• 1.5 – 5T models with quiet operation and ECM fan motors
• Painted, louvered steel cabinets provide superior durability
CASED A-COIL
• 1.5T – 5T with complete ratings
• Multi-position installation
MULTI-POSITION AIR HANDLER
• Available with PSC or CT motor
• 2T – 5T models with all aluminum coils
• Certified less than 2% leak rate
• Optional field installed heat kits available
MULTI-POSITION GAS FURNACE
• Single-stage 80% AFUE or two-stage 96% AFUE
• Aluminized steel tubular primary heat exchanger
• Stainless steel secondary heat exchanger
• Quiet, multi-speed ECM blower
• LP kit included
• Fully insulated cabinet prevents sweating
RESIDENTIAL PACKAGED UNITS
• Gas/Electric: 13.4 SEER2 and 81% AFUE
• Heat Pump: 13.4 SEER2
• Horizontal or downflow discharge
Recruit and Retain Female Technicians
Here’s a partial answer to future talent shortages. By
Angie Snow
It’s the Little Things: Improve Your Company Culture Today
You can make your company’s culture sizzle with just a few changes.
Communicating Without Conflict
The second part of why effective communication matters every day in business.
By Doug Wyatt
Maximize Sales: Educate Customers on Rebates & Incentives
If you’re going to be in step with customers’ rebates and incentives, you must be knowledgeable. Here’s a start. By
Ken North
Surviving Peak Periods in HVAC: How Managers Navigate High Stress & Long Hours
It’s all about time control and figuring out what’s really important. Here’s how.
By Rick Gutenmann
16 5 Ways That Your Business Can Fall Victim to Fraud
You’re a candidate for fraud, but here’s how to protect yourself and the company.
By Michael A. Bohinc
19 Don’t Let These Financial Surprises Trip You Up
Learn effective strategies to prevent uncomfortable surprises.
By Keven Prather
20 Selling Your Business Part IV
Explore Part 4 of the most common financial mistakes.
By Ruth King
5 Editor’s Notebook | Joe The Plumber Discover why follow-up phone calls can work wonders.
Tom Perić
4 MRS | Editor’s Choice
If you want to sharpen your thinking and who doesn’t, then read “Thinking, Fast and Slow” by Nobel Prize winner Daniel Kahneman, one of the most brilliant economists of his generation.
Focus 22 20 Questions with Maynor Gutierrez
Owner of Ontario, California-based Macawsome Heating & Cooling, one of our Tops In Trucks Design Contest winners
EDITOR’S CHOICE Management Resource Shelf
The guru to the gurus at last shares his knowledge with the rest of us. Nobel laureate Daniel Kahneman’s seminal studies in behavioral psychology, behavioral economics, and happiness have influenced numerous authors, including Steven Pinker and Malcolm Gladwell. In Thinking, Fast and Slow, Kahneman at last offers his own, first book for the general public. It is a lucid and enlightening summary of his life’s work. It will change the way you think about thinking.
Thinking, Fast and Slow
Daniel Kahneman
Two systems drive the way we think and make choices, Kahneman explains: System One is fast, intuitive, and emotional; System Two is slower, more deliberative, and more logical. Examining how both systems function within the mind, Kahneman exposes the extraordinary capabilities as well as the biases of fast thinking and the pervasive influence of intuitive impressions on our thoughts and our choices.
Leaders Eat Last: Why Some Teams Pull Together and Others Don’t
Simon Sinek
Imagine a world where almost everyone wakes up inspired to go to work, feels trusted and valued during the day, then returns home feeling fulfilled. Today, in many successful organizations, great leaders create environments in which people naturally work together to do remarkable things. Learn why it works and why it doesn’t. www.amazon.com/Leaders-Eat-Last-Together-Others/dp/ B084D1NZGL
Mastering Metrics: KPIs for HVAC, Plumbing & Electrical Contractors
Successware
Successware is continuing its popular eBook series, releasing a fourth version in its online library called “Mastering Metrics: KPIs for HVAC, Plumbing & Electrical Contractors.” The new “Mastering Metrics” eBook takes a deep dive into four categories of KPIs that are essential for HVAC, plumbing and electrical businesses to monitor for sustainable growth: Business/Financial KPIs, Technician KPIs, Customer Service KPIs and Sales Team KPIs. The eBook explores these foundational metrics, dives into what should be measured and explains the benefits of measuring them, from proactively identifying issues for customers to planning strategically for growth.
www.successware.com
The Fast Company Blog
Hosted by Fast Company Contributors
Fast Company is a leading business media brand focused on innovation in technology, leadership, world-changing ideas, creativity, and design. Founded in 1995 and owned by Mansueto Ventures, Fast Company aims to inspire readers through thought-provoking articles and cutting-edge insights. The magazine is known for its annual lists, including the Most Innovative Companies and Most Creative People in Business. With a strong emphasis on the intersection of business and culture, Fast Company continues to influence and inform the global business community.
www.fastcompany.com
Duct Tape Marketing Blog
Hosted by John Jantsch
The Duct Tape Marketing blog is a rich resource for small business owners seeking practical and actionable marketing advice. The blog features expert insights, innovative strategies, and useful tools designed to help businesses improve their marketing efforts. Regular posts cover topics like advertising, consulting, lead generation, SEO, and referral generation. The blog also includes podcast episodes and links to additional resources such as marketing guides and workbooks, making it an invaluable hub for entrepreneurs looking to enhance their marketing knowledge and drive business growth.
www.ducttapemarketing.com/blog/
Tim Blog
Hosted by Tim Ferriss
Tim.blog, created by Tim Ferriss, is a hub of insights on lifestyle design, productivity, and personal growth. Tim, an accomplished author of five #1 New York Times and Wall Street Journal bestsellers, is also an early-stage technology investor and adviser with investments in companies like Uber, Facebook, and Shopify. Known for ‘The Tim Ferriss Show’ podcast, which has surpassed one billion downloads, Tim’s influence spans multiple platforms. His blog features practical advice, interviews with world-class performers, and a wealth of resources aimed at optimizing life.
www.tim.blog
THE HVACR MANAGEMENT MAGAZINE
TERRY Tanker
Publisher ttanker@hvacrbusiness.com
TOM Perić
Editor in Chief tperic@hvacrbusiness.com
MEGAN LaSalla
Art Director mlasalla@hvacrbusiness.com
BRUCE Sprague Circulation Manager bs200264@sbcglobal.net
BARBARA Kerr VP Operations bkerr@hvacrbusiness.com
ADVERTISING
STAFF
TERRY Tanker
Publisher Tel 440-731-8600 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.
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.
Afew minutes before I started writing this column, I witnessed one of the best examples of exceptional service from a tech that you could wish for. I confess that my example is a plumber and not an HVAC tech, but the lesson applies to any service business.
You see, it isn’t only that he wants you to appreciate his work and pay for it. He wants to show you that he appreciates you. And who doesn’t like that feeling, even on our dullest days?
Joe Fennimore, the owner of Pipes Plumbing, came to my house to fix an icemaking problem. No ice. Many of you have the same refrigerator. Large, expensive and has enough space to feed a platoon. What we thought would be a quick fix turned up several problems that he diagnosed and then repaired. I actually thought, given the time and effort (he swapped out the plastic water line for copper and a new valve), that the price we paid was a bit modest.
After finishing the repair and sitting in the dining room creating an invoice, I asked Joe if he wanted any referrals. I subscribe to a local neighborhood-type chat group and often read a post like, “I need a plumber who is good and reasonable.” “He quickly said, “No, I’m not interested.”
Then, my wife asked if he would be interested in friends of ours who live a few doors away and with whom we socialize. Joe asked, “Are they nice?” My wife said they are nice but can be very picky, especially the husband. I said, “He’ll probably hover over you as you work.” (There’s nothing that I hated more than when I worked in a newsroom and an editor hovered over me.) Joe replied, “No thanks.” Joe is a solo operator and can be picky because his calendar is booked.
We made an appointment for future work, and Joe said he’d be on time, if not earlier, for the future appointment. “On time,” I said, “many contractors don’t run on time.” He admitted that when he started out, he was always late, both professionally and personally. “My goal is to get to my clients 15 minutes early, ” Joe said. “I felt I had to improve.”
