan Payments?
Learn the proper accounting for journaling negative accounts receivable on your balance sheets.
By Ruth KingDEPARTMENTS
5 Editor’s Notebook | Rebranding
Why is everyone talking about rebranding? Plus, how do you know if it’s time to rebrand?
Heather Langone4 MRS | Motivation
This month we delivered a brand-new list of top podcasts and book picks on motivation!
21 Product Focus
22 20 Questions with Aaron Gaynor Owner of Eco Plumbers, Electricians and HVAC Technicians
Motivation Management Resource Shelf
This month we outdid ourselves by bringing you some classic books on motivation including a must-read (or reread) by Malcolm Gladwell, a NY Times Best Seller written by a Navy SEAL, top podcasts on time management and the science of success, and we even discovered a motivational podcast specifically for you, the HVAC owner! Enjoy September’s picks for the top podcasts and books on motivation.
The Wisdom of the Bullfrog: Leadership Made Simple (But Not Easy)
Admiral William H. McRaven
THE INSTANT #1 New York Times BESTSELLER
From the acclaimed, bestselling author of Make Your Bed—a short, inspirational book of advice and leadership lessons that Admiral McRaven collected over his four decades as a Navy SEAL. The title “Bullfrog” is given to the Navy SEAL who has served the longest on active duty. Admiral McRaven was honored to receive this honor in 2011 when he took charge of the United States Special Operations Command. When McRaven retired in 2014, he had 37 years as a Navy SEAL under his belt, leading men and women at every level of the special operations community. In the ensuing four years, he served as Chancellor to the entire University of Texas System, with its 230,000 students and 100,000 faculty and health care workers.
https://www.amazon.com/dp/1538707942
Outliers: The Story of Success
Malcolm Gladwell
In this best-selling book, Malcolm Gladwell takes you on an intellectual journey through the world of “outliers” — the best and the brightest, the most famous and the most successful. He asks the question: what makes high-achievers different? Along the way he explains the secrets of software billionaires, what it takes to be a great soccer player and more!
https://www.amazon.com/gp/ product/0316017930
The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers
Ben Horowitz
Ben Horowitz, cofounder of Andreessen Horowitz and one of Silicon Valley’s most respected and experienced entrepreneurs, offers essential advice on building and running a startup — practical wisdom for managing the toughest problems business school doesn’t cover, based on his popular Ben’s blog. While many people talk about how great it is to start a business, very few are honest about how difficult it is to run one. Ben Horowitz analyzes the problems that confront leaders every day, sharing the insights he’s gained developing, managing, selling, buying, investing in, and supervising technology companies.
https://www.amazon.com/gp/product/0062273205
The Science of Success Podcast
Hosted by J. Matthew Bodnar
Humanity has tremendous untapped potential, but we are so often blinded by ignorance, bias, and even the biological limits of our own minds. This podcast strives every day to help you grow and improve by sharing the knowledge and wisdom you need for your journey. The Science of Success is about the search for evidencebased personal growth. It’s about exploring ways to improve your decision-making, understanding your mind and how psychology rules the world around you, and learning from experts and thought leaders about ways we can become better versions of ourselves. The podcast has listeners in over 100 countries, has hit #1 New & Noteworthy on iTunes, and has more than 3 million downloads.
https://www.successpodcast.com/podcast
Beyond the To-Do List
Hosted by Erik Fisher
For more than a decade, Erik Fisher has sat down with productivity experts, authors, and creatives as they share their insights on how to implement productivity strategies in both your professional and personal life. Our goal is to help you gain perspective, practical knowledge, and productivity insights for living a whole life that goes Beyond The To-Do List
https://www.beyondthetodolist.com/about/
Waste No Day
Hosted by Brian Burton & Nate Minnich
A podcast devoted to challenging, encouraging, advising, and highlighting the men and women of the home services industry. Whether you are a plumber, electrician, or HVAC technician, you all share the common tension of being both the hero and the villain in the eyes of the customer. Hosts Brian and Nate discuss and interview guests to show how to not only be the hero but to be rewarded with more than a cape.
https://podcasts.apple.com/ my/podcast/waste-no-daya-plumbing-hvac-and/ id1543265737?l=ms
THE HVACR MANAGEMENT MAGAZINE
TERRY Tanker
Publisher ttanker@hvacrbusiness.comHEATHER Langone
Managing Editor hlangone@hvacrbusiness.comMEGAN LaSalla
Art Director mlasalla@hvacrbusiness.com BY HEATHER LANGONEEDITOR’S NOTEBOOK
ADVERTISING STAFF
TERRY Tanker
Publisher Tel 440-731-8600 ttanker@hvacrbusiness.com
Is It Time to Rebrand?
BRUCE Sprague Circulation
Managerbs200264@sbcglobal.net
BARBARA Kerr VP
Operationsbkerr@hvacrbusiness.com
Every competitive brand will have, as part of its success, a strong brand identity. Often the brand story is accidental –built through the audience over time – but it can also be established at the outset.
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©2023 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: 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,
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If an entrepreneur starts a company with a strong brand identity, especially one that has worked well, there may be resistance to change. It can feel like abandoning the loyal patronage that built the company from the ground up. Or there can be fear around change. Will it work to go in a slightly different direction or to completely rebrand altogether? But like any relationship, if there is no room for growth, it can’t be sustained.
Great Brands Change With Time
If you are in business long enough, rebranding on some level is inevitable. As a company evolves, it is essential to review its branding periodically. Ask questions like: Is the branding still fresh? How well is our marketing delivering? Do we need to invest in fleet design or a brand-new design for our old fleet wraps?
Our 20Q column this month on page 22, with Aaron Gaynor, is a must-read on the topic. Not only did he start over twice, but he grew a business from nothing to a multi-milliondollar entity and always looked at branding – from color schemes to messaging to customer base – meticulously.
Once you can answer the relevant questions, decide, and stick to a plan. It may take several years to get the brand working the way you want. But I think the end of the year is the best time to take personal and business inventory. Notably, the decision to overhaul a brand shouldn’t be based on the length of time you have had the same message. It should be based on audience connection.
Great brands change with time. Well-known brands like McDonald’s, Microsoft, Netflix, and Apple have all changed their brands (and logos) over the years to better connect with their customer. If you do decide it is time to rebrand, make sure the priority is customer-focused and connected. Show your team how the change will be better for them too. It’s not an easy process and needs to be well thought out.
Approach Rebranding as Diligently as a Business Plan
Rebranding can be the exact boost a company needs to find new life. Make sure you’ve based your branding on research, strategy, and great execution. Without these key elements, customers find your new messaging confusing or a complete departure from what worked about the brand in the first place.
Remember rebranding should add life to an already successful brand. Surveys are a good way to start if you aren’t certain whether it’s time. When we launched the new HVACR Business website, we asked our readers what worked, what didn’t, what they liked, and what they wanted us to add. We evaluated our site against dozens of others, some of which were successful consumer brand sites with millions of visitors. We wanted to understand how they built that traffic. Readers have come to rely on a certain voice, tone, and content delivery. So, when we launched the new site, we still stayed true to the brand. And if you’ve visited the site, you know we significantly improved the navigation and organization of the site. The important message is often you don’t have to start from zero, but you do have to continually improve and evolve to meet customer needs and expectations.
Here are signs to look out for when considering a rebranding:
• Expansion. Expanding into a larger market may require you to strengthen your service offering.
• Updated Digital Marketing. If your online presence is weak and does not deliver traffic or leads, it needs updating.
• Dated. The look of your branding, colors, design, or marketing is dated.
• Distinct. Customers should be able to distinguish your brand from the competitor. If you’re getting lost in the mix, trying too hard to be “the other guy”.
