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No longer a sleepy little town, today’s Atlanta is the business, transportation, and cultural hub for the more than 3 million people who call the region home.
One of those who calls Atlanta home is Tommy Estes, owner of Estes Heating and Air Condition-ing. His strictly service and replacement company is blossoming in the economy, securing over $9 million annually in sales.
Just what is Estes’ key to success? Maintenance agreements. He has more than 10,000 of them, which help keep his 28 service technicians hopping all year long.
As Estes notes with pride, “We’re very profitable. We concentrate on profit rather than volume, which is why we don’t do new construction.”
No New ConstructionThere’s no doubt that Atlanta is an excellent place to be in business — especially in the heating and air conditioning businesses. Residential and commercial buildings are taking over every available space, and occupants are going to need to be comfortable in their new structures. But Estes says he’s not interested in working in new construction.
“I can’t see that the bar’s been raised too much as far as pricing in new construction — that’s just the nature of residential new construction. When you’re dealing with builders, they’ll beat you to death for a dollar a ton,” says Estes, who would rather spend his time with homeowners rather than builders.
In fact, Estes would like to see builders encourage homeowners and contractors to come together and discuss their heating and air conditioning systems. “The homeowner really has no idea what he’s buying, and that’s the most important appliance in his house; it’s what uses the most power and controls whether or not they’re comfortable. It’s not fair to homeowners, because they’re paying big bucks for those houses.”
Estes would rather let someone else handle the new construction, and then he can step in and service and replace it further down the road. “Most of the people who do new construction don’t want to have anything to do with service and replacement. And we can make more money changing out a condensing unit than they can putting in a new house job that takes them three weeks. We can do it in two hours,” he says. One of the top-three Amana dealers in the country, Estes handles most of these replacements with Amana equipment.
The profit margin is the reason why Estes is most comfortable in the service and replacement business. That’s the market his company knows best, especially residential service and replacement. And the company is doing a great job, as evidenced by the fact that they were awarded ACCA’s “Residential Excellence Contractor of the Year” last year.
Keeping It In The FamilyEstes Heating and Air Conditioning has been in business since 1949, and with its strong sales and management, there’s no wonder it has been attractive to consolidators. But Estes is not interested right now.
That’s not to say he’d never consider selling; however, he’s content with the way things are right now. As a supporter of the independent contractor, Estes was one of the original members of Excellence Alliance and is very active in the group.
His 26-year-old son, Brian, joined the business three years ago and is doing very well, according to his proud dad. He hopes to pass the company along, provided his son still enjoys the business. “My son’s a very sharp guy. I’m giving him some time to see how he develops.”
Estes’ background is in marketing, which is why he believes very strongly in having a heavy advertising program. Estes does all of the company’s radio and TV commercials, so his voice is very well known in Atlanta. In addition, the three major TV stations always call him when it gets cold or hot, in order to get his opinion. Usually a TV crew follows a technician around, which has resulted in the company obtaining four free spots on the news last year alone.
The company also partners with the local utility, Georgia Power. “We were the Georgia Power dealer of the year for the last couple of years, because of our dual-fuel heat pump sales.” Estes is one of only two Premier Partners of Georgia Power and had more than 800 dual-fuel heat pump conversions with them last year. Consequently, they get a lot of co-op dollars and such from Georgia Power, which helps with advertising costs.
All in all, everything is good at Estes Heating and Air. Estes’ only concern is the same as everyone else’s: finding quality people. But he notes, “Atlanta is an excellent place to be in the heating and air conditioning business.”
Publication date: 01/15/2001