This should be the end of the story and the conclusion of this implied lesson about service that is prompt, successful and adds that personal touch. It wasn’t.
The next day, at 6:47 p.m., Joe called, and the message rolled into voicemail. We were watching The Wire, and at 8:36 p.m., I called him back. Why did Joe, the Plumber, call back? He simply wanted to know if the icemaker was working as it should. He didn’t call because he was trying to reel us in as a
regular customer (we already were), nor was the ticket so expensive that he feared we might have second thoughts. (It was about $370.) When I called him back, I put the phone on speaker so that my wife could hear the conversation.
The essence of that call is that he wanted to ensure that his customers were satisfied with his work. This stunned me because who would make a follow-up phone call for this modest job? Yet he was willing to spend seven minutes finding out if all was well.
We hear about soft skills ad nauseum and think, “Yeah, yeah,” but I can tell you after we hung up, my wife said, “I love that guy.” Heck, I love the guy.
I’ve been writing about contractors, directly or indirectly, for decades. Leaving aside the need for technical skills, I can’t imagine a greater talent, instinct, style or approach than what Joe the Plumber offered that evening. He was a master of soft skills and did so seemingly without effort because he made us feel that we were special.
I know that some contractors call back customers, at least sporadically. But I would suggest that you do it as frequently as time permits. Customers typically know the drill: When the contractor is done, they’re done with you.
That follow-up call establishes you as being different, a face behind the marketing slogan. We have endlessly urged contractors to stand out from the pack. We suggest that you create and demonstrate your own personality and that you’re different from other contractors. That follow-up to check in is what makes you strikingly different.
Joe’s call back simply floored me and my wife. If you’re thinking I was overly impressed, you could be right. But I knew it was notable for several reasons. Joe did it, and many contractors never do, including some whom we’ve paid considerably more money.
You see, it isn’t only that he wants you to appreciate his work and pay for it. He wants to show you that he appreciates you. And who doesn’t like that feeling, even on our dullest days?
This should be the end of my little story with Joe the Plumber, but it isn’t. My wife promised to send Joe a photo of a bin filled with fresh ice. She delivered on the promise.
You don’t have to make a phone call to check back on completed work, but if you do, your customers will never forget you. We won’t forget Joe Fennimore. u
RECRUIT & RETAIN FEMALE TECHNICIANS
BY ANGIE SNOW
Twelve years ago, we hired our very first female technician at our HVAC company. She had applied for a maintenance technician position, and to our surprise, her husband had also applied for the same job. They were going through HVAC tech school at the same time. I learned later that she was completing the program in an effort to support him and help him complete his schooling. I don’t know if they were applying for all the same positions, but it was evident in her interview that she was the better candidate for the job. She was humble, coachable, and eager to learn and develop in this position. And that is exactly what she did.
We loved her attitude, her desire to learn, and her willingness to work in a predominantly male industry. Her previous work had also been in a variety of industries in which men held most of the positions, such as truck driving and
As she continued to progress and learn the service side of HVAC, she began to outperform her team.
bus driving. She was used to working in this type of environment.
She exuded potential and humility and demonstrated values that aligned with our company culture and goals. We quickly hired her, and we did not hire her husband. We only had one position available. It was an entry-level maintenance job. We were looking to hire someone who could quickly learn and step into the role. This woman had the same experience and education level as her husband. We were attracted to her positive attitude, humility, and desire to learn, which her spouse did not demonstrate. We also felt that she had a better technical understanding of the job and its requirements.
As the first female technician in our small but growing HVAC company, she quickly discovered that the male technicians were not in favor of her working at our company. Throughout her initial training period with the team, her male trainers often made her do the most difficult and strenuous tasks in an attempt to scare her away from HVAC.
Because of her grit, determination, and past experiences as a perceived underdog, she took the challenge. She became just as good and, in many instances much better than our other technicians. As she continued to progress and learn the service side of HVAC, she began to outperform her team.
Some of the male technicians felt
threatened and continued to sabotage her work, her jobs, and we even found some scribbling on our bathroom wall, “For a good time call (name) at (phone #).” It was horrifying and disgusting to me as the business owner, maybe even more so because I’m a FEMALE business owner. I couldn’t believe how immature and inappropriate some of our technicians were behaving. My company had to establish consequences.
Reflecting on that experience, I realize that as a business owner, I could and should have done a lot of things differently before I asked her to join my team.
First, I could have prepared my team and adjusted our culture to be more welcoming and accepting of female technicians. At this point, none of our competitors had a female technician, and it wasn’t really even heard of in our area to have women working as technicians.
In addition, I could have set clear expectations with our male technicians about the best ways to support her as a team member, just like they would support any other new technician. The fact that she was a woman shouldn’t bear any weight on her ability to perform her job. She would have the same expectations as they did.
Not only should I have set clear expectations with my employees, but I could have also done the same with our customers. It was surprising to hear how many of our customers (older males in particular) were not comfortable with having a woman work on their HVAC equipment. In fact, she shared that these older male customers would typically stand right behind her back and critique her work. They would ask her question after question to make sure she was qualified and knowledgeable about the work she was performing.
Interestingly enough, for as many men who were uncomfortable with her working on their equipment, we heard the same amount of positive feedback (if not more) from our female customers who felt so safe and comfortable with her in their homes. They expressed that it made them feel more comfortable having a woman work on their equipment.
Long story short, this female technician excelled. She grew to be a service technician and then a topperforming comfort adviser who worked for our company for more than ten years, outlasting all of her counterparts who trained her.
As an advocate for women in the trades, I have reached out to several female HVAC technicians to ask them what attracted them to the trades and specifically to their current place of employment.
One technician from Pennsylvania said that she was attracted to the morals and values of the company owner. She said he contacted her immediately after she dropped off her resume and came across as straightforward, honest and trustworthy. He spoke not only of his interest and excitement in having a female technician but also about his reservations, which were personal health issues. She appreciated his transparency and openness.
Another female technician from North Carolina shared that her life situation meant she had to be the breadwinner for her family. After working in the dental field for some time, she decided it was not for her and wanted to join a trade where she had the potential to be paid very well. She selected her current company because
Women in the trades make 95% of what men get paid, compared with an average 81% gender pay gap.
they offered her very nice wages, which was a key factor.
In a recent article published by Forbes, women in the trades make 95% of what men get paid, compared with an average 81% gender pay gap. The skilled trades also support a quicker educational path that is less expensive compared to the cost of a four-year degree. In some cases, contractors will even pay for their team’s education because the labor shortage is so real.
As a past board member for Women in HVACR and a current adviser for Women in Plumbing and Piping, I know that there are many scholarships available for women entering the trades. Both of the above organizations offer scholarships, mentorship programs, and resources that help support women in the trades. Understanding what resources are available to women will also help contractors better support the female technicians in their business.
So, what advice do these female technicians want owners to know as they are looking to recruit more women to their team? Here are five tips to observe.
First, don’t treat them differently from male technicians unless they come to you with a specific concern that you need to address due to their size, strength or physical limitations. In most cases, though, women know what they are getting themselves into and feel confident and competent in performing their duties.
Second, create a culture that celebrates the individual, not the gender. Many of the women I interviewed for this article shared that the best companies have a culture that empowers every employee,
girl, she gets a lot of stares on job sites. Some men ask her if she knows what she’s doing and if she needs help. Assertively, she let them know that if she needed help, she’d ask for it. When women can do the job and do it well without help, it’s very empowering and helps them grow as a person.
As contractors become more aware of the challenges that female technicians are facing in the field, with customers and with co-workers, they can be more proactive in finding solutions and developing a culture that nurtures, supports, and celebrates the women who are working in the field.
If you’re looking to add more women to your team, the most important action you can take is to evaluate your culture.
male or female, to be their own advocate and to be a forever learner. Employees should be encouraged to share their experiences with each other, good and bad, so that they can learn from each other, since no experience is entirely the same. Such companies also celebrate and congratulate every individual and team win, which helps maintain a positive culture, even during the dog days of summer.
Third, as a female technician, it’s essential to know that the contractor has their back. This is very important, specifically in situations where the customer feels the woman cannot perform the job strictly because they are female.
