Lori Stuckert

If You Don’t Get Them on the Phone You Don’t Want Them

By Tom Grandy

If you have read my articles over the past 30+ years, you know I like to use real life situations whenever possible.  Theory is one thing but actual experience often presents a totally different perspective.

Several months back, my father-in-law died while living in an assisted living facility in North Carolina at the age of 94.  He left his small home to one of his daughters who lives in Washington state.  After the memorial service, several of the children began cleaning out, his small two-bedroom home.  Bear in mind, the home had not been lived in for over two years, with the water and gas turned off.  When the mold was taken care of, electrical repairs completed, new toilets were installed and the hot water heater was replaced, it was about time for the Washington state daughter to return home.  However, during the repair process it was noted the original roof (the house was built in 1991) had a couple leaks. 

To add to the sense of urgency, there was a major hurricane predicted to move up the coast from Florida, a week or so later.  It may or may not have hit North Carolina.  No one knew for sure at the time nor did anyone know the amount of rain that might or might not come with it.  It was time for the Washington daughter to return home but the house needed a new roof as soon as possible.

The next phase involved her sister that lived very close to her dad’s home.  She was asked by the Washington sister to secure a minimum of two bids for the roof replacement as soon as possible.

It was a holiday weekend but the North Carolina sister called several contractors anyway.  She really did not expect a response on the holiday weekend but decided to leave messages in order to be near the top of the callback list the first day back in the office.  To her great surprise, one of the contractors answered the phone.  He explained that he was out of town for the holiday but would call back at 8:00 AM the first day back in the office.

The holiday ended and sure enough he called right at 8:00 AM as promised.  An appointment was set and he came out that day.  At this point, none of the other contractors had responded to her messages.  The responding contractor accessed the situation and promised to call the Washington sister at 9:00 AM, West Coast time, the next day with details and costs.  The Washington daughter checked out the references of the contractor prior to his scheduled call.  He had an outstanding reputation and had done work for a couple of the North Carolina sister’s friends, all of whom were really pleased with his work.

Guess what?  At 9:00 AM West Coast time he called!  He provided all the details, sent pictures of different color roofs and gave her a very reasonable price.  However, being a wise customer, she still wanted a second bid.  However, none of the other contractors had yet responded and the hurricane was getting closer.  Another day went by with no additional calls being received.

After talking with friends and family she decided to go forward, without a second bid, with the responding contractor by sending overnight a check for 50% of the job.

Now for the “Dah” question.  Why did she select the contractor that responded?  In addition to responding in a timely manner, he explained what he would do and when.  It’s called honesty and integrity, which is often lacking within the trades industry.  Even if another contractor had eventually called (no one EVER did, days and weeks later) the responding contractor would have gotten the job.  Could she trust another contractor to do the work when it took days or weeks to respond?  As the title of the article says, “If you can’t get them on the phone, you don’t want them”!

For the past 33 years I have consistently told contractors it only takes three things to be very successful.

1.    Do quality work

2.    Do what you said you would do

3.    Do it WHEN you said you would do it (show up on time)

The above is still true but there is one more thing, that should not have to be mentioned.  Answer your phone and respond to messages!

In today’s world there is no reason not to answer your phone.  You can transfer the office phone to your cell phone, utilize a live answering service or at least have an answering machine in your office.  When the call is received, in whatever format, respond.  It would “seem” to be common sense.  However, as one of the staff members told me at the assisted living facility where my father-in-law was “Common sense isn’t so common anymore.”

Communication is a key element when it comes to building a successful business.  It is a direct reflection to the customer, of the quality of work they might expect.  Good communication is also a sign of respect and it should be just good old common sense.

Would you like to pick up a few more “business tips” each month?  If so, check out our Profit University Audio Series.  Each month it features a different business topic, by a different national speaker.  In addition to a new program being posted each month, there are 275+ past presentations on every conceivable topic.  The series is normally $24.95/month but if you take advantage of the Website Special it’s only $19.95/month…for life.  Cancel at any time.  Order today!  

