LAS VEGAS - Residential contractors George “Butch” Welsch, St. Louis, and Jeff Laski, Detroit, shared their secrets to success in the residential marketplace at the Partners in Progress conference in March.
Laski explained that he made more money installing a furnace for an individual homeowner than he did doing a new construction HVAC installation for an upscale, 3,000-square-foot home. Welsch praised the improved cash flow and profit margins. Both contractors admitted that it was much more enjoyable dealing with a homeowner who cared about IAQ, zone systems, and comfort, not merely the lowest bid.
Welsch, a former Sheet Metal and Air Conditioning Contractors National Association (SMACNA) president, said he took the plunge into the residential business because he got tired of laying people off during economic downturns. He now has 5,000 maintenance agreements that keep his people busy year-round, especially during the slower months of March and April.
Welsch explained that the overhead is higher because the business requires more people, more trucks, and a 24-hour answering service, but he is adamant that his company maintains a human focus with a live human being answering his phones. He also is careful to hire people with great people skills to keep his homeowners coming back year after year.
“Probably the toughest part of getting into the residential business is the customer base,” said Laski, a former member of SMACNA national’s board of directors. “For years we did new construction work and just gave those customers away to my competition, letting them do the service work. I would love to have those people back.”
Laski recommends purchasing a small two-man residential shop for its customers’ names in order to beef up the current customer list.
Speakers Discuss Residential Profits
April 5, 2010