Ask All the Right Questions

June 26, 2006
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Want to start your own contracting business? Well, so did I. I have the technical skills, I treat customers with respect, I know I can price a job better, and I am positive I can run a company better than my past employers. You too? That's great, but have you asked all the right questions?

THINK IT THROUGH

Before starting my own company, Choice Heating & Air Conditioning Inc., Manassas, Va., I had been thinking about it for years. After all my conversations with friends, family, co-workers, and even myself, I was sure I had thought everything through.

I knew how much money I needed to start the company, what equipment I would sell, who my vendors would be, what vans to buy and how much I was going to spend on them, tools I needed, a company name, areas I would service, a business plan, a company logo, a slogan, employees, phones, uniforms, licenses, invoices, contracts, and a lot more.

So, in August of 2004, I quit my employer of seven years, and took the time I needed to have everything in order to open for business May 1, 2005. I wrote my business plan, got the money, ordered the vans, and designed invoices and business cards. I bought computers, software, office supplies, truck stock, uniforms, and tools.

Then the real fun started: paperwork. In my metropolitan area, all counties and city governments that you wish to do business in require a business license. Not only did I have to have a master HVAC license, I also needed to have a contractor's license.

HUMBLE BEGINNINGS

May 1, 2005, came and a new heating and air conditioning company joined the ranks of all the other companies in my ever-growing metropolitan area where over 400 companies serviced the area already. And then, nothing. For the first month the phone did not ring once, not even a wrong number. My first call, the customer didn't even show up for the appointment. I called to reschedule but the customer's phone was disconnected. Was this the way I was going to spend my first summer in business?

ADVERTISING WOES

I chose spring to open knowing that most HVAC companies make 75 percent or more of their yearly income during the summer months. With all my hard work and dreams, I figured I couldn't lose with a May start date. I knew I needed to get into a phone book before opening my doors, and in today's climate, I figured I needed to have a Website too.

Even starting by August, it was too late to get into a single big phone book. My only choice was a community one. I was able to have a Website designed before I opened. We designed a good layout with informational content and ease of movement. This is where I must warn other aspiring contractors. Make sure when choosing a lower cost site designer that you can make changes to the content.

With the Website up and running, I began a door-to-door advertising campaign handing out fliers. I hired some help and we passed out 5,000 fliers. I received five calls, and of those five, only three became valid runs. A little desperate, I turned to a professional for help. I had to get the ball rolling. My phones had to ring.

The advertising professional recommended I use the fear of the changing market price to drive customers to their phones. I bought all the do-it-yourself paraphernalia, packed with all the information I needed for guaranteeing at least 1 percent of my phone calls. I then purchased a small mailing list and targeted homeowners that had an income over $75,000, had been in the home for five years or more, had a family of three or more, and homes that had more than one system.

One thousand newsletters went out. One sales call came in, and I lost that sale to a company that gave the homeowner a $350 discount. I tried local newspaper ads, local baseball teams, community newsletters, church bulletins, and radio to get the word out that I was here to solve their air conditioning and heating needs.

The summer of 2005 was a hot summer, but customers still weren't calling me, even with all my efforts to get the phone to ring. I did have some luck with helping out friends. My wife's work offered an informational Website for their employees; this was a great way to get business.

In the end, the summer months did not prove to be fruitful. I ran every call that came in; I even tried working with real estate agents. Price was not the problem. Customers needed to know I should be the one to call not the other guy. In my metropolitan area of 3 million, the largest company has only 3-5 percent of the market share, which is based on service contracts alone. My ads in the newspapers and homeowners association papers, my discounts, and my driving around was still not getting the phone to ring.

WHEN ALL ELSE FAILS...

Running out of money with only $5,000 left in the bank, I unknowingly turned the corner. I got an installation job, an entire system. I strongly recommended a dual fuel system. This job led to another, and another. I continued to install dual fuel systems thanks to happy customers telling their friends and family.

Turning that corner was attributed to the company's new Website, which my customers were going to and rating their service experience. With all the money spent on advertising, word of mouth was what I needed to kick-start the phone ringing. Turning the corner helped to pay the bills and to stay out of debt. I did end the year in the red, but all in all, for a one-man operation, I was able to pay the bills on time and have the capital to stay open for six more months.

LESSONS LEARNED

Did I ask all the right questions? No, I missed the big one; "How do I get the phone to ring?" There are many ways and forms of advertising available to those who can pay for these services, but in my opinion, word of mouth is still the best and most cost efficient form to get the message out. In all my conversations with friends, family, and co-workers I never asked where my customers would come from. My recommendation to those of you thinking of going into business, make sure you ask.

Brian Boysen, Choice Heating & Air Conditioning, can be reached at 703-530-1111 or brian@choicehvac.com.

Publication date: 06/26/2006

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