The aforementioned Pennsylvania technician felt very grateful when her owner stood up to such a customer. He politely informed the customer that he had complete confidence in her technical abilities or he wouldn’t be sending her out to the field. The owner also told the customer that if he had any issues with that, he could hire another company to work with. Ironically (or maybe not), this female technician has now been servicing this very customer for the last five years upon the customer’s request.
Fourth, remember that women don’t think the same way as men. A female technician may view or see something completely differently, but it does not mean her way is incorrect. Women see things differently and often pay attention to details differently from men .
Fifth and finally, don’t assume that women need extra help. The female technician from North Carolina shared that as a 5’3” skinny, blonde, blue-eyed
A female technician stated it best when she shared that the very thing that creates a great culture, regardless of gender, is respect. There is no tolerance for arrogance, which can have adverse effects on teamwork and learning capabilities. We all have room to grow and learn from each other, including leadership, which creates a great work environment and reputation.
It’s also beneficial to showcase the women who are working for you. With their permission, use images of them working in the field and share evidence of their workmanship and talents in your marketing and content development. Create videos that highlight their expertise and experience on your social media, YouTube and website. Educate others and highlight women who are working in the trades.
As you strive to develop an inclusive culture that celebrates and respects the individual and not the gender, your team and customers will embrace your female technicians. This will not only help you retain your current female technicians, but it will be very attractive to future female prospects. u
For more information and guidance to help your team achieve a 7-star level of customer service, visit www. SnowBusinessCoaching.com or give her a call at (801) 477-0064. Follow Angie on LinkedIn for more great tips. https://www.linkedin.com/in/ angiesnowsuccesscoach .
IT’S THE LITTLE THINGS IMPROVE YOUR COMPANY CULTURE TODAY
BY WILL MERRITT
Company culture will make or break your HVACR business. If you have created a great culture within your business, success will come naturally. Employees are happier. They want to work harder and perform at their utmost. It’s contagious throughout your organization. We see this from many of our clients. You can tell when you walk into their contracting business or even when you do virtual meetings with them. You can feel good vibes emanating from the entire company. On the other hand, a bad culture will limit your contracting company’s success. If the culture is terrible, it brings your entire team down. Employees don’t care about their jobs or their performance. It just becomes a “job” to them. Bad culture is just as contagious as a good culture. People have more sick days, they show up late, and they don’t go the extra mile for the customer. It all starts from the top. It starts and ends with the owner.
Lead by Example as an Owner
I know we’ve all heard this before, but it’s the truth: The leader must lead. If you’re an “absentee” leader, a poor communicator, or someone who genuinely does not care about your business, it will show. The employees will know and feel it. It will begin to spread
If you’re an “absentee” leader, a poor communicator, or someone who genuinely does not care about your business, it will show.
throughout your heating and air business. YOU MUST LEAD BY EXAMPLE:
• Show great work ethic.
• Be happy, smile. It’s contagious.
• You must be the hardest worker in your company.
• Compliment your employees.
Bite your tongue, even if it hurts.
Lead by example; be your team’s leader.
“You“
Work for Your Employees, Not the Other Way Around
This is the proper mindset every owner must have in order to build a great culture. As owners, we often work long hours committed to growing our business. Trust me, I know, nights and weekends, it doesn’t matter. We are invested in whatever it takes to make our company succeed. And we think our employees should do the same, right? It’s just not going to happen in most cases, and you should not expect that
from them. You work for them. Let me repeat that, “You Work for Them.” The business world has changed from the old days. When I started in the industry in the 1990s, we worked 60 hours per week, and we were glad to have a job. It’s just a different day and age now. As an owner, you must treat your team with the utmost respect. Be mindful of what makes them tick and be concerned about their personal well-being. You must engage in what is going on in their lives, learn about their passions away from work, and get to know their families; you must genuinely care. They are the lifeblood of your HVAC company, and they are directly responsible for your success or failure. If you have this mindset, you will succeed. You work for them.
Give Attention to Your Employees
Do you ever feel like your contributions don’t matter? Employees often feel their efforts go unnoticed. We know the contracting business is a constant rat race, but if you take the
time to recognize your employees, your company culture will improve tremendously. Remember to spotlight accomplishments:
• Employee Anniversaries.
• Courses or Accreditations.
• Better processes or ways to work more efficiently.
• Going above and beyond for the customer.
Celebrate Your Company Wins and Don’t Dwell on the Losses
Our organization loves to celebrate wins by our team. When we gain a new account, we celebrate during our team meetings. Nothing outlandish, a simple “Hell Yeah,” and a round of applause. It’s simple: keep your team involved in your company’s victories. The same goes for losses in business. Everyone can feel a “sense of failure” when your company loses business, in our case, when we lose an HVAC or plumbing client. We analyze what happened, what we could have done better to keep their business, and what we learned from the situation. The team processes and mourns, but only for a short period of time. Remember, it’s business, we have to keep our heads
up. It’s time to learn from our losses and, move forward and do better.
Get Feedback from Your Team
Feedback from your team members is paramount to the success of any HVACR business. Ask your employees for their thoughts and direction on how to improve your organization. What can we do to improve our processes? The sense of involvement makes your company stronger, and employees are more “bought in” on the direction your contracting business is taking. If they feel they are fully involved in company decisions and direction, they become truly vested in your organization. Your people feel a sense of unity with company decisions.
Team Events
Team or company events really drive the bond among your employees. Heating and air conditioning is a tough business, especially during the summer. It’s not fun to face150 degree attics, nor are 12-hour days. So, we must make the time to reward our team members and have some fun. Here are some ideas for team-building events:
Set clear goals for all team members, tally the results, and then reward the overachievers.
• Cook or bring in breakfast for your company.
• Cookouts (everyone loves grilling or barbecuing; invite family members).
• Team building events away from the office;
• Mini-golf.
• Local sporting events (minor league baseball, soccer, football).
• Fun activities (scavenger hunt, egg drop, sack race). Things we did at field days growing up.
• Scavenger hunt.
• Top golf.
• Bowling.
• Christmas parties every year.
• Lunches paid for by you, the owner.
• Training paid for by the company.
These types of events give your employees a chance to let loose and have fun together. It works to grow your culture. Jennifer Beatty, customer
service manager at Andersen Heating & Cooling, says, RESPECT – “We all treat each other the way we want to be treated. It might not seem like much; but after all is said and done, it is the little things that go a long way. I love my TEAM and would do anything to help any member of our team at the drop of a hat.”
Set Goals – Reward Employees for Going Above and Beyond
Remember the old saying, “What gets measured, gets done.” If we are not setting goals in our business, then how do we know if we are succeeding? Or even worse, how do we know if we are failing? Set clear goals for all team members, tally the results, and then reward the overachievers.
Example: Create sales goals for your customer service reps, managers, comfort consultants, and your service technicians.
Competition can really drive people to go the extra mile. The rewards don’t always have to be monetary (not all people are motivated by money). Some are looking for accolades and respect; find what works for your organization.
Improve Your Culture Starting Today
Great company culture takes time. It is a marathon, not a sprint. You must work at it every day. As an owner, start by leading by example and working for your people, not the reverse. Strive to keep the workplace fun, reward your employee’s successes, ask their opinion, and celebrate the triumphs. Great culture will follow. u
Will Merritt is the Managing Partner at Effective Media Solutions, a fullservice marketing agency. With 27 years of experience in the HVAC field, 10 of that in marketing for contractors, our agency has keen insight into our industry that others do not. Contact Will at will@myeffectivemedia.com or (704) 507-7858. “We Speak HVAC.”
COMMUNICATING WITHOUT CONFLICT
The Six Foundations to Effective Communication Strategies to Inspire Your Team & Serve Customers Better
BY DOUG WYATT
There are Six Foundations for Effective Communication. In this article, we’ll continue with Part 02 of this Two-Part Series, outlining the final three of the Six Foundations.
Previously, we summarized the first three Foundations as:
1. The Ground Rules: Communicating to Persuade, Not to Manipulate.
2. Becoming a Wordsmith: The Words We Share Matter
3. Becoming a R.A.R2.E™ Listener: Listening with The Intent to Understand, Rather than to be Understood.
Interestingly enough, we can create just as much emotion with a whisper as we can with a very loud volume.