• Consistent Messaging. If you recently launched a new fleet wrap design and did not update the site, or you took over a legacy company but left the old 2010 web design, it’s time to redesign with an updated brand. Your messaging –uniforms, trucks, website, and story, should be consistent throughout. u
Remember rebranding should add life to an already successful brand.
IMPROVE YOUR COMMUNITY-GIVING AND EXPERIENCE THE BENEFITS
BY MARK SWEPSTONAs business owners, it’s no secret that profits and revenue play a significant role in our long-term decisionmaking. However, at Atlas Butler, we have adopted a consistent approach to our community impact decisions. This stems from the realization that our philanthropic endeavors within the community directly impact our business’s success. Furthermore, we hold a strong belief that small businesses all over the country have the potential to attain comparable results by embracing similar practices.
A Dedicated Giving Program is Good Business
Like anything in life, you can’t give with the expectation of receiving something in return. Still, with a dedicated and thorough community-giving strategy, you can help attract new customers while retaining old ones simply by showing that you share similar ideals.
This is a practice that we’ve lived by at Atlas Butler for over 100 years since our founding and one that has continued to grow as we’ve expanded, but the principles and components have remained the same. Adhering to the following tips has helped our company
Volunteer projects come in various forms, ranging from significant endeavors like sponsoring and constructing a community park to smaller initiatives like organizing a canned food drive in collaboration with a local store to support a food shelter.
grow its philanthropic impact in Central Ohio as well as our customer base; I hope following some of the steps we have taken, might yield the same results for you.
1. Volunteer Company Time –Increase Your Presence in the Community
Donating your company’s time or volunteering for a project can go a long way and is a great starting point for philanthropy. Although philanthropic news often focuses on capital donations, it’s essential to recognize that volunteer hours and projects at a company level can also create a substantial and enduring impact on the community. By combining financial contributions with active involvement, companies can maximize their positive influence and bring meaningful change to
the communities they serve.
Volunteer projects come in various forms, ranging from significant endeavors like sponsoring and constructing a community park to smaller initiatives like organizing a canned food drive in collaboration with a local store to support a food shelter. Our experience with volunteer projects has taught us the importance of seeking input from the entire company to enhance participation and engagement in these endeavors.
During my earlier years, I devoted 10-20 hours per week to volunteering in the community, participating in fundraising, serving on boards, and coaching youth sports. The potential for volunteer opportunities is limitless, but ensuring that these projects align with your company’s mission and values is crucial.
2. Develop a Company Philanthropic Strategy
Develop a philanthropic strategy that aligns with your company values and goals to ensure buy-in and continued investment company-wide. Developing your company’s philanthropic strategy is crucial to guaranteeing that your hard-earned resources, both financial contributions and time, are directed where you desire and make a genuine and meaningful difference in your community.
The easiest way to do this is by crowdsourcing what type of organization causes pique your employees’ interest. This step fosters engagement and active involvement and ensures their commitment to the company’s community-giving efforts. Once you’ve gathered the information on preferred causes and organizations, you can crossreference them with those that align with your company’s mission statement and address community needs. Effectively communicating the final decision and strategy to the entire company and providing its rationale is vital to ensuring everyone is on the same page.
While developing your philanthropic
strategy early is essential, it’s also important to remember that it isn’t written in stone. Your giving strategy can and should be regularly reviewed and updated as needed.
3. Conduct Internal Surveys on the Giving Strategy
Surveying your employees semiannually is a good way to gauge the current giving strategy and if it still aligns. During my time at Atlas Butler and multiple times under my leadership, we’ve altered or revised our community-giving strategy to better align with our community’s needs. Conducting semi-annual surveys among employees to collect their feedback and assess their ongoing interest in the causes and organizations we support is the most effective approach. Armed with this valuable information, we can make necessary adjustments and decisions. However, one fundamental aspect of this process is consistently communicating these decisions with our team, as clear and open communication is vital to the success of any company-wide strategy.
4. Align with Like-Minded Organizations
Don’t be afraid to say no if the organization or cause doesn’t align with your determined strategy. I understand that saying no to a nonprofit organization or fundraiser requesting money can be challenging. We faced the same difficulty until we established a well-defined philanthropic strategy. However, it is crucial to prioritize funds and volunteer time for causes and organizations that align with the collective agreement between you and your company. This approach ensures that your employees take your community giving strategy and program seriously. Even if you decide not to provide direct support or donations to a particular organization, you can still assist them by connecting them with other businesses or individuals you know who share similar causes and are willing to offer support. By fostering connections and networking, you can create a more interconnected and supportive philanthropic community.
Since becoming more selective over our philanthropic giving, we’ve noticed several significant impacts that have helped validate our strategy. The most valuable lesson we’ve learned is that our impact on our chosen philanthropic causes has
experienced remarkable growth in both financial contributions and volunteer hours. Notably, our employees have shown a heightened interest in participating in our community giving program!
5. Employees’ Causes Matter –They Are Your Backbone
Don’t forget about your employees and their loved ones – they are the company’s backbone. Involving your employees has been highlighted in every tip above because the team effort is truly the foundation of a thriving communitygiving strategy and program. Your employees are your company’s bedrock, and ensuring they’re taken care of beyond their salaries and benefits is vital. At Atlas Butler, we encourage our employees to submit proposals for contributions to charities or causes they’re passionate about. In doing so, you can support organizations that have direct ties and personal meaning to your employees that can enhance their sense of belonging in your company.
For example, we support the Cancer Support Community of Central Ohio and the National Multiple Sclerosis Society* due to the personal experiences of our employees and their families with these organizations and the diseases they support. Anytime you can go above and beyond supporting your employees and their families while contributing to a worthy cause, it should always be considered a win-win!
Throughout the years of witnessing the profound influence of small businesses on their communities and being raised with the value of active community involvement as a lifelong commitment, the Junior Chamber of Commerce’s motto, “Service to Humanity is the best work of life,” holds truer than ever. It is a sentiment that resonates deeply and that most people can wholeheartedly appreciate and embrace.
As a collective organization, you have the power to make lasting impacts in your community and by doing so enhance your presence there. As successful business owners, we are responsible for leaving a positive legacy and using our resources to improve the places we serve. As you embark on or continue to adopt your
company’s community-giving strategy, remember to support causes that align with your company’s mission, values, and beliefs. This ensures you make a meaningful difference in organizations and causes that matter to your employees. Moreover, such alignment connects you
with potential clients with similar values and fosters lasting relationships. u
After graduating from Ohio State University with a degree in finance, Mark Swepston began working for Atlas Butler, where he has spent the past 45 years. He currently serves as the CEO. His son Michael, the fourthgeneration owner of Atlas Butler, now handles the day-to-day operations as President.
*https://www.cancersupportohio.org/ https://www.nationalmssociety.org/
Conducting semi-annual surveys among employees to collect their feedback and assess their ongoing interest in the causes and organizations we support is the most effective approach.
CULTIVATING A THRIVING CUSTOMER BASE: STRATEGIES FOR SUSTAINABLE GROWTH
BY EDWARD M c FARLANEIn the burgeoning world of businesses, attracting and retaining a solid customer base can feel like navigating a labyrinth. It’s particularly challenging for air conditioning contractors, where competition is high, and customer loyalty often hinges on service quality, timely responsiveness, and transparent pricing. Whether you’re a small contractor starting your venture or an established industry giant seeking to expand your customer base, there’s a pressing need for effective strategies to enhance your customer acquisition and retention endeavors.
Meeting the Challenges Head-On
What are the primary mechanisms for attracting a new customer base and retaining the existing one? How can small firms compete with industry giants? Can older, established companies learn from the agile methods of new entrants? These are the
Whether you’re a small contractor starting your venture or an established industry giant seeking to expand your customer base, there’s a pressing need for effective strategies to enhance your customer acquisition and retention endeavors.
questions that every business, regardless of its size or age, grapples with. Here are steps you can take immediately to enhance your customer acquisition and retention efforts.
