HVACR BUSINESS NOVEMBER 2022

DEPARTMENTS

5 Editor’s Notebook

By Heather Langone

By Gregg Hicks

By Bryan Mitchell

By Heather Langone

20 Questions with

of

By Michael Daly

By Will Merritt

By Tom Tasker

By Ruth King

TIM FERGUSON Owner

MORAL OF HIS STORY? KEEP DIGGING.

In 1999, Tim Ferguson built his business from the ground up, starting by digging ditches to install plumbing. Two decades later, along with his son-in-law, GM Jacob Hamilton, he’s built a thriving company that puts people first—whether it’s through sponsoring a fund that helps employees with emergency costs or supporting a restaurant that provides a community for people in need. For these reasons and more, they are truly Building a Higher Standard .

See how you can become

dealer

THE HVACR MANAGEMENT MAGAZINE

TERRY Tanker

Publisher ttanker@hvacrbusiness.com

HEATHER Langone Managing Editor hlangone@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

ERIC Hagerman

VP Sales

Tel 216-409-3246 ehagerman@hvacrbusiness.com

TERRY Tanker Publisher

Tel 440-731-8600 ttanker@hvacrbusiness.com

EDITOR’S NOTEBOOKBY HEATHER LANGONE

Contractors: Start 2023 Fiscally Fit

It’s time to review your fiscal year-end checklist. Year-end accounting does not neces sarily always refer to January through December.

HVACR Business, founded January 1981, is a monthly nation al trade magazine serving contractors, mechanical engineers, manufacturers, manufacturer representatives, wholesalers, distributors, trade associations, and others in the heating, ven tilating, air conditioning and refrigeration (HVACR) industry primarily in the U.S.

The editorial focus and mission of HVACR Business is to pro vide business owners and managers with the very best busi ness management concepts available. Critical topics covered include leadership, management, strategy, finance, sales, mar keting, training, education, staffing, operations, human resourc es, legal issues, customer service and more. We are dedicated to helping contractors master these key management skills and provide them with the resources necessary to build strong, profitable companies. Every effort is made to provide accurate information, however, the publisher assumes no responsibility for accuracy of submitted advertising and editorial information.

Copyright©2022 by JFT Properties LLC.

No part of this publication may be reproduced or retransmit ted 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 substan tial monetary damages up to $100,000 per infringement, costs and attorneys’ fees.

This publication should not be utilized as a substitute for profes sional advice in specific situations. If legal, medical, account ing, 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 responsibil ity for the accuracy or completeness of such information or for loss or damage caused by any use thereof.

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HVACR Business (ISSN 2153-2877) Copyright ©2022 is published monthly by JFT Properties LLC,31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039, Phone: 440731-8600. Periodicals postage is paid at North Ridgeville, OH and additional mailing offices. (USPS 025-431)

POSTMASTER: Send address changes to HVACR Business, 31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039.

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Most small businesses do choose the 12-month period or fiscal year that matches the annual calendar. However, not always, some businesses tailor their calendars to align with busy quarters or busy industry seasons. So, while December might not necessarily correlate with your end fiscal review, no matter your preference, setting the calendar to do a traditional “end-of-year” fiscal review is always a good practice. Set an appointment in November with your financial team to make sure your books, accounts receivable, accounts payable, balance sheets, and inventory reports are all in order as you head into 2023.

YEAR-END FINANCIAL SUMMARIES

Many companies jump from year to year, and if they continue to see an annual profit, they pay little attention to balancing year-end books or creating end-of-year financial reports. Not only is this bad for business, but it can affect a successful sale or transition when you choose to retire. It can also impact taxes, and affect profits, especially if there are errors in accounts payable vs. receivables.

Here are my editor’s tips for getting your year-end accounting in order before tax season.

1. CHECK ALL INVOICES – PAID AND OUTSTANDING

Most financial platforms and reporting software allow you to track invoices, both paid and outstanding. Now is the time to make sure that all your invoices were sent, paid, and paid in full. If there are any outstanding from the past 12 months, try to collect or settle these balances so that they do not carry over into the new year. Correct any errors in invoicing. This also means making sure that invoices match inventory reporting, balance sheets, and amount billed vs. amount paid. If there are outstanding invoices, now is the time to set reminder alerts and schedule invoice follow-ups to go out in December.

2. EXPENSE REPORTS

Do a cross-check on expense reporting. Are all your expenses recorded? If not, update that report. And if any

outstanding expenses require reimbursement – i.e. reimbursing employees with expense accounts for expenses they paid out of pocket – set a reminder to settle those amounts by year’s end. This is a very important step that when missed, can greatly impact the deduction amount on your taxes, as well as proof of expenses if you are audited.

3. VENDOR BILLS OUTSTANDING

In addition to making sure all of your customers pay you, you need to square away any unpaid vendor debts your small business has accrued.

4. MILEAGE ACCOUNTING

Most HVACR companies have software that tracks mileage for field service accounting and business mileage tracking for sales execs. Make sure that this account is up to date. Review all mileage reports, balances on outstanding gas cards, and GPS tracking. Make sure all field service technicians’ mileage has been tracked and accounted for throughout the 12 months. Run reports and crosscheck all to ensure that balance sheets are accurate and that all mileage has been tracked and accounted for on all business vehicles.

5. PAY VENDORS

Pay outstanding bills from the previous year. You can’t pay all of them, some will carry over, but crosscheck inventory, vendor, and outside contractor invoices with outstanding bills, reconcile and if there are no errors, pay them. It’s a best practice to go into the new year with as little debt as possible.

Finally, one last tip which may seem obvious – but contractors have been known to skip the following – triplecheck your bank statements to make sure they match all financial reports for accounts payable. Cross-check what was invoiced, paid, ordered, and expensed to make sure the numbers balance out in case there are errors as in your doublepaid, or in the worst-case scenario, theft.

For more in-depth information on staying fiscally fit in HVACR, be sure to read our resident financial expert columnist, Ruth King’s monthly column. She offers invaluable advice monthly, replete with graphs, examples, and intricate checklists. Subscribe and follow her column – it’s like having a front row to a lecture with one of the most respected financial HVAC experts in the industry. To send comments and inquiries please email hlangone@hvacrbusiness.com. And to read more of Ruth King's column, go to www.hvacrbusiness.com/staff/ruth-king

Set an appointment in November with your financial team to make sure your books, accounts receivable, accounts payable, balance sheets, and inventory reports are all in order as you head into 2023.

TOP

HVACR TECH, ENERGY

BY HEATHER LANGONE

The HVACR field is an aging field, albeit an evolving one. As with any evolution, there are growing pains. But there is also a newness and excitement to the changes.

Post-pandemic — a busy period but one of imposed stasis while people hunkered down indoors — it seems that the industry not only picked up steam but is functioning at warp speed. With tech trends, sustainability growth, and regulatory changes all expected in 2023, and even changes with in-person training moving to virtual, HVACR owners are having to adapt quickly.

After some research, I have whittled down the following list to the most pressing trends and changes being buzzed about in 2023. Having spoken to many HVACR owners, the consensus is that the evolution is here and the need to advance to GPS software, advanced IT and security systems, and mobile tech for service calls, as well as

updated CSR and HR systems, has become necessary to stay competitive.

WHAT SHOULD HVACR OWNERS EXPECT IN 2023?

As we near the end of a busy year, I thought it fitting to look ahead and forecast some of the top tech, energy, and software trends that you can expect in 2023.

