The intention of the Boone saga is to show the many resources that are available to small HVACR contractors who struggle to run a successful business because they are too involved in putting out fires every day in the field. Boone exemplifies the many owners who would prefer to work "on the business" instead of "in the business."
"My biggest struggle is knowing how to prioritize and juggle my schedule," he said.
The first giant step in his effort to develop a successful business plan came in mid-February when Boone opened a new office - and a new company - in nearby Abingdon.
The new business, Perfect Air of Abingdon, held a grand opening on Feb. 17, with 50 local businesspeople and associates in attendance. A special reception and ribbon cutting ceremony featuring Abingdon mayor Lois Humphreys marked the beginning of Boone's new venture into the community.
The reception was hosted by the Virginia Highlands Small Business Incubator and the Virginia Small Business Development Centers.
Boone also continues to grow his new construction business, designing HVAC systems for some of the many new homes in a prestigious development outside of Abingdon. Boone has sharpened his skills at designing whole-house systems thanks to courses offered by Wrightsoft, specifically Right-Draw, Right-J, Right-D, Right-$, and Right-Proposal Plus modules.
He is also working with his local Honeywell sales representative, Mike Wise, in developing healthy programs utilizing Honeywell's "Whole House Program." A link to Honeywell has been placed on Perfect Air's Web site. On the same night as the Abingdon grand opening, Wise was the featured speaker at the Southwest Virginia Chapter of the Refrigeration Service Engineers Society (RSES).
One of the biggest challenges of the new location has been finding installers and service techs to support the anticipated workload. Boone addressed that challenge soon after the grand opening. He hired local installer Mike Reynolds and service tech B.J. Stephens. They will join lead installer Greg Blevins, who is moving over from St. Paul.
His new field mechanics will be equipped with flat-rate pricing books provided by James Leichter of Mr.HVAC.com. Leichter has also sent Boone some other HVAC resource material.
The Abingdon office manager is Jennifer Campbell, who has been busy learning the nuances of the HVAC business while studying the new office management software provided by Coastal Computer. She is also the company's administrative assistant.
Boone's main product line is Trane, supplied by local distributor Air Quality Control Center, managed by Bobby Boggs. Boggs is helping Boone defray some
of the cost of renting the building and has helped stock the showroom with Trane equipment, which is showcased alongside Honeywell's displays.
Walk-in customers and prospects will be able to browse through other IAQ materials provided by AirAdvice Inc. Boone intends to use the AirAdvice indoor monitor to provide a comprehensive report showing the quality and comfort of a homeowner's indoor air.
Much of the discussion centered around the cost of doing business, setting a fair price for services, marketing the new business, software training, and finding new employees.
Boone plans to continue working with Adams Hudson of Hudson, Ink on setting up a marketing plan for Perfect Air. Hudson gave him some guidance last year and helped design Boone's Yellow Pages advertisement. Although Boone advertises Trane in his ad, he prefers to downplay the brand name equipment angle.
"I want people to buy from me, not the brand of equipment I sell," he said.
Wise advised Boone not to put all of his marketing eggs in one basket. He said it is better to segment his marketing to builders, promoting healthy house concepts, and also segment his marketing to homeowners.
Boone said he would try and stay away from the office management software program, deferring to Campbell to handle all of the details. "Wait a minute, I want to write this down," joked his wife, Missy. "Terry does not want to be involved ..."
Heaton stressed the importance of getting all of the important financial information input into the program, including the company's profit and loss reports.
But the bulk of the discussion centered on hiring new employees - who to look for and what to offer in terms of salary and benefits.
Boggs stressed the importance of competency tests for new hires. "If they know the answers, you base their salaries on the scores they achieve," he said. "But these are just basic tests. You want to train your people the way you want them to work and ensure that they don't bring a lot of bad habits with them."
Heaton said it is important to offer a good benefits package, too. He told Boone to contact the local Virginia Small Business Development Center to learn about employee benefits and compensation packages. "Keep your risk at a very minimum," he advised. "Don't lock yourself into something like a retirement program until you get a cash flow."
Down the road, Boone would like to get the help of a mentor contractor. He joined the Air Conditioning Contractors of America (ACCA) and will soon get the mentoring help he needs from a fellow ACCA member. The one lesson he has learned through this entire process is that he needs help to structure his business model and run it successfully. He now knows that he cannot do it alone.
In the next installment, The News will revisit Abingdon and report on the progress of Perfect Air. In the meantime, if any readers would like to offer suggestions, real-life stories, or words of encouragement, please send them by e-mail to email@example.com.
