He then related that to the success of a company that wasn't around 15 years ago - Home Depot. "Home Depot moved $190 million of HVAC equipment in 2003," he said. "They weren't your competition 15 years ago.
"Our success comes from taking existing customers away from our competitors; it's called free enterprise."
Abrams likened the HVAC industry to the plumbing industry, where service is the mainstay of the business today. "Nobody buys water heaters from plumbers anymore," he stated.
He listed three keys to growth in the HVAC industry:
1. Total control (mastery of the business).
2. Direct marketing.
"If you lose the mastery of your business, you will lose your business," he remarked.
Future TrendsAbrams then discussed business planning for the next 10 years, adding, "We have to participate in the future and not be a victim of it."
Branding - He used the example of his company, One Hour Air Conditioning, saying that it is a $70 million business that didn't exist a year ago. "All owners must establish their own brand name," he said. "In 10 years there will only be three recognizable brands [merged, franchised, independent] in our industry."
Commodity equipment - Abrams said that all equipment will become commodity priced. "We can stay in the fight and provide quality service, but we will never be the grand winner," he said.
Big box is here to stay - He said there is no reason to believe that "big box" retailing will go away. He suggested keeping an eye on the changing business climate and "getting your house in order so you can jump through the opportunity window when it is open," Abrams said. "Change is very courageous. You have to take risk and then take action."
Budgeting and planning - He told contractors they need to plan what they intend to earn for the year. "The No. 1 reason that people don't make goals is because they don't want to fail," he said.
One of Abram's goals is to eventually create a wrinkle-free exact working model for an HVAC business. He plans to roll out the concept soon.
He added that he doesn't want to follow the model of the former consolidators. He wants One Hour Air Conditioning to become a national brand and be the world's largest home service company.
"We're building a business, not a stock price," Abrams said.
Publication date: 05/24/2004