4. Communicating with Generalizations and Transition Statements: Third-Person Sentence Structure is Key
First, Second, and Third-Person Sentence Structure, combined with Generalization and Transition Statements, is a little-known communication secret. It can practically eliminate sales resistance and have your team recommending solutions and asking for the order like never before.
Simply put, First-Person Sentence Structure is when we communicate in “I” Statements. These statements sound like, “I think you should do XYZ.” Or “I wouldn’t do XYZ.” While there is a time and place for these, when we utilize these types of statements early on in our presentation, it contributes to us feeling and sounding like a salesperson.
Second-Person Sentence Structure is when we communicate in “You” Statements. Quite frankly, we don’t recommend ever communicating in this
way. These are what we refer to as MotherIn-Law Mode or Critical Parent Mode. “You should do XYZ.” Or, “You shouldn’t do XYZ.” The more we communicate in this way, the more conflict and sales resistance we are creating for ourselves.
Third-person Generalizations remove the focus from the person we’re speaking with. They don’t feel like they’re being told what they should do, and they don’t get the impression that we’re a narcissistic know-it-all either, trying to sell them things they don’t need or want.
Perhaps one of the things we enjoy the most about Third-Person Sentence Structure is that it allows us to leverage the Principle of Social Proof (more on that in a bit) each time we speak in this manner.
“Most of our customers in similar situations would install XYZ.” Or “Generally, our most satisfied customers have decided to add an XYZ to their system.”
These generalizations also help us to leverage the Principle of Consistency by sharing what others are doing and help to make us the Authority for being educated on similar situations while leveraging the Principle of Likeability as well.
When combined with adhering to our Ground Rules, becoming a Wordsmith, implementing our R.A.R2.E Listening, and now Third-Person Sentence Structure, we’ll no longer have that potential anxiety that many of us feel about creating conflict with our customers by being perceived as a pushy, annoying salesperson.
5. Utilizing The Seven Principles of Persuasion
To become the most effective communicators, we also recommend utilizing The Principles of Reciprocity, Consistency, Social Proof, Likability, Authority, Scarcity, and Unity as often as possible. In 2006, I read the most comprehensive book I had ever found on the subject, Influence, by Robert Cialdini.
We can all agree that price is a factor in our business. However, we believe our responsibility is to share with the people we serve that the price is only one of many factors to consider. We’ve gone to great lengths to craft presentations that masterfully implement these other seven principles of persuasion to combat the cheap price concern.
RECIPROCITY: In many social situations, we pay back what we have received from others. The key is to be the first to give and to ensure that what we give is personalized and not expected.
CONSISTENCY: We want our beliefs and our behaviors to be consistent with our values and our self-image. We like to be consistent with the things we have previously said or done.
SOCIAL PROOF: A psychological phenomenon occurs when we copy the actions of others in an attempt to undertake accepted behaviors, especially when we are uncertain. Social Proof is more powerful when we are perceived as especially knowledgeable.
LIKEABILITY: People we like tend to have more perceived credibility, care
Becoming an effective communicator will require consistent work and ongoing practice.
about their appearance, are similar to us, and cooperate with us.
AUTHORITY: We tend to be influenced by people in positions of authority. That’s us. When we offer valuable information, we build authority, and our customers are likely to follow our suggestions.
SCARCITY: We want more of the things we can have less of. It’s not enough to simply share the benefits of what our prospects will gain if they choose us. We must also share what is unique about our offering and what they stand to lose if they fail to accept our proposal.
UNITY: We are inclined to say “Yes” to someone we consider one of us.
6. The EKG Method of Performance: Tone, Cadence, Volume, and Speed
Perhaps just as important as everything we’ve outlined thus far is that how we share the words we’ve chosen will determine our results. We like to refer to this as our EKG Method of Performance. And much like an EKG machine monitors our heart, we like to equate the same characteristics to our communication style.
And much like an EKG signaling that we’re dead or dying when our heart flatlines, the same is true when we present with a monotone or flatline style. Our presentation is dead, our sales career is
just as much emotion with a whisper as we can with a very loud volume. And in some cases, perhaps even more. The point is that we can create emotion by lowering our voice, lowering our tone, and slowing our pattern of speech or our cadence.
We can also create emotion by increasing our cadence, or pattern of speech, and by raising our volume. The key is not staying in any one place too long. If we’re continuously talking loud and fast, that becomes the new monotone and will lose its impact. And if we’re continuously talking low and slow, that becomes the new monotone and loses its impact.
We believe the key to any performance is to mix things up, keep the audience on their toes, and keep them guessing with an EKG Method of Performance.
Conclusion
dead, and if we don’t do something to revive it, our business could be dead soon as well.
Our ability to influence, and therefore our results, will be a reflection of how well we perform our intended presentations and words, not the presentations or words themselves. A monotone or flatlining presentation style communicates a lack of passion, energy, and enthusiasm for whatever it is that we are attempting to communicate.
So let’s chat for a moment about the different types of voice inflections, intonations, and speech cadences that are possible while using our EKG Method of Performance as a guide.
First, let’s examine The Flatline. There is certainly a time and place to be right in the middle. However, we simply don’t want to stay there for very long … or we’re dead.
If we begin along the flatline, we can increase the emotion by bumping up our voice inflection or intonation in one of three ways. First, we can speak faster. Second, we can speak louder. And third, we can speak higher or lower with our tone.
Now, let’s also talk about volume. There’s an entire range of volume that can be implemented, much like turning up a stereo or television from zero to 100, from a whisper, to a standard monotone, to being very loud.
Interestingly enough, we can create
Becoming an effective communicator will require consistent work and ongoing practice. Old habits will be required to be broken, and new habits will require time to develop. While these things certainly will not be easy, we believe that those who invest the time to master these skills, will find it a worthwhile endeavor.
Communicating Without Conflict, especially in a sales or influence situation, may be one of the most important skills we can master. It can open doors, close sales, and perhaps most importantly, provide a newfound confidence that many of us had come to believe was not possible for us. We encourage everyone to master these Six Foundations of Effective Communication and witness the incredible transformation in your own life, business, confidence, and relationships. u
Doug Wyatt, founder of Synergy Learning Systems, is an award-winning industry expert with over 20 years of experience in home services. He’s trained 5,000+ HVAC and plumbing technicians and collaborated with 1,000+ businesses. Synergy, recognized by Service Nation as a top valueadding partner, specializes in live and virtual training for call centers, service, sales, and leadership teams. Doug, a certified 7 Habits Leadership Instructor, delivers groundbreaking industry content. Contact Doug at info@synergylearningsystems.net or visit SynergyLearningSystems.net.
MAXIMIZE SALES: EDUCATE CUSTOMERS ON REBATES & INCENTIVES
BY KEN NORTH
Today’s customers have an unprecedented number of rebates and incentives available to help lower the cost of new high-efficiency heating and cooling systems. For contractors, these programs present a tremendous opportunity for sales growth. However, customer skepticism can be a challenge. As customers explore these cost-saving opportunities and compare the benefits of premium systems, contractor knowledge of rebates and incentives is vital to guide customers through the process.
Maximized cost savings for all customers
Historically, many incentive programs delivered cost savings through end-of-year
As contractors develop strategies to leverage online marketing, manufacturers provide a valuable resource.
tax rebates. Although these programs could be lucrative, they often created a challenge for customers who were unable to afford the upfront cost of the system. Today’s programs provide an opportunity to reach a broader customer base using a combination of point-of-sale discounts, tax rebates and affordable financing options.
Combined, these programs can equip more customers with premium systems
at considerably lower costs – and allow contractors to reach a more diverse customer base.
Federal programs such as the HighEfficiency Electric Home Rebate Act (HEEHRA) provide point-of-sale rebates for low- and moderate-income households interested in converting their traditional home HVAC systems to high-efficiency heat pumps. The program offers an immediate discount to reduce
financing and first-cost limitations many customers face, and it can cover up to 100% of an $8,000 heat pump for qualifying customers. Additionally, many states are poised to roll out Customers Managing Energy Savings (HOMES) program guidelines in the coming months. This provides customers at all income levels access to tax rebates on high-efficiency heating and cooling systems.
When combined, these programs provide historic levels of federal funding that customers can use in addition to state, municipal and HVAC equipment manufacturer programs.
