The American Dream

August 25, 2004
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[Editor's note: Dennis Mondul is a business coach for International Service Leadership (ISL). He will be making a monthly contribution to The News. ISL and Mondul are dedicated to sharing information to help HVACR contractors develop a great life for themselves and their employees, while generating double-digit net profits.]

As we survey the world of the business owners in our marketplace, we may notice several realities, many of which are not very encouraging. For instance:

  • According to The Wall Street Journal, 50 percent of all business startups fail or file for bankruptcy protection in the first four years.

  • According to reports from Drake University and Ball State University, 93 percent of all startups fail.

  • According to the U.S. Chamber of Commerce, of all of the companies that survive, those owners and leaders will live a very stressful and difficult lifestyle.

    Why is achieving the American dream so difficult? Let's explore some possibilities.

    Survey Says ...

    This survey may be a good one to exercise on your own situation. You may want to check the statement next to the issues that apply to your business life.

  • Most company leaders are very good in the "stuff" of their industry, but once the doors open on the company, there is little opportunity to develop skills in sales, sales management, process development, leadership, pricing, accounting, marketing, advertising, tracking systems, etc.

  • Most company leaders have little opportunity to do any strategic planning because days are full of reacting to employees, customers, vendors, and regulators.

  • A company's ability to grow is tied directly to the owner's ability to make all of the decisions, and to direct and control the staff.

  • There is no historical pricing model. That means the lowest price in the market is the largest influence of pricing practices in any given market. Most decision makers in a company presume that their prices need to reflect something close to the lowest price. Problem: No one can pay the bills at that price level and deliver a high level of value.

  • There is an enormous misunderstanding of what the accountant produces. A great planning resource goes entirely unutilized most of the time.

    Now, you may be wondering if I'm just trying to be your little ray of sunshine today. Let's finish defining the challenges of self-employment. Then, and only then, the exciting part comes when we look at the methods used by contractors to escape these issues.

    Common Problems

    Siege mentality - The standard perception of other companies is that they are the enemy. It's understandable, but one of the results is that the bank of great ideas that has allowed each company to survive tends to get "siloed." That is to say, the tremendous problem-solving ideas build up in one company and all others (the industry) have to recreate the wheel on each issue.

    Accountability - It's just a part of the human condition and it is required. Unfortunately, most business owners don't have anyone on staff who is prepared to tell the boss that a mistake is being made.

    Scarcity mentality - Scarcity mentality is the practice of Employee A allowing failure by a coworker so that Employee A may play the rescuer. Saving the day, in a strange way, is viewed as bringing value to the company. Therefore, the rescuer is deserving of more status and pay. Abundance mentality is the recognition that when everyone is more successful, the company is more successful, and everyone gets more satisfaction and better compensation.

    Growth - Many companies in the industry have grown past the $1 million revenue mark and, at some point, lost money. What is rarely recognized when this happens is that revenue may outgrow the company's leadership structure.

    As a result, there is an industry wisdom that has developed along these lines: "I just want to stay small. It's easy, and I can make money if I don't grow." In reality, this is the most difficult way to run a business.

    Hiring dilemmas - We in the industry work very hard to hire people who appear to have experience - sometimes at the expense of things like character and good attitude. Eventually an owner might say, "There are no good people out there."

    The perception exists that a small business can't afford to train a person from scratch; therefore, we tend to limit the search to a labor pool that is very narrow or may not really exist.

    Now let's add these challenges that are unique to HVACR:

  • Working in 150 degree F attics.

  • Carrying heavy toolboxes on ladders.

  • Working on windy, cold rooftops.

  • Working in crawl spaces.

  • Handling hot metal.

  • Working with poisonous substances.

  • Working with gases and liquids that may be explosive under some conditions.

  • Exposure to gases and liquids under extreme pressure.

  • Exposure to high and low voltages.

  • Handling sharp metal, hand tools, and power tools.

  • Maneuvering heavy equipment.

  • Working on motors and fast-moving parts.

    Reality Check

    We need to come to grips with two things:

    1. It takes a heroic effort to survive as a small business owner.

    2. It is important for HVACR contractors and employees to recognize that we may perform the most sophisticated work ever done in the home service world.

    We can start by changing the culture of our companies. To do this we need a model, or a template, of how we want to think and act as we execute our roles at work. Then we can begin to develop processes that serve the model and the culture.

    By focusing on process (as opposed to "what the boss wants today"), we can have a great work life that can help deliver a great personal life for everyone in the company.

    Mondul can be reached at dennis.mondul@islinc.tv.

    Publication date: 08/30/2004

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