1. GREEN BUILDING, HEATING & COOLING ALTERNATIVES

If you are an HVACR owner (doing work with commercial customers especially) you might want to pay attention. As we roll into 2023, prepare for more builders to expect “green” systems. Your team will need to be highly trained, and your inventory/ vendors will need to be aligned to adapt – particularly if you are a small family

business that is run in an old-school fashion. While there is nothing wrong with being a small mom-and-pop catering to locals, even for you, things will shift. With regulatory changes and more builders catering to consumer demand, green building is no longer reserved for “big corporate”. So, if you plan to stay competitive in the next ten years, now would be the time to make changes. More and more new properties are being built with eco-friendly designs, to use minimal energy for heating and cooling. Insulation is no longer enough. According to KGG Consulting, Green builders must work directly with HVACR system

Smart home systems have been a giant trend for homeowners this past year. These are all-encompassing “smart” heating and cooling systems – not simply just the thermostats – and they allow homeowners (and commercial property owners) to integrate their HVACR technology with most of the other functionality throughout the home.

installers to achieve the “green” goal. KGG explains how this will impact materials and coordination between builders and HVAC systems installers, in an article titled, What is the Role of an HVAC System in Green Buildings?1

To build more environmentally sustainable, builders should prioritize the role of the HVAC system in green buildings [whether]…upgrading or replacing an old inefficient system with a modern green model, will result in major savings. The energy-efficient theme is evident in HVAC trends for sustainable buildings… More sustainable HVAC systems, such as solar or wind power, are becoming increasingly popular. To keep HVAC equipment operating expenses low, utilize renewable resources.

And says KGG…

Here are several current HVAC trends that green builders should be aware of:

• Mini-Split Systems

• Variable Speed HVAC Systems

• Heat Recovery Ventilation

• Thermal-Driven Air Conditioning

• Ice-Powered Air Conditioning

• Recycled Quiet Duct Wrap

• Geothermal Heat Pumps

This leads to the next change coming in 2023, and this one isn’t voluntary – it’s the regulatory changes taking effect in 2023.

There are some caveats, and regulatory effects do vary statewide so be sure to do your research. But the federal government is imposing these mandates starting in January 2023. However, the government will not require you to replace older heat pumps or air conditioners when the minimums become the federal standard. Any 13 SEER models will no longer be allowed – be sure to adapt when doing 2023 inventory forecasting. Your new equipment must be rated 14 SEER (Seasonal Energy Efficiency Ratio) at a minimum – it is 15 SEER in some states. Also, any new heat pumps must adhere to the HSPF rating of 8.8. Check with the U.S. Dept. of Energy for more information.2

Until this change is mandated, the efficiency baseline remains 13 SEER for heat pumps and air conditioners installed in homes in the northern half of the U.S. and 14 SEER for equipment in the southern states.

But in a few months, the minimum standard will be 14 SEER for northern states and 15 SEER for southern states.

Refrigerants

Changes also impact the kind of refrigerants manufacturers will use in new air conditioners and heat pumps. Due to global concerns and a move toward creating climate change initiatives, R-410a, a hydrofluorocarbon (HFC), will be eliminated or phased out. This refrigerant has been found to have a harmful environmental effect if it leaks. The EPA has announced a phase-down directive on the manufacturing and import of HFCs by 85 percent over the next 15 years.

How does this impact your company?

equipment repairs during the phase-down, new air conditioners and heat pumps will not contain R-410a beginning next year.

Manufacturers will begin to roll out their new products. So, again, if you are budgeting and forecasting for 2023, keep this in mind.

In addition to Smart Home Systems, sustainability concerns, and a focus on IAQ, there will be increased consumer demand for the following:

• Solar-powered HVAC systems

• Variable speed compressors

• Inverter air conditioners

• Geothermal heat pumps

• Sensor-enhanced vents for IAQ

• Motion-activated A/C Units

See our latest product page3 and industry news and product focus both in the issue and online. Also, be sure to subscribe to our monthly Ahead of the Curve4 newsletter, where we issue product releases and company updates on all the latest.

thermostat from your smartphone or get an early warning of leaks. The suite of products means you can take control, wherever you are.

What does this mean for you, the HVACR owner?

Potentially, this increased demand by consumers for the installation of smart home systems could mean an increase in profitability. But that may also mean an initial investment both in supplies and in training. Because increased smart systems will lead to increased preventive maintenance. Tip: After any smart system upgrade, be sure to sign up customers for preventative maintenance contracts.

2. ENERGY & REGULATORY CHANGES IN 2023

Heating Efficiency

Federal regulatory changes are taking effect in 2023 and they will impact HVACR manufacturers and owners. The minimum rating for heating efficiency will increase for air-source heat pumps. The heating seasonal performance factor (HSPF) is moving from a required 8.2 to 8.8.

Starting in 2023, new cooling systems will contain a refrigerant with a lower global warming potential. Several manufacturers have announced plans to build heat pumps and air conditioners compatible with the new R-454b. R-454b is more environmentally friendly. But again, there are some drawbacks, R454b is mildly flammable. The best approach is to stay informed. Knowledge is power. Make sure to train all your technicians on the changes.

Although R-410a will still be available for

3. INCREASED CONSUMER DEMAND FOR SMART HOME SYSTEMS

Smart home systems have been a giant trend for homeowners this past year. These are all-encompassing “smart” heating and cooling systems – not simply just the thermostats – and they allow homeowners (and commercial property owners) to integrate their HVACR technology with most of the other functionality throughout the home. An example, a homeowner can adjust a thermostat temperature via remote or voice remote. But since smart home systems are in demand, the better option is an entire home system. So, most companies now suggest and offer entire home systems. An entire home system fits into your life and works with your current appliances. As an example, you may be able to control your

4. HIGH TECH GPS, MOBILE COMMUNICATION, APPS, AND CSR

With a move to everything “smart” controlled, customers will expect more advanced field service both at the inhome appointments and in between – this includes all communication. If customers are becoming more inclined to immediate accessibility in their daily lives, they will have higher expectations regarding customer service and field service communication. A move to mobile communication, automated text alerts, apps, and GPS will be necessary. Advanced GPS is essential to integrate communication between the customer, the field technician, and even the sales and product managers. See our article by Kevin Aries in the June issue.5

5. VIRTUAL REALITY (VR) & REMOTE TRAINING FOR HVACR PROS

The HVACR workforce is dwindling

Virtual reality training is a nice substitute for remote instruction because it simulates the on-site experience.

continued

7

as more owners and skilled trades workers retire. Not a new issue, in the post-pandemic era where everything became remote, the industry had to discover new ways to train – VR, Remote, and Hybrid have grown in demand. While most of us don’t believe there is any suitable substitution for on-the-job training and in-the-field training, there may need to be a middle-ground compromise here, as more manufacturers and companies are offering Virtual Reality training and remote learning. According to the U.S. Bureau of Labor Statistics, the 2016-2026 job outlook for HVAC technicians is expected to grow 15%, more than three times as fast as the average 4% growth rate of all occupations. Yet, the pool of qualified labor is not expected to keep pace. We have recently reported on several companies offering online classes, troubleshooting, and actual training.

Virtual reality training

Virtual reality training is a nice substitute for remote instruction because it simulates the on-site experience. It allows technicians to practice in real-life field scenarios. This also allows technicians some autonomy while learning as they can work

on equipment without instructor oversight or potential “real-world” problems. In addition to training, it can be used in a hybrid way, before or during the onboarding process to refresh a technician’s skills before embarking on a complicated job. Again, while there is no substitute for real-world training, to attract young people to the field, a generation largely raised on YouTube, the industry must adapt and companies are taking note.

Remote training

Trade associations are offering digital learning opportunities that technicians can access remotely. This does not simulate real life but does allow for training with an instructor regardless of location. It is a good way to attract potential technicians and

offer credit and training updates. It is also valuable to companies because one training, with one instructor, can accommodate several hundred students. An increase in income, without the cost of location, personnel, and overhead. You may need to invest in software, but it’s a minimal cost compared to sending a recruit to a school or having to run an event to recruit and train. It’s also easier to market online. You aren’t restricted to location so one social media post can attract hundreds or thousands of interested candidates. Also, a remote session can be saved as a webinar to view later, so techs can log in from any location, at their own pace, and based on their schedule. Again, this has training benefits internally as well. It can be required viewing for all new techs or to refresh skills, without having to

bring in more personnel or take time away from service calls.

In the coming months, we will be talking to more HVACR pros, launching our 2023 spotlight series focused on some of the giants in the industry, and talking about more trends and products you can expect this year.