1. Cultivating Relationships: The Power of Networking
In an industry as competitive as air conditioning services, networking plays a pivotal role in growing your customer base. Participating in platforms like the ACCA (www.acca.org/join) enables businesses to exchange experiences, share best practices, and even generate referrals. No matter the size of your company, a well-nurtured professional network can result in improved business visibility and credibility. Moreover, established businesses can leverage their experience to mentor newer entrants, fostering goodwill within the industry.
continued on page 10
An easy-to-use portal is exclusive to Advantage members and provides access to the digital solutions you need to optimize your business performance and expand your team’s heating knowledge online — anytime, anywhere. You get VIP tech support, e-learning and a variety of digital tools. Plus, you receive the business recognition and visibility you need to stand out among your competitors as one of the best!
WE MADE THE SMART CHOICE THE EASY CHOICE
2. Emphasizing Customer Experience
While chasing new customers, businesses often overlook the immense potential lying within their existing customer base. Ensuring high service quality, quick response times, and creating a seamless customer journey results in higher customer satisfaction. Happy customers remain loyal and become advocates for your brand, bringing in new clients. Larger companies can achieve this through dedicated customer service teams, while smaller businesses can focus on personalizing their services and creating a memorable customer experience. Consistency and predictability are also key. Customers should know your brand and expect the level of service each time they engage with your team. The more consistency and predictability you can deliver, the more loyalty you will engender.
3. Investing in Digital Presence
As the world increasingly moves online, your digital presence can significantly influence your customer base growth. For smaller firms with limited resources, online platforms present a cost-effective avenue for reaching a larger audience. A well-managed digital presence for larger, established companies can reinforce brand image and drive customer engagement. This includes having an easy-to-navigate website, being active on social media, and maintaining a regular blog to share industry insights and company updates. If you are not confident in your site or you do not have top-quality content, it’s worth investing in a web and writing team.
4. Harnessing the Power of Data
Data-driven insights can offer a competitive edge in understanding market trends, customer behavior, and the performance of your services. While established companies may have dedicated analytics teams for this purpose, smaller businesses can start with basic customer feedback collection.
Surveys, emails, and reviews are good places to start. Utilizing data helps businesses adapt to market needs, tweak their services, and more effectively cater to their customer base.
Action Steps for Growing Your Customer Base
• Join Industry Associations: Network and learn from peers at platforms to expand your business visibility and acquire new customers.
• Prioritize Customer Experience: Enhance your service quality and response time. Remember, your existing customers are also your brand ambassadors.
• Boost Your Digital Presence: Harness the power of the internet to reach a larger audience. Keep your website up-to-date, maintain active social media accounts, and share insights through a regular blog.
• Leverage Data: Collect customer feedback, monitor market trends, and use these insights to adapt your services and strategies. Growing your customer base is an ongoing process requiring consistent efforts and adaptations. By leveraging industry networks, prioritizing customer satisfaction, maintaining a robust digital presence, and harnessing the power of data, businesses – regardless of their size, age, or resources – can cultivate a thriving and loyal customer base. u
Born in Scotland and now a U.S.-based executive, Edward McFarlane has a diverse career in the private sector, focusing on training, sales, marketing, and business development. Starting as a Service Technician, he gained industry passion and expanded into sales, management, and speaking at national events. Co-founder of a tech company, he’s also a VP of Learning Development and Engagement at Sila Services with strong skills in negotiation, business planning, and coaching. www.silaservices.com
Participating in platforms like the ACCA enables businesses to exchange experiences, share best practices, and even generate referrals. No matter the size of your company, a well-nurtured professional network can result in improved business visibility and credibility.The Bluetooth® word mark and logos are registered trademarks owned by Bluetooth SIG, Inc. and any use of such marks by Ruud® is under license. Other trademarks and trade names are those of their respective owners.
SURVEY SAYS - HOMEOWNERS AREN’T PREPARED FOR COSTLY HVAC EMERGENCIES
BY WILLIAMS COMFORT AIR, ADDITIONAL EDITING BY HEATHER LANGONEOver the years, we have run many features geared toward HVACR owners on the importance of selling maintenance plans to stay competitive. But we have never run a feature that turns the tables and examines the homeowners’ point of view – until now. The following relevant and current research was conducted by Williams Comfort Air and Mr. Plumber based in Indianapolis, IN. Given that the survey results reveal that most customers are not budgeting for expensive replacements and repairs, this information should be worked into sales pitches and cited by all your customer service representatives, salespeople, and technicians to make a case for why it’s essential to plan. Utilize this information to relay more confidently the importance of consistent preventative maintenance both for the upkeep of HVACR systems point of view, but also to show evidence of potential long-term savings.
Williams Comfort Air and Mr. Plumber by Metzler & Hallam have been
Research shows homeowners spent an average of $1,953 on emergency projects per household2 in 2022. Based on Williams Comfort Air and Mr. Plumber’s survey findings, 57% of homeowners in Indiana would have trouble covering that cost.
serving the Indianapolis area for seven decades: Williams Comfort Air since 1966 and Mr. Plumber since 1946. Since its inception, the homegrown company has expanded into a large organization with 150+ team members now serving the entire Indianapolis area as well as many Central Indiana towns.
From Survey to Pitch: What You Need to Know
Homeowners can get the most out of their HVACR and plumbing systems and equipment by choosing the right equipment and more importantly, performing preventative maintenance on it over time. Consistent maintenance extends the life of these systems, saving
people time and money. Williams Comfort Air and Mr. Plumber set out on a mission to find out if Hoosier homeowners are proactively having maintenance performed, and if they would be prepared to cover the cost of emergency HVACR and plumbing repairs if needed. So, in May, they launched the 2023 Hoosier Home Maintenance Survey.
After surveying more than 550 anonymous Indiana homeowners, the results were “concerning” according to the organization. Results showed that by and large, people are not prepared to cover the often-costly emergency HVACR and plumbing repairs. Additionally,
people are largely not proactively having routine maintenance performed on their core comfort systems (air conditioning, furnace, heat pump, and water heater). This is important information for HVACR owners to know.
Key findings from the study of Indiana homeowners found:
• 69% of homeowners do not currently have an ongoing preventive HVACR and/or plumbing maintenance plan.
• 40% have scheduled at least one maintenance visit for their HVACR and/or plumbing system in the last year.
• 30% have never had an HVACR and/ or plumbing maintenance visit.
• 65% have less than $1,000 set aside for emergency home repairs.
• 57% describe paying for an unexpected bill over $1,000 as “very difficult” or “somewhat difficult”.
continued on page 12
continued from page 11
Emergency Repair Costs: What to Expect
Annual maintenance and tune-up services performed by professionally certified and licensed HVACR service contractors and plumbers extend the lifespan of HVAC systems and plumbing equipment and can help prevent unforeseen repairs. Results from the Hoosier study found nearly 7 out of 10 Indiana homeowners (69.6%) do not invest in an HVACR and/or plumbing equipment maintenance plan.
Maintenance is best performed annually for each of your home comfort systems (air conditioning, furnace, heat pump, and water heater). Many HVACR and plumbing company maintenance plans include annual system inspections – but only 40% of Indiana homeowners say they have scheduled at least one maintenance visit for their HVACR and/or plumbing system in the last year. Even worse, 30 % admit they have never scheduled a maintenance visit for their home.
And said, Hallam:
Financial experts – see any of Ruth King’s columns on maintenance1 – often recommend saving and setting aside one percent of a home’s value for emergency home repairs, with more savings recommended for those owning older homes. For example, if your home is $226,350 (the average Indiana home price as of June 2023, according to Zillow)2, you should have $2,263 set aside for emergency repairs.
