HVACR BUSINESS MARCH 2023

Tap An Executive Recruiter For Your Top-Tier Talent

There’s recruiting for your business – recruiting new technicians, finding talented office candidates – and then there’s executive recruiting. Executive recruiting focuses on identifying highly qualified candidates to fill senior-level positions. Need to hire a general manager, a vice-president, or a CFO? That’s executive recruiting.

The people you choose for these vital positions will play a fundamental role in the success of your business. Putting the right person in the right seat is crucial. Sourcing, screening, and interviewing qualified candidates for roles that can shift the course of your company’s future can take weeks, even months.

When it comes to hiring critical roles, the best and brightest may not be in your market. At the very least, they may be difficult to find. That’s why engaging with a third-party executive recruiter can benefit you tremendously. Here’s how:

1. Executive recruiters tend to have large, active networks, which they leverage to find the right candidates. Good executive recruiters use their network to play the “who you know” game to find the right person. They also tend to be well-connected beyond a single market with access to candidates across the U.S., possibly even Canada.

2. Executive recruiters have experience recruiting specific types of highly qualified people. Some even specialize in the trades. They will recognize and understand the skills and experience you’re looking for.

3. They save you time. Executive recruiters take care of everything. They manage sourcing candidates as well as contacting them, conducting initial interviews, and serving as the primary liaison. They work with you right up until the glorious moment when you’re sitting in a room with the newest member of your leadership team.

Do you already have an in-house recruiter? Great! It’s still a good idea to work with an executive recruiter to fill senior-level roles. Most likely, your in-house recruiter is busy. Engaging with a trained executive recruiter ensures they have time to focus on other open positions.

If there’s an opening on your leadership team, save yourself some serious hassle. Engage with an executive recruiter so you can focus on your business!

Be Great

Author Steffan Busch is the Recruiting Coach and Executive Recruiter for Nexstar Network and supports Nexstar members in identifying and retaining the best and brightest talent.

FEATURES

6 Spotlight On: Highlights from AHR Expo 2023

We highlight featured products from the best of AHR Expo 2023.

By Heather Langone

10 Storytelling to Brand Your Home Service Company

Create a story unique to your brand to accelerate business growth.

By Heather Ripley

12 What Contractors Should Know About HVAC Surety Bonds

Trymbiski shares everything you need to know about surety bonds.

By Lisa Trymbiski

14 10 Management Lessons from the Navy

Originally published in 2009, Kawasaki reflects on lessons he learned while visiting the USS Nimitz.

By Guy Kawasaki

16 A Content Strategy That Will Grow Your Business

Pulizzi talks about the importance of online content as part of an effective content marketing strategy.

By Joe Pulizzi

18 HR Software Technology: Is It Worth the Hype?

The reasons to invest in HR software technology and how it can help your company compete.

By Staff

COLUMN

19 4 Reasons Why Planning the Future Isn’t DIY

The four most important elements to understand when planning for the future of your business.

By Keven Prather

20 Don’t Run Out of Money Because You Grew Too Fast

In another article straight from her latest book – King warns of growing too fast without planning fiscally.

By Ruth King

DEPARTMENTS

5 Editor's Notebook

Learn ways to bridge the generation gap and attract more Gen Z recruits.

Heather Langone

4 MRS | Solving the Marketing Matrix

In this month’s installment, we offer four top book choices on HVACR marketing.

21 Product Focus

22 20 Questions with Kim Archer VP of Coaching & Trainer, BDR

Great Service Sells Itself!

Management Resource Shelf

Solving The Marketing Matrix

Business success depends upon successfully solving the marketing matrix – meaning finding that sweet spot specifically for your brand. Effective marketing is a necessity for most businesses and finding the wow factor for your brand is essential for real growth. Without good marketing and sales techniques that bolster profits, you can’t continue. But if you solve the marketing matrix, if you break through that next level, well, then it’s on! We have identified four books for you that will help your HVAC company find that sweet spot.

One Million Followers, Updated Edition: How I Built a Massive Social Following in 30 Days

Brendan Kane

Essential to any successful marketing strategy is the existence of a large online following –especially for contractors. Digital strategist and "growth hacker" Brendan Kane reveals how to build a massive following – in 30 days or less. A wizard of the social media sphere, Kane has built online platforms for A-listers including Taylor Swift and Rihanna. He's advised brands such as MTV, Skechers, Vice, and IKEA on how to establish and grow their digital audience and engagement. Kane has spent his career discovering the best tools to turn any no-name into a top influencer simply by speaking into a camera or publishing a popular blog—and now he'll share his secrets to success with you.

https://www.amazon.com/One-MillionFollowers-Massive-Following-ebook/dp/ B07B26Q19V/

HVAC Customers for Life: How to Turn $25 Leads into $25,000 Raving Fans in 90 Days or Less

Steph Whittle

Steph Whittle is the founder of HVAC GrowthLab, with over ten years of experience in turning homeowners into customers for life. She is an industry leader in helping residential contractors upgrade their marketing so they can grow profitably. Are you looking for a step-by-step, proven blueprint that will take you from the seasonal rollercoaster to the most in-demand HVAC contractor in your service area... without burning your margins on mediocre marketing? In this conversational and results-oriented book, Steph Whittle presents an industry insider’s formula to help you profitably acquire more customers, maximize your value to each customer, and create lifelong raving fans.

https://www.amazon.com/HVACCustomers-Life-Leads-Raving/dp/ B0BSJ6DLHJ

Building a StoryBrand: Clarify Your Message So Customers Will Listen

Donald Miller

More than half-a-million business leaders have discovered the power of the StoryBrand Framework, created by New York Times bestselling author and marketing expert Donald Miller. If you use the wrong words to talk about your product, nobody will buy it. The StoryBrand process is a proven solution to the struggle business leaders face when talking about their companies. Without a distinct message, customers will not understand the value you bring and thus, will be unwilling to engage, causing you to lose potential sales, opportunities for customer engagement, and more. Miller’s process has helped thousands engage with their existing customers, giving them the ultimate competitive advantage.

https://buildingastorybrand.com/

HVAC Marketing Made Simple:

John Wyche & Andrei Cimbru

Learn the HVAC Marketing Strategies that have helped our clients become the #1 Local HVAC Authority in their city and dominate the competition without wasting time on outdated marketing methods or buying shared leads. In this book, "HVAC Marketing Made Simple", we lift the curtain on the strategies we use in our company Service Vista (https:// servicevista.io) to generate HVAC Leads, including both FREE and paid strategies. Get all the insights on how we run our social media advertising programs, including but not limited to SEO, Business Listing Optimization, Google Local Service Ads, Facebook Ads, Instagram Ads, Youtube Ads, Tik Tok Ads, and the whole 360 HVAC Marketing Strategy.

https://www.amazon.com/HVAC-MarketingMade-Simple-Everything/dp/B09TRGGVNB/

Everything you need to generate unlimited HVAC leads for your business and close more jobs on demand

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

BY HEATHER LANGONE

EDITOR’S NOTEBOOK

ADVERTISING STAFF

ERIC Hagerman

VP Sales

Tel 216-409-3246 ehagerman@hvacrbusiness.com

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.

Copyright©2023 by JFT Properties LLC.

No part of this publication may be reproduced or retransmitted in any form or by any means, including, but not limited to, electronic, mechanical, photocopying, recording or any information storage retrieval system, without the prior written permission of the publisher. Unauthorized copying may subject violators to criminal penalties as well as liabilities for substantial monetary damages up to $100,000 per infringement, costs and attorneys’ fees.

This publication should not be utilized as a substitute for professional advice in specific situations. If legal, medical, accounting, financial, consulting, coaching or other professional advice is required, the services of the appropriate professional should be sought. Neither the authors nor the publisher may be held liable in any way for any interpretation or use of the information in this publication.

The authors will make recommendations for solutions for you to explore. Any recommendation is always based on the authors’ research and experience. The information contained herein is accurate to the best of the publisher’s and authors’ knowledge; however, the publisher and authors can accept no responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof.

Subscription Rates: Free and controlled circulation to qualified subscribers. Non-qualified persons may subscribe at the following rates: U.S. and possessions: 1 year $48; 2 years $75; 3 years $96; Canadian and foreign, 1-year $108 U.S. funds only. Single copies $8. Subscriptions are prepaid, and check or money orders only. Subscriber Services: To order a subscription or change your address, write to HVACR Business, 31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039 or call (440) 731-8600; or visit our Web site at www. hvacrbusiness.com. For questions regarding your subscription, please contact bkerr@hvacrbusiness.com.