Feel free to let us know what you’d like to see more of in the future – i.e., trends, spotlights, or more product information. u

Heather Langone is Managing Editor at HVACR Business Magazine.

1Ambrosetti, 2022, https://kggconsulting.com/article/ construction/what-is-the-role-of-an-hvac-system-in-greenbuildings/

2https://www.energy.gov/

3HVACR Product Page, https://www.hvacrbusiness.com/ news/products/

4AOTC Newsletter, https://www.hvacrbusiness.com/ eNewsletters/

An increase in income, without the cost of location, personnel, and overhead. You may need to invest in software, but it’s a minimal cost as compared to sending a recruit to a school or having to run an event to recruit and train.

TIPS FOR BETTER TEXTING WITH HVACR CUSTOMERS

Know

BY GREGG HICKS

Homeowners want to work with contractors who communicate in ways that reflect their preferences. In a recent Modernize Home Services survey of more than 1,700 homeowners, only 8% said they prefer to speak with contractors on a phone call. Texting is the most popular choice and is more likely to be opened and engaged. Furthermore, contractors in our network report that close rates go up by an average of 15% when they text their leads.

Using this medium effectively as a contractor takes more than just knowing how to text. Every interaction with your customer counts. You need to know what to avoid and the proper techniques to close successfully.

There are four principles to remember if you are an HVACR contractor, texting homeowners.

1. KEEP IT SIMPLE

Use clear, straightforward language in every text message. Homeowners don’t want to read long blocks of text. Remember, this isn’t an email or a letter. It’s a text. So, show homeowners that there is value when engaging with your texts, by sending short, attention-grabbing messages like:

· Schedule your free HVACR quote by clicking here (link)

· Get 10% off installation labor if you respond by X DATE

· Save money today by scheduling your free estimate here (link)

2. GET CUSTOMERS TO ENGAGE

Texts are a great way to elicit specific actions from homeowners. For instance, ask them to answer yes/no questions or to click through to a website. If you don’t tell them exactly what they should do, homeowners might read your messages without taking any action. You need to include a call to action to get you closer to your goal. Questions that encourage yes or no responses work well because they are easy to understand. Questions that end with a call to action, also deliver well.

Examples of messages that drive engagement include:

• Can we schedule an expert to get you a quote? Call us at (555) 555-5555

• Can you confirm the appointment scheduled for TIME/DATE?

Answer “y” for yes or “n” for no

• Will you give us an online review?

Please click here

3. IT’S ALL IN THE TIMING

It is best to send messages during regular business hours when homeowners are accustomed to dealing with service people. Don’t flood their phones with too many

messages, as it could be viewed as invasive or as true SPAM. Most consumers have programs that block SPAM – be aware of this before randomly messaging customers –never a good idea. TIP: Text only when you have something valuable to provide. If you aren’t staffed on evenings and weekends, consider using a texting service that can provide auto-responses to inquiries, and queue up those messages first thing in the morning when you’re open for business.

4. LEVERAGE THE POWER OF AUTOMATION

If you’re worried that a move to text messaging as the primary communication tool might overwhelm staff or bother customers, there are a number of text management tools that can help alleviate those concerns. Automation simplifies your follow-up processes and saves time for your sales and customer service teams. If you’re using a CRM, you can integrate texting capabilities to measure, track, and optimize this communication. Automation can be very powerful when used correctly, meaning you use it as a tool. But at some point, there should always be a human on the other end of that initial communication.

ADAPTABILITY AND FLEXIBILITY ARE GOOD BUSINESS

Savvy contractors always adapt to customer preferences. It’s that flexibility and forward-thinking approach, that differentiates one contractor from another. Today’s homeowner prefers a screen, not a voice when communicating about projects. Most times, consumers won’t even pick up the phone unless it’s a known caller. HVACR contractors need to recognize these preferences – and we’ve researched for you – you only need to adapt to these wants. While there are appropriate times for calls, adding texting to the communication process can help land more business and keep satisfied customers continuing to come back. u

Gregg Hicks is a longtime marketer of home improvement services. He is a business leader for Modernize Home Services and has 20 years of experience in web analytics, SEO, social, SEM, and affiliate marketing. His role as a spokesperson is to explain the value of thoughtful matchmaking between homeowners and home improvement professionals that forges positive and productive connections between the parties.

In a recent Modernize Home Services survey of more than 1,700 homeowners, only 8% said they prefer to speak with contractors on a phone call.

TEMPERATURE & ENVIRONMENTAL

PRESENT NEW SERVICE OPPORTUNITIES

BY BRYAN MITCHELL

What if the thermostat you installed last year sent you a text warning that your client’s compressor or fan was about to fail? Or what if you discovered that the rooftop unit you installed in that elementary school last fall, is now blowing at half capacity and the client alerted you on Sunday morning?

Your business can profit from a dashboard that shows every one of your client’s temperatures, humidity, and IAQ in real-time, and delivers reports that show trends over time. Advanced capability — customer IAQ and realtime tracking installed in minutes and deployed for a reasonable upfront price or monthly bundle — is the new reality of commercial sensors and smart customer software. Especially when installed at highly specialized commercial buildings like hospitals, universities, and laboratories. These highly advanced sensors are falling in price while the software is evolving to be more user-friendly – and it’s only getting better.

NEW TECHNOLOGY WILL TRANSFORM THE WAY HVACR CONTRACTORS DO BUSINESS

A new wave of technology providers is entering the HVACR market and they

are armed with advanced and innovative solutions that will transform the way contractors understand their business opportunities while also helping them to deliver improved data-driven service packages. The HVACR market is rife with opportunities to adopt increasingly affordable and simple-to-install products, especially for contractors who are focused on growing their service business and leveraging market growth. The reality is that many of these technologies are selling straight to the end user, some of whom may not be as technically sophisticated as contractors in this space. This represents a unique opportunity for contractors and distributors to collaborate with manufacturers now before the market is saturated with direct sales. And it presents an opportunity to increase recurring revenue and service calls.

Before contractors rush in, attempting to connect every environment they service, a brief background of the technology and opportunities is in order.

IOT – WHAT IS IT AND HOW CAN YOU LEVERAGE THIS TECHNOLOGY?

The world is rapidly advancing toward the digitization of everything.

From connected front door cameras that

keep criminals at bay and delivery associates accountable, to communicating daily alerts from thermostats installed by contractors - it ‘s happening, big change. We’re all in a rush to connect to increase visibility and efficiency.

The Nest might have offered real and immediate appeal, but Ecobee raised the practicality game with its new malfunctioning system alerts.

The “rush to smart everything” can lead to alarm fatigue if we’re not careful about how much we connect and how it’s configured. However, it can also open up a diverse range of customer-focused advanced technology straight out of an episode of “The Jetsons”.

And most importantly, it can deliver data that drives service calls and upselling opportunities.

WHAT CAN YOU MONITOR?

Here are a few more HVACR monitoring opportunities:

• Ambient Temperature and Humidity – This may be the most obvious smart option for monitoring, at least to the conventional HVACR contractor, but service providers with experience in commercial building

management or automation systems like Automated Logic or Schneider’s ExoStructure have a wealth of options to connect, alert, and produce data-rich reports.

• Indoor Air Quality (IAQ) – IAQ is the leading buzz topic among HVACR contractors these days. That is because more customers are working remotely so it’s never been more important. Thanks to a global showdown with the COVID-19 virus, more precise monitoring for airflow and specialized sensors, the list of requests is virtually infinite. If you can dream it, odds are it can be monitored.

Other areas to connect for monitoring include:

• Ventilation levels

• Airflow

• CO & CO2 levels

• Air pressure differential

• Energy consumption

• Door open/close

• 02 levels

• Water exposure

Now that the field is wide open for service opportunities, when coupled with tiered alarms that can ensure the right

Service Is Becoming a Reality: How can you profit?

person in an organization receives a text or email alert, and the newest sophisticated reporting that delivers added value from any HVACR organization, these systems offer far more than “simple” monitoring.