According to the Virginia Department of Small Business Assistance Web site (www.dba.state.va.us/smdev/sbincubator), the small business incubator is "a physical facility, which provides various sizes of offices or office suite, warehousing and manufacturing space, common loading docks, shared board/meeting space, kitchen facilities, and a common reception area.
"The incubator provides a receptionist to greet visitors and to assist tenants in using a shared copier, fax, and audio-visual equipment and often times computers. The incubator manager assists tenants in preparing business plans, securing financing, business counseling, and management advising.
"Tenants are expected to graduate from the incubator within a reasonable time frame to allow others to use the service. The incubator recoups costs by charging reasonable lease rates and fees and charges for the use of specialized services and equipment."
The Abingdon Facility
A new state-of-the-art facility in Abingdon, the Virginia Highlands Small Business Incubator, recently hosted the grand opening of Terry Boone's company, Perfect Air of Abingdon. Boone's facility wasn't large enough to handle the expected attendance. The Virginia Highlands facility opened in late December 2004 and has been attracting tenants ever since.
James Doss, Ph.D., P.E., is the executive director of the facility and is very proud of the building. "We could have gone into a refurbished warehouse, but the state and community spared no expense in building this facility," Doss said.
The $4.1 million facility encompasses 42,000 square feet. It has 33 office spaces and some larger warehouse units. Doss said that any type of business can apply to use the incubator, but each has to have a business plan, among other things.
"We don't let rent â€˜shoppers' here," he said. "We have a tenant screening process and we want the business to add jobs to the community."
Doss said that tenants pay $1 per square foot, which includes everything except phone and data bills. He added that if a tenant is using an unusually high amount of electricity, he might choose to install a meter on the office.
An added bonus for tenants is the availability of the Virginia Small Business Development Center, which has an office in the building. Sue Wagner, client services specialist, is on site to help small business owners find the resources they need to grow their businesses.
Doss said incubators like the Virginia Highlands location are popular because of their success rates. "Incubator success rate is 80 percent through the fifth year," he said. "That is the exact opposite of the industry rate, where four out of five fail before the fifth year."
For more information, contact the National Business Incubation Association at www.nbia.org.
- John R. Hall
Wise spoke about indoor air quality (IAQ) issues and how Honeywell is meeting the needs of fresh air ventilation. He began his presentation by stating, "Seventy percent of the contractors I run across have no business being in this business. They don't know what they are doing. IAQ is very important and, unfortunately, the government doesn't regulate the licensing of contractors, many of whom don't know much about IAQ."
He asked the members of the audience if any of them knew a building inspector who knew how many fresh air exchanges should occur in the home. No one raised a hand.
The Importance Of Ventilation
Wise said it is simple, "You have to exhaust air out of the home."
He said ventilation is important because of the proliferation of tighter buildings, which lead to the buildup of harmful indoor pollutants and decreased dilution of these pollutants. "The number of people who visit the doctor from symptoms of allergies or sinus problems has increased 200 percent over the last 10 years," he said. "Homes are too tight."
Wise pointed to ASHRAE Standard 62.2 as the legal standard for ventilation. He also noted "mechanical ventilation can cause uncontrolled air infiltration, allowing moisture and ground contaminants to enter a home."
He said that Honeywell has developed the Y8150 Ventilation Control System and W8150 Ventilation Control. Wise indicated that both products meet 62.2 requirements. He called the Y8150 the "complete solution for supply ventilation," stating that it was easy to install and calibrate, and the use of one part number simplifies ordering and stocking.
He noted that the system is part of the American Lung AssociationÃ¢ Health HouseÃ¢ program, and it is installed near the HVAC equipment, where it has a low probability of occupant interaction.
The W8150 can control ERV, balanced and supply ventilation topologies. It is customized to fit each house size and ventilation rate.
He added that being an IAQ expert could open up an important niche market and differentiate contractors from the competition. Wise said, "If you do nothing to differentiate yourself from the other contractors and there are three proposals on the customer's table, what do you think the customer will judge you on? Price."
Wise stated that these ventilation products are ideal for new construction, as well as for retrofit applications. But he said the challenge for contractors is to convince builders that these types of Honeywell products are an important part of residential IAQ.
"If you want to talk to a builder about ventilation and if the price is an additional $2,000, nine out of 10 builders will say no thanks," he said.
A local building inspector in the audience said he talks to small and large builders and is convinced that they "are just not getting it."
The chapter meeting drew a large number of questions about IAQ, which was an encouraging sign to Jimmy Kroll, the chapter's president. Kroll said the S.W. Virginia chapter meeting attendance is "always one of the highest of any RSES chapter."
For more information on Honeywell products, visit www.hotfreshcool.com. For information on RSES, visit www.rses.org.
- John R. Hall
Publication date: 03/14/2005