In addition to rebates, there are several advantages for customers
weighing financing options. Many utility companies – both electric and natural gas – offer incentives for customers who upgrade to high-efficiency heat pumps or furnaces. These programs often feature low interest rates and allow customers to combine the cost of their home comfort system with their monthly utility bill. Some HVAC manufacturers also offer simplified financing options that provide customers with fixed monthly payments.
Leveraging digital storytelling to engage customers
Cost savings can often create a compelling offer for customers deciding when to upgrade their systems, but many are unaware of the opportunities available now and even for those who may be uncertain about how these programs work or how a premium HVAC system can impact comfort and efficiency. Over half of customers start their HVAC buying process with online research, even before contacting a contractor. That’s why it’s essential to begin the education process before a customer even sets foot in the door.
By building a “digital brag book,” contractors can compile and share tools, testimonials and product information on their website and social media accounts to educate and inform customers before meeting face to face. On the website, tools, including incentive databases and savings calculators, allow customers to easily estimate cost savings. On social media, you can use a series of graphics and videos to focus on key details, allowing customers to build their knowledge.
As contractors develop strategies to leverage online marketing, manufacturers provide a valuable resource. Some manufacturers will provide web- and social media-ready content that can be easily branded and leveraged as part of the contractor’s marketing strategy. Manufacturers may also offer sales and marketing training opportunities to help contractors harness and grow these skill sets.
For example, the Johnson Controls Ducted Systems Academy offers virtual and in-person training courses in sales and professional development designed
Rebates and incentives can be an unfamiliar topic for many customers, and some may feel uncertain about the process. Contractors can help to ease their concerns by serving as an adviser.
to help contractors navigate challenging situations and achieve success. Additionally, contractors can advance their knowledge of premium and highefficiency systems to prepare for their growing demand.
Building confidence through expertise
Rebates and incentives can be an unfamiliar topic for many customers, and some may feel uncertain about the process. Contractors can help to ease their concerns by serving as an adviser. Customers often want to understand how rebate checks are issued and when they will be received.
In some instances, the savings can be immediate, while other programs may mail a check directly to the homeowner. Staying up-to-date on these processes and having documentation from each source can help overcome hesitation. Some contractors may use HVAC-specific customer relationship management (CRM) software to access a rebate and incentive database to gain insight. For those who do not have these programs in place, manufacturers can also be a helpful resource.
In addition to understanding the details of rebate and incentive programs, contractors who can educate customers about the benefits of premium systems, such as variable-capacity air conditioners and heat pumps combined with ultrahigh (up to 98%) efficient furnaces, also stand to gain increased profit margins.
Many cost-savings programs apply specifically to high-SEER/EER equipment. Emphasizing how these systems can reduce utility bills and maintenance costs over time is another important part of the conversation. The digital brag book can come in handy in this phase also by providing a resource where contractors can highlight previous
By combining cost-saving rebates and incentives with low-interest financing, customers can upgrade their homes with high-efficiency, premium HVAC systems while contractors grow their business. u
installations and customer testimonials that demonstrate these results.
By educating customers before and during the sale, contractors can build relationships with customers and help them navigate their options.
Ken North is Director Of Channel Development and Strategy at Johnson Controls.
SURVIVING PEAK PERIODS IN HVAC: HOW MANAGERS NAVIGATE HIGH STRESS & LONG HOURS
BY RICK GUTENMANN
In the HVAC world, peak periods demand full throttle. For most managers, this busy time brings high expectations, increased workloads, and extended hours. Labor shortages, supply chain issues, customer conflicts, urgencies, and emergencies can create high levels of stress. It often feels just as intense inside the workplace as it does dealing with external pressures! The long hours and stress can take a toll on our family life, sleep, exercise, diet, and friendships. Most of us accept the rigors of peak periods as unavoidable, often bidding farewell to our families and promising to return to normalcy after the rush subsides.
At Management Action Programs (MAP), we work with hundreds of clients and thousands of managers in multiple industries, including HVAC. Here are some tips, tools, and strategies in three
Only about 20% of your To Do list is truly vital to your performance and the success of your business.
key areas that will help you gain control of your time, leverage your staff, and reduce costly communication errors, so that you can turn down the heat of stress and turn up the sizzle on performance.
Bonus: These tips, tools, and strategies work all year long.
1. Time - Control time, or it will control you
We can’t actually control time, can we? No matter what we do, it keeps marching along. We can’t buy it, create it, slow it down, or hold onto it. We can only control what we DO within those minutes and hours each day and week.
Prioritize with Pareto
Are you a list maker? There’s relief to get things out of your head and on paper, and crossing tasks off the list is satisfying. Many of us go about our day knocking out a few easy wins and never really considering what matters most. Unfortunately, the items on the list are not equal in importance and don’t deserve our equal attention.
The Italian Vilfredo Pareto taught us what many recognize as the 80/20 rule. The Pareto Principle states that roughly 20% of our efforts yield 80% of our results. The numbers may vary, but you’ve probably already witnessed that a few
technicians or sales staff are driving the majority of your sales. Most revenue is generated in a few hot zones across town. You spend way too much time dealing with a few difficult employees. Similarly, only about 20% of your To Do list is truly vital to your performance and the success of your business.
Focus on the Vital Few
Determine your vital few and prioritize them. Keep your list small, and instead of being mediocre at many things, you’ll be great at a few highly impactful needle-moving things.
All hours are not equal either.
Everyone has pockets of time when they are most productive. For most people, that time is in the morning. We’re charged up and fresh. Our
energy is high, and so are our focus and attention. Protect those energy- and high-focus hours by blocking them from your schedule. Close your door, remove distractions, turn off notifications, silence your phone, and get in the zone. You may have to designate someone else to handle any trivial issues or emergencies during your productive time. This might feel really weird. Start by giving yourself 30 minutes of uninterrupted time and work your way up to 90 minutes. See if you can find another 60-minute block or two in the other parts of the day to do the same.
The 4 Ds
For the other 80%, you have four choices:
• Delegate it.
• Delay it.
• Delete it.
• Do it (try not to).
Challenge 1: Track your time for one full week and analyze the results.
Challenge 2: Use the Pareto Principle and the 4 Ds to cut your workload in half.
Challenge 3: Block off 30 minutes for deep focus during your peak production window.
2. Delegate – Let go to grow
If you’re like most overwhelmed do-it-all types, you really struggle letting others help. Maybe you’re afraid to give them additional work or worried that they won’t do it as well as you. Or maybe you think it’s just faster if you do it. You can do anything. You just can’t do EVERYTHING.
Research conducted by Liz Wiseman and Greg McKeown, authors of Multipliers, indicates most leaders only extract about 50% of their employees’ capacity, while some leaders, multipliers, extract 100% capacity through coaching and development. Does your team have some unused capacity? I’ll bet they do. Delegation not only leverages their time to free up yours, it’s a great opportunity to provide professional development.
Select the right person.
Find the person whose skills match up best with the task, but caution against always tasking your A player. They will never say no and burn out quickly. Pay
Determine your vital few and prioritize them.
attention to workloads and delegate tasks to everyone.
Focus on the results.
Provide clear instructions, a desired outcome, and a deadline, but resist the temptation to micro-manage. In his book Drive, author Daniel Pink tells us that employees want to be players, not pawns. Autonomy is a key piece to what he calls Motivation 3.0. Let your delegate have as much control as possible over when, what, how, and who else to work with. Focus on the results and let them do it their way. They might even do it better than you!
Follow up.
Remember that you are still ultimately responsible. Don’t hover, but do schedule some checkpoints. Be available for additional guidance if needed. And give full credit to your delegate when they succeed. Take full responsibility for failure.
Challenge 1: Choose two things to delegate today.
Challenge 2: Create a tracking and follow-up system.
3. Communication –Is anyone listening?
“The single biggest problem in communication is the illusion that it has taken place.”
– George Bernard Shaw
It is estimated that poor communication is costing us somewhere in the range of 12-18% of payroll. Combine all
reason, we hate silence, and so we feel compelled to fill the dead air with more talking. People need space to think, so they should be willing to wait a long time for the answer. And by a long time, I mean at least three seconds.
Simplify
When speaking, have some compassion for the listener. You know they’re struggling to pay attention, so minimize the history, the lead up, and tangents. Pare it down and focus on a simple message or set of instructions. Einstein said, “If you can’t explain it simply, you don’t understand it well enough.”