NOT ALL CONNECTED DEVICES ARE CREATED EQUAL

Items to consider before you rush to connect your client’s environment to the cloud include:

Is it made in America or at least assembled here?

German engineering may be renowned and there’s no doubt you can get almost anything cheaply made in Asia, but if your clients come to depend on this technology the same way they do their connected thermostat and doorbell, you probably want hardware made in the United States. Add in the increased burden for the government and their suppliers to buy American, and it likely makes sense to invest a bit more to ensure you’re installing American-made hardware. This may be subjective, but again when it comes to reliability, deliverability, and consumer brand values – it is the better way to go if you can.

Is it hosted on AWS, Google, or Microsoft Azure?

The cloud is consuming, computing, and returning server closets to their original owners, but don’t make the mistake of confusing AWS for My Cousin Willy’s IT.

One is trusted by the CIA and The Pentagon, the other may not be in business after their third divorce. Cyber security and rapid scalability are two of the many features these trusted providers can deliver. Again, in this case, not all IT is created equal.

Do they feature live, Americanbased support?

We all know the unholy treachery of waiting on hold for a support ticket.

Or to be sent through an endless labyrinth of prompts only to explain the same technical challenge to four different reps each located in a different time zone. Everything can and will malfunction at some point, but not every provider stands ready with a friendly American voice ready to get you and your clients back online. If not staffed with American technical and customer service support, at least ensure that the service is prompt and live, not merely chatbots that end in frustration and bad reviews.

While these are likely the most important considerations when exploring

temperature or environmental monitoring solutions, there are some others you should also consider.

Does it have a mobile app?

Today, most of us live on our phones. So, what good is it if we invest in technology that doesn’t arrive with a trusted app, one that delivers real-time alerts, and allows us to see a simple dashboard? Browser-based applications are fine, but they rely on you to open and review them.

An app is always there, always ready to alert your team. Make sure there is a mobile app that complements the monitoring system.

OPERATIONAL TECHNOLOGY VS. INFORMATION TECHNOLOGY – A CRUCIAL DISTINCTION

OT stands for operational technology and is for connecting, monitoring, managing, and securing an organization's industrial operations. Operational Technology is the technology backbone of your organization. It's necessary for monitoring, managing, and securing core functions such as email, finance, human resources (HR), and other applications in either a data center or the Cloud. The major distinction between IT and OT is that IT is centered on an organization's front-end informational activities, while OT is focused on its back-end production (machines).

Examples of OT include robots, industrial control systems (ICS), supervisory control and data acquisition (SCADA) systems, computer numerical control (CNC), and building management/ automation systems.

Warehouses and outdoor areas such as parking lots and highways are rapidly adopting OT to increase safety and efficiency. ATMs and kiosks, connected buses, trains, or a system that allows a city to manage chargers for electric vehicles are further examples.

If you’re an HVACR contractor, you’re a major player in the growing importance of OT.

Temperature and environmental monitoring are playing an increasing role in the expansion of the OT market. Get smart on how to think and talk about OT. And when you and your team are trained enough to understand its importance, you will be opening a door to new revenue opportunities, many of them recurring streams of income. Don’t disregard this technology as it’s increasingly growing more important to the competitive end users and their clients.

How does a monitoring system work within an operational technology framework?

Temperature and IAQ monitoring can be a simple install, in most applications. What was once deemed expensive and clunky hardware by many OEMs has now evolved into “plug-n-play” applications that install in minutes and can be configured to the cloud with the same ease we’re used to when updating our smartphone’s operating system.

This video from Sonicu shows a popular application: a freezer monitor used to protect COVID-19 vaccines. Even more sophisticated applications like air pressure differential or CO2 monitors have become widespread and can be installed in minutes. When you add the opportunity for service and regular calibration, the service revenue is real and will only increase as more customers look to these solutions.

Where can I deploy these systems to leverage new opportunities?

The most obvious opportunity for commercial climate control and refrigeration contractors to seek out lives within industries that have some element of regulatory oversight. If your customers are concerned about the Food Safety Modernization Act, the Joint Commission, or regulations related to the shipment and storage of pharmaceuticals, you likely have an opportunity to upsell these solutions.

When you combine the hardware sale and installation revenue with the opportunity to monitor their environments remotely for an additional service charge, you can be sure it will lead to increased revenue.

Industries with immediate opportunities for remote temperature and environmental monitoring include:

• Healthcare

• Veterinary Medicine

• Life science and Research

• Food production and distribution

• Pharmaceuticals

• Commercial kitchens

• Food banks and non-profit organizations

• K-12 and Higher Education

• Government agencies

The avalanche of federal aid dollars steered toward K-12 school districts during the pandemic means many have invested in new climate control and ventilation systems. Now comes the opportunity to install monitoring equipment to help superintendents and business managers quantify the invisible results of their investments.

How real is cyber risk?

If it’s connected to the Internet, there’s always a risk of cyber hacking. Be sure to review any IT assessments the provider may have completed for their past customers.

Hospitals, research facilities, and government agencies are among the most demanding clients around IT security. If you ask about representative clients and you see these sectors on the list, then their trust in these solutions sends a strong signal that the IT software has been vetted by IT security professionals.

Whom can you trust?

Coldvision.ai is a brand offered by the parent company Sonicu and I would be remiss not to mention it as of course, I stand by this brand. But there are more... TSI offers a wide range of sensors and monitoring solutions. Temp Genius is a brand used in diverse applications.

Elpro is another brand option for the HVACR contractor to consider.

I would end with – start small if you are ready to get connected. Do your research and be open to the world of increased revenue opportunities available. u

Bryan Mitchell leads Inside Sales and Marketing at Sonicu. He previously managed communications and advertising for Carrier and Rolls-Royce. He holds a bachelor's from the University of Tennessee and a master's degree from Oklahoma University.

Operational Technology is the technology backbone of your organization. It's necessary for monitoring, managing, and securing core functions such as email, finance, human resources (HR), and other applications in either a data center or the Cloud.

HVACR SYSTEMS: TAKING

AT OUR ROLE

BY MICHAEL DALY

Most business owners understand the high cost associated with heating and cooling their facilities and therefore frequently look for means to reduce these costs. According to various research studies, commercial building owners pay an average of $6.79 per square foot in non-fixed operating expenses, with over half of the budget going toward HVACR costs. However, these costs come in many forms, not just the apparent more impactful frontrunners. The insidious additional financial impact over time can add up.

They include in part, these factors:

• The impact of downtime when HVACR equipment is not running

• Facilities incurring time and labor lost maintaining equipment or responding

to building occupant comfort complaints

• Undertaking the responsibility of sustainability issues and/or addressing excessive carbon emissions when there is an ever-present opportunity for reduction

EFFICIENCY LOSS: THE COSTS & TRACING IT BACK TO MAINTENANCE

When operational efficiency declines, the result is greater energy consumption, carbon emissions, and increased utility costs. There can be a variety of factors associated with efficiency loss as well as the associated rising costs. And, while some of these cause-andeffect conclusions are obvious, others often go completely unnoticed, and it affects the business’s bottom line. As equipment ages, associated operational costs go up,

requiring more time for maintenance. Each of these fractional costs can ultimately lead to a greater financial impact. However, each respective department may feel the financial effects of HVACR equipment differently.

Given that HVACR equipment has a relatively long life expectancy, it is quite common that if one is in business long enough, the facility will experience multiple operational use changes. Namely, internal loads, for instance, change with added and reduced occupant headcount, including changes to working shifts and new heatgenerating equipment. Since HVACR systems are rarely rebalanced for every significant change in an organization, the upkeep or lack of upkeep is a common issue businesses face, and one that ultimately can result in less efficient system operations. So, a less obvious source of efficiency loss is the continual degradation of the operating

performance of the HVACR equipment. In other words, the performance loss accrues slowly, over time.

