Florida contractors work hard behind low-key exteriors
In fact, one contractor doesn’t have a visible sign on the building. (It took this reporter a few missed turns circling around the block before I determined I had the right building.)
The fact that their businesses are located in “less conspicuous” places does not take away from their busy nature.
One Bradenton contractor said he doesn’t mind a lack of walk-in traffic, mainly because many of his big customers are out-of-town.
“We work everywhere,” said Bill Long, general manager of Ocean-Aire Conditioning, Inc. “We’ve done jobs near the Alabama border and down in Key West.”
Even though her business is at a main thoroughfare in St. Petersburg, Maryann Sabo’s storefront blends into the atmosphere of the older neighborhood. She sends out trucks as far as 75 miles away, but her focus is on the older neighborhood being rejuvenated around her. It’s called the “Enterprise Zone.”
Lee Robinson shifts the focus from his Climate Design business, at the end of a dead-end street in Clearwater, to his trucks. Each one is painted dark blue with a large white logo of the company name. The company’s trucks, not the building, double as billboards.
Ocean-Aire Conditioning: working for retailersLong is a long way from his roots in Chicago and the Air Force, where he served as a pilot during the Viet Nam War. He has settled happily into the Bradenton residential and commercial new construction market.
Long started as a 14-year-old doing sheet metal work in Chicago. Now he is installing hvac systems in area shopping centers.
“We’ve done 36 Payless Shoe Stores and 16 Manhattan Bagel Stores,” he said. “When you work with one builder, you keep doing the same stores over and over again, even if it is out of state. We just did a Gap Store and now we’re doing an Old Pottery, Old Navy, and another Gap Store for them.”
That’s a lot of work for someone who, as a youth, really didn’t want to be in the business. Long got his undergraduate degree in education from Indiana University and did graduate work at the University of Miami. He taught school for five years until he began his hitch during the Viet Nam War. After he returned to the states he found that he was overqualified to teach, so he wound up back in the hvac business.
“I went back to Chicago and took a job as a dispatcher at the Trane Home Service Company,” he said. “Trane eventually bought a company in Bradenton and I came down here.”
Long opened his own business in 1979 and eventually sold to the present owner of Ocean-Aire. He still teaches on occasion; he is certified to teach load calculation and design.
Doing well, thanksBut he is devoting most of his time to running a rapidly growing business. Ocean-Aire’s 1998 volume was $2.5 million and that mark will soon be topped.
“We are way ahead of last year’s [sales volume],” he said. He attributes this to hard work, preparation, and “just plain luck. Each month we are showing about a 20% increase.”
It wasn’t just plain luck, however, that Long hired a new residential salesperson who is generating a lot of sales. Add that to the fact that his company also installs solar and gas water heaters, and it is easier to see why business is brisk.
Ocean-Aire also works with several builders on new home and condominium construction. Two recent jobs involved multiple installations at two area condominiums. Each job was worth about $300,000.
Former workers now competitorsLike other contractors, Long said he would like to see more qualified workers in the local labor market. In fact, Ocean-Aire has lost some very good former employees who have branched out on their own.
“I know of nine companies that have been opened by guys who used to work for me,” he added. “Some of these guys are now my competitors and they don’t mind going head-to-head with me.”
Also in the category of competitors are the consolidators. Long said he has been in contact “almost every day” with consolidators interested in his business.
“They’ve made the prices of businesses higher but unfortunately, much of that price is in stock,” he said. Moreover, “Most of them aren’t interested in our commercial market.”
Long isn’t turning a deaf ear and he likes a lot of what they bring to the table. “In five years I’ll be 53 and could be in a position to manage for a consolidator. They ask for and maintain higher prices for residential systems. But this is pricing that should be in place anyway.”
Unfortunately, in the Bradenton area pricing is a very important consideration. Long said it is not unusual for senior citizens on a fixed income to get up to six estimates for a system.
“They shop for price, not quality,” he said. “There are a lot of customers that call only when a system is broken. It is not unusual to find a system that is 13 years old and never been serviced.”
Long sees some changes down the road for his company. For example, he would like to concentrate on niche markets.
“I would like to departmentalize my installation crews,” he explained. “I want to find guys who will fit into a niche.”
ABS Air ConditioningMaryann Sabo’s rise to the top hit a few snags over the years, but as the proud owner of ABS Air Conditioning Co. she is busy working on her future, not dwelling on the past.
Sabo began in the hvac business as an accountant for a contractor in Seminole. She eventually convinced the owner to open a satellite office in Tampa, which she ran for him “very successfully.”
She was “wined and dined” by a rival contractor who eventually hired her to run his business. However, after five years, the business went bankrupt. Not deterred, Sabo took the key employees and management staff and within two hours after learning of the company’s demise, formed a new business.
“About four months later, I received a letter from an attorney’s office in New York with a letterhead that was probably three quarters of a page long,” she recalled. “It was full of names and locations. They were ordering me to ‘cease and desist’ using the name Airtemp because Chrysler [manufacturer of window a/c units] was using the name. I switched names to Air Tampa.”