The Feedback Loop
the lines of communication inside and outside your company, and then determine the cost of all the mistakes and misunderstandings that could result. You will quickly realize thousands of dollars (profit dollars) are wasted on communication failures.
Poor communication is not only costly, it’s highly frustrating. How can we cool off this major heat source on your stress meter?
Listen first
Everyone is talking, but is anyone actually listening? In a recent survey, 96% rated themselves as good listeners. However, research has revealed that we only retain about 25-30% of what we hear (in the first hour). It’s not completely your fault. Most people speak about 150 words a minute, while our brains process about 400 words per minute. Too often, we’re jumping ahead or thinking about what we want to say, or even worse, interrupting.
Start by removing distractions.
Distractions (phones, notifications, noises, other people) surround us, making it difficult to focus on a single person. When possible, seek out a quiet place. Silence your phone. Quiet your mind. Pay attention.
The sounds of silence
Good listeners ask questions. After asking, wait for the answer and be comfortable with silence. For some
When speaking, make sure you are conveying understanding by having the listener play back the message. It’s amazing how simple yet effective this technique is at eliminating confusion and misunderstanding. It sounds like this: “I want to make sure I didn’t miss anything. Would you mind playing back what I just said?” Use this over and over to make sure everyone is on the same page. You can also reverse the feedback loop when you are on the listening end. “Just to make sure I understand, what I heard you say is…”
Challenge 1: Identify your biggest listening obstacle and commit to minimizing it.
Challenge 2: Use the feedback loop three times today and start making it a habit.
Final takeaway
Turn down the noise by focusing on your vital few and ignoring the trivial many. Be proactive by organizing your time and protecting your productive windows. Use delegation to leverage the open capacity of others while picking up time for yourself. Eliminate the illusion of communication by becoming a better listener and simplifying your messages. Lastly, use the communication loop to ensure understanding and reduce costly errors. Do less. Do it well. Stay out of the heat. Watch your results sizzle. u
Rick Gutenmann is a senior consultant with the Management Action Programs. Contact him at rkgutenmann@mapconsulting.com.
5 WAYS THAT YOUR BUSINESS CAN FALL VICTIM TO FRAUD
BY MICHAEL A. BOHINC
If you are a small business with fewer than 100 employees, you are the perfect target for fraud.
According to the most recent Report to the Nations on Occupational Fraud from the Association of Certified Fraud Examiners, the median loss to a small business (below100 employees) is $141,000; only companies with 10,000plus employees experienced a higher median loss of $200,000. Because small businesses have fewer employees and lower revenues, the impact of a fraud loss hits them harder than larger companies.
Here are five areas of your business where fraud often occurs:
Fuel Expense
This is one of the most common types of fraud that contractors face. You have employees using company vehicles for personal errands or side work. (This doesn’t just cost you money. It exposes you to significant potential liabilities with your insurance coverage.)
You also have employees filling their personal vehicles as well as family and friends’ vehicles using company fuel credit cards. In a number of cases studied, technicians would call their spouse or family member and meet them at the
Cash is the asset most susceptible to theft. It is easily misappropriated, lost or stolen. It is essential to have effective internal controls over cash transactions (receipts … sales and disbursements ... petty cash, and also credit card processing by employees).
gas station. They would back up their personal vehicle to the pump where the technician was fueling the company vehicle. They would fill their personal vehicle after filling up the company vehicle. They did this in one transaction, so it was harder to detect. The increased use of technology (GPS on vehicles) and monitoring of expenses via company Key Performance Indicators (KPIs) have brought many of these thefts to light in contractors’ businesses.
Cash
Cash is the asset most susceptible to theft. It is easily misappropriated, lost or stolen. It is essential to have effective internal controls over cash transactions (receipts … sales and disbursements ... petty cash, and also credit card processing by employees).
Here are a few ways that employees steal cash from the company. A customer pays a technician in cash for a service call. The technician pockets the money and tells the office that they canceled the call when they got there, or they’ll cover their tracks by forging the service ticket and turning in only the amount of the service call fee and say the customer declined the work.
I’ve also heard stories where the technician asks the customer to make the check payable to him or to cash. It may seem odd, but some manipulated customers do this. The technician cashes the check and alters the paperwork. A technician for a contractor in the Southwest went so far as to get his own credit card machine and set up a bank account with a name similar to the contractor he worked for. He processed client transactions through his own
machine and then made the deposits into the bank account he had set up rather than the contractor’s bank account.
It’s not just technicians that can do this. It happens with office personnel as well. They’ll steal cash payments and then cover it up in the company’s records.
Some ways to reduce this happening include following up with your customers after service calls. Also, have a second (separate) person count all cash receipts that come into the office. It’s also important to lock up all cash and checks received until they’re ready to be deposited in the bank. Again, if possible, after filling out the deposit slip, have separate people make the bank deposits.
Check Washing
Per the U.S. Postal Inspection Service, check washing involves changing the payee name and often the dollar amount on checks and fraudulently depositing them. Scammers typically target businesses more often because the check amounts are much higher, and businesses usually have a predictable schedule for paying bills.
The best way to avoid check washing is to make payments to vendors and others via an electronic payment system (bank, credit card, etc.).
Take your outgoing mail to the post office or give it directly to the postal employee. Do NOT put any mail in the blue collection boxes because, in many cities around the U.S., postal employees have been robbed of their blue box keys and then mail stolen out of them.
Never leave mail in your mailbox overnight.
Put a hold on your mail at the post office if you’re going out of town for any reason (business conference, vacation).
Payroll
There are several ways you can become a fraud victim in the payroll department. They include:
• Falsifying time cards or recording hours worked: This is harder to do with technology and software today.
• Unearned bonuses, incentives or raises: This is an area where collusion between employees may occur.
• Duplicating payroll checks (doublepaying someone): This one should not be difficult to detect if you have someone reviewing payroll and reports on a regular basis.
The median loss to a small business (below 100 employees) is $141,000; only companies with 10,000-plus employees experienced a higher median loss of $200,000.
Inventory
An employee may take inventory items from the shop or a service truck and not report them. They may use the materials personally, on a side job or sell them to someone else. This becomes evident when the company does a physical inventory count. The counts will come up short … i.e. the inventory “shrinks.”
If you don’t conduct physical inventory, then the theft may go undetected for some time. Unless it’s a significant theft, it wouldn’t show up on a financial statement as much of a variance. For example, if someone steals $1,000 worth of materials during the year in a company that has $200,000 in material purchases and that is one-half of a percent of material purchases.
A significant control that you can put into place in this area is physically securing your assets (access to materials and equipment). Lock up your inventory. Check your security cameras for unauthorized after-hours access to the shop (assuming you keep inventory there). You can also establish procedures for ordering materials (i.e. a purchaseorder system).
I’ve also seen a trend in recent years where many contractors are intentionally reducing the amount of inventory items and quantities that they keep in stock. This also helps with the company’s cash flow as you don’t have excess cash tied up in inventory that doesn’t sell frequently.
The above five areas are some of the top ways that a company is susceptible to
fraudulent activities. I believe contractors face exposure to potential fraud in almost all areas of their businesses. Implementing and monitoring internal controls is the best way to minimize the chances that you’ll be a victim of fraud. The cost to implement policies and procedures to reduce the risk of fraud is much less than the cost of recovering from a fraud loss. u
Michael A. Bohinc is a Cleveland-based accountant and owner of Keeping Score, Inc., a financial management and accounting firm. He is a Premier Business Coach for Service Nation. He has more than 35 years’ experience as the Chief Financial Officer of his family’s plumbing business. Michael is a recipient of the Servant Leader Award. He is the youngest to ever receive this honor. Michael will be leading a workshop on preventing and detecting fraud on October 17, 2024, at the Service World Expo in Orlando, Florida. Contact him at (440) 708-2583 or mbohinc@keepingscorecpa.com.
VCD-Series
Features
• Accepts traditional 24VAC thermostats for convenience and advanced control options
• Wired programmable control included
• Optional electric resistance heat kits
Extreme Performance Heat Pump
Up to 18.0 SEER2
Six models to choose from 18,000 to 60,000 BTUH
• Multi-position air handler Operating
PROVIDED BY KEVEN PRATHER, CFBS FINANCE
Don’t Let These Financial Surprises Trip You Up
Surprises on our birthday can make for truly special, wonderful moments. But when it comes to surprises about our finances? Yeah, not so much.