HVACR Business (ISSN 2153-2877) Copyright ©2022 is published monthly by JFT Properties LLC,31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039, Phone: 440-731-8600. Periodicals postage is paid at North Ridgeville, OH and additional mailing offices. (USPS 025-431)

31674 Center Ridge Road, Suite 104 North Ridgeville, OH 44039 Tel: (440) 731-8600

Web site: www.hvacrbusiness.com (ISSN: 2153-2877)

Bridging the Generation Gap

According to Anita Lettink, Future of Work & Pay Keynote Speaker, and author of the article, “No, Millennials will NOT be 75% of the Workforce in 2025 (or ever)!1” the workforce isn’t only about to change, millennials and Gen Z will dominate in the next two years. Says the author:

In 2025, baby boomers will represent only 7% of the workforce, and Gen Xers will be reduced to not quite 33% of all American workers. Millennials will remain steady at about 40%, while Generation Z will jump to almost 20% of the U.S. labor force.

Gen Z is Moving Away from the Trades

According to NPR and recent research on Handshake, Gen Z’s interest in trades and skilled work has dropped. An article titled, America needs carpenters and plumbers. Gen Z doesn't seem interested, the application rate for young people seeking technical jobs — like plumbing, building, and electrical work — dropped by 49% in 2022 compared to 2020, according to data from online recruiting platform Handshake shared with NPR.

What do those numbers (and the previous statistics on an increasing Gen Z workforce) mean for you? Breaking it down in the simplest of terms — if you factor in the current worker shortage in the trades, endemic to the HVACR industry, and you add to that an aging industry with many owners planning on retirement, the purported balance shift in generational percentages could forecast some significant challenges. Most companies are already struggling and are creatively attempting to solve the problem of how to attract top technical talent — specifically a younger talent pool. If we flash forward a couple of years and look at the picture statistics are showing us, it means owners will need to find even more creative ways to appeal to young recruits. Specifically, it’s time to figure out how to bridge the generation gap. To do that, you need to know who these folks are and what matters to them.

Who is Gen Z and What Do they Want?

If you look at all the research, Gen Z workers are entrepreneurial and tech-savvy, and they are more moneyconscious than Millennials because they watched their parents struggle in the 2008 recession. So, promotions, security, and money — are all matters that are important to Gen Z. Nearly 82% of the generation believes in college

education leaving 18% (and possibly more) available for work in the trades. Gen Z is also the generation that has been coined the “phigital”2 generation because they are the first group “who don’t draw a distinction between the physical and digital worlds and are comfortable in both.”

Lastly, they need meaning in their work. They need to know that what they are doing matters.

Build a Bridge and Close the Gap

What can owners do to attract Gen Z employees now? Speak their language.

When seeking recruits, follow these best practices:

1. Sustainability and energy efficiency. Stress the importance of their role in changing the industry and your focus moving forward on sustainability and energy efficiency

2. Paint a picture of future ownership. Gen Z is entrepreneurial. Show them the road that a career in trades can pave. Give them examples of how most owners started as technicians.

3. Virtual Training. To attract, you must adapt. Gen Z values privacy and remote training. Those companies who have offered virtual training have seen the big difference it can make in attracting recruits.

4. Pay vs. Value. Gen Z values money. Traditional pay scales most likely won’t work with this generation. Gen Z folks are free thinkers. If they think they can make money another way, they will. You’ll need to rethink pay, incentives, and benefits. Many may need to see a path to competitive six-figure incomes especially those who are lugging around student loan debt.

As you can see, there are real generational differences. However, gaps existed from Boomers to Gen X and now from Millennials to Gen Z. And somehow as an industry, we all found ways to adapt. This generation is the most unique in fifty years because we have never had a generation that not only understood only smartphones and the internet, but also virtual reality. Gen Z does not know a life without the most advanced optics. But as we have done in the past, it is possible to not only bridge the gap but build an entirely thriving new generation of trades workers. It will require ingenuity and out-of-the-box thinking, but heck, Boomers — that’s old hat for you! u

Lettink (September 2019) No, Millennials will NOT be 75% of the Workforce in 2025 (or ever)!

https://www.linkedin.com/pulse/millennials-75-workforce-2025-ever-anita-lettink/?trackingId=jx%2Fgm6SYQH%2BYQ4LmnHaWnA%3D%3D

2 Stoner (May 2017) The Coming of the Phigital Generation — and Reality https://www.insidehighered.com/blogs call-action-marketing-and-communications-higher-educationcoming-phigital-generation-%E2%80%94-and

BY HEATHER LANGONE

Our team attended the AHR EXPO 2023 in Atlanta in February. To say it was jam-packed with innovation, a noticeable commitment to energy efficiency, and a focus on streamlining both in size and usability –would be an understatement. But after carefully culling through all the info and booth visits, we have narrowed it down to five that we chose to highlight in 2023, for very specific features. Though these weren’t the only choices, they were some that we felt deserved a spotlight.

ECITM | THERMOGRID SOFTWARE

Featured for All-in-One Contractor Software Technology

ThermoGrid is all-in-one contractor software that helps field service professionals take control of their dayto-day. From estimate to invoice, and

everything in between, ThermoGrid is a good choice for ease-of-use and contractor-specific operation and for the research ECI has done to get it right.

Contractors can manage business operations without juggling paperwork. With ThermoGrid, you can connect with customers and leads, match technicians with jobs, and close more business–all from one location. This reduces manual data entry and the mistakes that come with it. By using ThermoGrid Software to help keep track of all estimates, customer communication, job details, inventory, installs, repairs, and invoices in one place, nothing will be missed. ECI puts its money behind the research. You can read from multiple case studies with contractors who have used the software with great results. Not only that, ECI shows KPIs. It’s not only easy to use, but according to ample data and contractor feedback, it drives business performance.

Since using ThermoGrid we have been able to manage all aspects of our company with ease and achieve aggressive growth goals.

– ThermoGrid Customer, TROY, OWNER, A/C CONTRACTORS

According to one study, ThermoGrid helped drive 150% business growth, despite the pandemic – ECI | ThermoGrid, Shafer Heating & Cooling LLC Case Study 1

With smart dispatching, you can make smart business decisions with data that is always up to date. ThermoGrid daily management reports show you immediately how every department is performing so you can see what is working and, more importantly, what is not working.

https://resource.ecisolutions. com/c/thermogrid-overviewvideo?x=D4KxNL

ENLIGHT™ BY LENNOX Featured for Heightened Customer Flexibility in Energy-Efficient Products

Lennox is leading the way in innovation with the introduction of the Lennox Rooftop Series composed of Model L, Enlight™, and Xion. The choice to share highlights of Enlight™ was based on its increased flexibility, ease of use, and increased attention to energy efficiency.

Enlight™ rooftop units powered by the Lennox® CORE Control System create a bright future through a highly energyefficient and environmentally sustainable design. Comprehensive configurations meet a wide range of applications, making it the most flexible product line Lennox has to offer.

Said Eddie Chavez, Director of Product Management for Lennox Commercial. "Our solutions are the result of partnering with our customers to develop products that meet their needs for energy efficiency, indoor air quality, and serviceability. In addition, our innovative and industry-leading products position them to adapt in an evolving regulatory environment and help meet ESG objectives."

Enlight™ Minimizes Environmental Impact and Maximizes Efficiency

The Enlight™ product line of rooftop units minimizes environmental impact through exceptional efficiency and sustainable design while providing

extreme flexibility, engineered intelligence, and simple service. Enlight™ units include the Lennox® CORE Control System, an intuitive rooftop controller that enables real-time data through connectivity, integration, and optimization.

Enlight™ Product Highlights:

• A comprehensive, high-efficiency product line consisting of 3-25 ton gas-electric and electric-electric models and 2-20 ton heat pump and dual fuel heat pump models.

• Energy-saving efficiency ratings of up to 17.8 SEER, 17.0 IEER, and 13.3 EER qualify for energy rebates and incentives.

• Environ™ Coil System with up to 52% less refrigerant and up to 59% lighter than traditional coil systems, reducing overall environmental impact.

• Lennox® CORE Unit Controller uses advanced sensor inputs to optimize the real-time operation and maximize energy efficiency and space comfort.

• Efficient maintenance and service operations that reduce operational costs and minimize downtime.