OIL BREAKDOWN, CONTAMINATION & DEGRADATION

HVACR performance is principally affected by two attributes: 1. mechanical friction, and 2. heat transfer. Most mechanical systems rely upon oil to reduce friction effects and are susceptible to oil degradation over the life of the equipment. Eventually, oil contamination and oil breakdown can result in compressor degradation or failure. With the advent of oil-less magnetic bearing type chiller compressors, the oil concern may be eliminated eventually. However, currently most chiller systems – and all DX systems in service today – utilize oil.

Providing sound maintenance programs on systems with accessible compressor crankcases or oil sumps allows the opportunity to monitor and replace degrading oil. Although many systems have hermetically sealed compressors making oil changes much more labor-intensive and costly and, in some cases, regular monitoring service often gets skipped. But not only does regular maintenance allow the opportunity to create more energy efficiency, but also allows HVACR companies the opportunity to leverage consumers’ economic, sustainability, and energy concerns. should be scheduled in advance.

Note: While advancements in refrigerant oil types have greatly helped the longevity of oils, even synthetic oils wear over time.

OIL BUILDUP OR OIL FOULING, THE COST & THE SOLUTION

Compressors, Refrigerants & Oil 101

1. The compressor process - In addition to reducing frictional forces, compressor oil serves another important function: sealing the gaps between moving parts. A compressor’s function, as the name implies, is to compress the vapor state of the refrigerant. The refrigerant, under pressure, tends to squeeze through gaps between mechanical parts. Refrigerant seepage into the oil crankcase is limited by the wetting surface tension of the oil between the moving parts. Inevitably, some oil within the compressor mixes with the refrigerant and works its way into the refrigerant loop. As the refrigerant flows through the system, it carries and deposits the oil throughout the heat exchanger coils.

2. The resulting oil buildup - Over time, oil buildup becomes significant enough to reduce efficient heat transfer between the refrigerant and the heat exchanger coil surface. HVACR engineers have designed systems to allow for some oil to circulate with the refrigerant, incorporating a way to return this displaced oil to the compressor crankcase or sump, where it belongs. Yet the oil that remains on the surface of the heat exchanger coils, reduces the overall system efficiency. Oil buildup is more prevalent in the evaporator coil but also occurs in the condenser coil. Oil migration is

largely impacted by the refrigerant flow velocity, with significantly higher velocity in the smaller diameter highpressure lines. Once the refrigerant passes through the expansion valve, the velocity drops, causing a drop in temperature and making it easier for the migrating oil to deposit on the evaporator coil walls.

This process causes a slow oil migration and leads to oil buildup, also referred to as oil-fouling, (not to be confused with oil-logged evaporators). Oil-fouling creates excessive work for compressors in delivering called-for BTUs and can lead to increased energy use and shortened system or component life. The supply chain issues faced today with HVACR replacement systems and components are taking much longer to procure than ever before. Additionally, inflated prices have us all in need of extending our current equipment longevity while looking for methods to reduce operational costs. Also, the need for added equipment and service calls increases the potential for refrigerant loss, and negatively affects businesses’ BPA compliance.

COMBATING OIL-FOULING –SIMPLE SOLUTIONS

While oil-logged evaporators have a litany of potential fixes, including extensive equipment teardown and reassembly, as in the need for a compressor heater or other corrective measures, oil-fouling can be remedied with a much simpler solution.

THE ADVANCEMENT OF OIL FOULING – A SIMPLE BUT OVERLOOKED SOLUTION

Early stages in oil-fouling treatments, gave the entire process a bad rap. Treatments for oil fouling were first developed decades ago with mixed outcomes. Early treatment formulations chemically cleaned the oil from the heat exchanger coil surface, which resulted in breaking down the oil. This solution was detrimental to lubricating properties and inevitably shortened the life of compressors. Other early treatment

formulations included solid particles intended to enhance heat transfer from the refrigerant to the heat exchanger coils and to improve the lubricity of the compressor components. Components that once deposited, negatively changed the function of the expansion valve. This too wasn’t the best solution.

Today, advances in material science have enabled oil-fouling treatment solutions to finally perform as intended by displacing deposited oil from heat exchanger coil walls and putting the oil back into circulation with the refrigerant. Various methods or physics explanations have been used to describe how the oil is being displaced without the use of solvents or other cleaning chemicals, but most seem to rely on an attractive force stronger than the wetting bond of oil to the coil surface. Some have described it as a covalent bond, others, as a weaker Van der Waals force. Additionally, some oil-fouling treatments also claim the benefit of improved lubricity of the compressor components, an easy claim to make with the advent of synthetic refrigerant oils. Suffice it to say, the advances are game-changing.

Although the science is here, oilfouling treatment solutions still face market resistance due to several issues.

These concerns include:

1. The legacy of poorly performing oilfouling products precedes the latest advances causing consumer resistance

2. Some solutions offered are not supported by professional data analysis consistent with International Performance and Verification Protocol (IPMVP) data collection and analysis methods, leaving potential clients questioning the soundness of the product itself

3. The difficulty in demonstrating performance gains with available clients’ utility data is leaving consumers weary. For example, a typical building may apply 40% of utility energy for HVACR and with oil-fouling treatment achieve

a 10% - 15% HVACR energy efficiency gain, resulting in an overall 4% - 6% utility energy reduction. This can be very difficult to demonstrate and trace back to oil-fouling treatment, especially with highly variable month-to-month utility data

In full discretion, I am biased, in that I work with ThermaClearTM. However, I can still speak to the science, and advanced technology. The advanced qualification methods as well as overwhelming data points to rigorous compatibility testing and the extensive IPMVP methods to quantify restored efficiency performance. Like most, I was largely unaware of oil fouling but have found a great appreciation for this lesserknown cause of HVACR efficiency loss. Knowledge is power - so we can gain back lost HVACR performance and contribute to reduced energy consumption, lower utility costs, and the enviable position of furthering decarbonization at an affordable price. While the sustainability community is eager to implement more sustainable energy sources, we need not forget the additive benefit of first reducing current energy uses and lessening the burden on future sustainable sources. Now is an excellent time to look at simple ways our HVACR systems and the industry as a whole, can contribute to long-term decarbonization goals. u

Michael Daly, P.E., Chief Technology Officer at ECM Technologies, is a seasoned professional with 30-plus years of engineering and business management experience. He has made a career in developing, manufacturing, and selling lifesaving and life-changing technologies focused on energy conservation measures. Michael has a PE license in the State of Arizona, with his BSME from the University of Arizona, and executive education through the Harvard Business School Program for Management Development. Additionally, he received his program management certification, PMP through PMI and is certified in several quality methodologies.

Since HVACR systems are rarely rebalanced for every significant change in an organization, the upkeep or lack of upkeep is a common issue businesses face, and one that ultimately can result in less efficient system operations.

SIMPLE TECHNIQUES TO MAXIMIZE YOUR HVACR MARKETING

Marketing ‘One-Percenters’

BY WILL MERRITT

You're investing marketing dollars to grow your company, so how do you maximize your investment? Often, it's the little things that can have the greatest impact on our high-level marketing campaigns. Let’s take a look at how we can squeeze the most out of our investments. We like to call them the “Onepercenters”, they can have added impact on your marketing results.

THE BASICS

The list below may seem like common sense to most of you. However, as business owners, we can often disregard what we know in search of new and better ways. Simply ask yourself, ask your team, "Are you paying close attention to the basics, the tried-and-true marketing 101 fundamentals?” Let’s review.

• Answering the phone is #1 on the list! The poor homeowner whose air conditioner is broken wants to speak with a live person, someone to hold their hand and let them know everything is going to be OK. It may seem like a 24-hour response time is good from your point of view, but from the homeowner’s position, a full day without air-conditioning, the wait for an HVACR appointment can seem like an eternity.

• Smile, they CAN see you. The customer on the other end of the line can tell when you are smiling. So, smile when you are answering the phone! Friendly customer service will go miles to creating long-lasting brand loyalty.