It’s possible, of course, to receive terrific unexpected news that you’ve just inherited a fortune or that the early-stage company you invested in a few years ago has become a unicorn. But let’s face it: Surprises about our money and assets typically aren’t occasions for throwing a party.
The good news: You can take steps to avoid getting blindsided by financial surprises that could leave you with anything from a minor inconvenience to a serious cash flow crunch or other threat to your future security.
With that in mind, here’s a look at some common financial surprises that individuals, families, and others tend to experience at various stages of their lives, along with tips for avoiding them and knowing what’s on the horizon instead.
Retirement Surprises
Unexpected developments when you’re no longer working—and instead relying on savings and investments—may be the most commonly feared type of financial surprise. Without the safety net of a steady paycheck, any uncertainty around money can potentially create a lot of anxiety.
In general, it can make sense to estimate a hefty life span in your financial planning rather than aiming low.
1. Higher-than-expected taxes. Many retirees count on sliding into a lower tax bracket after they’re out of the workforce. While that often happens, the opposite can and does occur—leaving them with higher-than-expected tax exposure. That might happen when people forget that Social Security benefits could be taxable or when they start taking out money from certain retirement accounts (particularly if they’re also getting income from pensions, deferred comp plans and the like). To potentially sidestep this problem, pay close attention to your annual earnings from all sources as well as the specific income levels of the various tax brackets. In some cases, converting a tax-deferred account to an account that allows tax-free withdrawals in retirement can also help keep the IRS at bay.
2. A longer-than-expected life. Living longer than you thought you would should be one of life’s really nice surprises. And it probably is—unless you’re not financially prepared to fund your lifestyle needs and wants far enough into the future. While it may seem ludicrous to think you’ll live to see 100, advances in medicine that, to some extent, roll back the clock on our bodies are becoming more common. In general, it can make sense to estimate a hefty life span in your financial planning rather than aiming low.
3. Bigger personal expenses. Preretirees may often hear that their expenses will fall significantly once they retire. However, it’s quite common for expenses to hover around the same level they were at during someone’s final few working years. And, of course, forces beyond your control (such as inflation’s big surge a few years ago) could cause your cash outflows to rise more than anticipated. The upshot: Don’t bank on retirement being cheap
when running the numbers for your golden years.
‘Life Happens’ Surprises
The number of tasks we have to manage each day can seem herculean, so it’s easy to see how financial surprises could creep up on us. Some to look out for:
1. Overlooked payments. The fees you might pay on overdue bills and the like won’t jeopardize your financial health. But why pay them at all when it’s so easy to put reminders in place that can ensure you don’t forget an important financial obligation? It’s easy to set up account alerts via text or email to tell you of upcoming payments due—or you can schedule regular online payments for recurring bills.
2. Home repairs. A fallen tree, a wildfire, a flood—life happens. Or maybe that roof you’ve been meaning to fix but never got around to finally gave in. An adequate emergency fund is vital for these situations, of course. So, having the right homeowners insurance is important for your particular risk profile. That goes double if you have two (or more) homes in
different states. Such a scenario can lead to complications, particularly if policies from different insurance companies cover the homes. Or say your home was built using expensive or rare materials. If you don’t attend to these factors, the rebuilding costs (in case of, say, a devastating fire) could easily be far, far greater than your coverage.
3. Lawsuits. If you have wealth, you may also have a target on your back as people look to unjustly take your assets from you. Asset protection planning can potentially legally shield your assets from future lawsuits and creditors. However, it’s essential to put asset protection plans in place before someone sues you. What’s more, you need to review wealth protection plans every few years and update them when necessary to reflect changes to your bottom line or your risk exposure.
Conclusion
If you work with a financial professional who takes a comprehensive, proactive view of your financial life, chances are good that the types of financial surprises outlined above won’t trip you up. Still, it’s wise to occasionally review your emergency fund cash, your various types of insurance, and any planning you’ve done regarding your retirement spending.
If you’re unsure how well-protected you are against the impact of financial surprises, consider stress testing your plan to see how your financial picture could look under various scenarios. That way, you’ll know whether you’re in good shape—or if you need to take steps that can keep your financial life steadier and more predictable. 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.
BY RUTH KING FINANCE
12 Most Common Financial Statement Mistakes to Fix Before You Sell – Part 2
Whether you plan to sell your business to family, employees, or outsiders, you must present clean, accurate financial statements to potential buyers.
There are 12 common financial statement mistakes to avoid. Last month, I discussed the first three: operating on a cash basis instead of accrual, mismatched profit and loss statement and balance sheet dates, and an unbalanced balance sheet. This month, I’ll cover the next mistake. To present your company well, ensure your financial statements show growing profitability.
Mistake #4: Negative Gross Profit
A negative gross profit means you’re selling items for less than their cost.
For example, a client once told me, “We lost $80,000 this month; we’re going out of business.” They hadn’t actually lost that money. The loss appeared because they ordered materials for a large job that hadn’t started yet. The materials were incorrectly categorized as cost of goods sold instead of inventory, leading to a false loss on the profit and loss statement.
Another common issue: “We’re busy, but we’re losing money.” Both situations arise from what I call “financial statement fruit salad.”
What is Financial Statement Fruit Salad?
Financial statement fruit salad happens when revenues and expenses don’t match in the same month. This often results from a lazy bookkeeper. The only time you might see a negative gross profit is if your company only did warranty calls and callbacks in a month, with little or no revenue but significant labor and material expenses.
Financial statement fruit salad happens when revenues and expenses don’t match in the same month.
If revenues are recorded in one month and the expenses for those revenues are recorded in another, you end up with fruit salad (apples and oranges) on your profit and loss statement. This mismatching is disastrous. Revenues must match expenses in the same month to ensure accurate financial decisions.
If your bookkeeper separates revenues and expenses across different months, you’re misleading yourself. The month with revenues but no expenses will look profitable, giving you a false sense of security. The month with expenses but no revenues will show a loss, making you unnecessarily worried. Neither scenario
reflects reality.
Lazy bookkeepers might close the month without ensuring all revenues and expenses match. They might also misclassify materials ordered for jobs as cost of goods sold without recording the corresponding revenues.
A common reason for being busy but losing money is improper accounting for maintenance sales.
Example:
Mrs. Jones pays for a maintenance agreement in January, which you record as a January sale. You perform the first
check in April and the second in October. In January, you have revenue with no matching expenses. In April and October, you have expenses with no matching revenue. This creates financial statement fruit salad, where January’s profit and loss looks better than it should, and April and October look worse.
Seasonality can skew your financial statements. Even in slow months, your gross margin should remain consistent. With properly accounted recurring revenue, your company should at least break even in slower months.
A positive gross profit is normal. Ensure your bookkeeper isn’t creating fruit salad in your financial statements. u
Ruth King has more than 25 years of experience in the HVACR industry and has worked with contractors, distributors and manufacturers to help grow their companies and become more profitable. Contact Ruth at ruthking@hvacchannel.tv or at (770) 729-0258.