For more information about the Lennox Enlight™ and Xion™, visit https://www.lennoxcommercial.com.

SPACELOGIC INSIGHTSENSOR | SCHNEIDER ELECTRIC

Featured for Smart Integration & Future-Ready Eco-Comfort

We chose to highlight SpaceLogic Insight-Sensor for its future-forward, eco-friendly design while still allowing for smart integration and very few additional investments. SpaceLogic Insight-Sensor monitors light, sound, ceiling temperature, humidity, occupancy, and people count. It integrates with EcoStruxure™ Building Operation, which responds to changes in room conditions

and the number of people in the room, dynamically and accurately, to ensure optimized temperature, humidity, and lighting, as well as fresh air circulation. It also uses that sensor data to help achieve LEED, WELL, and other building certifications.

Not only will you reduce energy waste and create healthy, sustainable, and smart buildings to increase occupant comfort and productivity with SpaceLogic Insight-Sensor, but the ease of integrating this future-ready design is a highlight of Schneider Electric’s innovation.

Product Highlights:

• Enables balanced comfort and energy consumption in an efficient way

• Benefit from higher operational and energy efficiency for increased ROI

• Enables demand-driven HVAC based on real-time occupancy level

• Maximize space efficiency by space usage pattern insight

• Enables personalized well-being and comfort based on true occupancy level

• High-rated environmental performance of the product

https://www.se.com/us/en/

Our solutions are the result of partnering with our customers to develop products that meet their needs for energy efficiency, indoor air quality, and serviceability. In addition, our innovative and industryleading products position them to adapt in an evolving regulatory environment and help meet ESG objectives.

– Eddie Chavez , Director of Product Management for

Lennox Commercial

WATERFURNACE | THE WATERFURNACE 7 SERIES™ & SYMPHONY PLATFORM

Featured for GeoThermal & Energy

Data Monitoring Technology

Given that WaterFurnace was one of the first in the GeoThermal space, the WaterFurnace 7 Series™ is quite possibly the most advanced heating and cooling system in the industry. It provides homeowners with the ultimate in comfort and performance and represents the finest in geothermal products. This line is built using the latest technologies and the highest standards.

While other conditioning systems run at one or possibly two speeds (high and low), the 700A11 scales compressor output and airflow to exactly the level needed for any heating or cooling situation. It offers the most highly attuned comfort for the space while keeping with energy efficiency standards.

The 7 Series comes standard with builtin energy and refrigeration monitoring sensors. Customers have access to insight by reviewing monthly, weekly, or daily analyses of their units’ energy usage from their thermostats and/or the Symphony

platform. No estimates — actual data.

The Symphony Platform is a Wi-Fi-based comfort platform that's unsurpassed in its ease of use, feature set, and level of information it provides. Symphony marries the Aurora controls of a WaterFurnace geothermal system with a WebLink router, giving the customer and contractors access to the comfort system from practically anywhere. Symphony is cloud-based so there's no software to install and provides control over the entire geothermal system-not just the temperature as in other 'smart thermostat' systems. Customers can also benefit from cloud sharing to look at geo-energy monitoring and pricing in their regions, giving actual real-time data on what customers are likely to pay for this energy-efficient system.

https://www.waterfurnace.com/

SERVICE NATION | ROUNDTABLE REWARDS

Featured for Contractor Organization

At AHR Expo 2023, the team spoke with Pete Danielson, Vice President of Market Development at Service Nation – at a very popular exhibitor booth as always.

Service Nation was created by contractors for contractors in 2002. Still, the most revolutionary organization was

founded by a collaboration of leading contractors to share information and help other contractors improve their sales, marketing, operations & profitability, as it continues to evolve. Although the organization could have become complacent, it has continued to show a commitment to growth which is why we chose to highlight it here.

Today, with more than 5,000 members, initiative-taking and adaptability are the foundations of the organization. Also, Service Nation offers different membership levels because they understand not every company is at the same level of growth.

When you first join the organization, you become part of Service Roundtable, the first and still foundational membership level. From there you have an opportunity to learn more about their three Premier Membership levels –Service Nation Alliance, Service Nation Alliance Premier, and Retail Contractor Coalition.

Roundtable Rewards

We chose to highlight Roundtable Rewards for its profit-by-participation motto that benefits contractors by putting money back in their pockets.

More than 200 contractor-vetted Preferred Partners participate in the Roundtable Rewards buying group. These partners provide rebates on products and services you already use to operate and promote your business – marketing, recruiting, training, equipment, office supplies, vehicles, distributor and so many more. Participation in Roundtable Rewards effectively turns your Service

Nation membership into a profit center. Thus far, more than 2 billion dollars have been distributed to members by Partners. Get to know them – you’ll profit from the experience in more ways than one.

We have spoken to thousands of contractors over the life of this magazine and Service Nation has changed lives and helped company owners grow.

Contractors need to be a part of Service Roundtable because the partner companies purchase more than a BILLION dollars annually in goods and services. Through Roundtable Rewards you use that collective buying power to receive rebates and discounts from more than 130 participating vendors. Through the Roundtable Rewards program, you can get substantial rebates and discounts for your purchases. Plus, new partners are being added constantly and each goes through stringent vetting.

Service Roundtable Preferred Partners

Who are these partners? They’re companies large and small. Companies that offer everything you need to run a successful business for less:

• Equipment

• Software

• Computers

• Sales Training

• Tools

• Marketing Services

• Office Supplies

https://join.serviceroundtable.com/ about/roundtable-rewards/

continued from page 7

STORYTELLING TO BRAND YOUR HOME SERVICE COMPANY

BY HEATHER RIPLEY

While technology continues to make it easier to shop, participate in educational courses, and conduct some business completely online, the one thing that many businesses lose as they become more digital, is the human touch.

Although home service companies still want to make in-person visits to find a refrigerant leak or fix a broken furnace blower, a customer’s initial contact with your company might be walled off by online reviews or digital schedulers. Often, HVACR technicians have no contact with a customer before a home service visit. This is exactly why your home service business should have built into its brand, a cohesive narrative that can reach your potential customers. And, a good brand story is a mix of emotionally connected messaging and hard facts – a story that is unique to your brand and evokes the marketing “feeling” you wish to convey. Establishing a public relations strategy that promotes your humanness

and the reasons why your home service company is the right choice, helps you gain that understanding.

Creating a Unique HVACR Brand Story

Facts vs. Feelings

While you might offer the same services as a competitor down the street, you aren’t the same company and haven’t had the same experiences. If your greatgrandfather started your company at the turn of the last century and you’re still in business today, that legacy is a unique part of your brand story – use it. Why? Because it says, you are family-oriented, and you believe in tradition and history. But also, it elicits feelings of trust and security – the community has trusted

your company for a century.

• The fact: You are a family business that has earned its success and reputation among community patrons.

• Emotion It Evokes: We believe in family. We love this community. You can trust us with your home. If you’re a newer company, but your service techs all have advanced certifications making them the experts in your service area and your company routinely includes community philanthropy you may combine those two aspects into your brand story.

• Fact: We train our service technicians, so they earn the most advanced certifications from

organizations like North American Technician Excellence (N.A.T.E.). This fact will distinguish your brand in the eyes of prospects and customers.

• Emotion It Evokes: Giving back to the community through organizations like Habitat For Humanity can elicit a warm feeling that says, “we care,’ about our community and we believe in giving back.

Bottomline: Find what sets you apart from the competition. That way, you can compete by being the different option, rather than trying to copy the competitor. The very thing that makes your company unique, is your superpower in brand storytelling. Write that story into your branding – in your blogs, on your website, in your advertisements, and in public relations campaigns.

People are Still Your Company Backbone

Even though technology has made it easier to click a few buttons to receive service, it’s still your service experts who

If your great-grandfather started your company at the turn of the last century and you’re still in business today, that legacy is a unique part of your brand story – use it.

go into homes or businesses to make repairs or installations.

Many home service companies often rely too much on selling the features their HVACR systems have or single out reasons why their technology helps save energy, but fail to mention the people who are doing the work.

Sharing your company’s culture is a great way to build unique and interesting content.

Instead of simply mentioning that your service techs have earned certain certifications, explain to customers the benefits of the training and certification and why your employees and company are the perfect service experts to handle their needs.

Value or Price?