• Be polite at all times. Simple manners are often forgotten today. But believe it or not, marketing begins with relationships, and no one wants to deal with an impolite CSR.

• Look and act like a professional. This starts with employee appearance – that means clean uniforms, tuckedin shirts, clean-shaven, etc… Some newer HVACR companies ignore this part because it’s fieldwork. Technicians get dirty. But don’t make this mistake. Ensure your technicians are presentable and have clean changes for appointments. They should also only enter the home with booties on.

• Do what you say you’re going to do! Follow-through is everything. Again, this sounds simple as if, “of course, that’s a given” but basic follow-through can slip through the cracks, especially during a growth phase of a company. Ensure that all of your employees understand the importance of this commitment. If a technician says they will be arriving between 2-4 pm, they need to arrive between 2 pm and 4 pm.

GUERILLA OR GRASSROOTS

MARKETING

• Social Media is your way to engage in real-time. Social media is such a great branding tool for HVACR companies! You can create positive impressions about your company for little to no investment. The key is frequency, message, and platform. Don’t try to sell your products and services on social media, simply show

what you offer. Lifestyle posts with your employees, their pets, and your customers help humanize your service company. TIP: If you do post these more personal photos, make sure the pictures are excellent and well-lit.

• A fleet of well-lettered, clean vehicles is vital to your business. Your company vehicles are rolling billboards, make sure they represent your company well by being colorful, eye-catching, and clean! Fleet wraps are becoming the go-to marketing tool for on-the-go HVACR marketing. Still, if the vehicle is dirty, it will speak volumes. Remember, if your vehicle is your calling card, that means customers are watching and taking notes.

• Put up job site signs. This is such a simple thing, but in my work with many teams over the years, you would be surprised how often it is overlooked by many HVACR companies. In the right neighborhood, these signs might be seen by thousands of potential customers.

Tip: Incentivize your customers to leave it in their yard for two weeks or even a month by offering a discount or coupon for future service. The right customer may be willing simply because they like you!

It may seem like a 24-hour response time is good from your point of view, but from the homeowner’s position, a full day without air-conditioning, the wait for an HVACR appointment can seem like an eternity.

S t u d y G u i d e A v a i l a b l e i n t h e N A T E O n l i n e S t o r e W W W . N A T E X . O R G

L o w - G W P R e f r i g e r a n t s C e r t i f i c a t i o n E x a m

Now Available

SUCCESSWARE

More Business Solutions for Home Service in One Integrated Design

Successware is a contractor-founded business and field service management software. Founded in the early 1990s by Phil DiRe, Successware was created, developed, and programmed to help his family's residential heating and air business run more efficiently. Born into a family of contractors, DiRe had a deep understanding of contractors’ needs, so he set out to create a platform to manage and grow businesses in the home service industry.

Today, Successware stands out from the others for its outstanding accounting functionality, customer service software, and direct accessibility within the platform. As the leading all-in-one business solutions software, there is never a need for add-ons or separate software purchases.

Successware’s accounting segment was developed to fully integrate accounting workflow into the platform – invoices, pricebooks, and general ledgers – to offer a streamlined all-in-one system. Developed as a simple platform with advanced functionality, it offers options other software platforms cannot like the ability to house agreements and defer revenue to the proper period. The integrated customer relationship management software (CRM) helps our clients easily maintain prospects and current customers. Successware is preferred by contractors for its ability to reduce administrative time for technicians and streamline the workflow, making it more efficient and cost-effective.

Why are the cloud and digitizing businesses important for contractors?

Some businesses still get by with traditional hosting, adhering to the adage if it’s not broken, don’t fix it. But technology isn’t only about fixing, it’s about solutions. Traditional servers are generally hard-wired, in a fixed location. If the server goes down or is hacked, access to your business data and the ability to book jobs or dispatch technicians to appointments is compromised. This can lead to a loss in revenue. The cloud offers more which is why it’s becoming the popular choice for contractors.

The Benefits of Cloud Hosting

Scalability: Scalability means you can increase or decrease resources – bandwidth, storage, RAM, and more – based on overall usage. Scaling can be done quickly, with little to no downtime or disruption to your daily business. Scaling with a physical server is expensive and can take weeks or months to complete. Hosting companies typically have the infrastructure for the cloud, allowing for a simpler transition.

Data Security: With cyber threats more common, businesses must choose the right hosting platform to ensure data security. Cloud hosting offers more data security than traditional hosting and can be more cost-effective.

Data Recovery: Another unparalleled benefit is access to data backup and disaster recovery measures. The cloud is connected to various nationally located servers, so data is copied, backed up, and archived onto remote servers. The

chances of data being lost are almost nil.

Updated Technology: Cloud-hosting companies constantly update and replace servers due to normal wear and tear. Consumers can then benefit by leveraging the latest technology and increased performance and efficiency. With traditional servers, updating is a time-consuming, expensive endeavor.

Successware will help you ditch the paper and migrate job folders, forms, and customer records to our platform and Successware Mobile.

Below are a few benefits of digitizing: Cost Effectiveness: Transitioning to digital reduces operating costs. The money saved can be reallocated toward training, technology, and other costs.

Efforts and Resources: Ensure technicians are on board to learn a new way of navigating digital forms and applications by utilizing Successware’s essential resources, video training, and excellent customer service to assist with the transition.

Saving Time and Efficiency: Employees manage their workflow on the digital platform more effectively. And the move to an eco-friendly workplace means the mobile applications house all documents in the cloud, providing technicians easy retrieval on-site and the ability to email forms directly to customers in real-time.

How does Successware increase top-line revenue?

Upselling to current customers is easier than acquiring new ones. Successware provides state-of-the-art sales tools with our Mobile solution. On-site, technicians can offer homeowners good, better, and best solutions to issues. If a homeowner chooses not to pursue a repair, the technician can send their information to the back-office application, allowing CSRs and Comfort Consultants to follow up later.

How does Successware decrease expenses?

Successware is the only digitizing platform on the market that provides this advanced all-in-one solution with no need for additional accounting, dispatch, or add-on software.

What operational efficiencies do you maximize?

Digital Forms: Successware facilitates communication between the technician and the office with our Customized Forms feature. Digital information is accessible as soon as

the appointment ends with no need to manually transcribe the information, eliminating errors, extra time, and effort, and allowing for more specific and thorough follow-up on potential sales opportunities. Digital forms are stored safely with no opportunity for them to be misplaced, torn, or damaged like paper forms. Plus, a paperless process is better for the environment!

Our design tool offers a robust selection to build any customized form style or template, including:

• Membership Forms • Inspection Reports

• Proposals & Contracts • Checklists

• Disclosures • Service Agreements

• Customer Surveys

• Standard Safety Forms

Once forms are created, technicians can easily retrieve them even while on-site. Custom forms are accessible via the technician’s workflow without ever leaving the application. Other advantages include:

• Search tools for past forms, customer names, or job

• The ability to add pictures

• On-site customer signature creation

• PDF file forms generation and emailing

Payment Processing: Successware’s unique all-in-one platform and its Successware Payments segment facilitate faster payment. Technicians can send payment links from the field using Successware Mobile and accept credit card and ACH payments before leaving the job.

Payment automation, digital invoice creation in a few clicks, and the option to email or text a payment link to the homeowner allow for a more efficient, integrated workflow and better payment monitoring. Also, with Successware Payments, your customers will want to say YES to more. Our built-in consumer financing, available both on the platform and the app, offers the most competitive rates to help homeowners say yes to high-dollar projects.

Successware’s integrated platform design means more effective management solutions, more efficiency, and more sales opportunities, so you can do more business!

BUSINESS INSIGHTS : Advanced Software Technology brought to you by SUCCESSWARE

FOLLOW UP: Interested in learning more about how the cloud and digitizing your business with Successware can help increase top-line revenue and maximize operational efficiencies? Visit successware.com today to schedule a demo.

