ACHRNEWS

Growing A Refrigeration Business Takes Big Dreams

November 25, 2003
(Photo by Mark Trew.)
The contractor/technician who is owner and sole employee of his own refrigeration service contracting company might be battling an uncooperative ice machine and perhaps dreaming grander dreams.

That vision could include becoming a much larger company with more employees, more customers, and a lot more revenue.

But visualizing just what a major refrigeration contracting company looks like may be a bit more difficult. That's because the top refrigeration contractors - based on sales volume as determined by Dun & Bradstreet - don't fit into any sort of mold.

In interviews, in survey results, and in viewing the Web sites of a number of companies at the very top of the list, the diversity becomes evident.

Consider the company at the top of the D&B list - TDIndustries of Dallas (profiled in detail in the story "Meeting Customers' Needs" in this issue). This is a company that indeed does refrigeration work - but also heating, ventilation, air conditioning, electrical, life safety, plumbing, process piping, and building automation systems. It may have a main address in Dallas, but it also has offices in Austin, Houston, San Antonio, Phoenix, and Washington, as well as project offices in Atlanta and Denver.

Another high-ranking company, Egan Service of Minneapolis, often deals with boilers and chillers as part of HVAC services. It also deals with infrared thermography and office retrofit as part of its electrical services; phone lines, data lines, and fiber optics installation and repair for its communications and data services; and intercom, paging systems, and parking controls for building security.

Such offerings are a far cry from maintaining the proper airflow in a supermarket display case. Often such expanded services sprung out of a refrigeration foundation.

AMS Mechanical Systems, which has offices in Burr Ridge, Ill., and Highland, Ind., began as Antarctic Refrigeration "with a simple premise to provide honest, reliable service to the refrigeration industry." Its officials maintain that it operates under the same principles today while continuing to grow and expand in new directions.

Kroeschell Inc. of Chicago (profiled in detail in the story "A Classic American Success Story" in this issue) began as a boiler manufacturer in the 1870s. The company took on an ice machine focus at the turn of the century and grew in a variety of directions from there - often in response to the demands for all types of systems in the growing city of Chicago.

TDIndustries does refrigeration work, as well as HVAC, electrical, plumbing, piping, and building automation systems. The company has a staff of over 200 highly specialized service technicians. (Photo by Mark Trew.)

Beyond Diversity

The visionary contractor may also need to consider who is hired for a growing company. "Refrigeration service technician" may end up being only one job title of a firm that could include sheet metal mechanics, pipe fitters, plumbers, millwrights, professional engineers, estimators, planners, and project risk managers - as is the case with titles carried by some of the 300 employees at H.T. Lyons Inc. of Allentown, Pa.

In the D&B Top 20 list, totals ran from a low of 60 employees to highs of well over 1,000.

Then there is that time commitment. To be among the top companies correlates with a willingness to answer the phone at every hour of the day or night.

Here is how Egan put it: "After normal business hours, your call will always be answered by a full-time Egan Service employee." Hardy Corp. of Birmingham, Ala., noted one of its specialties is mechanical renovation of occupied buildings. That means work schedules must fit the building owner's requirements. "Working midnight to 8 a.m. is never a problem."

One good way to make life a bit easier in this industry is to have a solid base of customers. H.T. Lyons Inc. noted, "Ninety percent of our business is repeat business with the same customers."

And then there is a need to consider each customer individually, no matter how many customers you may have. Fidelity Engineering of Sparks, Md., said, "Building customer confidence is a process that must be accomplished one customer at a time, one project at a time. It grows from a complete understanding of what an individual wants."

With growth comes the obvious need to expand equipment-and not just the tools carried on a truck. The H.T. Lyons Co., for example, does computer-generated construction drawings operated by CAD personnel. Edwards Electrical of Indianapolis has a 100,000-square-foot sheet metal manufacturing facility.



Age Is Relative

It does not necessarily take a lifetime and then some to grow a business. Yes, a company like Kroeschell can trace its founding to just a few years after the Great Chicago Fire. And a number of companies have beginnings in the 1940s.

Hardy Corp. was founded in 1943 as "a mechanical contracting company serving the emerging commercial air conditioning market." Meanwhile, Fidelity Engineering started in 1945 with a commitment to having "a complete understanding of what an individual customer wants and needs and delivering precisely that."

Growth can come within a half generation. Del-Air, with Florida offices in Lake Mary, Kissimmee, and Clermont, goes back to 1983. The company has thrived in the rapidly growing central Florida market and has some 350 employees and a fleet of some 250 trucks.

So that's what some of the big contractors have done to grow their businesses. It may seem a daunting task, but it can be accomplished. Then again, getting a malfunctioning ice machine up and running again and leaving a happy customer who pays your invoice on time can also make for a rewarding and productive day.

Publication date: 12/01/2003