If you’re an HVAC company and you say “anyone who needs HVAC work,” that might be the answer to why you can’t seem to get any traction.

I fell into this trap years ago in my own business — with less than stellar results.

I did plumbing work: new construction, service work, waterline installation and repair, remodels, and underground sewer installation and replacement. I did HVAC work: new construction, service work, remodels, furnace changeouts, and a/c replacements. I did hot water heat work: installation of both floor heat and radiators, service and repair, and boiler replacements. I did all this for residential, industrial, and commercial.

I even got into buying/selling used restaurant kitchen equipment — an extremely profitable business but not if you’re a five-man company trying to do all of the above at the same time. That whole fiasco is a story for another time though.

Long story short, I was trying to do too much for too many different people, and that brings up issues on multiple levels. To thrive, you need to specialize.


1. Operations: You need tools and equipment, systems, and support help (office and management). A smaller company will struggle to provide this; a larger company with more resources can — although based on my experience, it takes a mindset switch for management to understand the need.

2. Marketing: If you’re all things to all people, it’s really hard to get known to your customers as the go-to guy for any one thing. Your customers will see you as “meh… I’ll use that company in a pinch.” Your name won’t come to mind when they have a problem in a specific area.

3. Knowledge: Without deep knowledge in any one area, you (by definition) can’t truly be an expert. It takes a large company with a lot of quality people to pull off more than one area of deep knowledge, and I’d argue that even then, it’s difficult. Decisions that need to be made by those at the top can’t be made well if those people don’t really understand how their decisions affect everything down the line.

4. Company DNA: Every successful company starts with something specific they do. Usually, it’s the original owner’s or owners’ passion area, and that thing they do gets embedded in the company’s DNA. Once it gets established and ingrained, it’s just there. Going outside the thing they started with is possible (witness Intel), but for it to really work, it has to start at the top. It has to start with the ownership and management deciding to make the switch, then going full steam ahead — gaining buy-in from everyone in the company, and replacing everyone who can’t get behind the change.


I once worked for a company that was the result of a merger of two smaller companies with different offerings. The management of one of the companies left, and the management of the other stayed on.

The newly forged company kept the DNA of the company whose management stayed, but it kept offering the services of the other company, too. Result? The new company excelled at the areas covered by its new management’s DNA, but it never did compete well in the other areas. Management didn’t truly understand (or seem to care about) those other areas, and it didn’t have the capacity to dig deeply into them to figure them out.

I wasn’t privy to breakdowns of profit margins between different offerings within the company when I worked there, but I’m fairly certain the 80/20 rule applied here: 20 percent (or a little more) of the effort put in gained 80 percent (or a little less) of the profits for the company.

This was a good-sized company, and they struggled with it, whether they wanted to admit it or not. For a small company, it’s that much harder.

Small companies don’t have the resources — especially the people — to do everything.

So, what should you specialize in?

There are four basic areas to think about:

1. What do you like to do? What gets you fired up when thinking about it? What gets you up in the morning?

2. What are you good at? This ties back to No. 1 somewhat, as we tend to excel in things we’re passionate about.

3. What can you make money at? Loving something and being good at it but not being able to make money doing it is the definition of a hobby, not a business.

4. Is there a market for it? This ties back to No. 3, but with an additional consideration: There has to be enough people in your market area willing to pay you for what you’re offering. If you can make money on 50 sales a year but the sales only amount to $100 each, you’re going to be living in a tent, riding your bicycle to work, and eating ramen.


Do the work needed to get this figured out. Shutting down certain areas of your company — or selling them off — can be like cutting off your limbs. You’ve got time, resources, effort, emotional investment, and a whole bunch of other things tied up in all parts of your company. I understand that; I’ve been there.

But if you’re struggling with being profitable, growing your company, or having to work too hard for too long to keep all the balls in the air, it’s worth it. 

Publication date: 5/21/2018