LEWIS CENTER, Ohio - Jeff Cullins is no stranger to hard work. His first several years in the heating and cooling business were marked with good revenues and solid profits. The owner of One Hour Heating & Air Conditioning® in the Columbus, Ohio, area seemed to have a business model that was working.

Cullins' company was profitable every year except one, but that one year threatened to put an end to the business. In 2003, Cullins lost $180,000. However, after making major changes to his business model, he expects to turn a 5-percent profit in 2004.

"I took on a lot of things too fast," admitted Cullins. "Things would have been easier if I hadn't overloaded myself, but it seems that being overloaded is when I function the best."

One Hour technicians Mike Reilly (left) and Dave Stainer put the finishing touches on a residential replacement.

The Beginnings

Cullins decided to go out on his own in 1988 after working for an HVAC contractor for nine years. He borrowed $9,000 and started his own company.

"I just wasn't happy with my job," he said. "And I took a risk when I left my job."

One of the first obstacles he overcame was the original name of his company. There was a Columbus-area contractor with a similar last name, and the similarity led to confusion for some customers and resulted in some angry phone calls.

Eventually the problem stopped, but Cullins said he should have done his homework in the first place and researched company names before choosing one.

Cullins said he had "big aspirations" for his company and made plans to add plumbing and mechanical services in addition to his residential service and new construction business. It was at this point that he decided to attend an AirTime 500 meeting to learn how he could expand his service side.

"The people at AirTime 500 asked me what I was doing in the installation business," said Cullins.

During this time, Cullins had expanded his office staff and ratcheted up his relationship with an area home builder, hoping to build his niche in the Columbus-area new construction market.

"I tried to put together a lot of programs in a short period of time," he confessed. "It took a lot of effort, and we lost money during that time. We also had more people working for the company, but we weren't making money."

Cullins acknowledged that he made some poor hiring and personnel decisions, such as keeping a salesperson who had a low closing rate on his leads. "We burned through a lot of leads," he said.

Still, the company remained profitable. "Even though we bumbled a lot, we still excelled," said Cullins.

In 2003, however, things eventually caught up with Cullins. The company lost money on a contract with a local builder, and the snowball effect began to plunge the business into the red.

"The president of One Hour Heating & Air Conditioning suggested that our business plan was too aggressive and that we might be out of business because we couldn't handle the workload," he said.

Jeff Cullins checks in with two of his employees as they wrap up a residential replacement job.

The Turnaround

Cullins said he needed to change some things right away.

"I changed my philosophy about the people I hire," he said. "I want people who are successful and not ones that are looking for a second chance."

That new philosophy equates to background checks, random drug testing, checking financial records, personality testing, and mechanical aptitude testing.

"I also took back the sales side after the other people left," noted Cullins. "My average ticket is $4,700. We look for an average service ticket of $225. But, of course, we look at each ticket closely to ensure that we are not abusing the client."

A big factor in the turnaround was the purchase of the One Hour franchise for his area. It not only brought a recognizable name to the Columbus landscape, it brought much-needed business systems to the company.

"The turnaround is a matter of staying with the system and following it to a T," said Cullins. "The biggest reason for our successful turnaround is our people and how they use the system. No one is bucking it."

Cullins went from a staff of 10 people at the company's peak to its current level of five employees, including two service techs and an installer. Cullins works in the field when the schedule gets demanding, but he prefers to continue working "on the business" instead of "in the business."

He also knows his limitations and where he should place his focus. "I could be doing $1 million in new construction, but it would be on the backs of my employees," he said. "I won't do that."

Cullins has automated a lot of his business software systems by adding the Successware® platform.

"For a company our size to take on a massive program like Successware was quite a challenge," he said.

It also helps to be in a fast-growing area, which will eventually become a fast-growing area for residential service and replacement.

"Columbus is a hub surrounded by a lot of suburbs," said Cullins. "I have the [One Hour] territorial rights to these suburbs. Right now I am concentrating on Westerville [where his business is based] and then will expand out. A lot of success will depend on future growth, as a lot of homes in the area begin to age in 10, 12 years."

Cullins One Hour Heating & Air Conditioning moved into a new office complex last November, and the 3,000-square-foot building can accommodate new salespeople and office staff as the business grows.

To reduce overhead and take advantage of the space in his office, Cullins now does his own in-house mailing of marketing pieces.

"I can turn the mailing on or off as I choose," he said. "When it gets hot, we can mail out as many as 500 pieces and begin getting calls within a couple of days. Being in-house has cut our mailing costs almost in half. We can now spread out our mail drops instead of sending out pieces all at once."

Cullins credits the One Hour systems for ensuring a steady workload.

"We had virtually no summer or winter last year in our area and the economy was not doing well," he said. "Yet, we still excelled. Our clients love what our people are doing. Anytime we have challenges with a client, we view this as a learning experience. We need to empower our people in the field to handle the problem, to ensure that customers become cheerleaders for us."

Cullins, who "always wanted to be an architect," does not like standing still or sitting behind a desk. He has plans for life after being a business owner. He said he plans to eventually sell the business and use the money for a very worthy cause.

Cullins' wife Judy has been afflicted with multiple sclerosis for several years. She worked side-by-side with her husband, running the office, until her doctor ordered her to stop.

"I want to start a clinic to research multiple sclerosis," he said. "We need to find a cure for it and not just more ways to treat it."

For now, Cullins will stick with carving a niche in the residential service and replacement market. He is putting on hold the idea of branching out into other areas, like plumbing and electrical. Instead, he plans to perfect the system and ensure that 2003 was just an aberration.

Publication date: 09/13/2004