BONITA SPRINGS, Fla. - The Sunshine State saw approximately 500 members of the Mechanical Service Contractors of America (MSCA) descend upon the Hyatt Coconut Point Resort for the association’s 24th Annual Educational Conference. Owners and managers from around the United States came to discuss the construction and building service and maintenance industry - its future as well as the current-day recession that has greatly impacted member businesses.

Attendees were encouraged to use their time at the conference to take stock of existing capabilities and strategic plans to be successful in today’s economic climate. The meeting spanned four days, Oct. 18-21, and showcased some bright and humorous talent.

The program opened with Mark Scharenbroich, and his unconventional approach to building an organization that fosters a high level of performance. His presentation was followed by a Floribbean Tropical Nights Welcome Reception. However, the tropical weather did not show up until a bit later the following day - it seems that even HVAC conventions are sometimes subject to the whims of Mother Nature. Still, the cool night could not dampen spirits at the MSCA convention; membership continues to climb in the service organization, and the outlook for business in the coming year was very positive among conference-goers.

PEER GROUPS BOOMING

Throughout the conference there were opportunities for members to join a number of discussion groups designed to address specific issues faced by members. Though a few may have fallen to the temptation of golfing in the Florida sunshine, or visiting nearby Everglades National Park, most people flocked to the peer groups. Attendee options included Best Practices, Unique Sales Strategies, Maximizing Green Opportunities, Selling Energy Services, The MSCA STAR/GreenSTAR Brand, Cost-Saving Field Technology, and others.

During the Best Practices peer group discussion, GPS implementation was one of several concepts that were discussed. “One of the biggest benefits of GPS is that as emergency calls come in, we can quickly identify the most qualified technician in the area,” said Tom Conger, a 45-year veteran with Boland Trane company of Gaithersburg, Md.

A number of people agreed that the biggest hurdle to implementation of a GPS tracking system in the company is the common complaint of having Big Brother watching over everyone’s shoulders. Still, the consensus was that the numerous benefits such as more accurate dispatching, fuel savings, or justification of invoices for customers all far outweigh the common concern.

Among other best practices discussed in the session was general contractor (GC) competition. No earthshaking solutions came to mind as the group wondered how to combat GCs that offer direct purchase arrangements for building owners, but the warranty question reared its ugly head.

“What you said just scared me - not installing the equipment but being held responsible for the warranty,” said one contractor.

He had responded to a comment from a contractor in another state who said GCs often install equipment only to sub out the service contract on the building to a mechanical contractor, which carries warranty obligations. Some contractors in the group said they would never accept a service agreement on equipment that they had not initially installed and maintain the warranty. However, it appeared that in different states, different approaches can work effectively given direct purchase arrangements.

CASH MANAGEMENT IS KING

Kathyrn Crosby, a contractor for 17 years turned conference speaker, told her packed audience that cash flow is as simple as the two-pocket system. “Money comes in one and goes out the other. You want to have more money in one of those pockets than the other,” said Crosby. She then went on to share insights on a number of factors that impact cash flow. The list included credit policy, documentation procedures, billings and collections, overhead and soft costs, and employee accountability, among others.

Regarding collections, Crosby offered these hints to bringing down accounts receivable aging. “Re-examine your credit terms; does discounting help or hurt you? Date your invoices for the date of the call, not the day after, or whenever you might happen to process paperwork. Be alert to the paying habits of your customers. Establish a relationship with the people who approve and pay your invoices. Add interest terms on each invoice even if you don’t plan to enforce the charge,” she said.

KEYNOTE ECONOMISTS SHINES

“This is the longest, deepest recession since the Great Depression. However, for this Great Recession, as some people are calling it, the worst is behind us,” said Jeff Thredgold, president of Thredgold Economic Associates, and a current economic consultant to the $50 billion Zions Bancorporation.

Thredgold told the group, “Economics in the hands of an amateur is a dismal science. But in the hands of a professional, it’s much worse.” That set the tone for his enlightening and humorous approach to the state of the economy.

Though Thredgold expects unemployment to continue to rise for the short term, he pointed to an opportunity. Thredgold said, “Given the recession and the slack labor market, you have the opportunity to greatly enhance your workforce. Don’t hesitate to make improvements in your company.”

“Inflation will stay in check because of worldwide competition. Cost reductions are coming at us from all angles including the Internet. European markets are stabilizing, as are the markets in South America, Mexico, and Canada. Global stability is returning. Stability is the first step toward easing the pain of a recession,” said Thredgold.

Generally, Thredgold told the crowd to expect growth in 2010.

“As people become less scared, they will spend pent-up dollars for maintenance and retrofit for existing buildings. Though commercial real estate is about to take a big hit, existing buildings should grow in importance. If you focus on existing buildings, you should see growth in 2010.”

For more information, visit www.msca.org.

Publication date: 11/30/2009