Research shows homeowners spent an average of $1,953 on emergency projects per household3 in 2022. Based on Williams Comfort Air and Mr. Plumber’s survey findings, 57% of homeowners in Indiana would have trouble covering that cost. With their annual HVACR and plumbing maintenance plans starting at an average of $8.95 per month, it is usually more affordable in the long run to spend a little on ongoing maintenance, rather than spending a lot on a whole new system.
What Could Go Wrong?
Most homeowners understand that eventually heating and cooling systems will break down after years of use and eventually require replacement. However, not everyone realizes that there are a whole host of other problems that can arise as well with HVACR and plumbing systems. According to Paul Hallam, Director of Plumbing for Mr. Plumber, it can get bad if not attended to. Said Hallam:
Some of the worst damage I have seen was caused by the sump pump, or sump pump switch failure. Not protecting your basement from flooding is just like gambling in a high-stakes poker game. Eventually, the house will win! Frozen pipes bursting can also be very expensive and is often avoidable with preventative maintenance and proactivity.
A clogged air conditioning condensation drain line, an overworked air handler blower motor, or a cracked furnace heat exchanger are all examples of HVACR issues that can be caught early through proper maintenance. Added Roger Elkins, Director of HVAC Services for Williams Comfort Air:
A cracked heat exchanger can be very costly, and it can also cause carbon monoxide to leak into the home. Not replacing the air filter or cleaning dust buildup inside the furnace can restrict air flow, making the heat exchanger run hotter. The excess heat can cause the heat exchanger to crack, which unfortunately means replacing the entire furnace.
The Benefits of Preventative Maintenance
Maintaining your plumbing system is no different than maintaining your car. You would not drive your car for years without changing the oil or rotating the tires. Most homeowners know very little about their plumbing systems until they don’t have hot water, a stopped drain, or a leak. Having an annual maintenance evaluation on your system is critical to preventing these and more potential problems.
How Much Does Preventative Home Maintenance Cost?
Williams Comfort Air and Mr. Plumber call their HVAC and plumbing home maintenance program the True Comfort Membership. While regional pricing will vary, the example below is relevant to understand the monies spent vs. the money for emergency repair.
During maintenance visits, certified plumbers thoroughly evaluate a home’s plumbing system. This includes:
• Inspecting drains
• Flushing out the water heater
• Checking water pressure and water quality
• Testing emergency shut-off valves
• Examining crawlspaces and basements for potential problems
During maintenance visits, certified HVAC professionals thoroughly evaluate a home’s heating and cooling systems. This includes:
• Inspecting indoor coils and cleaning outdoor coils
• Checking refrigerant levels (if applicable)
• Inspecting the heat exchanger
• Testing all electrical components of systems
The benefits of a membership plan go beyond annual preventative maintenance visits. As you will see above, your memberships can also include discounts on other HVACR and plumbing services, 24/7 emergency services without the typical overtime charge, prioritized service placement, discounts to events in the area (like local sporting events or concerts) and more.
The Survey Methodology
The 2023 Hoosier Home Maintenance Survey was conducted by SurveyMonkey on behalf of Williams Comfort Air and Mr. Plumber. Fielded between May 11-12, 2023, the results are based on 556 respondents. Selected respondents were screened and qualified based on the following criteria. All those surveyed were required to be residents of Indiana, 18 to 99 years of age, and current homeowners. The research was conducted with a +/- 4.25% margin of error.
SURVEY QUESTION 1
How much money do you have set aside in your budget for emergency home repairs?
SURVEY QUESTION 2
How difficult, if at all, would it be to pay an unexpected home repair bill costing over $1,000?
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SURVEY QUESTION 3
Is your home currently covered by an HVAC and/or plumbing maintenance plan?
SURVEY QUESTION 5
What has kept you from scheduling preventive maintenance on your HVAC and/or plumbing systems? Choose all that apply:
SURVEY QUESTION 4
When it comes to preventive maintenance, such as a furnace tune-up, air conditioner tune-up, or water heater flush, choose what best describes you and your current home:
The President of Williams Comfort Air and Mr. Plumber, Greg Wells, summed up the results and concluded:
According to our research, most people do not invest in preventative maintenance, until they have major problems. It seems counterintuitive to spend money on HVAC and plumbing systems when nothing is broken. We want to help educate the communities we serve that proper maintenance can extend the life of systems—often by years.
We agree – but more importantly, the facts support the research. As Wells and so many others have warned, the truth is that in the home service industry not acting proactively with regular preventative maintenance will cost your homeowners more in the long run. And as evident in questions 1 & 2, homeowners aren’t always educated on the value and savings of paying upfront membership costs versus heavy-duty costs for repairs later. Now, armed with the results of the survey and data you can speak directly to those customers, addressing these concerns and allowing them to make betterinformed decisions about HVACR maintenance. u
Locally owned and operated, since 1966, Williams Comfort Air has proudly established lifelong relationships with heating, air conditioning, and plumbing clients built on a foundation of trust. Williams Comfort Air and Mr. Plumber combined to create the most comprehensive, client-focused home service company in Central Indiana. https://williamscomfortair.com/
1 https://www.hvacrbusiness.com/news/2010/nov/01/start-building-maintenance-agreement-base/
2 https://www.zillow.com/home-values/22/in/
3 https://www.angi.com/research/reports/spending/#part1
USE “LOCALLY OWNED AND OPERATED” TO YOUR ADVANTAGE!
BY WILL MERRITTIn the August issue, Martin Hoover1 talked about the advantage of staying local in a sea of companies striving to expand. He stressed that being the best local service company can result in way more success than any company expansion. In this issue, Will Merritt adds to this discussion – this time from a marketing expertise point of view..
Why Customers Prefer the Local Choice
Everyone prefers to use a local company. Most people appreciate a company that is a part of the local community, someone that gives back and is a fixture in the town. Understanding how to use this aspect of your business to your advantage is key when marketing locally. But given so many companies have lost their personal touch, this is a time when customers value the local trust a small company within the community engenders.
Google My Business
Even Google started to focus on “local” businesses, in 2018, when the internet wasn’t as location-focused, Google made the move to “localize” the internet search. That’s when things truly
Your goal should be to show up on Local Google Maps Pack when people are searching for services, such as, “AC Repair” or “HVAC Service” with a location modifier (Charlotte, NC or Miami, FL) or “near me”.
started to change for local companies within the home services industry. The effort began to drive search results to local businesses, ones that were in close geographical proximity to the search source and changed the game for the small business owner.
Your HVACR business cannot be right around the corner from every home or business owner in need. And most home service companies have only one physical location. So, how do you use your local status to drive leads to your company?
Here are some ways to get Google to find you in every relevant search locally:
Google My Business (GMB) is a good way to showcase your heating and air company. Every contractor should refine their GMB profile and make sure it gets found.
You should also do the following:
• Keep your company information current and up to date.
• List your company as a “Service-Area” business.
Go to Google.com/business and log in with your credentials. Select the “Info” tab. Then “Add a Service Area.”
• Add pictures regularly and tag them properly.
• Create Google posts as often as possible.
• Drive as many reviews as you can to your GMB profile, and respond to them, preferably within 24 hours.
• Be sure to enable messaging.
• Get a Google Badge (Screen, Verified, Guaranteed).
• Make sure your business hours are correct and match your website hours.
• Enable appointments; any good calendar plug-in can enable appointment scheduling.
• List all your local service areas.
• Make sure you have GEO pages on your website or pages dedicated to locations in your city or state.
