Residential Contractors Talk Commercial

September 13, 2000
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CHICAGO, IL — Contractor Success Group members are heavily into residential air conditioning work. But during the most recent quarterly convention here, talk turned to the commercial side of the business during one session.

In fact, the majority of the two dozen people in the seminar — moderated by Alton Smith of Comfort Tech, Jackson, MS — noted that they worked in both residential and commercial hvac.

The message from the hour-long session: Be aware of big differences between the two.

Smith ticked off some of the possible differences.

Commercial charges are based on time and material. Residential is becoming more and more flat-rate pricing.

With commercial jobs, it is sometimes difficult to find the decision-maker. A residential decision-maker is pretty obvious.

Credit can be set up for a commercial account. It’s pretty much C.O.D. in the residential world.

Commercial accounts do not have as many patient people as in residential jobs.

“What does it take to be in commercial?” asked Smith. “It takes an awareness that it is more technical than residential and that startups are more difficult.

“In commercial, you can’t rely on an ad in the Yellow Pages to attract the customer. You have to partner with them. It’s a relationship. It is developed with everybody in the company. You act as a consultant, a team member. You are expected to solve all problems, including hvac, refrigeration, energy efficiency, IAQ, air balancing.”

In commercial, “you need to touch base over and over again with customers. If you screw up, then what? Respond quickly.”

He offered one practical aspect of adding commercial work to a residential business.

“What do you do with a residential tech who burns out after being in attics for too long? You provide him an opportunity in commercial.”

The transition doesn’t have to be that difficult, especially for contractors who work on large residential systems and add small commercial projects.

Sidebar: A Brief History of CSG

CHICAGO, IL — In 1991, several St. Louis-area contractors formed Contractor Success Group as a way to better gain expertise in the business and technical aspects of running an hvacr company.

In 1996, 12 CSG contractors started the Service Experts consolidation group.

CSG has grown to about 250 members, half of whom are independent contractors, and half members of Service Experts.

Earlier this year, Lennox purchased both CSG and SE and operates them as separate subsidiaries.

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