Get Your Business Working for You

(Getty Images)

You’re a great technician. You have all of your necessary licenses: a red seal plumber; a gas fitter 2; and you have your 313A refrigeration license. You’ve spent years working, learning, developing your craft and honing your skills. Now it’s time to take the next big step … business ownership.

Becoming an owner-operator means you run all operations, sales, marketing, accounts receivable, account payable and you’re doing all the installation and servicing of equipment. Once things start rolling, you will begin making a little more money and need to hire a technician in order to take on additional work and grow. Now you’re an owner-operator with an employee and a second truck.

Here’s where the “fun” begins. Being a business owner is hard — it’s really hard — and being an HVAC/R business owner can seem near impossible. There are a million moving parts literally and figuratively. This is why getting some extra help is a great option.

Hiring a business manager or a company to help manage your operations can be a scary thing, but when we break it down and look at what a business manager can do for you, it might be the easiest decision you make.

Strategic Planning and Goal Setting

A business manager will help in setting the long-term goals and creating a strategic roadmap for the company’s growth. Essentially, if you are working with the right team they will operate as a sounding board and help put together that business plan that you don’t have the time to do.

A manager can help analyze market trends, identify opportunities, and develop strategies to stay ahead of the competition. By working closely together, as a team, you make sure that every decision made contributes to the overall success of the business.

Financial Management

Maintaining healthy finances is essential for the growth and sustainability of any business. Managing cash flow and expenses is one, if not the biggest, challenge operations will face. Hiring a manager that can handle the financial aspects such as budgeting, forecasting, cost analysis and general expenses can help grow the bottom line and profitability. This type of advice can help to optimize pricing structures and identify areas where cost savings can be achieved.

Accountants alone are not always financial managers, they are not analyzing monthly numbers and guiding the business in the most profitable direction, and financial management is a key ingredient to success.

Marketing and Business Development

Promoting a plumbing/HVAC company and attracting new customers is needed for sustained growth. A business manager should develop and execute effective marketing strategies tailored to your specific target market and geography.

In today’s world, that involves overseeing digital marketing campaigns, managing the online presence, and leveraging various channels to generate leads and increase brand awareness. Don’t drive across the city if you can sell projects in your backyard.

Additionally, a business manager can explore business development opportunities such as partnerships with suppliers, manufacturers and help expand the business into different verticals to increase revenue potential.

Build Relationships with Suppliers

As mentioned, developing strong relationships with suppliers to negotiate favourable terms and discounts is an important business strategy. These days the competition is so fierce that it takes more than just a handshake and a cup of coffee to get the red carpet treatment.

You need to have actionable and concrete plans (see strategic plan and goal setting) to get the right pricing and payment terms. This helps you lower your material costs and improve your margins. Additionally, prompt payment to suppliers can lead to better credit and overall health of your company.

Combat Seasonality

For the longest time the industry has spoken about the “off season” of HVAC, but here’s a secret: the companies that have the right business systems in place don’t have an “off season”.

A business manager can help put programs in place to prevent the fluctuating demand typically experienced during the year. Yes, of course, peak heating season and peak cooling season should always generate more revenue, but that doesn’t mean spring and fall can’t be a huge success for you as well.

I’m sure you’ve heard the term monthly recurring revenue, this is where a business manager can help implement monthly recurring revenue streams.

These few points provide a very broad overview of the areas any new or existing business owner needs to work on in order to succeed. I’ll dig a little deeper into each of the above subheadings in future articles (where space permits).

There is a reason that private equity money is making its way into the HVAC industry. It’s because the people with the money realize they can acquire HVAC companies, create efficiencies to scale the businesses and multiply their investment. Instead of that happening, let’s do it ourselves. <>

Mathew Pottins has worked with HVAC manufacturers and suppliers for over a decade, and his passion is in growing the industry. Pottins recently launched a manufacturer’s representative company (Laylan Hydronics and HVAC Sales). He’s also a partner in an HVAC business management services team and can be reached at mathew@laylanhvac.com.