Your goal should be to show up on Local Google Maps Pack when people are searching for services, such as, “AC Repair” or “HVAC Service” with a location modifier (Charlotte, NC or Miami, FL) or “near me”. An SEO’d Google Business Profile is the top-ranking factor for the Local Maps Pack. (Neil Patel2)
Every page of your business should have all the various search terms and all the possible GEO locators that may be searched.
Do You Have Multiple Business Locations?
Many HVACR businesses cover a wide geography, for example, a metro
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area or a large rural area. It can be very advantageous to open a 2nd location, but you need to let people know where that is or no one will find you. We have witnessed great success with companies that open a small satellite office, when they have a local address in an area the business wants to serve. Some companies will open several small locations. The key here is to make sure it is a brick-andmortar building with signage. Google Locations is looking for the actual building and signage. Google frowns upon UPS stores meaning your address is at a P.O. box or a shared office space. Chances are if you do this, Google will shelf you when customers are looking for an HVAC company near me – which is often the search term. An actual location will allow you to show up more often in local searches and ultimately drive more sales.
Pay Per Click and Google Local Ads
Another way to land on Google Maps is through paid advertising. Your business will show up as a “Sponsored” location at the top of the local maps pack. It will make your HVACR Company show up as a local option even though your business may not be the closest to the online searcher. Indeed, the adage applies here –you get what you pay for. (See Below)
Recent Changes in the HVACR Industry
The HVACR industry has changed drastically in recent years – everything from proposed refrigerant changes, supply-chain issues spawning from COVID-19, massive price increases, efficiency changes, and continued consolidator movement driven by private equity groups. These events have created additional challenges for contractors today. One thing we can count on in the heating and air conditioning business is change. But does the consumer care about the changes in the service industry? Have you asked your team, “How do these changes impact our customers?”
What Does the Consumer Care About?
How have changes, particularly regulatory changes, impacted the consumer – your customer? And do customers who patronize local brick-andmortar companies care about changes industrywide? Well, the answer is “yes” and “no”. No, they don’t care much about refrigerants or supply-chain issues. However, they do care about keeping their family or business comfortable. For you, this means that if you work to secure your reputation within the community as a small, locally owned, and trusted business, then it will strengthen your curb appeal and your ability to compete with a nationally owned chain. Larger companies with multi-city or multi-state footprints are great, but many wouldbe buyers of heating and air equipment prefer the local choice.
Consumers Prefer Locally Owned Businesses
For the same reason that local HVACR companies thrive off word-ofmouth referrals and must keep a good reputation in the community, customers prefer to patronize the local shop owner as well. When you live and work in the local city, it means you interact with the local schools, restaurants, and churches. You are seen as an active part of your community. Consumers not only identify with that, but when they ask a friend whom they trust to be their HVACR company your name should be the first on their list. Other types of companies still have a place and space in business, however, survey after survey shows that customers still prefer local businesses.
Customers also feel like they are giving back to the community when they select a local brick-and-mortar firm. A recent study from the New York Post3 reveals that 9 out of 10 people rely on small businesses for purchases. Said the article:
A whopping 88% know someone who is employed at a small business in their community, with the average person knowing four names of small business employees. The survey…highlight[s] the impact of small businesses ahead of Small Business Saturday, found that people regularly rely on a small business for everything from manicures and pedicures (54%) to handyman services (45%) and haircuts (44%).
Focus on Your Strengths –Your Local Brand
Your heating and air company, your family, and ultimately your brand, are all a part of the “local” community. You must capitalize on your place in the community and your unique brand. Consumers only purchase heating and air systems 2.5 times in their lifetime on average, so the purchase is few and far between. This is why branding yourself as the “local” HVACR contractor is so important. As home service providers, you are entering someone’s sacred space, a person’s home. If they see your company involved in the local community, at the local church, or at charity events, it will build trust in the community. Local advertising on traditional outlets, such as TV, radio, and billboards works great!
But do not discount the value of grassroots marketing and its importance:
• Local sports team sponsorships, ie. uniforms for kids’ baseball teams
• Member of local neighborhood Facebook groups
• Nextdoor
• Yelp (Be sure to CLAIM your page)
• Homeowner associations
• Sponsor local events especially school events, food drives, and mediacovered events
• Referral programs
• Fleet wraps! Every time you park your truck, another local resident will see your branding
What Messaging Works for Local Contractors?
So how do you become “the” local choice? Remember your target customer wants to purchase from you over the big box store. Let’s reinforce what makes your company local with the right messaging and discover how you can stand out. Actively grow your maintenance customer base! This creates long-term loyalty and greatly increases your interaction with local customers – some of whom will be living in the neighborhood for ten to twenty more years. You need to create a relationship. But remember, you are out of sight and out of mind for most homeowners until their HVAC breaks! Continue to drive your “local” branding messaging through whatever marketing or advertising platforms.
The following messages work well:
• Locally owned and operated...
• Be a part of the city you serve.
Example: “Proudly serving Orlando for the last 20 years!”
• Name the number of years in business, especially if it’s a legacy, family-owned business..
• Claim your place.
Example: The Community’s Most Trusted HVACR Company...
• List testimonials from the community on your site, on your marketing material, and on socials.
Hard work, consistent messaging, and community involvement will help your heating and air conditioning company become the BEST local choice for consumers. Remember, the three principles consumers look for in a home service provider: Trust, Value, and Fixed Now. Use the “local” option to support the customers’ need for those values! u
Will Merritt is the managing partner at Effective Media Solutions in Charlotte, NC. He has more than three decades of experience creating marketing solutions for business owners. For more, visit http://myeffectivemedia.com or email will@myeffectivemedia.com.
Remaining A Small HVAC Shop in A Large Market (Hoover, 2023) https://www.hvacrbusiness.com/news/2023/aug/01/ remaining-a-small-hvac-shop-in-a-large-market/
2 How to Optimize Google My Business for Enhanced Sales (Patel, 2023) https://neilpatel.com/blog/optimize-google-my-business/
3 Most people prefer small businesses over large chains: poll (SWNS, 2022) https://nypost.com/2022/11/22/most-people-prefer-smallbusinesses-over-large-chains-poll/
For the same reason that local HVACR companies thrive off word-of-mouth referrals and must keep a good reputation in the community, so too do customers prefer to patronize the local shop owner.
TO PREPARE FOR THE BUSY SEASON TEAM BUILDING TIPS
PART 2 OF THE SERIES
BY JUSTIN CARROLEvery year my business finds itself in a situation where client demand significantly outweighs our capacity. We have a name for this situation. We call it a “state of emergency” and we do that to make it clear to everyone that we are in a moment of special need. We have a specific set of rules that we expect everyone (including the company and leadership team) to live by during these times. These expectations are communicated during the interview process, about a month before every expected busy season and when the busy season finally arrives. Setting expectations on the front end significantly reduces the odds of friction within the team. If everyone knows what the expectations are, then one of the only things that could produce friction is someone not honoring their part of the commitment to the expectations. Again, this is a topic that you should discuss in your planning meeting and communicate to your team regularly. I suggest allowing all the team members to add suggestions to the list of expectations. This is a great way to find true balance and harmony within your team.
A few ideas that can help you get started on brainstorming the expectations of the company include:
• Value Your Team Members – Keep in mind while the team is giving more than usual, the company should be giving them more than usual. Relationships where one person is giving more than the other don’t last.
• Healthy Team – Team members who work late get to start later the next day.
• Work-Life Balance – Guarantee that nobody will be expected to work more than X hours per day and/or week.
• Offer Guarantees – Guarantee for anyone who works X number of days straight will be allowed a day off.
• Bonuses – Offer special bonuses for people who run X number of calls per day with no callbacks and do X number of installs per day.
• Remove On-Call – Remove on-call responsibilities during this time. Everyone will be working hard enough as it is. I don’t believe in the value of on-call in general. In my company, we don’t do on-call.
