Robert Bean talks about the changing face of the HVACR industry.
HALIFAX, Nova Scotia - Robert Bean had a message for attendees of his session at the HRAI Canada 2003 Meeting: Learn from past trends in order to understand the future of the HVACR business. Bean, a business consultant, professional engineer, and ASHRAE committee chairman from Calgary, Alberta, said that successful businesspeople need to recognize change in the industry and act.

"If we expect change, we have to change," he said. "For example, customers are asking us to give them more control over their homes, like setting the indoor temperatures while they are sitting on a beach."

Bean said that there has never been a time when HVACR contractors have had to be more flexible in both their personal and business lives. He discussed several factors affecting the trade today, including the shrinking labor force and the importance of educating consumers on HVACR.

Dwindling Labor Force

"We are going through a huge change. The workforce is aging and a lot of craftsmanship is dying off," Bean said. "Kids are not sitting in classrooms today and thinking, ‘I can't wait to get out of school and into the trades.'"

Bean used a statistic to explain the shrinking labor force. A 2000 study by Paine Webber showed that the labor force growth peaked at over 3 percent annual growth in the early 1980s and will dip below 0.5 percent by 2020.

During HRAI’s 35th annual convention, attendees gathered for a welcome reception at Pier 21, Canada’s “front door” to over a million immigrants, wartime evacuees, refugees, troops, war brides, and their children.

Educating Consumers

Bean said it is important to create a "need" for HVACR products in the minds of consumers. There are several ways to accomplish this, he said. Bean quoted a business professional who once remarked, "Products are the vessels that carry a company's brand. The designer's challenge is to balance human, aesthetics, and technological factors in order to enhance brand value."

Can the design of an HVACR system sell itself? According to Bean, a lot depends on the presentation. Salespeople need to sell comfort and security, not necessarily a box. If, for example, a system is perceived as a "science experiment" because of its many components, consumers may be turned off. On the other hand, if a system appeals to comfort, it has a better chance to sell itself.

"Consumers get mixed messages about our systems - the systems are simple, yet complicated," Bean stated. "We need to create a survival form for our products."

Bean also said that contractors need to slant their sales pitch more toward women.

"As of 2000, there were 11 million widows with a combined purchasing power of eight billion dollars," he said.

Maintaining A Profit

Bean said that contractors need to think about the future of their business today, especially when it comes to selling the business.

"In the year 2010 when baby boomers [begin to] retire, how many businesses will be for sale? Plenty," he said. "Today is the time to prepare your business for sale by making it clean and profitable. If a contractor can't sell his business,

it also impacts the people who he buys from - the wholesalers."

Bean quoted a friend and familiar name in the "wet heat" trade, Dan Holohan. "Dan said that so many people enter this business because they got mad at some boss. They quit and bought a truck and dropped the prices below what the boss was charging and figured that word-of-mouth would do the trick.

"Years go by, and that's the way it stays. They have created a job, not a business."

The first step to success and profitability is to enjoy what you do, according to Bean.

"If you enjoy working with tools, work for a contractor," he said. "But if you enjoy working in a business, you have to love the business. Businesspeople get satisfaction from making money; mechanical people get pleasure from knowing they can fix things."

Publication date: 11/17/2003