Do you have a vision for where you want your business to be in five years? Surprisingly, many HVAC contractors don’t. Do you know what specific things you need to do to make that vision into a reality?
Figuring this out requires stepping back from the day-to-day demands of HVAC installation and repair and looking at the big picture and what drives business growth. Taking time from the day-to-day — stepping off of the proverbial treadmill — can be challenging. After all, there’s always something that needs your attention, right?
HVAC contractors like you are skilled professionals who are good at what they do, but too many hit the ground running with plenty of technical skills and little business training. In today’s crowded market, being a great technician isn’t enough to grow beyond just making ends meet. Growing revenue and achieving your goals takes strategic vision and solid business management skills. It also takes a level of financial expertise that you might not have yet.
In short, you’ve got to be able to work on your business, not just in your business, if you want to realize your growth vision. Here are five tips to help get you there.
As an HVAC business owner, to plan where you’re going, you have to know where you are. That means you need an understanding of financial statements and accounting. You need to review and understand profit and loss statements, daily overhead, and cash flow, as these pieces of information allow you to identify and fix operational and financial challenges.
It can be tempting to turn the job over to an outsourced bookkeeper or a family member, but if you’re not careful you could find yourself held hostage. You, the business owner, need to develop these skills, too. Look for industry-specific trainings that will help you grow your business education and be in full control of your company’s growth, profitability, cash flow, and well-being.
Make a Plan
Some business owners have a fear of growth. Growth means change. It means letting go of the way things have always been done. It means getting outside your comfort zone. But a business plan makes change easier to face because it lays out specific actions to take. It’s like turning on the light in a cave. After all, if you don’t have a plan, where are you going?
Every year, put aside a day or two (or three) and create business plans for the next year and the next five years. Include everything you need to achieve your goals. Plan who you need to hire, what you will pay them, whether you need to raise rates, how many calls you will run and installs you will do — any decision that impacts your goals. Next year’s plan comes from looking at your recent past, diving into your results to find opportunities in your current operations, and uncovering inefficiencies that you can turn around. Get it all down on paper, and let it be a roadmap for your growth.
Correct pricing is everything in the HVAC business, and all too often we are pricing too low to thrive. Getting it right starts with information. You need to know your monthly and daily overhead. You need to know and understand your direct costs. Go into your business every day knowing what your daily break-even number is. That way, you’ll know what you need to capture in revenue and gross profits, and you’ll be closer to getting your pricing right.
But don’t forget to address the sales side. The profit story starts with selling at profitable prices. All jobs are not created equal. Once you make sure your pricing is correct, offer customers different options — good, better, best and fantastic — and don’t discount.
Discounting is a tempting and dangerous trap. If you go down that road, you risk becoming known as a discounter. Let referrals come to you because of great service, not deep discounts. Instead, offer financing options so your customers can afford great equipment, along with enhancements and accessories to customize their system to their needs.
Armed with in-depth reports, you can identify areas that need your attention, need to be changed, or need to be cut from your operations altogether. Be brave and be honest.
With your team, set expectations on a daily basis, and take a personal interest in all callbacks. Did you know that the average callback takes three service calls before the problem is solved? When it comes to managing costs, callbacks are the cancer of our industry. Make sure you know the status of every callback.
Own Your Company Culture
Company culture isn’t just for office jobs. Every company has a culture created either by default or by design.
Ask yourself, what value does your company deliver? Center your company culture around your value proposition and your ideal customer experience. Align all aspects of your operations and marketing around this culture, including hiring, best practices, and branding.
It’s true that there is a low bar to entry in our industry, but it is complex on a number of levels. We all have a responsibility to elevate professionalism in our industry, and one way to do that is through creating a high-impact culture.
Time to Take Action
If these items aren’t currently in your skillset or on your radar, take action and add them today. Take classes, attend trainings, and reach out to experts. General training is good, but it will only get you halfway. Industry-specific training will give you industry benchmarks — the standards and averages for certain metrics within the HVAC industry. With these tools, you should be able to see your profits grow and build the business you’ve always dreamed of having.
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