A few ideas that can help you get started on brainstorming expectations of the field teams:
• Remember that these rules only apply while the company is under a “state of emergency” which shouldn’t be more than a few weeks per year.
• All techs are expected to run calls until all the calls are run, or they have worked X number of hours regardless of whether they are on call.
• All techs or installers are expected to work up to X number of days in a row regardless of whether they are on call.
Praise and Blame Aren’t Created Equally
Praising team members puts fuel in their tanks and encourages more of the behaviors praised. The things we praise also communicate what we value as an organization. You can exponentially improve the value of your praise by using words found in your mission and values in the praise message. As an example, at my company, our mission is “Elevating Lives”. So, I could see someone in the hallway and say, “Great job last night, Bob. The fact that you went out of your way to make sure Mrs. Jones got her AC running last night was a prime example of ‘Elevating Lives.’”
Another tip is to praise in public most of the time, so others hear it. The more people hear that language, the more you bring those things alive and make them real in your business. Positive leadership spreads a general feeling of security and wellness throughout the company. Send out company-wide text messages and emails giving praise to people who go above and beyond. It’s difficult to ever praise too much. More praise also buys you the right to coach when things don’t work. If you’re always coaching and rarely praising people, they get beat down, and
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Value Your Team Members. Keep in mind while the team is giving more than usual, the company should be giving them more than usual. Relationships where one person is giving more than the other don’t last.
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that can kill morale and eventually team member retention. I suggest following these tips all year long, but if not, do these things more often during the busy season. A couple of ideas that can help you get started on this:
• Companywide Email: Last night Mary volunteered to stay at the office an extra 2 hours to take calls because she wanted to make sure we were able to serve as many clients without cooling as possible. I am so proud of you Mary. You are a perfect example of a team player!
• Encourage Team Building Behavior: Ask people on the team to whom they would like to give praise. Do this in person with as many people present as possible if you can and do this as often as you can. In my company, we take time at every company meeting to ask who has praise for another team member that they would like to share with the room. This is always very heartwarming. It reminds everyone why they’re working so hard and that they’re part of a team and motivates more of these behaviors.
Communication & Listening to Feedback
We need to communicate very effectively while maintaining an appropriate balance of frequency. Communicating effectively includes using caring and tactful language and trying to be as clear as possible in your messaging. Take the extra time to craft your language in such a way that it accomplishes those objectives. Also, we need to be conscious of whether we’re communicating too much. Especially during the busy season as we need to respect the fact that everyone is overloaded and doesn’t have a lot of extra time for meetings or reading messages. It’s a delicate balance that you should work towards to be truly effective. Listening to your team in an empathetic way is just as important as effective communication. When we listen, we need to listen to hear. Often, we’re just listening to respond and convince someone of doing something our way. Great outcomes result when we listen, understand, and genuinely seek answers that will lead to win-win outcomes. Most humans want to be heard and valued. I can’t say that I can think of any human that doesn’t value this. When considering a big company change or a big event (like
a busy season), ask the company for their input on it.
An example of effective asking and listening that can help you get started on this:
Prompt: We’re considering changing our business hours…
• How do you think this could positively and negatively impact the company, clients, and team members?
• If we decide to do this, what ideas do you have to make it as successful as possible?
• Take notes on a whiteboard or flip chart as you receive their feedback.
• After it’s done, thank them for their input, repeat back the feedback that they provided, and tell them you will be considering everything they’ve shared. Then, communicate your final decision and the details when you have them.
In summary, I would say that most of the advice I’ve shared applies to running a great business all year long. Most of the things I’ve suggested should simply be amplified during the more stressful times. Understanding team building and its
importance before the busy season hits is a best practice for any business. u
Justin Carrol is an esteemed entrepreneur and visionary. His professional journey is characterized by a dedication to personal and business growth, and a mission to elevate lives. Carrol began a career in the HVAC and plumbing industry in 1999 and by 2006, he had founded his own HVAC and plumbing company, Perfect Home Services. In November 2021, driven by an ambition to expand his mission in a more impactful way, Justin made the strategic decision to bring a private equity partner on board. This partnership infused the company with capital and paved the way for further growth and nationwide expansion. In 2023, fueled by his unwavering dedication to the mission of elevating lives, Carrol made the courageous decision to step down from his position. This year he embarked on a new chapter by launching Elevating Lives, a family and team member-owned venture based in Naples, Florida. Carrol’s commitment to his mission, coupled with his strong belief in the power of faith, is reflected in the exceptional reputation of the businesses he manages.
The Urgency of Planning & Realistic Timelines
Global economic disruption uniquely affects each business. Whether you are being hit with a hammer or expect to suffer a slow burn, your reaction to changes and proactive planning will play a major role in how your future unfolds. Signals indicate that COVID-19 is under control, and the world economy has begun to recover. Businesses are rebuilding so now is the time business owners need to ask themselves if they want to go through another major disruption – the likelihood is inevitable. Or is it time to transition out of their business while they can? This is the most crucial time to plan so that your business has the best chance of supporting your personal and financial goals, even if those goals are changing. It’s likely that your timeline is changing too.
To get a better idea of the urgency of planning, here is a breakdown of tasks that may be involved in planning for the future of your business and the time each might take to complete.
Setting (or Resetting)
Your Goals
No matter what, it’s a good idea to revisit your goals periodically. During times of change, this review is even more important. It’s a good time to look at what your goals have been, especially concerning how much longer you want to stay involved in your business, how much you’ll rely on your business for financial security, and to whom you want to transfer ownership in the future. Have any of your previous goals changed? Are there partners, advisors, or family members with whom you want to discuss possible changes to your goals? This activity is important, so it’s a good idea to give it the time and space it deserves. This may take 30 to 60 days.
Plan Design
Start with your preliminary plan. What aspects of your previous planning still make sense and which of your plans will
need to change given new circumstances? Your task here is to get ideas and strategies on the table and start to weigh your options and investigate alternatives. This may require assembling some new data and conferring with specialists. It’s likely that some options previously available to you no longer make sense; it’s just as likely that new alternatives are now worth considering. Depending on how much planning you’ve done in the past, plan on this phase taking anywhere from 90 days to 9 months.
Implementation
Next, you’ll start implementing the strategies you’ve identified that you believe will take you where you want to go and put you in a position to transition your business when and to whom you want. Preparing yourself, your business, your management team and your personal situation brings your greatest chance of long-term success. Many business owners have a sizable gap between the resources
they have and the resources they need to achieve their goals. Your gap may be changing. This is where the important work gets done. It can take six months (if you’re trying to get out of your business soon) or five years (if you need to build value and prepare team members).
The Ownership Transfer
There are many ways to transition out of ownership when you are ready. Your options tend to fall into one of two primary categories: you can sell to a third party, like a strategic buyer or investor, or transfer to an insider, such as a child or your employees. If you and your business are prepared for the transfer, and you commit to pursuing a third-party sale, you can sell your business and be completely out within a year or so. On the other hand, it’s common for transfers to insiders to take longer, usually because new owners don’t have an immediate ability to cash you out. It may still be possible for you to get the value you want and need for your
ownership interest, but it can take time. A well-prepared business can transition to insiders and deliver a fair value to a departing owner in three to five years.
The Full Timeline
Planning for the future of your business, and taking the steps necessary to get there, will have a timeline that is unique to you and your company. It’s common for the process to take anywhere from one to ten years. That’s a pretty big range, but you are probably already applying the process to your situation and getting a sense of your personal timeline.
Now is a great time to take a second look at planning you’ve done in the past. Look at how flexible and dynamic your planning has been. Take this opportunity to build a new path toward your future. When everything is changing, it’s important to change too so that you can react to your situation instead of being a victim of your circumstances. u
Keven P. Prather is a registered representative of and offers securities and investment advisory services through MML Investors Services, LLC. Member SIPC. Call 216-592-7314, send an email to kprather@financialguide. com or visit transitionextadvisors.com.