CHRIS O’GRADY COGrady@authoritybrandsllc.com | 443-691-4882

CHANGING CONSUMER IAQ NEEDS PROVIDE CONTRACTORS WITH NEW BUSINESS OPTIONS

BY TOM TASKER

With mortgage rates at a nearly 15-year high, and communities across the nation facing housing shortag es1, many homeowners are opting to stay in their current homes and invest in renovations that better fit their family’s current lifestyle. Among these projects, the 2022 American Home Comfort Study revealed that upgrading HVACR systems was highly ranked, with a focus on improving indoor air quality, increasing comfort, and reducing energy bills. These changing consumer needs provide contractors with an opportunity to upgrade customers to premium systems and add high-performance enhancements. When opportunities are leveraged successfully, contractors can increase revenue. But demonstrating performance, financial accessibility, and long-term value is key.

IAQ ON THE RISE

For many homeowners, COVID-19 has increased their understanding of how the air their family breathes can impact overall health and well-being. The American Home Comfort Study found that 65% of homeowners were willing to invest in methods to improve their indoor air quality (IAQ.2) While mitigating the spread of viruses remains top-of-mind, controlling dust, pet dander, and other allergens has become an equally important factor.

Although IAQ features are important to homeowners, a study by YORK® showed that 73% of homeowners have faced at least one barrier to improving their home's air quality, such as a lack of resources or knowhow.3 Educating homeowners on their options and the effectiveness of air quality improvements could be the bridge necessary to enhance new systems and upgrade existing equipment with IAQ accessories.

MERV-11 or higher filters, energy recovery ventilators, humidifiers and dehumidifiers, and ultraviolet air treatment systems are all easy points of entry –especially during allergy and cold and flu seasons when the impacts of poor indoor air quality may be felt the most. Homeowners using stand-alone products such as singleroom humidifiers or air purification systems will appreciate how a whole-home approach can increase air cleaning effectiveness and eliminate the ongoing maintenance required by single-room products. Additionally, understanding how IAQ enhancements help to enhance HVACR system life can serve as an advantage in demonstrating value.

PRIORITIZING COMFORT

The American Home Comfort Study also revealed that some homeowners have indicated feeling inconsistent temperatures from room to room and are willing to spend up to 31% more on HVACR systems now than they were just three years ago if the system could provide a solution.4

Zoning systems with advanced controls provide an opportunity for homeowners to upgrade the performance of existing or new systems and experience a more consistent level of home comfort. Zoning systems coupled with smart home technology provide customized temperature and humidity levels per zone. So, for example, a parent working from a basement office and a child attending virtual school from an upper-level bedroom can feel equally comfortable. Automated controls can be used to conserve energy in unused rooms, maintain preferences by zone and schedule away or vacation settings. Recent advancements allow many homeowners to upgrade to zoning systems without the need

for extensive changes to existing ductwork when an open/closed damper is present.

COST-SAVING SYSTEMS

The International Energy Agency estimates that working from home could increase residential energy consumption by as much as 23%.5 Paired with a 13% increase in cost-of-living expenses over the past year6, more homeowners than ever are looking for ways to save money. Sixty percent of homeowners said they were willing to invest in high-efficiency systems if they could lower their energy bills by just 25%.7

Top-tier, variable capacity systems can be a key solution to reducing both energy consumption and utility costs. These premium systems can save homeowners as much as 50% on energy costs compared to lower-SEER models. In addition, a dealer can adjust modulation and blower performance based on the local climate to better balance outdoor temperatures with system usage.

High-end systems also incorporate advanced controls that further increase energy efficiency and provide contractor benefits, including a simplified installation process and remote monitoring and diagnostic capabilities. These features help to build the homeowner-contractor

Changing consumer needs provide contractors with an opportunity to upgrade customers to premium systems and add high-performance enhancements.

relationship after installation by providing long-term peace of mind.

INVESTING IN HOMEOWNER KNOWLEDGE TRANSLATES TO PROFITABILITY

Homeowners are poised to invest in their home comfort systems, but education about performance and long-term value may still be required before they leap. While an understanding of IAQ and home comfort capabilities has increased among homeowners, many are unsure if these enhancements will be effective and they’re not sure where to get started. That’s where your knowledge is crucial to educate consumers.

Demonstrating performance and understanding individual needs is key to developing a homeowner’s trust.

Ask these pertinent questions:

• Are there pets or multiple generations living within the home?

• How are individuals using the home?

• Are they working remotely or homeschooling their children?

• Is anyone living with seasonal allergies, asthma, or other respiratory conditions?

Questions like these will make it easier to develop a customized solution that can increase perceptions of value and satisfaction.

Assessing whether upgrades can be made to an existing system or if a full replacement is necessary to meet a homeowner’s goals is also critical. Many newer-construction homes have been designed with base-level HVACR systems and limited features. This can provide an opportunity to improve comfort and increase IAQ without a complete system replacement.

When a new system is required, higher price points associated with premium systems may be a source of apprehension for some homeowners. Communicating how high-efficiency systems can reduce utility bills and maintenance expenses can help to illustrate long-term savings. Additionally, financing options, rebates, and federal programs such as the newly passed Inflation Reduction Act can help homeowners reduce up-front costs.

As lifestyles continue to evolve, homeowners remain reliant on the contractual relationship to provide insight and recommendations beyond what can be found online. Contractors who take a consultative approach and customize solutions based on changing lifestyle needs stand to gain improved homeowner confidence and increased profitability. u

Tom Tasker is a senior product manager at Johnson Controls. In this role, Tasker is responsible for planning and executing the strategic direction for furnaces and controls. He has a bachelor’s in electrical engineering from Wichita State University and a master’s in business administration from the University of Kansas.

1Freddie Mac (Sept. 15, 2022) https://www.freddiemac. com/pmms?intcmp=CWS-HP

2Decision Analysis (2022) American Home Comfort Study

3Johnson Controls (Feb. 2, 2021) https://www. johnsoncontrols.com/media-center/news/pressreleases/2021/02/02/american-homeowners-placinggreater-focus-on-their-home-indoor-air-quality

4Decision Analysis (2022) American Home Comfort Study

5International Energy Association (June 12, 2020) https:// www.iea.org/commentaries/working-from-home-can-saveenergy-and-reduce-emissions-but-how-much

6U.S. Bureau of Labor Statistics and Move.org (Aug. 4, 2022) https://www.move.org/where-inflation-is-impactingliving-costs/

7Decision Analysis (2022) American Home Comfort Study

Are You Making these Balance Sheet Mistakes?

Accurate balance sheets are critical to making good business decisions. Make sure your company is not making these mistakes. I would advise that you never cut corners on this step, whether you have a professional bookkeeper or you choose to balance the books yourself.

NEGATIVE CASH & LOUSY BOOKKEEPING

The company cannot have negative cash. First, the banks will charge exorbitant fees for bouncing checks and, if there are too many bounced checks, the bank will close the account. Most of the time negative cash is the result of this lousy bookkeeping mistake. Someone printed checks from the

accounting system and the checks were left sitting on the bookkeeper’s desk waiting until there was enough money in the account to send them and they were sent too late, or too early. This is not a good way to manage your accounts payable.

Alternatively, there may have been a lot of money in undeposited funds that have been deposited, but the deposit was not made in your accounting system.

Make sure the bookkeeper isn’t printing checks and having them sit on his or her desk until the money comes in to pay the bills. And, as a regular rule of order, make sure all undeposited funds get deposited in the bank. Otherwise, there is too much room for error.

NEGATIVE ACCOUNTS RECEIVABLE

The company cannot have negative accounts receivable. Yes, on the accounts receivable aging report, there may be a few customers to whom the company owes a refund or who overpaid their bill by a dollar or two. However, the company doesn’t owe its entire customer-base, money.

Generally, this mistake happens when the company receives a deposit for a job and there is not a liability account set up (usually it is deferred income – deposits). The deposit goes into accounts receivable, and it is “negative” because there is not an invoice to offset that amount.

This is an easily remedied mistake. Simply, make sure there is a deferred income account in current liabilities for job deposits. Then the company will not see negative accounts receivable.