Some market consultants advise business owners that they can compete in this market by reducing prices to attract more customers or selling to “value” when their service is more expensive than their competitor(s). But, a good brand story can bolster your position, further validating why your home service company is the best value for the price.

Your PR strategy should emphasize the ongoing training your technicians receive. Your accounting departments should have a firm understanding of overhead and the cost of service to ensure your pricing strategies are accurate. Understanding your overhead and market forces will help you to be the most profitable you can be. If you have these two foundational building blocks in place, then your brand story can go a long way to increasing business.

Selling the branding story about your well-trained and certified service techs

offer customers added value and will help you offset pricing complaints, especially in today’s volatile economy.

PR in HVACR

For many home service business owners, the willingness to tell your company’s story isn’t a stretch. Rather, the ability to communicate effectively is the issue. This is where an excellent PR strategy comes into play.

A public relations expert can not only help you brainstorm ideas that will communicate your company’s story, highlight your people, and explain your value, but a specialist can also organize the information into a cohesive strategy that becomes the brand story throughout the company – for sales, operations, technicians, and CSRs. A public relations professional can also train you and your team on how to deal with the media and the public, and the best way to tell your brand story.

A marketing and advertising team wellversed in building campaigns, and capable of training your technicians how to speak about your brand as they meet and chat with customers in the community, can do well to propel your company’s position in the market.

But beware: a brand story needs to

be meaningful, personal, and emotional while remaining factual and authentic. If your story isn’t unique or doesn’t make people feel personally connected to your content, it’s not going to do you much good. Merely creating content for content’s sake won’t capture anyone’s attention.

There are dozens or even hundreds of home service companies in your area vying for customer attention. Analyze how are you different and develop your own story, your narrative should be your own.

Putting PR Into Practice

The best thing you can do is remember that despite the bricks and mortar, the logo, and the technology that make your business a company, it is a person who was behind starting the company – whether that was you or your great-grandfather.

Putting your face behind your brand story and building campaigns that explain who you are, what you do, and why you do it, is a start.

Whether your campaign includes blogs that provide readers in your community with household tips or promotes a charity you are involved with or simply lets customers know of your latest specials, you need to stay on brand when you

create the content for these campaigns. Your story doesn’t change because there are new ways to do truck wraps or a manufacturer develops a more energyefficient water heater or HVAC system. Your company is unique because of where it came from or who established it or why it exists. It is not successful because of a gimmick.

Once your target audience knows more about you, they begin to trust you, and, the more they trust you, the more likely they will become your customer. Then, you will have created brand advocates who will cheerlead your products and services for years to come. u

Heather Ripley is the founder and CEO of Ripley PR, an elite, global public relations agency specializing in skilled trades, franchising, manufacturing, and B2B Tech. Ripley PR has been recognized by Entrepreneur Magazine as a Top Franchise PR Agency five years in a row and was named to Forbes’ America’s Best PR Agencies for 2021. She is the author of “NEXT LEVEL NOW: PR Secrets to Drive Explosive Growth for your Home Service Business.” For additional information, visit www.ripleypr.com.

There are dozens or even hundreds of home service companies in your area vying for consumer attention and jumping on the competitors’ marketing bandwagon to get noticed. How are you different? It doesn’t mean you can’t be inspired by others’ brand stories, but your narrative should be your own.

WHAT CONTRACTORS SHOULD KNOW ABOUT HVAC SURETY BONDS

BY LISA TRYMBISKI

As a contractor involved with installing heating, ventilation, and air conditioning (HVACR) systems, it is important to understand your regulatory and legal requirements especially when it comes to surety bonds. Even if you are a veteran HVACR owner, I have found that many contractors are misinformed when it comes to surety bonds. Most of you are aware that HVACR technicians are required by the U.S. Environmental Protection Agency (EPA) to obtain certifications or licenses before they can legally operate. Many states, cities, and counties also require HVACR contractors to obtain licenses. A common condition of licensing is to get an HVACR surety bond. Lastly, it’s important to understand the facts about bonds, both for you and your HVACR technicians and apprentices.

Below, I have outlined everything you need to know about HVACR surety bonds as a contractor.

What are HVACR Surety Bonds?

HVACR bonds are surety bonds that might be required as a condition of obtaining a certification or license to work as an HVACR contractor.

A surety bond is an enforceable

When the surety company issues an HVACR bond, the bond serves as a guarantee that the contractor will abide by the law and the regulatory requirements for government HVACR contracting work. It also guarantees that the contractor will operate their business ethically and will perform their work as promised.

agreement that involves three parties –the HVACR contractor who needs to obtain the bond, the governmental body that requires the bond as a condition of obtaining a license, and the surety company that issues the bond. These three parties are referred to legally as:

• Principal - The HVACR contractor who needs the bond

• Obligee - The licensing group that requires the bond

• Surety - The bond agency that issues the bond

When the surety company issues an HVACR bond, the bond serves as a guarantee that the contractor will abide by the law and the regulatory requirements for government HVACR contracting work. It also guarantees that the contractor will operate their business

ethically and will perform their work as promised.

Misconceptions vs. the Truth About HVACR Surety Bonds

A common misconception is that an HVACR surety bond is another type of insurance. However, insurance and surety bonds function quite differently. While your commercial general liability insurance protects you from liability in the event of a loss, your HVACR surety bond will instead protect your customers, and the government, against any illegal or unethical conduct in which you might engage during the course of doing business.

If you violate the law or the terms of your contracts, a claim can be filed against your bond. Surety companies investigate

claims to determine their validity. While a surety company will pay a valid bond claim, you will be legally obligated to reimburse the surety in full for all amounts it pays on your behalf.

This is because you will be required to sign an indemnity agreement to receive a bond from the surety company. The indemnity agreement serves as a “hold harmless” agreement. This means you will agree to hold the surety harmless for any losses that might be incurred through a bond claim. If you fail to repay the surety for a valid claim against your bond, the surety can come after you in court to recover everything it had to pay on your behalf, as well as any legal fees it incurred to recover compensation from you.

Your HVACR surety bond guarantees prospective clients from monetary losses. If you fail to fulfill your contracts or violate the regulations and laws that govern the HVACR industry, for instance, your clients can recoup their losses through bond claims.

How Much Does the HVACR Bond Cost?

The bond amount you might have to post to obtain an HVACR license will depend on your state or local jurisdiction. However, you won't have to pay the entire amount to purchase your bond.

A common misconception is that an HVACR surety bond is another type of insurance. However, insurance and surety bonds function quite differently.

For example, if you must post a $15,000 HVACR bond, you will only have to pay the bond premium the company quotes you instead of $15,000.

If you have excellent credit and a good business reputation, your quote could be as little as 1%. If your credit is poor, your quote might be up to 10% or more.

How to Get an HVACR Bond

To get an HVACR bond, you simply need to apply through a surety company. Many bond companies have online applications to make the process fairly simple. Once you submit your application, it will go through underwriting before the surety will agree to approve it.

Remember, surety bonds are a form of credit since the company agrees to pay valid claims for you, but you will then have to repay the surety. Because of this, a bond company will want to evaluate the risk it would face if it agrees to underwrite your bond. As a part of the underwriting process, the surety will want you to provide information about your credit and your business.

If your credit score is excellent and your business is stable, the surety company might give you a low bond premium quote. If your credit score is poor, you might either receive a high premium quote or you could be denied.

Why Every HVACR Contractor Needs a Surety Bond

Licensing authorities require HVACR bonds to ensure that the contractors they license, or grant permits, understand the legal requirements and will comply with them. Both surety bonds and licenses expire and need to be renewed. If a contractor violates their bond or license conditions, the licensing authority likely won't renew the contractor's HVACR license. Requiring a surety bond as a condition of licensing helps governmental licensing bodies ensure the contractors that their license are ethical and legally

compliant. The bonds also are designed to protect the public against malfeasance and ensure they are compensated if they lose money due to errant action or negligence on the part of a contractor.

Bottom line: You need to get bonded to perform work as an HVACR contractor because you can't get a license to run your business legally without doing so in most jurisdictions. If you complete HVACR work and do not have a license on your own, it is illegal.

Do your research. The licensing requirements for obtaining certifications vary from state to state. You will need to check with your state to find out its requirements. However, importantly, even if your state doesn't require HVACR contractor licensing, you might be required to get bonded by your city or county or in a next-door county in which you might want to perform work. So, do your homework to avoid any issues.