Sabo moved to St. Petersburg two years ago and changed the name to ABS, although the corporate name remains Air Tampa. Her move to St. Petersburg was a shrewd business decision. “There were a lot of grants and bid opportunities for minority contractors in this area.”
Today ABS generates $2 million in revenues from a combination of residential and light commercial service, new construction, and retrofit work. Sabo said her residential accounts are growing but she wants to keep focusing on commercial accounts, which will help carry the business through the slower months.
Enter the zoneOne part of her market that should carry her throughout the year is the Enterprise Zone, an area of St. Petersburg blocked out for renovation and remodeling.
The work is being awarded to minority business owners. Sabo said she plans to keep ABS actively involved in many of the contracts.
“I wanted to be here, in their face, to do this type of work,” she said. “And we are getting a lot of bid opportunities.”
Sabo also gets a tax credit from the city of St. Petersburg for hiring people who live in the Enterprise Zone. But like so many other areas, she is finding it hard to recruit qualified workers.
“I can spend thousands of dollars advertising for help and maybe three people will come through the door, and maybe I’ll hire one of them,” she said. “Unfortunately, many of them won’t be able to pass a drug test and we are a drug-free company.”
Workers who stay on with Sabo are guaranteed employment even when the jobs slow down. “When you have a good employee, you create work for them. You don’t want them to go anywhere else.”
Sabo is keeping a watchful eye on other issues that affect her business. Consolidation has started to take hold in the area, and a few different companies have courted her. But she’s not budging.
“I’ve put a lot of blood, sweat, and tears into this business and I don’t want to give it up,” she said.
“It’s like big money [a bank] coming in and having a branch on every corner. The customer becomes just a number to them. And eventually, the customer will go back to their local bank. I’m the neighborhood bank.”
On the whole, Sabo likes what she sees going on around her. St. Petersburg is on the rebound, revitalizing the downtown area and making the “Pier” area more attractive to passing cruise ships.
But she is not consumed with rising to the top of the contractor list, even if she adds some lucrative contracts.
“I don’t want to be so big that I don’t know the names of my employees. It’s important that my employees make my customers happy and that I make my employees happy.”
Climate DesignLee Robinson and his partner, Ernie Kendler, worked together at General Electric (GE) and eventually decided to open up their own business. In 1973 they established Climate Design, which has since expanded from Clearwater to a second location in Bradenton.
About 90% of the company’s work is in residential installations and service. Company annual revenues are in the $6 million range, a very attractive number to consolidators. But Robinson isn’t biting right now.
“We don’t want to deal with the overhead the consolidators bring to the table,” he said. “We haven’t had a great deal of interest in them, but we would be open to offers.”
Robinson added that he doesn’t mind competing with the consolidators because they have done a lot of good for the industry, especially offering an exit strategy for owners. But he is more concerned about the growing consolidation efforts of manufacturers.
“I think there will be more involvement of manufacturers buying contractors than people think,” he said. “Manufacturers have reasons to be concerned about their distribution system. For example, consolidators may establish national accounts from Carrier and steer their contractors away from Trane. And people like Lennox may feel left out of the consolidation mix.”
Robinson isn’t wasting time thinking about his competition. His main concern is that of the rest of the hvac trade — finding qualified help. He prefers to start a new employee from scratch — that is, if he can find a new employee.
“We recruit heavily year round,” he said. “Most of our people are internally trained. We’d rather not hire from the outside because those people are already set in their habits.
“Many times our competitors are technically skilled people with little business experience. That’s going to be a real problem for consolidators who are looking to tuck in other contractors who have little business experience. The ability to be a businessperson is more important than the ability to be a technician.”
R-E-S-P-E-C-TRobinson believes that if employees make it past their first two years, the turnover ratio is very low. “We ascertained that people usually leave before two years, so we need to give them reasons to stay,” he said. “We always make sure our people get 40 hours a week, even in slow times.”
Climate Design tries to make its environment employee-friendly. Besides a regular workweek, management offers bonuses and employees are given the room to make their own decisions.
Robinson said he never refers to them as employees; he calls them coworkers.
“We believe in involving our coworkers in the decision process of the business. This way, each coworker has a greater interest in the success of the business. We utilize a team concept to accomplish this.”
Teams are usually made up of nine people, including at least three field workers. Most of the company’s work is design-build, including a major account that specializes in high-rise condominium work.
Robinson wants to expand his service department as one of his long-range goals. He currently has 4,800 service agreements and sees room for more growth. He also sees service and new construction as ways to support the business during lean times.
“We believe in having a lot of different legs to stand on,” he said. “Being active in a number of different areas allows us to have a continuing level of success even when one of those markets is down.”
Robinson hopes to be doing what he’s doing five years from now. He wants to be in the category of contractors who are part of an “elite” group.
“Seventy-five percent of the work in this market is done by 10% of the contractors. We want to try and separate ourselves from all of the other contractors.”