HVAC Contractor Shares His Top 10 Tips

June 8, 2009
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Paul Bigham, who owns a One Hour Heating & Air Conditioning franchise in Santa Rosa, Calif., finished 2008 with $5.4 million in revenue.


It may surprise some people, but your business doesn’t have to be a casualty of the economic downturn. Just ask Paul Bigham, who owns the One Hour Heating & Air Conditioning franchise in Santa Rosa, Calif. He finished 2008 with $5.4 million in revenue and profitability of more than 12 percent. Some of his technicians are having their best year ever in 2009, with revenues through March ahead of the previous year.

How does he achieve these numbers in a slow economy? Here are Bigham’s top 10 tips for surviving and thriving in tough economic times.



TOP 10 TIPS

1. Profits are in the details. “In the service business, every detail matters,” Bigham said. “We are making sure we are answering phones correctly, that our technicians and comfort advisors are equipped with every sales advantage and are properly trained.”

The company is even devoting twice the intensity to its training now. “In today’s economy, you are likely to have fewer opportunities, so you must be positioned to take advantage of the opportunities that come your way,” he said. “Our people must be trained, ready to go, and the sharpest they have ever been.”

2. Don’t skimp now. In a slow economy, companies are tempted to cut back, for example, on having a live person answering the phone. “That’s just another nail in the coffin,” said Bigham. “The customer won’t talk to an answering machine. The customer wants service now. He or she will call different companies until they get a live response, and ours is going to be the company answering the phone.”

3. Demonstrate stability. “Just because times are tough, doesn’t mean everyone is a price shopper. Value is more important than ever,” Bigham said. “Customers making a large purchase, like a new HVAC system, understand they will have a relationship with the provider for a long time.” In short, customers look for stable companies. “That’s a benefit of having a national brand standing behind your company,” he added. “It gives the consumer confidence.”

4. Provide financing. Companies that can offer financing will have an edge in this economy, Bigham said, pointing out that many franchisees have access to those relationships. “Customers are looking for convenience,” he said. “We offer payment plans that are longer term so we can do lower interest and lower payments.”

5. Rally the troops. Constant negative news about the economy can be downright depressing. “We are working even harder to keep everyone on our team looking at things in a positive light,” Bigham said. “We used to do quarterly meetings to pump up our team; now we do them monthly as a whole company.”

By gathering ideas from employees and sharing this information more often with everyone in the company, “some of our technicians are having their best year ever.”

6. Look for opportunities. In this economy, it’s a reality that more businesses are probably up for sale, thereby giving stronger contractors an opportunity to grow. “When times are difficult, more businesses may become available for purchase,” Bigham said. “Over the past three years, we purchased four companies and we are due again.”

7. Show customers how to turn the economy to an advantage. From a consumer’s standpoint, there is no better time to replace a heating and cooling system - but they need to hear this from a trusted expert. “Most utility companies have great rebates on replacement systems, and a federal tax credit may be available as well,” Bigham said.

“You can take advantage of rebates and tax credits now, or wait for the economy to improve and pay inflationary prices without the help of rebates and credits.” Contractors should feel obligated to explain these options to homeowners.

8. Think in terms of relationship. Hard times aren’t limited to new construction contractors. “Companies that do nothing but replacement systems are having a tough time now,” Bigham said. To be insulated from economic downturns, contractors need to think “relationship,” and take time to build maintenance agreements. “Our Comfort Club Memberships provide business opportunities over time as we reinforce the value we provide to customers with each visit.”

9. Focus on your core. Don’t jump around looking for the next big profit center until you get rock solid at what you already do best. “If you are not achieving double-digit profitability and you don’t have your house in order, you have no business getting into something else you can’t be good at,” Bigham said.

“I was having difficulty achieving 5 percent profit as an independent, and now I’m at double-digit profitability even after paying franchise fees. That success comes from focusing on my core business.”

10. Keep your eyes on the prize. Ask yourself: Why are you really in business? “If you’re in business just to fix furnaces, you’ll never get anywhere,” Bigham said. “I’m in business to serve customers and achieve profitability. One day I’ll be ready to move on, and with a national brand and a profitable business, I will have a substantial asset to sell or pass on to family.

“That longer view helps me stay focused day to day on maintaining a positive attitude and not sweating the small stuff.”

Publication date: 06/08/2009



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