Additional Benefits to Getting Bonded

If you are not required to get licensed and bonded, getting an HVACR bond might still offer some benefits. Being bonded adds trust and credibility to your business and shows potential clients that you operate a stable and trustworthy operation. The additional effort could help you to secure contracts that might otherwise be unavailable to you. u

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10 MANAGEMENT LESSONS FROM THE U.S. NAVY

BY GUY KAWASAKI

Ihad the extraordinary experience of spending a day and a night at sea in the Pacific Ocean on board the USS Nimitz. I was part of a Navy outreach program to give ordinary landlubbers like me a perspective on the mission and operations of a naval strike group.

I was excited. Who would turn down a chance to get on top of a nuclear power plant driving 100,000 tons of steel through the ocean, with 5,000 men and women handling scores of aircraft, carrying thousands of pounds of bombs and missiles, burning thousands of gallons of jet fuel a day, with margins measured in inches, and tolerances of seconds?

What I discovered during my visit is that many of us who are working in non-military organizations, and who may not have given a second thought to the Navy as a model, would do well to understand how a small city floating on the ocean works. During about 30 hours of immersion with sailors and pilots (and public affairs officers), I realized several principles at work make the Navy so successful — principles that are not at all unique to running an aircraft carrier

As much as the movie “Top Gun” created the impression that it’s about competing to be No. 1, the ethic in an actual operating situation is intensely about team performance.

— representing important lessons for everyone interested in entrepreneurship, innovation, teamwork, and management:

1. Inspiration:

Having a big, meaningful goal is a tremendous force for inspiration, motivation, and cohesion. The Navy’s mission is not some vague, abstract, feel-good paragraph in a business plan; it is very concrete and very easy to understand and internalize. In addition to defending America, fighting terrorists, and rescuing victims of piracy, the Navy takes enormous pride in its role in helping natural disaster victims whether it’s a hurricane or tsunami halfway around the world. While everyone I talked with had his or her own particular story, everyone had a distinct and powerful pride in what they had accomplished, and in the

people around them. Even in the best organizations, in my experience, such a core consistency of pride is extremely rare.

2. Perspiration:

If everyone buys into the goal, you can get an amazing amount of work done, including regular 16-hour days with very low pay. The Nimitz does not offer a 9-to-5 workday. Some days, crews are on the flight deck for 14 or 16 hours, into the wee hours of the morning, inhaling noxious fumes and making sure every plane gets back safely. And then after the planes get back at midnight, the maintenance crew is still at work making sure the planes are ready for the next day. A maintenance chief told me that, given the age of the planes and the stress of carrier flying, it is typical that a plane requires 25 hours of maintenance

for every hour of flight time. That seems inefficient, but the alternative is unacceptable. You don’t want to fly a plane that is anything less than 100% maintained.

3. Teamwork:

As much as the movie “Top Gun” created the impression that it’s about competing to be No. 1, the ethic in an actual operating situation is intensely about team performance. Watching the crews maintain, fuel, set up, and pilot F-18s for flight, it’s clear it’s not about who’s the hottest dog on the deck. Every single person counts on other members of the team to enable them to get their part of the job done, and no one person can take credit for success, or benefit from another’s failure.

4. Recruiting and training:

There is a common misperception that the military attracts the lower performers in our society who have no other choices. The Navy is very fortunate to have more people who want to join than there are available slots. But more importantly, the men and women who make it through

training are astoundingly competent people. The lesson here is that it’s not about fancy degrees and prior polish; it’s about a commitment to excellence in each individual, and the willingness to work to exhaustion to make sure you live up to your commitment.

5. Accountability and continuous improvement:

There is no contradiction between an intense ethic of teamwork and the need for individual accountability. In the Navy, everything is monitored and measured. Every system has to perform at 100%, and for every system, there is a person responsible for making sure that happens. Every cycle of take-offs and landings is measured and scored. And every score is assessed to figure out a way to do it better.

6.

Respect:

In the Navy, if you don’t like someone because of their race, or creed, or something else, you have the opportunity to change your mind, because that person may be living in the bunk 14 inches away from you. Respect isn’t just an altruistic ethic; it’s a necessity. More so than any other institution, the U.S. military has been successful at integrating America’s young men and women. I’m sure the Navy is not perfect in this regard, but when I looked around the bridge and saw the incredibly diverse team of men and women who were calmly, confidently, and competently running this multi-billion dollar acme of American technological accomplishment, I thought why can’t all of America be more like this?

7.

Overcoming fear:

On a busy aircraft carrier, there are a lot of things that happen that are scary, and people die. Despite the macho prototype of the Navy pilot, in private these pilots admit that landing a jet on a moving carrier at night is a downright terrifying experience. Watching a series of jets land at night, you get the impression that it must be pretty easy because they do it so well. But it isn’t easy; and even with years of practice and experience, it’s nerve-wracking.

8. Work/Life balance:

It’s hard to imagine how people in

the military handle being away from their families for months at a time, in environments that are almost entirely work-related. It is not easy for most. My impression is that the Navy tries to ease the strain by creating a work environment that is much looser and more casual than we expected. We thought the crew aboard the ship would be much more heavily starched than they were, and that the interactions between subordinates and superiors would be much stiffer. When you are on the line, there is no slack, and there is no room for anything less than 100%. But when there is a break in the action, you can relax and be human.

9. Reverence and irreverence:

The week before our visit, the Nimitz lost five crew in a helicopter accident. These were not strangers; these were coworkers and friends. Among the pilots, it

seems that everyone has at least one story of a good friend who was lost. For these men and women, death is all too real. There are memorials around the ship to remind everyone of those who has given their lives in the service of their country. At the same time, there is an irreverence that pops up quite frequently, sometimes when you wouldn’t expect it. The captain, in welcoming us, referred to the aircraft carrier as being “kind of like a jail, except there’s the possibility of drowning.” Not exactly what you would expect to hear.

10. 100% performance:

From moment to moment, the operations on board a nuclear aircraft carrier expose the crew to an extraordinary degree of danger. A simple mistake can result in death, and much of what is being done on the ship and in the air is not at all simple. But they make it look easy. We watched scores of planes

take off and land on a moving platform without a hitch. The key is training, training, training, and total focus and dedication when you are on the line.

Not every entrepreneur wants to model his or her organization and culture in the Navy. For many entrepreneurs, indeed, that is a very unappealing concept, but that’s because they don’t understand what makes the Navy one of the most effective organizations on the planet. Like any other successful organization, it’s about the people. The key is harnessing the incredible potential of every individual through inspiration, training, and teamwork. u

Guy Kawasaki is the chief evangelist of Canva and the creator of Guy Kawasaki’s Remarkable People podcast. He is an executive fellow of the Haas School of Business (UC Berkeley), and an adjunct professor at the University of New South Wales. He was the chief evangelist of Apple and a trustee of the Wikimedia Foundation. He has written Wise Guy, The Art of the Start 2.0, The Art of Social Media, Enchantment, and eleven other books. Kawasaki has a BA from Stanford University, an MBA from UCLA, and an honorary doctorate from Babson College.

The men and women who make it through training are astoundingly competent people. The lesson here is that it’s not about fancy degrees and prior polish; it’s about a commitment to excellence in each individual, and the willingness to work to exhaustion to make sure you live up to your commitment.

A CONTENT STRATEGY THAT WILL GROW YOUR BUSINESS

BY JOE PULIZZI

Historically, HVACR contractors have relied on referrals and traditional marketing efforts, such as direct mail and advertising to grow their businesses. Although those efforts may continue to pay some dividends, online content is where the true opportunity lies. Consumers looking to purchase heating and cooling equipment and services are starting their search on the Web. According to a 2021 Forrester study, over 90% of consumers begin a search for any product on the Web. With stats like that, not having a Web presence can crush any new business opportunities, even for HVACR contractors.

Creating Content for The Web

More and more successful businesses are employing something called “content marketing.” Content marketing is the practice of creating relevant, valuable, and compelling content for customers and prospects (instead of sales information). This type of “un-marketing” is now a

To attract the attention of consumers, contractors must first understand search engines — where most consumers start their search. Search engines, like Google and YouTube, love content, especially valuable and relevant content that generates links from outside, reputable Web sites.

great option to target consumers who are tuning out advertising messages across the board.

To attract the attention of consumers, contractors must first understand search engines — where most consumers start their search. Search engines, like Google and YouTube, love content, especially valuable and relevant content that generates links from outside, reputable Web sites. Unfortunately, creating valuable and compelling content is not easy to do.