PRODUCT FOCUS »
APRILAIRE
AprilAire has introduced the 720 Fan-Powered Evaporative Humidifier. Like all AprilAire Humidifiers, the 720 is part of the AprilAire Healthy Air System® with the ability to maintain balanced relative humidity between 40%–60% which has been shown to reduce the incidence of respiratory infections and symptoms related to allergies and asthma by minimizing the formation of bacteria and viruses. The unit’s inventive onepiece disposable water panel assembly cartridge can easily be changed out in 60 seconds and contains a maintenancefree strainer.
www.aprilaire.com
DANFOSS
Danfoss expands its digital portfolio with the launch of the ICAD B, its next-level connectivity and real-time remote monitoring. Designed for reliability and user-friendly operations across a wide range of applications, the new actuator eases workflows with a wireless interface that offers remote control and adjustment, eliminating the need to manually access the valve. Fully backward-compatible, the ICAD B seamlessly replaces the current ICAD A. www.danfoss.com
FELLOWES
Fellowes is highlighting its new Array Air Quality management system, designed to ensure superior protection against asthma and allergies in the workplace. Fellowes’ innovative Array system, equipped with a unique and powerful fan design, works alongside HVAC to help spaces achieve additional equivalent air exchanges per hour (eACH). At the heart of the system is the H13 True HEPA filtration technology, which removes 99.95% of airborne particles as small as 0.1 microns. This includes dangerous contaminants such as PM2.5, polycyclic aromatic hydrocarbons (PAHs), and volatile organic compounds (VOCs), ensuring powerful protection against particles often too small to see but perilous to health.
www.fellowes.com
SOLATUBE
Solatube International Inc. has announced the launch of its latest residential innovation, the ClimaSense™ Series Solar-Powered Attic and Garage Fans. The fans are engineered with integrated sensors that detect temperature and humidity changes, automatically activating the fan to maintain desired conditions. During the day, the fan is powered by the sun’s free daylight. At dusk, it seamlessly switches to house power and continues running for four hours into the night. By pre-cooling the home’s attic before the next hot day, the system enhances overall thermal efficiency, lowering the entire home’s temperature while reducing strain on the air conditioning system and decreasing air conditioning costs.
www.solatube.com
IPEX
IPEX’S new System 1738 PVC Product Line is a flue gas venting plumbing and mechanical solution certified to the stringent UL 1738 standard, a development for gas-fired water heaters, furnaces, and boilers. With a maximum flue gas temperature rating of 149˚F, System 1738® PVC meets the requirements of UL 1738 for gas-burning appliances, categories l and lV. The PVC venting system resists UV degradation with clear markings indicating material type, application, and temperature rating for easy identification and installation. Featuring durable solvent welding joints and UL GREENGUARD Gold-certified cement and primers, this system ensures long-lasting performance and ease of installation.
www.Ipexna.com
TESTO
Testo is introducing the BluetoothEnabled Testo 770-3 Hook Clamp Power Meter. This new product incorporates all the capabilities of its counterparts in the Testo 770 series. The Testo 770-3 stands out with its added features of real-time power measurements (Watts), power factor assessment, and Bluetooth connectivity. Utilizing the Testo Smart app, users can remotely access, monitor, log data, and generate reports. This convenient application enables the creation of personalized reports, complete with images, data, and graphs, which can be conveniently saved or shared via email.
www.testo.com
WARREN CONTROLS
Warren Controls, a manufacturer of control valves and specialty fluid handling products, announces significant enhancements to its ARIA Series Actuators, which are now available with more robust power supply options. These improvements are designed to meet the demanding needs of commercial steamfired water heater applications. The ARIA actuator, designed specifically for Warren Controls’ electrically actuated industrial control valves, delivers performance with its 12-bit hall-effect feedback, providing controllable linear resolution exceeding 2,000 parts per inch. This feature ensures seamless auto-recalibration to achieve the maximum valve flow coefficient (Max Cv) capacity according to actual demand. www.warrencontrols.com
ZIRCON
Zircon has released its latest innovation, the SuperScan® ID advanced stud finder. The Zircon® SuperScan® ID advanced stud finder with One Touch™ technology enables a user to map virtually all objects behind the wall surface, all in a single mode. The new stud finder boasts an intuitive user interface that includes a 4-Color Target ID display, target indicator bars to indicate the center, left edge, and right edge of wood and metal studs, as well as a low battery indicator. www.zircon.com
20QUESTIONS >>
with MAYNOR GUTIERREZ
Editor Tom Perić sat down with Maynor Gutierrez, owner of Ontario, California-based Macawsome Heating & Cooling, one of our Tops In Trucks Design Contest winners. The two discussed the impact of rebranding, how Macawsome chose their branding theme and the challenges of running a family operation.
1. What is something you do that annoys your wife?
When I throw Byanka’s coffee away before she “finishes,” even though it’s been four hours. I drink my coffee in less than 15 minutes.
2. What is something you thought you would have but haven’t yet?
A boat to go fishing. I love to fish, and I’m working on getting the boat. Fishing is a great way to unwind from business.
3. What is a ridiculous thing you’re afraid of?
I’m afraid of cats. When I was a kid, running along the beach, a cat jumped on my back and scratched me. So, I’m always careful around cats. I am also ridiculously terrified of rodents. I know many people are too, but in my line of work, I come across it a lot more than I would like to.
4. What is the last thing you Googled for fun?
Fishing dates. We love to go deep sea fishing. Sometimes, I look up jokes about air conditioning. It’s a nice way to relax, and sometimes I share them with customers. For example, “Why did the air conditioner apply for a job? It wanted to be a cool employee!”
5. What are three things you have to do every day?
I make coffee first thing, then I check emails to find out what’s urgent, and then I line up the team and send them to their jobs.
6. How did you get started in the HVACR business?
I was 19 years old working in a warehouse, I looked around and thought to myself, “I need to get into a profession so I can provide for my future wife and kids.” I went to work for a contracting company that did new construction. I started as a helper, and within three months, I became a team leader. To round out my training, I attended HVAC classes every Saturday for one year. This helped to round out my practical experience with the educational parts. After a year of classes, I got my contractor license.
7. What made you decide to rebrand your company?
I wanted to present a professional look so that potential customers in my service area would notice me. If they saw one of my trucks, I wanted to make it easy for them to find or contact me. I also knew that if potential customers kept seeing my trucks, the message would be that we were working with a lot of people in the community. That repeated exposure is a powerful message.
8. Who made the decision, and how did you finally decide to go forward with the change?
Both my wife and I made the final decision to move forward with the rebranding. We found a creative agency and after meeting with them we had faith they could help us execute our plan. They listened carefully to what we had in mind, and we went through several drafts of different options and finally settled on what we have today.
9. How did you decide on the style and look?
I wanted to use elements from my Central American heritage. I’m originally from Honduras, and the Macaw is the national bird of Honduras. I wanted the palm trees to represent California, where we live. I thought the combination of the two gave a pleasant feeling of how people think of relaxation and comfort in warmer climates. As we say on our trucks, “Paradise in every room!”
10. What did this new look cost, and how many vehicles did you change?
Total rebranding cost about $60,000 to $70,000 for our four trucks and a Prius.
11. Was the return on investment for the branding effort worth the cost?
Yes, it paid off by attracting new customers directly and increasing the professional look that my wife and I were searching for. There’s always hesitation about whether you should move forward. We both realized that if we were really going to grow as a business, we had to take the risk. It paid off big time.
12. What do your employees think about the new look?
They love it and feel proud to be part of the company. It gives them a stronger sense of identity working for the company. Customers seem to like it also because it stands out in a pleasant way. Also, when you have a uniform on, customers automatically know who you are and are
13. Would you change anything about the rebranding effort if you had to do it all over again?
I would have started sooner. Starting sooner would have increased our growth, but you can’t look back. For us, we’re glad we started when we did, and it’s worked out really well for us.
14. If you had to give advice to another contractor about rebranding their fleet, what would you tell them?
I would tell a fellow contractor that it’s worth investing in a good rebranding effort as soon as you can. It will increase business and pay for itself, which I believe is a terrific return on investment. Plus, with a rebranding effort, you’ll look more professional.
15. Is there an aspect of the business you enjoy managing but should delegate?
I enjoy being in the field and with customers, but know that I need to spend more time in the office. Being in the field gives me a close-up look at what customers think and what they say. I like that.
16. In which areas of management do you excel and why?
Customer service. It’s simple in a way. Find out what they want and give it to them. Be pleasant with them, and be considerate. I understand a basic rule. The real customer is one that stays with you. That’s what I’m after. In my perfect world, my customer never leaves me.
17. If you started your business all over again, what’s the one thing you would change?
I would not work with home insurance companies and focus on reaching customers directly. They provided steady jobs at first, but the low pay limited my earnings. I got too comfortable relying on them instead of seeking direct customers. By focusing on direct customers from the start, I could have charged market rates, had more control, and grown my business more effectively.
18. Who is your business hero?
My mom taught us from a young age that the key to a business is knowing how to manage it. And, I would also add Tommy Mello, a home service expert. He advises mastering one business entirely before starting another.
19. Who do you rely on for advice?
My friend Adel, who has a plumbing company, and Stephanie, who has an air conditioning company. We trust each other and have honest, open conversations about the business.
20. Give us three words that best describe you. Positive, persistent, forward-looking.
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.
