If you are considering starting up a HVAC contracting company, it’s essential that you are aware of exactly what that entails. This article will cover some of the most important tips to help you run a business that will generate a sustainable, thriving contracting operation.
1. Planning
Before starting your journey, planning marks the first port of call for any successful business. You need to have goals for your business, as well as a plan to accomplish them. Prior to thinking about the numbers, you ought to think about your company mission statement and your unique selling point. What makes you stand out from the competition? Next, think about your financial aims. What are your goals in terms of sales, gross, and net profit? You should aim to generate a detailed breakdown of these figures, as this will help you stay on track. By its very nature, HVAC is somewhat seasonal. Therefore, it’s important to realize that you will have ups and downs throughout the year. Make your plans with this in mind. Consider how many sales you will require, both in terms of general inspections and premium services such as installations. Another key factor is staffing. How many HVAC technicians are you going to need? How many sales people will you require? You also need to consider other practicalities like holidays, weekends, and potential absences. Consider where your business will come from. How much will you rely on repeat customers? How many referrals do you expect? How much new business will you have to acquire through advertising? The next big consideration? Your required monthly cash flow. Think about your sales figures, then think about expenses like overhead. The difference here should be a positive amount. Cash flow considerations are especially important for contracting businesses, since payments typically arrive in large amounts and only once expenses have already been covered. You need enough funding in place to bridge this gap (especially when you first start a company). Planning may seem a little daunting, but the reality is that it’s a relatively simple process. With proper planning, running a successful business becomes much easier.
2. Stay on Track
With each passing month you should perform a review of your company finances, including all statements and balance sheets. Determine where your profits and losses sit. Rarely do businesses fail when because they can't turn a profit. Usually, they fail because they simply run out of cash. Keep tabs on other important factors too, such as average sales, sales per worker, and losses. Then, carry out comparisons between times of the year, seasons, and years. This will allow you to better understand your market, learn how to improve sales, and plan for the future. Keep tabs on service calls, leads, service contracts, and your cash flow balances. Ensure your bookkeeper keeps track of all of these records, so that you can easily access them throughout the week. Naturally, not everyone loves analyzing numbers, but it’s an essential aspect of running a business. Set aside a particular time each week to go through everything. Don't wait until it becomes overwhelming.
3. Scout For New Talent
Another fundamental aspect of running a contracting business involves scouting for new workers. Always keep an eye out for potential newcomers into your business. Take note of individuals who you believe may make a great addition to your company. If you aren’t in a position to hire someone immediately, start forming a relationship. That way you know you’ve always got someone trustworthy when you suddenly find yourself in a better position. Useful qualities that go a long way in this industry include competence with key subjects, including mechanics and a good level of general HVAC knowledge. A co-worker with a credible HVAC technician certification will likely be far more trusted among potential clients than those without.
4. Get Involved in Your Local Community
As the face of your company, it’s important to maintain great communication and trust among your co-workers and local community. You can easily boost your company’s reputation and awareness by participating in local activities and organizations. You might feel these activities take you away from your business, but at the same time they bring potential customers closer to your company. Inside of your business, your attitude and communication can have a huge impact. Maintaining a positive outlook can provide motivation to employees and increase morale. In the end, your business is an expression of yourself, so make sure it’s a good one. Maintain good, positive communications with your staff and they will feel appreciated and know where they can make improvements. You should offer your staff individualized attention and provide one-on-one meetings on a regular basis. This gives employees the chance to air concerns and provide you with feedback you may find useful. Each year, it’s a good idea to share all of the pertinent company stats with your staff so they understand where the business currently stands. This allows them to feel more connected with the actual running of the business and feel more responsible for how it operates day to day.
5. Entrust and Assign
As the owner and person who has probably invested far more into the business than anyone else, it can be difficult to let things go. However, you have to share the burden and trust your co-workers. They may not do everything in the same order or exactly how you would do it, but you will have to let go of this hang up to truly grow your business. Create a team and a set of standard operating procedures that will make your business run smoothly without your involvement, and you'll achieve growth.
6. Continue to Learn
Things change all the time, and the HVAC industry is no different. New legislation that impacts the industry always looms, and new innovations and technology (like HVAC software) are constant realities. Therefore, it’s essential to stay prepared and commit yourself and your team to a life of learning and knowledge seeking. It’s easier than ever to stay on track with the latest and greatest industry changes and innovations. Read trade magazines, keep in touch with HVAC industry pros, follow popular blogs (like this one!), and attend annual conventions in your area. The bottom line is simple; if you don’t keep up to date, your business will quickly fall behind. This is a guest post by Dave Miller, an HVAC tech who now dedicates himself to sharing knowledge on his website HeatTalk.com. Dave has worked for over 20 years in the HVAC industry and for the last 5 has run his own contracting business. Dave can be found on Twitter with the handle @heattalkcom and you can also find him on Facebook.