Even though most contractors may agree with the move to the Web, most are still using traditional marketing strategies they have used for decades. There are

several reasons for this:

• Most contractors are set up to sell products and services, not to provide relevant and valuable information to customers and prospects. Moving to content marketing means contractors need to start thinking about educational newsletters, blogs, podcasts, video series, and free reports. These are just a few types of initiatives that contractors could consistently produce. It’s as simple as this: If the information you are sending out to customers doesn’t help them make better choices, don’t send it.

• Most contractors have well-worn marketing paths that are easy to

follow. Going off the beaten path into uncharted territory is intimidating.

• Most contractors aren’t measuring their marketing, so they aren’t even sure what is and what is not effective.

As customer behavior continues to move to the Web, taking a new approach is the option that will add one more arrow in the quiver. By implementing a new content strategy program, contractors can see positive results through search engines and referrals in as little as nine months (although a long-term strategy will be the true payoff).

The B.E.S.T. Formula A Structured Approach for Creating a Content Marketing Roadmap

To grow your business, you must think like a publisher by delivering relevant content that will have intrinsic value to your targeted customers. Providing information about your services and having a Web presence isn’t enough. To get found on the first page of search engines, you need to feed content into

HR SOFTWARE TECHNOLOGY: IS IT WORTH THE HYPE?

BY HEATHER LANGONE

HR software technology may seem like a no-brainer necessity for most business owners and contractors. However, many smaller HVACR owners still question its worthiness. So, we are posing the question. HR Software Technology – Is it worth the hype?

In an industry in which recruiting top talent can be a challenge, the use of advanced onboarding tools, and the integration of a more efficient management system, can make all the difference. For HVACR contractors specifically, there are a handful of top HR software technology choices, that have stepped up the game to change the way HVACR contractors do business. Most of the current HR software technology options are all-in-one – combined field service and HR management in one system – and can help you solve a slew of recruitment, onboarding, training, retention, HR management, and compliance issues.

To increase productivity and remain competitive, choose from the HR software technology that focuses on communication and data management to and from the field team to your office staff. Manual data and paper filing of applications and personnel management is a thing of the past. Many contractors choose to avoid any software investments as a way to keep the bottom line lean, and still use outdated systems. But my guess is that given a demo of the right software, even the most resistant contractor would see that that investment would likely pay for itself. If you could understand that there is a way to better leverage talent management more effectively, especially with the shortage of new technicians and the scarcity of top talent, would you be interested? HR Software Technology can make even the leanest company

more competitive because it allows for the capability to streamline your day-today personnel operations. If you are still using an outdated system, there is a high probability that the lack of efficiency and streamlining has caused you to lose out on a great hire or two, because the application process isn’t as streamlined as it could be. HR Software Technology is an investment. But the benefits work both out in the field and internally. Just think about it as an investment that will lead to profitable streamlining.

Some of the benefits of integrating HR software technology are as follows:

Attract and HIRE the Top Candidates

When it comes to hiring the top recruits, speed and the quality of an interviewing and potential onboarding experience, matter. Just as you are assessing if a candidate is a good fit, they are comparing you to two or three other employers. Your best practice is to have software that manages vacancies, and the pool of candidates and has efficient management systems at various stages of the application process.

HR Systems Increase Employee Retention

After you have hired top talent, this is where HR software can truly make a lasting difference – in the management and retention of your current employees. A good software choice will help your HR team deliver a quick, seamless, and

highly professional experience for all your employees’ HR management needs. Most of the top HR software allows for integration between the field and the office, payroll management, core processes, procedures, and performance reviews – all of which will ultimately increase employee retention.

Payroll Efficiency & Accuracy

Storing up-to-date field service jobs and pay data in an all-in-one integrated payroll and data management system, will reduce the time it takes to do your payroll processing and increase accuracy. So not only is your team communicating in one efficient system, increasing the efficiency of the way jobs are paid out, but also HR, payroll, or financing will be subject to fewer payroll complaints or questions due to human error.

HR Software to Support Field Service Management

HVACR operations involve many moving parts – both people and departments on-site and in the field – so creating seamless communication between all these parts while keeping the focus on customer satisfaction, can be a large undertaking for a small business owner.

The best solution is to get HR software that integrates with field service management. The good news is that it exists, but there are better and best ways to leverage these systems.

Most companies offer training, but making sure to do the following three steps will ensure you are off to a running start.

1. Once you choose the software, make sure the HR or office manager creates an employee database and collates it based on skills and technician level.

2. Create an existing customer database per service demands.

3. Then use the data management and system integration to schedule work orders based on the right technician and matching skill set.

If you are thinking of upgrading your HR software or adding HR software to already existing field service management software, many companies offer all-in-one options that allow for easy integration between HR management and CRM systems.

Here are some of the top-rated ones*:

• Scorpion

• ConnectTeam

• Service Fusion

• ECi Software Solutions

• Succesware

• MobiWork

• ServiceTitan

• SimPro

Most HR software, especially the ones that work best with HVACR contractors, will allow for seamless oversight of jobs, field communication, personnel, and payroll in one system. Contractors will agree that upgrading to an easy-to-use HR software that can integrate with your field service management systems, is a best practice to compete, increase productivity, and attract the best talent in the industry. So, the answer is ‘yes’ – it is true that HR software technology although an investment, is worth the hype. u

Heather Langone is the Managing Editor of HVACR Magazine.

*

https://www.scorpion.co/home-services/

https://www.successware.com/

https://www.mobiwork.com/lp/48-field-services-software.html

https://www.servicefusion.com/field-service-management-software

https://www.servicetitan.com/go/brand-all-service

https://connecteam.com/

https://www.ecisolutions.com/

https://www.simprogroup.com/campaigns/field-service-mgmt-software-lp1

In an industry in which recruiting top talent can be a challenge, the use of advanced onboarding tools, and the integration of a more efficient management system, can make all the difference.

PROVIDED BY KEVEN PRATHER, CFBS EXIT PLANNING

4 Reasons Why Planning the Future Isn’t DIY

At their core, successful business owners like you, are builders. Whether you founded your business, or purchased one and took it to new heights, doing it yourself runs through your veins. Why, then, would you need professional help to plan for a successful business future?

We could go on and on about all the reasons why, but let’s focus on four major elements of planning for a successful future. These are the elements that are typically complex and extremely challenging for even the most talented business owners to handle alone.

1. Your brilliance may not be scalable

Business owners are a special breed of ambition and brilliance. As you run the business, you may have methods that work well based on your talents and idiosyncrasies.

However, a key to a successful business future is building a business that doesn’t rely on you. Because if it relies on you, you can never leave it. And even if you never want to leave it during your lifetime, a business that lives by you may also die by you, which can have wide-ranging effects on others.

The true tragedy of individual brilliance is that when it comes naturally, it’s hard to explain to others. A classic example of this is Wayne Gretzky. Gretzky was the greatest hockey player in history, setting unbreakable records with ease. But when he tried his hand at coaching, he was much less successful because he struggled to explain how he did the things that made him so outstanding, and which came so naturally to him.

The same is true in running a successful business. Having (a) documented operating systems that increase cash flow sustainability and (b) a way to scale those systems in ways that don’t involve you, are profoundly important for a successful future. A

professional advisor can help you distill your brilliance into something that doesn’t rely on you for success.

2. What does a successful future mean?

The idea of a successful future might seem easy to understand at first glance. Maybe you want enough money to retire with some left over to begin building generational wealth. Perhaps keeping the business in the family is your idea of success.

Whatever your vision of success is, do you know precisely what it takes to achieve it? And have you begun implementing a plan to pursue it?

Many business owners have two jarring experiences when they start considering the nuts and bolts of a successful future. First is the Misperception Spell. This is when a business owner becomes complacent because they believe they’re farther ahead in their planning than they truly are.

For example, you may think that having $3 million in retirement is enough for you. But how can you know that for sure? What happens if your estimate is wrong? What if you live longer than you expect? Would you be willing to go back to work for someone else if you were wrong about your estimates?

Second, and related to the Misperception Spell, is that many business owners have an Asset Gap. This is the difference between what you actually have and what you’ll need to achieve financial independence, whether you leave your business during your lifetime or die at your desk.

Without accurate information, planning for a successful business future is essentially a gamble. Professional advisors can help you obtain accurate information about your wants and needs, and then create plans that help you achieve them.