Preparing yourself, your business, your management team and your personal situation brings your greatest chance of long-term success.BY RUTH KING FINANCE
Do You Have Negative Accounts Receivable or Negative Loan Payments?
Most of the time, the only negative numbers you should have on your balance sheet are allowances for doubtful accounts, accumulated depreciation, less current portion of long-term debt (in the longterm liabilities section), and treasury stock. If you have negative equity, this means that your company is losing money and probably has been for years. All other numbers should be positive.
Negative accounts receivable and negative loan payments are two areas where I commonly see negative numbers. What do the negative numbers mean and how do you correct them? The answers and examples are next.
What are Negative Accounts Receivable?
Negative accounts receivable means that your company owes your customers money. While you may owe a few customers a refund, or a few customers have overpaid their invoices by a few dollars, your company doesn’t owe your entire customer list a refund. On an aged accounts receivable report, you may see a few negative numbers for those customers to whom you owe refunds. The entire receivables list should not be negative.
Generally, negative accounts receivable happens because your company received deposits for work to be done. The bookkeeper erroneously enters the deposit in accounts receivable. Since there has not been an invoice generated, the accounts receivable is negative.
Deposits for work that has not been performed are liabilities and go in the current liabilities section of your balance sheet under a deposit account.
When you perform the work and invoice the customer for the work, the deposit is applied to revenue (debit the amount of the deposit and credit revenue). The total invoice for the work performed less the deposit is the accounts receivable amount.
This is the proper accounting for the deposit:
Assume you receive a $10,000 deposit on a $100,000 project.
The journal entry is:
Cash $10,000
Current liabilities – deposits .......... $10,000
When the project is completed and billed to the customer:
Accounts receivable .......................... $90,000
Current liabilities – deposits $10,000
Revenue $100,000
This keeps accounts receivable an accurate, positive number on your balance sheet. Then you can watch an accurate trend of accounts receivable to accounts payable to ensure you have enough cash to pay the company’s payables. Generally, you want at least a 2:1 ratio: at least twice as many accounts receivable to accounts payable. If your company collects more than 50% of its revenues on a COD basis, then add accounts receivable plus cash to accounts payable.
What are Negative Loan Values?
Negative loan values mean that the bank or other creditor owes your company money for an asset purchase. Not likely.
This is what typically happens. A loan payment is made. The entire amount of the payment is debited against the loan amount. In fact, the payment is a combination of principal repayment and interest paid to the bank for the privilege of getting a loan.
At the end of the loan period, if the entire loan payment was applied to the principal, the loan for that asset will be a negative amount on your balance sheet.
This means that your company’s profit and loss statement is inaccurate too. The interest portion of the loan repayment goes into the overhead. If this expense isn’t recorded as an overhead expense, your company’s net profit is too high.
When you receive a loan, it’s important to set up the asset and the loan amount on your balance sheet. If it is a truck loan, set up the truck asset in “Long
Term Assets” and the truck loan in “Long Term Liabilities”. Both should have the description of the truck, i.e., the 2023 Ford Truck. Then your bookkeeper knows which loan is being repaid when the payments are made.
This is the proper accounting for the truck purchase:
Assume the truck was $50,000 and a down payment of $10,000 was made: 2023 Ford Truck $50,000 Loan – 2023 Ford Truck $40,000 Cash .....................................................$10,000 This is the proper accounting for loan repayments.
Assume that the payment is $500 a month. Of the $500, $100 is for interest and $400 is for repayment of the principal.
The journal entry looks like this: Loan repayment .................................... $400 Interest ........................................,........... $100 Cash ..............................................,........... $500
The loan repayment and cash are balance sheet items. The interest is an overhead item on your company’s profit and loss statements. In most accounting software systems, this recurring invoice can be set up with the loan payment and interest as the debit, and cash as the credit. Then, if input correctly, you will see the accurate balance owed to the creditor every month. 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.
Generally, negative accounts receivable happens because your company received deposits for work to be done. The bookkeeper erroneously enters the deposit in accounts receivable. Since there has not been an invoice generated, the accounts receivable is negative.
BOSCH HOME
Bosch Home Comfort, a leading source of high-quality heating, cooling, and hot water systems, has launched Bosch Home Comfort PRO: A new one-stop-shop for HVAC contractors equipped with tools and support for their every servicing needs. The PRO program is designed to streamline administrative tasks so contractors can dedicate their time to assisting customers and providing top-notch service. Resources include product registration incentives that allow contractors to earn points toward rewards; a refreshed lead generation tool; an extended warranty program; an updated catalog of apparel, marketing materials, and more, purchasable with points earned through the program.
www.bosch-homecomfort.com/ us/en/residential/home/
FABRICAIR SPECIALIZED FABRIC DUCT
People rarely associate wind turbines with HVAC ductwork, but the two are now a perfect match. FabricAir, the largest manufacturer of fabric ducts for commercial HVAC systems has recently acquired Borealis Wind, an international service provider for wind energy systems. Wind turbine freeze-ups are a major problem in the renewable energy sector. FabricAir, through its new Borealis Wind purchase, now provides and installs specially-made fabric duct installed in new or existing wind turbine blades to prevent frost buildup and maintenance headaches. FabricAir is well known throughout the HVAC, engineering, and facility management communities.
www.fabricair.com
www.borealiswind.com
GOODMAN AIR CONDITIONING & HEATING
Goodman GSXC7 (17.2 SEER2) is a high-efficiency 2-stage scroll compressor with enhanced airflow in its two-stage scroll compressor. It is recognized as one of the best high-efficiency management systems in 2023. Listed at a comfortable price point, customers also appreciate the affordable price tag. Goodman includes its ComfortBridge technology which enables your AC system and other HVAC components to interconnect and ensures peak performance. Goodman’s GSXC7 also boasts proprietary ComfortAlert, built-in diagnostics, and their CoolCloud Bluetooth technology For more information on Goodman GSXC7 or ComfortBridge technology, visit the website.
www.goodmanmfg.com/ products/air-conditioners/gsxc7
GOOGLE NEST
Google Nest Pro thermostats are designed to work with most heat pumps, and they now have improved intelligent features built in to make the heat pump work even more efficiently. They use information from a recent heating or cooling cycle – including the heat pump’s runtime, data from local weather forecasts, and the temperature in the home – to actively adjust how much auxiliary heat is used. With Heat Pump Balance, your customers can choose to prioritize comfort, savings, or a mix of both. Nest thermostats can actively adjust how much auxiliary heat is used based on what’s prioritized. For example, choosing Max Comfort generally results in a higher auxiliary lockout temperature, so their Nest thermostat will try to get their home to the temperature they want, even if it means using expensive auxiliary heat.
www.nest.google.com/pro/blog/ heat-pump-enus
LOCHINVAR
Lochinvar, an industry leader in highefficiency boilers and water heaters, announces the Veritus™ Air Source Heat Pump Water Heater. Raising the bar on energy efficiency and simplifying installation and operation, the Veritus Heat Pump Water Heater (HPWH) serves as a sustainable option providing energy savings and reliable domestic hot water for a wide variety of commercial applications. ECM pumps, fans, and a scroll compressor work together to enable Veritus to operate with a high coefficient of performance (COP), optimize heat transfer and minimize emissions. To provide improved installation flexibility, Veritus heat pumps are modular, meaning units can be manifolded together — ensuring ample hot water supply, built-in redundancy, and capacity matching for larger commercial water heater demands. www.Lochinvar.com
RESIDEO
Resideo, a leading global manufacturer and developer of smart home products offers the Resideo T10+ Smart Thermostat – a solution to balancing home IAQ using a single device. Air quality is something we can’t see but easily felt. The T10+ offers homeowners more control over three areas of indoor air quality – humidification, dehumidification, and ventilation – without the stress of manually balancing tedious everyday elements. Using wireless smart room sensors, the thermostat can extend beyond the room and adjust the temperature and humidity from anywhere, helping homeowners stay comfortable in the rooms that matter.