Managing Your Business – start your employees off right STANDARD

By Bill Kinnard

Because of the challenge of getting new employees up to speed in your company, we are pleased to announce we are offering HVAC Onboarding through our Grandy Live Online instructor lead classroom. The program is eight hours and specifically designed to help you prepare your new personnel for the job. And better yet, there is no travel. They will attend right from your office. This isn’t a webinar. It’s a real class led by one of the Grandy instructors. Students will be engaged, can ask questions, and will need to pass a quiz to be sure they learned the concepts we are teaching.

We will focus on:

•Understanding major and minor system components: What are the parts and pieces that work together to make a comfort system function.

•The importance of proper system design and installation.

•Efficiency requirements and their role in our industry.

•Why IAQ is such a big part of HVAC

•Comfort controls: Let’s face it, they do a lot more than just read temperature.

•We will also explore why there are so many system options, and the benefits of offering higher efficient choices to your clients.

Sessions will be conducted over a consecutive two-day period. Session 1 will be on afternoons from 12:00 PM – 4:00 PM Central time, and Session 2 will be the next morning from 9:00 AM – 1:00 PM Central time. Whether your new team member will be working the service counter, answering the phones, or is an aspiring installer or comfort consultant; this class will be a spring board to a successful career in HVAC.

February 10-11  |  REGISTER HERE

March 5-6  |  REGISTER HERE

Hear what past attendees have said:

“Very to the point. I am new to this field, so this is a really solid foundation of the basics of what is going on in the HVAC industry. It gives me the basic understanding to build my future career upon. I really enjoyed it.”

“I thought the entire seminar was worth every minute I spent. I was in the HVAC industry 25 years ago and have only been working as a Home Comfort Advisor for 3 months so this was very intuitive. Thank you.”

Managing Your Business – Start your employees off right – CAC/BRY

By Bill Kinnard

Because of the challenge of getting new employees up to speed in your company, we are continuing to offer HVAC Onboarding through our Grandy Live online instructor lead classroom. The program is 8 hours and specifically designed to help you prepare your new personnel for the job. And better yet, there is no travel. They will attend right from your office. This isn’t a webinar. It’s a real class led by one of the Grandy instructors. Students will be engaged, can ask questions, and will need to pass a quiz to be sure they learned the concepts we are teaching.

We will focus on:

•Understanding major and minor system components: What are the parts and pieces that work together to make a comfort system function.

•The importance of proper system design and installation.

•Efficiency requirements and their role in our industry.

•Why IAQ is such a big part of HVAC

•Comfort controls: Let’s face it, they do a lot more than just read temperature.

•We will also explore why there are so many system options, and the benefits of offering higher efficient choices to your clients.

Sessions will be conducted over a consecutive two-day period. Session 1 will be on afternoons from 12:00 PM – 4:00 PM Central, and Session 2 will be the next morning from 9:00 AM – 1:00 PM Central Time.

Whether your new team member will be working the service counter, answering the phones, or is an aspiring installer or comfort consultant; this class will be a spring board to a successful career in HVAC.

 Qualifies for FAD Credit

Even your newest team members can help you meet your FAD training hours requirements. The program qualifies for 8 FAD credit hours.  Register for one of the HVAC Onboarding upcoming programs through My Learning Center:

January 23-24, 2020 |  REGISTER HERE

February 27-28  |  REGISTER HERE

March 26-27  |  REGISTER HERE

 Read what past attendees have said:

“Very to the point. I am new to this field, so this is a really solid foundation of the basics of what is going on in the HVAC industry. It gives me the basic understanding to build my future career upon. I really enjoyed it.”

“I thought the entire seminar was worth every minute I spent. I was in the HVAC industry 25 years ago and have only been working as a Home Comfort Advisor for 3 months so this was very intuitive. Thank you.”

Three Points of Growth (Part 3 of 3)

By Tom Grandy

We have been talking the last couple of months about the points of growth that have the potential of putting a company out of business. The first is when the company owner moved from the field into the office.  The second point of is when gross sales reach $1, $2.5, $5 or $10 million dollars. Each of those points of growth will require significant amounts of addition investment in the company in order to prepare for the next level of growth but usually the company does not yet have the sales to support the needed investment.