3. Best friends may not make best managers

A crucial element of planning for a successful business future is Next-Level Management. However, many business owners struggle with this because it could mean that longtime, loyal managers aren’t the best people to help them pursue future business success.

This doesn’t necessarily mean that you need to be starkly Machiavellian with your current managers. However, a professional advisor may be able to examine your talent pool more objectively. Then, they can help create a plan that allows you to maximize your business’s potential through Next-Level Management.

This may include incentivizing current managers to achieve more ambitious goals if they’re capable. It may also mean finding a more appropriate role for your current managers as you bring in nextlevel managers, if necessary.

4. Honesty is hard when it’s your baby

Finally, planning a successful business future is emotional. It often requires owners to confront the warty parts of their business to take the business to the next level.

For instance, business owners typically place a higher monetary value on their businesses because of how much the business means to them personally. It can be devastating, even financially harmful, to find that an objective valuation doesn’t agree.

Though many business owners believe they can handle the slings and arrows of building a successful business future, it’s much, much more difficult when their expectations fall short of reality. However, with the help of professional advisors, business owners can obtain accurate information; begin to act in ways that improve business performance; and gain a clearer path toward creating the business future they want, rather than a business future they’re forced into.

We strive to help business owners identify and prioritize their objectives for their businesses, their employees, and their families. If you are ready to talk about your goals for the future and get insights into how you might achieve those goals, we’d be happy to sit down and talk with you. Please feel free to contact us at your convenience 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.

Though many business owners believe they can handle the slings and arrows of building a successful business future, it’s much, much harder when their expectations fall short of reality.

BY RUTH KING FINANCE

Don’t Run Out of Money Because You Grew Too Fast

Many contractors are focused on growing top-line revenues. They want to increase revenues by 10%, 15%, 20%, or more in a year. I always ask them this question, “Why do you want to grow revenues?” Usually, the answer is ego-driven. At this point, I try to get contractors to focus on growing profits by a certain percentage each year. In my opinion, that is more important than growing revenues, and much more prudent financially.

Can Your Company Afford to Grow?

Of course, if you have grown your business so quickly that you are currently stuck in a “No Man’s Land” with revenues hovering around $1 million, or you can’t seem to get over the $5 million revenue mark and keep it there, then yes, you do need to grow revenues so that you can afford the overhead that needed to be added as you grew.

However, if you can avoid this situation and follow my advice to grow steadily and when you can afford to grow, then you will be better for it. Last month I gave you the formula to help you save cash and get to the point where you have a six-month cash reserve. This month I’ll give you the formulas to determine whether you are growing too fast and a rule-of-thumb determinant to estimate how much cash you need to grow.

First, let’s look at important definitions:

• Working capital: Current assets minus current liabilities.

• Current assets: These are cash or assets that are turned into cash within a fiscal year.

Generally, current assets are cash, accounts receivable, inventory, and prepaid expenses. All these current asset accounts should have a positive value except for allowance for doubtful receivables.

Those of you who have commercial revenues may list “work in progress” as

a current asset. In addition, be sure to separate retainage from other receivables. You never know when you will receive your retainage checks. So, don’t account for them among the “normal” receivables. Keep these separate.

If you don’t have inventory on your balance sheet, you are still accounting for inventory as costs of goods sold. In months that you buy a lot of materials which should be inventory, your cost of goods sold is higher than it should be, and your net operating profit is lower than it should be.

• Current liabilities: Accounts payable and other debts that must be paid within a year. Generally, current liabilities are accounts payable, payroll and business taxes payable, deferred income for maintenance plan enrollments, deferred income for deposits on jobs, and the current portion of long-term debt. All these current liability accounts should have a positive value.

The deferred income for deposits on job accounts is essential to ensure your accounts receivable are not negative. If you don’t have this current liability account, then when you receive a deposit on a job, the accounts receivables are negative until you invoice for that job.

• Annualized revenues: This is the amount that you estimate your annual

revenues to be at any month for your fiscal year. Of course, year-end numbers may differ and are best to use.

However, how do you annualize revenues if it is May and your year-end is December?

Annualized revenues for May equal the total of January through May revenues times 12 divided by 5 (the fifth month of your fiscal year).

This calculation is still appropriate even though our industry has seasonal revenues. The annualized revenue calculations in the first quarter (if it is the slowest quarter) might be a little low. However, as the revenues accumulate through the year, the annualized revenues for the year get consistent.

Is Your Company Growing Too Fast?

Every company wants to grow. But as you can see, sometimes this growth will be to your detriment and can negatively impact future growth if it’s not done in a fiscally responsible way. So, how do you determine if the company is growing too fast?

Below are two formulas to help you determine if your company is ready to grow:

• Formula to determine if your company can afford to grow:

The annualized revenues are divided by working capital. If these equal 10 or higher.

If the result is under 10, then your company probably is not growing too fast. You should not outgrow your cash.

• Formula to determine how much cash you need to grow:

You need 10% of the anticipated growth in cash to survive the growth. For example, if you are planning to grow from $1,000,000 to $2,000,000 in sales, you need $100,000 in cash to fund that growth.

The cash is needed for expenses in the following three major areas:

1. Vehicles: Van wraps and other signage, shelving, inventory, tools, etc.

2. Field personnel overhead expenses: Laptops, tablets, phones, uniforms, non-billable time, worker’s comp, and other non-billable payroll expenses

3. General overhead expenses: Any additional office personnel and their payroll expenses (dispatcher, CSR, accounting), additional marketing/ advertising, and potentially moving expenses if your company has grown past its existing building capacity

Having your bookkeeper prepare a weekly cash flow report should help you keep track of cash. Make sure that you see an increase in your savings account each week based on the amount of cash that was received. For example, if the company received $20,000 in cash, you should see a deposit of $200 to $400 in your savings account.

Use these formulas to make sure your company is not growing too fast and to determine the dollars needed to fund your company’s revenue growth. 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.

I try to get contractors to focus on growing profits by a certain percentage each year. In my opinion, that is more important than growing revenues, and much more prudent financially.

AIRTHINGS

Airthings in Atlanta, and 2022, 2023 award-winning developer and manufacturer of indoor air quality solutions for commercial buildings and homes, announced the launch of a new feature at the 2023 AHR Expo, perfect for HVAC pros: the Energy Efficiency Toolkit. Expanding Airthings’ focus on using air quality data to balance health and energy efficiency in any building, the dashboard feature provides customers with the data they need to identify unnecessary energy expenditures. Unnecessary heating and cooling are a massive source of wasted energy, especially during off-hours. Airthings’ Energy Efficiency Toolkit helps customers significantly reduce energy waste. www.airthings.com/business

BELL & GOSSETT

At the 2023 AHR Expo, Bell &Gossett introduced innovative solutions for building a better future. Among them was the e-1510 pump with Hydrovar featuring built-in intelligence and embedded IoT connectivity. This new integrated motor and variable speed drive solution paired with the e-1510 extends the pump lifecycle and reduces the cost of ownership, all in a compact, lightweight design with ratings up to 30HP (22kW) and delivering IE5 ultra-premium efficiency. Sustainability is top of mind with Xylem’s permanent magnet-assisted synchronous reluctance motor technology that uses a sustainable permanent magnet material without environmentally damaging rare earth metals.

www.xylem.com/en-us/brands/ bell-gossett/

CARRIER

Carrier Adds 515B Lower GWP Refrigerant Option to AquaEdge 19 — Carrier has announced the availability of the lower global warming potential (GWP) 515B refrigerant in its awardwinning AquaEdge® 19MV oil-free watercooled chiller. Carrier is a part of Carrier Global Corporation (NYSE: CARR), the leading global provider of healthy, safe, sustainable, and intelligent building and cold chain solutions. The AquaEdge 19MV was named the 2022 Commercial Comfort Product of the Year in the Cooling Equipment category by a panel of independent engineers selected by the editorial staff of Engineered Systems magazine.

www.carrier.com/commercial/en/ us/19mv

DANFOSS

The Danfoss Oil-Free Check Valve (OFC) brings even greater functionality and efficiency to Danfoss Turbocor® compressors. Designed specifically for an oil-free environment, the valve delivers a discharge solution that improves the performance and reliability of oil-free centrifugal compressors with magnetic bearings by incorporating a low-pressure drop-damped check valve, as well as stop and diffuser functions. Because the oil management system can be removed when using the OFC valve, the Turbocor compressor allows for a more energy-efficient chiller that will last throughout the lifetime of the compressor with minimal maintenance and no performance degradation.

