NAME
Todd Zeplin, co-owner, Collier’s Heating and Air Conditioning, Ossian, Ind.

HOW LONG IN BUSINESS
22 years

BIGGEST CHANGE TO THE BUSINESS
“We’ve always focused on geothermal. Since the mid-90s we focused strictly on geothermal, and actually branding our business. That created our whole market up here in Indiana. If they recognized Collier’s, they thought about geothermal.

“We used to be primarily new construction and new homes. As gas prices went up and awareness grew, we kind of switched and new construction fell off. It was perfect timing for changing things to the retrofit market. Most of our business was new construction and it’s switched to retrofit. When you add in higher gas prices with tax incentives, our whole company was on a wave that came in at the right time.

“We were actually prepared for it. We rode that wave.

“Now the business is changing again. We have so many competitors getting into geothermal; we’re in the process of changing. Why should you go with Collier’s? We’re running a campaign of, ‘Why go with inexperienced people? We’ve been specializing in geothermal for years.’

“Geothermal has been the focus of HVAC contractors since the downturn in the economy. ‘What are we missing out on? Why are these geothermal contractors staying busy?’ I know most of my competitors; they’re good and fair. But there are also only a few manufacturers that have products in our area to choose from.

“If a dealer was to ask me what to do, first choose a manufacturer that actually teams up with you to get a fair share of market. They’re also going to have to team up with a loop contractor initially. If they can sell enough to support their own loop department, I would recommend that. I would team up with a loop contractor for the first year or so.

“We’ve done our own loops since the mid 90s. The upfront investment in a heavy-duty truck, trailer, and excavator is approximately $100,000. It’s so easy to subcontract your loops until you can finance your overhead. Even if you’re doing your own loops, you still sub out your vertical drilling. HVAC contractors are buying drill rigs all over the U.S., and there are people who have bought vertical drill rigs and can’t keep it busy enough. They end up selling it at a loss.”

KEY MARKETS
Primarily residential retrofit and light commercial; majority of the business is a good 70 percent selling and installing geothermal systems.

ASSOCIATIONS AND AFFILIATIONS
ABC, ACCA, IGSHPA, WaterFurnace International

HOW DO THESE AFFILIATIONS HELP YOU
Through apprenticeship and training programs, lobbying, getting answers or directions; but mainly contact with other contractors (not direct market competitors).

BIGGEST CURRENT HURDLE TO OVERCOME
“Right now the biggest hurdle is giving customers reasonable financing. I think it’s getting better, but that’s the biggest hurdle getting into the geothermal market. It’s a larger sales ticket than a normal HVAC system. This is probably the biggest hurdle for the remainder of 2009.

“We’ve got two or three financing resources right now. It depends on how these different financing companies look at a customer’s application. They can get approved by one or disapproved by another. It depends on the financing company and what they can offer the customer.”

COMPANY STATISTICS
Office manager and wife, Kari Zeplin - “She keeps me on my toes, does all the marketing and advertising.”

37 employees (six in service, 12 installers, and the remainder in sales, office, and supervisors)

Trucks - 26

FAVORITE THING ABOUT THE INDUSTRY
“From the time I graduated high school, geothermal caught my attention. I could see that there were sales opportunities. Even now, throughout the U.S., there is hardly any competition out there.

“The industry changes so much, and the technology. Look at the HVAC industry and geothermal; it’s kind of like the old muscle cars. Now you can buy a really nice, luxury, sleek car with muscle and fuel economy. The auto industry doesn’t even change that much. In the HVAC industry, you have so much to pick and market and focus on, there’s so much to learn every year. You have to keep on your toes and it keeps you from getting complacent.

“If you sit and relax for a year, your competitors will get on top of you. You have to learn new products every year, and you have to be aware of what other manufacturers are selling.”

SUMMING IT UP
“Going from new construction to retrofit, we needed to be marketed and affiliated with our name and Waterfurnace. Once you pick a manufacturer, stick with them. You also don’t want the manufacturer setting up dealers all around you.”

Publication date: 06/08/2009