Recognizing a shortage of quality business training in Houston, Seattle-based Business Development Resources (BDR) seized upon the Texas-sized market of Houston to review the dynamics of profitability through its one-day seminar titled “Driving Profit and Sales Now.”

Nineteen dealer principals and two distributors showed up for the event, hosted free-of-charge by BDR, a training and coaching firm exclusively focused on the HVACR industry. According to BDR, there’s certainly a need, as there are 800 to 1,000 HVAC contracting firms registered in Houston and many are struggling to stay in business.

Bruce Wiseman, BDR’s president, predicts that the failure rate in that city will likely top 25 percent when the most recent statistics are released. Strangely, according to federal labor statistics, the single-most needed, sought-after specialist in the entire North American market today is the HVAC technician.

BDR events are often sold out and typically have 40 to 50 attendees. Recent events attracted standing-room-only crowds of 75 to 90. And while the group in Houston was less than expected, the BDR team was still excited about the turnout as this was their first self-marketed event in Texas. “We came into a new market [for BDR] to introduce ourselves and are doing so from the ground up,” said Barry Burnett, company vice president and trainer for the event.

BEWARE OF PROFIT KILLERS

Burnett is no stranger to the HVACR industry. In 1989, Burnett was recognized nationally as the most profitable HVAC contractor in the country. Shortly after selling his $15 million enterprise in 1992, he led a Northwest distributor to double-digit growth. BDR was formed in 1998 by Burnett and Bruce Wiseman.

The focus of BDR is to help business owners dissect the business in terms of profit and loss while looking objectively at overhead, labor management, sales and marketing strategies, reduction of callbacks, warranty programs, and other techniques designed to shore up profitability at every turn.

During the Houston meeting, Burnett reviewed the three profit killers for all dealers: mistakes on estimates, callbacks - which he referred to as the “cancer of our industry” - and underpriced maintenance agreements. These three profit killers typically gang up on a dealership to destroy whatever profit is made in the year. The great news is that they’re all preventable with a management strategy in place. Burnett went on to challenge each dealer, imploring them to become a 100 percent referral-based business.

PROFIT, GROWTH

The focus of the Texas seminar was to help attendees immediately drive profit and growth. Industry, technology, economic, and consumer awareness make it more important to implement new strategies to thrive in an increasingly competitive market. Many proven strategies and tools were explained in detail to the attentive group.

Because it is always an advantage for dealers to learn from their peers, BDR invited two independent contractors - professionals who’ve turned their companies around with help from BDR - to speak to the group in Houston. Steve Driskill, president of Kendall County Air (www.kendallcountyair.com) near San Antonio, Texas, and Mark Stout, president of Stout Heating & Air Conditioning (www.stoutheatingandair.com) in Salisbury, N.C., shared some of their experiences with the group.

Driskill’s 37-year-old firm was in trouble in 2004. He attended a BDR seminar that year much like the one offered in Houston and decided to take control. “We doubled our revenue since working with BDR,” he said. “We’ve added jobs and increased the bottom line, employee benefits, and services to homeowners. Best of all, I sleep well at night. Our profitability has increased eight-fold from what it was in 2004.”

According to Driskill, he added Opportunity Interactive software and capabilities a few years ago. The BDR “sister” firm provides management and sales presentation software that dramatically improved company operations and closing rates.

“Our sales proposals went from mediocre quality delivered slowly … to sophisticated, detailed and consumer-oriented presentations delivered during our initial visit. No competitor had anything like it. We went from bland and inefficient to greater success, almost overnight, by quadrupling our closing rates.”

Stout had a similar story to share with attendees of the Houston event. He became a Trane dealer in 2000. One of the first classes he attended - paid for by his distributor - was a BDR class on labor management.

“I was immediately pumped up,” said Stout. “These days, I rarely miss a class. There’s so much to gain that I’ve attended some classes two or three times, learning something new each time.”

Stout’s company has doubled its revenue from $1.5 million in ’00 to $3 million in ’09, even though economic pressures in North Carolina have pulled them forcefully in the other direction. Best of all, he said, “Our profitability has increased remarkably. We have no measurable losses; at worst, a company division may be flat at year’s end. Yet, in ’99, the company was losing money like a hemorrhage.

“Our service department was losing money, chiefly because of underpriced service agreements, and we misunderstood flat-rate pricing,” said Stout. “Today, our service side of the business is finely tuned and profitable.”

DEDICATION TO CHANGE

“Best of all,” concluded Stout, “BDR is a firm that really, truly cares about client companies and the business owner. They’re concerned about our welfare and it shows in everything they do. All training, mentoring, and assistance is geared toward securing long-term viability and profitability of the company.”

Publication date: 03/01/2010