www.danfoss.com

FELLOWES

Fellowes, announced the launch of its most advanced networked air quality system, Array™, at the 2023 AHR Expo. Array™, a breakthrough system that leverages cutting-edge technology, is the latest in a long line of innovations from Fellowes that dates to its founding, as the company continuously seeks to bring efficiency, comfort, and safety to the spaces where work happens. As a leader in the air purification space, Fellowes developed Array™ to combine the benefits of stand-alone purifiers, HVAC, and monitoring systems to detect and improve air quality better and faster. Combined with Fellowes’ new cloud-based software, Viewpoint, Array™ provides complete, real-time air quality data

www.Fellowes.com

HONEYWELL

Honeywell Optimizer Suite consists of a variable air volume (VAV) controller, a unitary controller, and an advanced plant controller to help any existing building system – premium commercial, healthcare, education, or governmental –enjoy the same advantages of IP control as a new state-of-the-art facility. The openprotocol suite leverages the powerful Niagara Framework and is designed to enable more efficient installation and commissioning, provide greater cybersecurity protection, be more energy efficient, and be easier to maintain with better system operability. Contractors and system integrators can wire the new controllers into a system, connect them wirelessly or utilize IP over twisted pair communications.

www.honeywell.com/newsroom

JOHNSON CONTROLS-HITACHI

Johnson Controls-Hitachi has introduced airCore, the first line of precision air conditioner (PAC) heat pump systems in the U.S. to use R-32 refrigerant. R-32 is a refrigerant with low global warming potential that produces fewer greenhouse gas emissions than R-410A. Low-GWP refrigerants such as R-32 reduce the impact of heating and cooling equipment on the environment and can meet upcoming refrigerant regulations. The airCore line features industry-leading piping lengths of up to 245 feet, which allows for greater installation flexibility and is especially advantageous for building configurations in coastal regions. www.jci-hitachi.com

TACO COMFORT SOLUTIONS

System M is a radically innovative airto-water heat pump system that provides comfortable, efficient heating, cooling, and plenty of domestic hot water to homeowners without the use of fossil fuels — so it doesn’t create CO2. This complete, packaged system is simple to install, simple to operate, and a simply unique solution for low-carbon heating and cooling. Simply put, System M is a Milestone. System M also enables the addition of even more comfortable heating and cooling options, like radiant floor heating, towel warmers, or integration into a central cooling system.

www.tacocomfort.com/product/ system-m/

with KIM ARCHER

1. Do you have a regular practice to destress?

Recently I have been working with a personal trainer virtually. I’ve been lifting weights and I love it. Also, I love to do jigsaw puzzles.

2. Would you describe yourself as cool as a cucumber or highly charged when it comes to decision-making?

Cool as a cucumber.

3. Where do you find daily inspiration?

Honestly… the wins of our team members and clients. I know that sounds like a “proper” answer, but it is a big component that keeps me going.

4. Documentaries, Marvel, or no TV at all? I’d say, no TV at all. If I do watch, it is documentaries.

5. A saying by Tao Te Ching, says, “When the student is ready the teacher will appear. When the student is truly ready... The teacher will disappear.” Do you agree?

Agree! Sometimes, a client is not ready to implement a specific item, but typically, this is simply a process of developing understanding. Sometimes it takes years, sometimes a few minutes. But when you get the “I get it!” moment… it is super rewarding. Once this occurs, we move to implementation… best practice processes, and systems development that support the goal.

6. What is the best part of coaching?

Seeing business owners or managers achieve their “why,” what they desire in life. When limiting beliefs are removed, they realize they can achieve their biggest goals.

7. What is the definition of a good coach?

A good coach listens with intent. The problem is not always the problem; therefore, a coach must ask effective questions, remove their “lens of the world,” and seek to understand before offering direction. A strong coach will consider scaling the needs of the company in unison with growth. A wise coach must navigate the most important issues based on financial intelligence. Lastly, a good coach has a passion to serve.

8. How would you define financial intelligence?

It is the ability to expose previously unknown opportunities through the collection and analysis of financial data. Think of your financials as your health scorecard. They provide markers that guide the company’s journey to profit and growth.

9. Who were your mentors when you started?

Barry Burnett and Bruce Wiseman. I met Barry in 1993. He was leading a training class, “Structuring for Profit & Growth.” One of our core values at BDR is “heartfelt care and concern,” this class was born out of his love for the industry. I met Bruce in January 1997 and six months later I was the first team member to

join his consulting firm. In 1998, Barry and Bruce started BDR. 25 years later BDR continues to serve the trades by empowering people in the industry with our proven best practices, elevating their ability to reach their financial and personal goals.

10. Summarize why small business owners need to be open to coaching and training?

We all need mentors. No one succeeds alone. In my experience, owners typically do not have an accountability partner. Without a third eye, one can become myopic and only see limitations. A coach can identify opportunities that get buried in the hustle of the day-to-day. A best practice – learn from someone who has been on a similar journey.

11. Is it more/equally important to seek out advice when a business is thriving or when it is just starting?

It’s important at all junctures. Businesses are constantly evolving. Strategic planning is a necessary component of scaling under the pressure of growth. If you build a strong foundation, your company will be able to advance and thrive under the pressure that comes with each phase.

12. How important is a failure in the success of a business?

Incredibly important. I tell my team, let’s work with the failures rather than minimize them. There is an opportunity for growth in each failure.

13. Where do you see BDR and or your role with BDR in the next three years?

I am working on creating our organizational chart for three and five years out. From there, the leadership team will identify areas for skill gap training so BDR will continue to grow and thrive.

14. Is there a single achievement in 2022 for which you are most proud?

Yes. We set a big growth goal for 2022 and achieved it. Preparation began before 2022… scaling of systems that would handle the additional transactions and team members without impacting our service delivery or profits – PROUD is an understatement! It was such an accomplishment for the entire team.

15. Many HVACR owners are self-taught and successful. What would you tell them about expansion and growth?

Never start the journey without a well-developed business plan. Understand the importance of scale; be ready for the increased transactional volume the company will take on. Elevate your leadership game and lead your team well.

16. How important is updated technology in the growth of a small business, especially in that it can be a large expense?

Extremely…I think it is safe to say we are all looking to improve the delivery of our products and services to our clients. To do so, we must perfect internal communication, reduce friction in the processes, deploy labor maximization strategies, and have access to prime performance metrics to ensure we are on track. Technology enhances our ability to deliver on all areas of the business.

17. How do you see the industry changing in the next few years, or do you?

The labor shortage has been a common theme for many years, not new news but a big threat. We MUST attract career seekers into the trades. A career seeker will look at the earning potential and assess whether or not it is enough to meet their goals. We need the workforce, yet the earnings offered do not attract career seekers. I could speak at length on this topic, but to keep it short, we must price our job correctly, reduce friction in our business and maximize our most critical resource, technicians and installers.

18. What is the biggest impediment to profit and growth?

A lack of understanding of the importance of scale and growth and how they are synchronized. When owners don’t understand the difference, they often operate under a “growth before scale” business model. Structures built on this foundation end up with systems that are poorly developed and teeter on the verge of collapse under the pressure of increased transactions. Adapting to a model of scale before growth, allows a company to grow with a solid foundation established at every level to withstand pressure at each phase.

19. What is the most important step an owner can take now to drive growth and profit?

Manage your assets to leverage the opportunities.

20. What is your biggest goal in 2023, in terms of your role at BDR?

Our biggest goal is to enhance our systems to reduce points of friction which will ultimately protect our brand and ensure a consistent delivery procedure is followed.

Heather Langone, Managing Editor, spoke with Kim Archer, BDR’s Vice President of Coaching & Trainer. They discussed growth vs. scale, the traits of a good coach, and an evolving industry.

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THERE IS A DEMAND + YOUR CUSTOMERS ARE ASKING FOR IT:

With IAQ solutions at an all time high, your customers want to have their ducts cleaned. By offering this service you help fill that need, can potential attract a new customer base, and you can up sell your core services.

OPEN THE DOOR TO MORE OPPORTUNITY:

By offering duct cleaning services, contractors have been able to capitalize on additional services like filtration upgrades, UV lights, system & duct change outs, and more.

CALL FOR PRICING & PROMOTIONS. FINANCING + TRADE-IN OPTIONS ARE AVAILABLE.