INVENTORY & BALANCE SHEETS

The company’s balance sheet is incorrect if inventory is not listed, or if it shows the same inventory number each month. Then the company’s cost of goods sold is higher than it should be, and the profits are lower than they should be.

Even worse is seeing negative inventory – phantom parts! Most of the time this mistake can be traced back to an inaccurate accounting of inventory. It happens when

materials/equipment have been credited from inventory for use on jobs. But when the inventory was ordered, the inventory did not get logged as inventory but instead went into the cost of goods sold.

For an accurate balance sheet, make sure inventory is accounted for properly and you will not see this error again.

NEGATIVE CREDIT CARDS

The only way a company can have a negative credit card balance is if the credit card bills are prepaid or the company has a refund on a purchase and it was the only activity on the card. Prepaying the bill doesn’t happen very often except, perhaps, at the end of your fiscal year.

Most of the time, the credit card company doesn’t owe the company money. The company owes money to the credit card company. This mishandling of accounting is generally traced to a bookkeeping error.

NEGATIVE PAYROLL TAXES

In most cases, the company cannot have

negative payroll taxes. If the company had negative payroll taxes, it would mean that the government would owe the company money. This is very unlikely. However, there are exceptions and I have seen cases where the payroll company makes mistakes and overpays the company’s payroll taxes. In these rare cases, the payroll tax balance on the balance sheet will be negative.

Payroll taxes are paid by the employee and the company. This is where the confusion often comes in. And, if the payroll taxes are paid weekly, these liability amounts should be zero (except if the payroll tax is due on the first day of the next month – then there could be a negative value).

The company should not have negative

garnishment payments, health insurance payments, 401(k) payments, etc. The company owes money to those entities. They do not owe money to the company –unless, again in rare cases, there has been a mistake and the bills were overpaid.

NEGATIVE LOAN PAYMENTS

The company can’t have negative loan payments – that means that the bank owes the company money for the loan. Generally, this happens at the end of the loan if the entire principal repayment was debited against cash when the payments were made.

The monthly loan repayments are a combination of principal reduction and interest. For example, if the monthly payment is $750, then $500 could be a

reduction of the loan principal (a balance sheet item) and $250 is interest (a P&L item).

If there are negative loan payments, find out what the actual loan amount is and correct it on the balance sheet. The difference is in the interest payments –which belong as expenses on your P&L. Make sure the company’s balance sheet has positive balances everywhere except in accumulated depreciation and equity. If there are negatives, the balance sheet is wrong. Correct the mistakes and make sure your team is delivering clean and accurate bookkeeping and accounting. Then, once again confident in your accounting, you can make good decisions based on accurate information. 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.

1. What would people be surprised to know about you?

I’m an introvert. If you know Myers-Briggs at all, I'm the rare INTJ personality type.

2. Do you have a favorite Thanksgiving tradition?

My entire family goes to my aunt's house to bake apple pies. It's one of my favorite days. The smell of everything is just awesome. We have coffee, tea, champagne … all the things.

3. Do you make the turkey for Thanksgiving?

No, the turkey intimidates me. But I am responsible for making the pasta for Pasta Sundays.

4. Do you belong to any contractor groups?

No, we're in Service Roundtable. Other than that, I am content to create my wheel rather than reinvent existing ones. Right now, I am working on perfecting – making the Grasshopper template, the Grasshopper template.

5. If you were to describe the Grasshopper template in one sentence, what would it be?

We create opportunities that change lives and lead people to make great decisions.

6. What does your typical work week look like?

We’re at a point where we have a fully developed and trained leadership team. My sole job is to develop, coach, train, and empower my leadership team, so they do the same with their teams. My week usually starts with a team meeting every Monday.

On Tuesdays, we have what's called Tuesdays with Grasshopper, where the whole company comes together to have breakfast. I talk to the entire company and typically do some motivational training. Leading people to become the best that they can be – that's my passion.

7. What is your business mix percentage?

We're 90% residential, 10% new construction.

8. The name Grasshopper seems to represent an overarching philosophy for you. Is that true? It’s true. When Covid hit, we were a commercial install company. Gov. Cuomo shut down construction job sites. I had no business. Everything came to a halt. I pivoted quickly, researching companies that did residential HVAC, learning as I went. It was then that I discovered the power of branding. I messaged anyone I could, asking questions like, What are you doing now to keep your people moving? Have you come to a stop? And almost 95% of them had experienced no stop in business. The common theme – they had excellent branding. So, I hired Kickcharge Creative, changed our name, and rebranded as Grasshopper. When I was deciding on the name, I Googled Grasshopper. What came up was that grasshoppers are responsible

for decomposition and regrowth within the ecosystem and that grasshoppers only move in a forward direction. That was it. This had been my entire philosophy even before renaming the company. It felt aligned.

9. What was the biggest business lesson you learned during the pandemic?

Take the reins of your company. Don’t rely on your phone to ring or become complacent. Always stay a step ahead.

10. Is there a difference between men and women in executive roles? And if so, what is it?

I hired my first executive hire in June, also a woman. She is our chief growth officer. While it's a man's trade, our goal is to attract more women into the industry. The office here is all women. I think women bring a different level of relational leadership to the business. Other than that, I don't think there's much difference.

11. What is the most important aspect of your job? Exclusive of heating and cooling, my purpose here is to lead people to be the best that they can be. My biggest investment is in my team. That’s a priority before any kind of profit.

12. How are you addressing the challenge of recruiting top talent?

We hired a videographer to shadow us to get some content out there to attract the right people. It makes people look and say, “Oh, what's this company about? This is something that looks like a place I might fit in.” I'd say 95% of the people with us now, found us that way. While we are in an aggressive growth phase now and have a recruiter, we’re also not above hiring and training people who are “green”.

13. What motivates you to stay competitive?

While I have a competitive nature, it’s more about competing with myself. I cannot fill my head space with what competitors are doing. I look at

competitors’ not-so-great Google reviews to make sure we avoid those pitfalls.

14. Has technology been a factor in the company's success?

It was a huge factor. Before I pivoted into residential, I signed up with Service Titan in 2017. It took time to understand Service Titan, how to schedule a call, how to sell an estimate, invoices, accounting, the price book, and dispatching, I still couldn't figure out a way to get there without bringing the business down to nothing. As soon as I felt ready, technology became the most integral part of streamlining payment collections and keeping consistent cash flow. We are a 98% paperless company. Everything is dialed into our CRM, which is service-tight, and estimates are sent and signed electronically. All our financing and marketing are also done electronically.

15. What are your 2023 goals for the company?

I have been conservative in setting goals because it was humble beginnings. We grew so much in a short period that last year's revenue blew me away. We grew 3300% last year alone. In 2023, I’d say $20 million is my goal, but we may surpass that.

16. How will Grasshopper be impacted by upcoming refrigerant changes?

We are hyper-vigilant and continue to educate our clients as well. Our distributor stays in constant communication with us on this.

17. What is your management philosophy?

Our servant leaders lead from the front, and we are in the trenches with them. If I walk into the call center and somebody's struggling on a phone or battling an objection, I am listening to the call with them and writing notes out to help them through it.

18. What business relationships have been important to the success of your company?

Our distributor partnership is vital. And Chris Yao, CEO of Rhino Strategic Solutions, an online marketing company. Before I believed in myself, he believed in me and saw my potential, and has consistently guided me. Also, Ken Goodrich, whom I met at Rhino X, a private exclusive home service event. When I have questions or when I'm about to make a big change, I run them by him. He's always willing to help.

19. What aspect of managing the company is most gratifying to you?

Leading people, changing people's lives, and leading them to become the best that they can be. That's it.

20. How are you mentoring other women in HVACR?

I still feel humble about my success. I haven't stepped into that role yet because I'm still very much on my way and have so much more to achieve.

Managing Editor, Heather Langone interviewed Amanda Triolo, CEO of Grasshopper Heating & Cooling. Triolo spoke about branding, rapid growth, and a passion for leading others to be their best.

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