This month we are going to discuss the third and final point of growth that has the potential of closing the company’s doors.  It can happen year one, year fifth or the 55th year.  It can potentially happen every single year.  That is any point of rapid growth.  I define rapid growth as anything over 15% a year.  Now, there is a huge difference in 15% of $300,000 in gross sales and 15% of $3,000,000 in gross sales.  Does that mean you can’t grow more than 15% per year?  Of course, you can but the company better be creating a detailed month-by-month cash flow budget each year to use as the basis for adjusting their labor rates in order to maintain profitability. Be aware that any point of rapid growth will not cause gentle cash flow problems, it will cause huge cash flow problems. 

Simply stated, it takes a lot of cash (money in the bank) to run even a small business.  It takes cash to make payroll each week. It takes cash to purchase materials.  It takes cash to cover overhead costs (rent, utilities, insurance, advertising, etc.). It takes cash to fund the ever-increasing receivables.  It takes cash to pay for increased inventory as the company grows, and, it takes cash to expand the company.

The irony is that most trades companies are started by a tech that used to work for someone else.  How much cash does the typical new startup company have?  The answer is little to none.  Bingo, the average contractor begins with cash flow problems that only increase as the company grows.

Many years ago, I was presenting a full day seminar for the Mr. Electric franchise.  During one of the breaks a contractor approached me stating he had a major problem.  When I asked him what it was, he began by explaining that his company had a 30% profit.  My mind instantly said, “Ah, that’s the problem.  This contractor doesn’t understand the difference in “Gross Profit and Net Profit.”  As most reading this know, gross profit is what is left after the company subtracts the cost of labor and materials (cost of goods) from the sales dollars.  Net Profit is what is left after cost of goods AND overhead costs are subtracted from sales.  Stated another way, Net Profit is what is left after all expenses are paid.

I verbalized this to the contractor.  His response blew me away.  He stated that the company actually had a “net” profit of 30%.  After everything was paid, they had 30% left.  I responded by asking him “Then what’s the problem?”  He went on to explain that his company had literally quadrupled sales over the past nine months and that if he couldn’t secure a loan, and/or a line of credit, by the end of the week he was going to have to close his doors. 

Cash flow, or in reality, the lack of cash flow puts more companies out of business than any other single item, except improper labor pricing.  Most companies try to overcome the lack of cash flow by creating a line of credit with the bank, and/or using their distributor as their bank.  How you might ask?  By delaying payment for parts and equipment and using that money to cover the cash flow items we discussed earlier.  The problem with both is obvious.  Receivables and inventory WILL grow as the company grows.  At some point the line of credit will be maxed out and the company will be placed on C.O.D by their distributor. Need I say more?

There you have it, the three major points of growth that have the potential of putting the company out of business.  The first growth problem occurs when the owner moves from the field into the office.  The second bump in the road is when gross sales reach a $1, $2.5, $5 or $10 dollar a year.  Finally, it’s rapid growth that creates major cash flow issues.

When it comes to growth, be proactive.  Be totally aware of the company’s ever-changing costs of doing business and adjust your hourly rates as needed to maintain profitability.

Three Points of Growth – Part 1 of 3

By Tom Grandy

The most misunderstood term within the trades industry is the word GROWTH.  Growth is generally considered a good thing.  Most company owners, especially new ones, visualize a direct relationship in their mind between growth and profitability.  If the company does more work it will make more money.  If they do a lot more work, they will make a lot more money and if they can double sales, they will double profits.  Although this can be the case, it’s usually isn’t.   There are actually three distinct periods of growth that literally have the potential to put the company out of business. 

Owner Moves From The Field To The Office

The first point of growth that has the potential of putting a company out of business is when the owner moves from the field into the office.  This transition typically takes place when the company has between 3-5 technicians in the field.  This point of growth affects the owner and the company in two very specific ways, one mentally, and the other financially. 

