BOYNE FALLS, Mich. - Are contractors getting paid what they are worth? Attendees to the Michigan Chapter of the Air Conditioning Contractors of America (MIACCA) Convention were given an earful on this topic by David Holt of Profit Strategies Inc.

Holt said that two things, right off the bat, are what customers judge a company by - which can have an immediate impact on profits. Those things are: the people who come into customers' homes and the equipment needed to service or replace HVAC equipment.

"We give too many people jobs just because they can fog a mirror," he said. "When we need people real bad we hire real bad people." Holt stated that most HVAC companies are "run by technicians that had entrepreneurial seizures. If you aren't working on your business it is being worked on by someone else."

"Also, we don't take real good care of our equipment so customers wonder about our ability to take care of theirs."

Holt talked about the local market, which is often run by "low bid Joe." He said these people often have their whole company in one truck, adding that there is nothing wrong with that as long as the company is run correctly. Still, working out of one truck often means that an employee is moonlighting, too.

"Companies are losing out to low bidders who are moonlighting on their bosses," Holt said.


Holt said that contractors often believe that profit is the root of all evil because they associate loving money with loving profit. "Loving money may be the problem - earning it is not the problem," he said.

He said contractors should think of themselves as life support specialists since they "design, install, and repair life support systems for the home and office."

This service comes at a price to customers, and contractors are often afraid to charge the right price that ensures a healthy profit and a healthy, competitive marketplace. Holt used the analogy of a body of water to make his point.

"Let's say a lake bed is the local market you work in," he said. "The boats on the lake represent HVAC companies. The water is the retail dollar available for the lake. The fish are customers.

"If you can raise the level of the lake - the retail dollars - everyone will benefit. You raise the level (prices) by studying customer's desires, by improving your operational systems, training your people, developing a retail mindset, and helping your competition to do the same."

Holt noted that contractors can also raise the lake level by developing menu pricing showing a good, better, best scenario.

"In an independent survey, 91 percent of customers preferred upfront pricing," said Holt. "If your customers want that, why not give it to them?"

He also said that he believes companies should develop the mindset that their customers deserve the best while understanding that not everyone can afford the best. "If they can afford it or not, it is their decision and not yours," Holt said.

He believes that given the knowledge to raise the lake level, successful service and replacement contractors will be able to maintain a healthy profit while raising the professionalism of the HVAC trade.

For more information, visit Profit Strategies Inc. at

Publication date: 09/04/2006