All business owners want to make more revenue from their services so they can grow, and HVAC companies are no exception. However, contractors have to grow right. Uncontrollable growth can be detrimental to your company, which is why you must plan your business growth. Creating a growth plan is the best way to guarantee your company’s fiscal health and ensure you don’t grow too quickly. As a business consultant, I have helped HVAC contractors create a growth plan to manage and prepare for business growth. Here are a few steps you can take to ensure you are creating a strong growth plan for your HVAC business.
Establish a company culture that fosters growth
If you want to grow your business, it is important to ensure you as a business owner grow as a leader. Strong leadership is essential and you must pass down those leadership skills to your employees. Fostering and teaching good leadership will improve company culture by giving you and your team chances to grow. An HVAC company with a good culture trains great talent and retains great talent. Your HVAC company is nothing without great employees and you maintain great employees by fostering an amazing culture.
Think ahead and build a better financial model
When your HVAC company starts getting business, it is important to understand your financial trends and figure out what they mean for future growth. Map out your financial model with these trends and use them to set future goals. For example, if you are looking to triple your revenue, use your financial model to project what your business would be like from $4 million in revenue to $12 million. How many HVAC installations or repairs would you need to reach that goal? How would you obtain these jobs and how many more workers would you need? This financial model will aid you in predicting the overhead necessary to support the increased cost of parts and manpower you will have. You must project for future growth because not doing so can lead you to a tricky situation where you have more jobs, but not enough cash flow to pay for the parts and labor needed to complete those jobs.
Rethink organizational makeup
Most HVAC contractors start their own business with only a small team or no team at all. This means owners can micro-manage and control every aspect of their businesses. However, this owner-do-everything organizational structure will fail as you grow. HVAC company owners must look to the future and think about changing the organization of their company as the company becomes bigger. Restructure your work flow process. A company meant to deal with 200 jobs a year will not do things the same as a company that completes 400 jobs a year. What types of employees do you need to complete a job and how many do you need? Write out new positions you need and clearly describe the job description. You must find people to take on these new jobs or you should postpone growing your business. Create clear standards to make sure each job is receiving the same amount of treatment and quality control. Promote or hire the right managers to ensure your staff is maintaining quality control.
Know the market and make more opportunities
A strong growth plan knows where successes come from and if there is room for your market share to grow. For example, if your main moneymaker is new construction, then you need to figure out how much capacity you can handle in that growing market. If you think you can handle 20% of the HVAC new construction market, then you need to draft a plan on how to increase capacity to reach that 20%. You must also figure out how you will reach new customers. You will need to create a marketing plan to reach out to potential clients. In your marketing plan, it is important to determine where the market is and what problem you are solving. Creating a marketing plan along with your growth plan ensures you can find the customer base to reach the growth goal you set.
HVAC company owners want to see their business thrive, but you won’t grow and thrive without a plan. Follow these steps and you will create a growth plan that shows you if you have the people, capital, processes, and culture to grow.