Yes, The Little Guy Can Compete
"It," in this case, is Mid-State Mechanical Contractors, located in this community just south of Hartford. Despite its low-key appearance and the presence of many other bigger competitors, Mid-State Mechanical Contractors and its four-person staff are doing everything the big boys are doing - and much more.
And, if you must know, owner Larry Kominske is doing just fine, thank you.
On the day The News visited Mid-State in early May, Kominske and his wife, Donna, were busy setting up air conditioning service and sales calls, at least two weeks in advance. That's because the weather had been heating up in the Rocky Hill area. Kominske, his son, Matt, and the company's other service tech, Brad Burgess, were "going like crazy" keeping up with the many requests for residential and commercial service.
But if you think it's just the weather that is making the phones ring at Mid-State, that would be an incorrect assumption. The 15-year-old company has been riding a crest of popularity with its loyal customers, including many service agreement customers.
On top of that, they are getting a lot of calls from referrals and from its now famous newspaper coupon, said Kominske. (But more regarding that coupon later.)
In an age of tough competition from larger, more high-tech companies, Mid-State is a perfect example of how the little guys can compete and enjoy a healthy, profitable business base.
The formula for success is quite simple, and it's a formula that works. Mid-State had revenues of over $500,000 in 2003. Simple math shows that each employee generates $125,000 of income, higher than the $100,000 per person that many HVACR businesses reportedly strive for.
From The BeginningKominske decided to break out on his own after working for someone else - in part because of his desire to be the boss and because he was being coaxed by Donna. He sees himself as a representative of every business owner.
"We are the grass roots of the whole industry," he said. "Everybody started out here."
Donna went to school to learn business management. She always had an eye for running her own business. She got what she wanted. And Kominske has always had a strong mechanical aptitude. In this case, husband and wife meshed.
"People ask us how we manage to work together all day long," said Donna. "We are able to separate our business life from our family life."
Kominske concurred, adding, "Donna knows that what I ask her to do during the day, I am asking as her boss. It doesn't carry over after we get home. It's a business."
Kominske tried running the business out of his home for about five years, but he felt that business was blending too much into family life.
"Guys coming and going to the house and 24-hour calls were too much," he said.
So Kominske moved the operation 10 years ago to its present location in a small office complex. He wouldn't have made such a move if it weren't for his solid financial footing.
Building A Financial BaseKominske believes that a company cannot be successful and survive if it doesn't have good cash flow and good credit. It starts with making sound, frugal decisions.
"We didn't have to start the business with brand-new equipment," he said. "I started out with a 10-year-old van and put 300,000 miles on it. The key is not to overextend yourself. You don't need a $30,000 truck to start out. Mind your â€˜Ps' and â€˜Qs'.
"A lot of guys will go out and do a lot of work and they will see a lot of cash in their pockets. But it isn't their cash. They have to pay overhead, bills, taxes, etc. Too many of them get caught in the trap of spending money they don't have."
Mid-State has a reputation for good credit among its suppliers - and that's important for any business.
"We pay our bills by the 10th to get our discount," said Kominske. "This allows us to go to the supply house and get good pricing."
That came in handy recently when Mid-State won a bid to service and replace furnaces in a local low-income housing project. The company is gearing up to replace 69 furnaces.
"For a supply house to extend a little guy like me a $500,000 line of credit says a lot about me," said the contractor. "Good credit with your supply house is like a lifeline."
Mid-State primarily sells American Standard condensers and Weil McLain boilers. Kominske appreciates the service he gets from the companies. But he prefers to sell Mid-State as his brand, and his trucks prominently display the company name. He even uses his utility trailer to advertise.
"We have this small signage on the building and it is hard to see," he said. "So we park the trailer out front so people will know where we are."
The Personal TouchKominske said a lot of the company's success rests squarely on Donna's shoulders. In fact, some customers don't even know who he is.
"I will run into customers at a jobsite who will say, â€˜Well, Donna told us this ...' or â€˜Donna said it was OK ...', " he mused. "People love Donna. She is very personable. I will even get her out to the jobsites so people can meet her. It puts a face to her voice."
Donna loves talking to customers, and the feeling is mutual.
"People establish personal relationships with us," she said. "We chat about families and other things that people like to talk about. Even when they leave a company, they try and take us with them to their next company."
Mid-State customers are on a first-name basis. Donna has worked with many of them for so long, she knows a lot about their equipment without having to look up the files. And the customers appreciate dealing with the same people over and over again.
"Some companies get tired of seeing different people all of the time," said Kominske. "If it's a commercial customer, they may need to have their own employee show a new technician around each time - to relearn, which is a waste of their time."
The personal touch extends into employee relationships, too. Mid-State has had as many as six or seven technicians, but the Kominskes had problems with some of them as they went through personal crises. They didn't want to babysit their workers. Larry and Donna are very comfortable with Brad and Matt, the latter who will someday take over the family business.
"Learn to take care of your employees. Let them be a part of your family," said Kominske.
"There have been slow times, but I have still paid the guys. If you pink slip someone, it tells the person that he really isn't important to you."
Donna said that Brad's kids are just like her own kids.
"I keep a picture of Brad's family on my desk next to my own family," she said.
On a regular basis, Kominske will hand out bonuses to the guys for doing good work. He also has offered them to take vacations when they want, but they have preferred to work through the hot summer months when they are needed the most.
"Our guys are unique, too," said Kominske. "They learn to work on boilers, furnaces, air conditioners, and in the residential and commercial markets."
Other Keys To SuccessKominske likes being the little guy, but not necessarily the stigma that goes with it.
"When I started out, I could have named the business Larry's Air Conditioning, but then it would have sounded like I was a little guy. I didn't like that image," he said.
He also doesn't like the image of being the lowest-priced contractor, either.
"I am not looking to be the low bidder," he stated. "I always prefer to be in the middle of the road. Being the lowest-priced guy is just like selling yourself short. I put a lot of effort into my business and expect to be paid for it."
One example of how Mid-State does not lower itself to the low-price clean-and-inspect bidders is its yearly "Pre-Season Cleaning & Check" coupon for central air conditioning systems. The price is $95 per unit, and each coupon has an expiration date.
"Customers love our coupons," said Donna. "They wait for that seasonal coupon. Some have even called a day after the expiration date, asking if they can still get the coupon price."
Besides using coupons to generate business, Mid-State also promotes service agreements for both its residential and commercial customers.
"Brad and Matt try to sell service agreements every time they go out," said Kominske. "They usually get a feel for the people who will eventually need a replacement."
Kominske is especially happy to land a good commercial service agreement. One local building owner was having problems with tenants who withheld portions of their rent because they couldn't operate when the air conditioning units went out.
"The owner had never cared about maintenance on the 16 rooftop units, but he eventually saw the value of maintaining each one or he would lose revenue," said Kominske.
The Bottom LineKominske believes that customers frequently shop around for service. In his estimation, they are not necessarily loyal to one contractor.
"Installers rarely meet the customer and are usually gone when a problem comes up," he said. "An install is an install. People look around because they are not happy with service."
He added, "Our business has been built on service. In service, you get to work with building owners and managers. It is personal. And from service, we can get into replacements. Your personality plays a big role in your business."
Does Kominske feel threatened or concerned by competition from the big boys? Let's just say if he is, he does not show it.
"I don't feel I'm held back," he said. "I am in the market that I like to be in. I don't get into other things like schools or elderly housing.
"I simply want customers to get what they pay for. When I walk out of the door at night, I become a consumer and I want to be treated right. I don't think a lot of other business owners understand that."
Publication date: 06/28/2004