From a mental standpoint, it’s a really tough transition.  The new owner is transitioning from a technician mentality into a business owner mentality and therefore, needs to learn the business side of the business.  That is a really hard transition and usually one the owner never really thought about prior to starting the new business.  The new owner left the old company for freedom.  The new entrepreneur visualized working in the field, doing sales, and having the freedom to pretty much do what he or she wanted to do when they wanted to do it.  However, things have now evolved to the point where someone needs to actually run the company.  How does the new owner learn how to do that?  They didn’t learn it in high school and nothing was covered on the business side of the business during trade school.  As a matter of fact, an individual can actually receive a PHd in Business from Harvard University and still not know how to run a small business.  The degree may help the individual run a corporation but normally is of little value when it comes to running a small trades company.

So how does the new owner learn the business side of the business?  Generally, it’s by the road of hard knocks.  The owner does some things right and a few things wrong. If their learning curve is not flat, they learn a few things along the way and the company survives.  If not, we all know what happens.  There a few business seminars and webinars that teach the basic principles of running a profitable business but who has time to learn.  Things are busy.  Fires need to be put out and those pesky customers need to be taken care of.  Working 60-70 hours a week leaves little time to attend a class, even if it’s online.

The bottom line is that making the mental transition from working in the field to working in the office is tough.  It is a necessary transition but a really hard one.  It’s called “forced growth”.

At the same time the new owner is adjusting to the mental transition, there is also an economic shift taking place.  When the owner was working in the field, he was productive labor (and happy).  However, when the owner moves from the field into the office, their salary just became an overhead cost.  The additional overhead generally requires the company to increase their hourly rate to the customer between $8.00 and $12.00/hour, just to make the same profit they made before.  Ask yourself a question.  Of all your friends, neighbors or relatives that made the transition from the field into the office, what percentage actually raised their hourly rates $8.00 to $12.00/hour?  The answer is really close to zero.  So, what happens?  The company begins that one to three-year process of going out of business.

There you have it.  The first point of growth that has the potential of putting the new company out of business.  We will discuss the second period of growth that can put a company out of business.  Here is the link to Part 2 of 3 – Three Points of Growth.

Know the Root Problem Before the Repair is Performed

By Tom Grandy

How many times has the tech quickly diagnosed the repair and performed the work only to find out the problem was not fixed?  It happens a lot and it tends to create some very unhappy customers.

Just this past month I was in my father-in-law’s home that had been shut down for over two years.  He had moved to an assisted living facility.  When we opened the house the list of needed repairs was quite long.  The plumber had to replace two toilets, fix a water leak and install a new sink facet.  When the work was completed, he left.  The next day we noticed the water pressure was very low in the faucet he replaced.  Nearly two weeks went by before we could get hold of him to return and fix the problem.

Note to self:  Be sure repairs are done properly and systems tested, prior to allowing the tech to leave the home.

When he returned to work on the facet, we noticed there was water under the hot water heater, or so we thought.  Yes, it was an older piece of equipment so his immediate suggestion was to replace it. Well, that sounds really simple but the house ran on propane so a propane tank had to be located.  That alone was not an easy task and eventually required one be purchased from a distributor 45 minutes away. 

When the water heater arrived he installed it.  After the work was completed, we noticed there was still water around the tank.  Come to find out there was a leaking pipe in the wall right behind the water heater.  He removed the drywall and made the repair.  Once completed he mumbled, “We may have just replaced a working hot water heater!”  We were not happy customers.

The point of both situations is obvious.  Slow down and do the repair correctly the first time.  Test the repair (faucet in our case) before leaving.  Also, before recommending replacement of a piece of equipment, be sure you know the root cause.  Failure to do either of these things can cause the company to lose a customer.  This particular tech will not be returning to my father-in-law’s home.

Have you considered starting your own business?  If so, you will need to learn the “business side” of the business.  You don’t have to re-invent the wheel.  The Profit University Audio Series covers every conceivable business topic from selling the business to where to find techs.  The program contains over 275 audio presentations with a new one being posted each month.  Now for the good news.  The investment is normally $24.95/month but with this month’s Website Special the investment is only $19.95/month and it stays at that rate as long as you are a monthly subscriber.  Don’t miss this unique opportunity.  Sign up today.