www.resideo.com/us/en/pro/ t10kit/
SCHNEIDER ELECTRIC
Based on open standards and a wired or wireless architecture, The Schneider Electric EcoStruxure™ Building Expert (formerly SmartStruxure™ Lite solution) is an affordable way to control and manage HVAC, lighting, energy, and metering with intuitive applications and features usually available only to larger buildings. Minimal to no business downtime, improved comfort and convenience, and reduction in energy and maintenance make a positive impact on your operating margins. Fast food restaurants, banks, grocery and convenience stores, small medical, retail, heritage buildings, and leased space are just a few of the types of buildings that benefit from an EcoStruxure Building Expert solution.
www.se.com/us/en/productrange/62191-ecostruxurebuilding-expert/
TRANE®
VariTrane® Round In Round Out (VRRF) units are designed to improve energy efficiency and reduce overall operating costs in existing systems. Typical VRRF retrofit applications allow customers to: Bypass/replace existing mechanical regulator (air valve); upgrade building and/or unit controls (e.g. Pneumatic to BACnet™) with or without replacing the mechanical regulator (air valve); convert Constant Air Volume System to Variable Air Volume System and convert pressure-dependent Variable Air Volume System to pressure independent Variable Air Volume System (e.g. Trane VariTrac™).
www.trane.com/commercial/ north-america/us/en/productssystems/air-handlers/variable-airvolume/round-in-round-out.html
with AARON GAYNOR
Publisher Terry Tanker sat down with Aaron Gaynor, owner of Eco Plumbers, Electricians and HVAC Technicians. The Columbus-based firm was a Tops In Trucks Fleet Design Contest winner. The two discussed overcoming adversity, starting over, and executing new business plans.
1. Do you have a favorite hobby?
I run. It’s my meditation. And, I work. I love what I do.
2. What’s your hidden talent?
Overcoming adversity.
3. What would people be surprised to know about you?
I’m dyslexic.
4. What’s your secret ambition?
I want to change my family’s legacy forever.
5. How did you get in the business?
I’m a plumber by trade. I started in 1997 out of high school. My buddy and I started a new construction plumbing company in the early 2000s called Precise Plumbing. We thought we were the best plumbers and thought we should own a business.
6. How did that work out for you?
It worked for a while. We said we’re going to go be technicians, then managers, and then entrepreneurs. We did grow a business to about three and a half million dollars in the new construction market but lost that business in 2006-7 to bankruptcy when the housing market crashed.
7. What happened?
We grew up in a time when we thought the building market was never going to end. We had one customer that accounted for 60% of our business. When they went under, we got crushed. We lost jobs, vendors didn’t get paid, and we went bankrupt. And then I lost my house, lost my car. I mean, I lost everything. Everything that you thought you had was gone and we tried to fight and keep it, but eventually the banks had us.
8. What did you do next?
I ended up back at my mom’s house at 28 years old, sleeping on her couch as a single dad with my threeyear-old son. And I just remember sitting on the couch trying to get my bearings. Even though he was too young to understand, I said, “I promise you this won’t be your life, I’m going to figure it out.” And I just got to work. I started Eco Plumbers for $50 and that was 17 years ago. This year we should do 70 million with about 280 employees
9. What were the big things you learned?
I didn’t want to be a tax ID to all the vendors. I wanted to be a service provider so I could control my own destiny. I realized I didn’t know how to run a business and I knew I needed help and got it from a lot of people over the years.
10. How did you come up with the name Eco Plumbers?
I was looking for something new in the industry, something that could inspire me, something that would be different. I wanted something I could compete with, something unique and different in the space. At the time “green” was popular but already trademarked. I went through some training on water conservation, energy, solar, thermal, and tankless water heaters. I thought Eco would be great. This resonates with me. It resonates with the brand.
11. How did you get into HVAC and electrical?
I wanted an opportunity to keep growing the business. At some point, if we didn’t expand trade lines or do horizontal or vertical growth, we would saturate the market. And then one of my core values and the core values of the organization is, “grow or die.” So, it was about creating opportunity and growing more, and creating safe trade lines that could expand our market share and create more opportunities for people in the business.
12. Congratulations on being one of our Tops In Trucks winners. How many vehicles are in your fleet?
Currently, we have 211. We have box trucks, pickup trucks, and service vans from Ford, Dodge, and Ram.
13. How did you develop the design?
We wanted to rebrand the entire company, so we hired three firms to help us. One worked on the design for the fleet, an advertising agency helped with the integration across the company, and the third was a firm that wrapped the fleet.
14. How did you introduce the design to your team?
We wrapped two Ford Transits so we could see the results on actual vehicles. We used these at our internal launch events, where we announced the rebrand to our team and then celebrated!
15. How did you select the colors for the design?
Our dominant brand colors from the old logo and branding were green and blue. We updated these to contemporary hues that continued to capture our
eco-friendly brand story and related to the services, plumbing (water/blues), heating (warm air/yellow greens), cooling (cool air/blues), and electrical (energy/yellow greens).
16. When did you start to implement the design?
We started rewrapping our vehicles in December 2022. To meet our goal, we were doing this to eight to ten vehicles per week. We wanted to have a portion of our fleet wrapped and have it coincide with our official external brand launch on Monday, January 3, 2023.
17. What type of investment have you made in the rebranding campaign? The investment in the fleet marketing campaign is currently $535,000 for design and wrapping. With the final 28 remaining vehicles, predominantly large box trucks and heavy-duty trucks to be completed, and other items, such as trailers and jetters, the investment should come in at approximately $650,000.
18. Have you seen a return on investment?
Yes, since this is branding, and we do view our trucks as billboards. We know that the new design is getting tens of thousands of impressions weekly!
19. How have your employees responded?
It was very positive. We threw a launch party for senior leaders that was a reveal of the new company name, new logo, and new truck wrap. The project was kept fairly secret, except to a few working on it and those outside of the company that were advising us. For our service and office team members, the new branded trucks were revealed with complimentary breakfast trucks. Our team members also received T-shirts with the new logo and the theme for the launch which was, “The Future Is Now”.
20. How have customers responded?
We are hearing from many customers, media reps, and other friends in the home service industry that they like our rebrand. We receive texts from customers and business partners, some of whom are also customers, with photos of our trucks at their homes, or wherever they see them. We used the Ford Transit side view on our introductory billboards and some of these will appear all year long. Also, the buzz from social media posts has been exciting. We’ll be working as quickly as possible to film our trucks driving in the neighborhoods and in the communities we serve, and to update our TV ads.
Our people are here for your people.
It’s about You having the best, most advanced products in the industry. You, with direct access, not middlemen. It’s You, backed by nearly 130 years of experience.
We are in the Business of You.
At American Standard Heating and Air Conditioning, we’re proudly not on your customers’ to-do list.
A ceiling fan with two settings: off and very very on.
Your customers have enough problems. But with a reliable, easy-to-use heating and cooling system from American Standard, they (and you) have one less thing to worry about.
Some outlets are more convenient than others.
Your customers have enough problems. But with a reliable, easy-to-use heating and cooling system from American Standard, they (and you) have one less thing to worry about.
Just what every homeowner wants: water stain wall art.
Your customers have enough problems. But with a reliable, easy-to-use heating and cooling system from American Standard, they (and you) have one less thing to worry about.