The HVAC industry is growing. However, many HVAC businesses can't seem to grow along. I recently spoke with an HVAC industry expert on the challenges faced by HVAC businesses today. So, I want to share some of the countermeasures.
Vicken is the Chief Technology Officer at Kinetix Air. He had more than 30 years of experience in the HVAC industry. He shared 5 strategies that HVAC business owners can adopt to grow their HVAC business in today's world.
Here is the 5 strategies you can adopt to grow your HVAC business:
- Strategically Invest in Your Technicians Skills
- Take Advantages of Low Seasons
- Focus on Your Service Quality
- Enforce a Good Inventory Management System
- Utilize Technology to Control Operating Costs
Generally, there are many ways to improve and grow your HVAC business thereby being successful in the future. However, many suggestions lack clarity and explanations. Therefore, many HVAC business owners find it quite risky to follow those suggestions.
Hence, detailed explanations that makes sense (practical) to existing HVAC business owners are better for them to gain more insights and eventually proceed to take real actions.
1. Strategically Invest in Your Technicians Skills
It is not hard to understand why you need to invest in your technicians' skills. In fact, it is common sense to have great technicians so that you can handle different kinds of services and maintain quality.
However, strategically investing in your technicians' skills is the key to differential yourself from your competitors.
Basic HVAC Trainings
But still, basic HVAC trainings are essential because according to statistics, the HVAC industry is experiencing a severe labor shortage. Fifteen percent shortage, to be exact, between 2016 and 2026.
You can work with schools and vocational institutes to provide internships and mentoring programs to aspiring employees. This allows you to develop in-house talent. Besides, there are many great training organizations across the country such as HVACclasses.
You can provide in-house training to your current employees to continually equip them with the latest knowledge and skills needed to provide exceptional HVAC services to your customers.
A great place to start is online HVAC courses from providers like Udemy which offers more than 450 HVAC-related courses online. For more advanced studies, ASHRAE’s instructor-led HVAC design and operation courses are great as well.
Meanwhile, you can encourage your technicians to read free online articles like those published on my website to gain new knowledge and keep up with the industry. It's better if they can subscribe to get notified of new posts.
Modern technologies like VR and AR (or the VR course offered by Lennox) can be utilized for simulations so aspiring technicians and employees can learn HVAC techniques from anywhere. However, they are a more advanced type of training and thus, cost a lot more than online courses.
Strategic HVAC Trainings
Basic trainings are good but you need to be specific in what should your technicians learn. For example, mini splits getting popular nowadays. However, the installation cost is high because there are still not many competent HVAC technicians on the market.
Hence, you can take this opportunity to equipped your technicians with skills to deal with ductless air conditioners and heat pumps.
Types of Mini Split Indoor Units
Mini splits are new to many people. So, they tend to only consider using wall-mounted indoor units for every room, not realizing that there are other types of indoor units that may better suit certain applications.
For instance, a ceiling cassette mini split is more suitable than a wall-mounted mini split in a sunroom with full-height windows. I've shown how it is done in my article Is Mini Split Good for Sunroom?
If your technicians are able to explain the mini split system to homeowners, you have a better chance to secure the job than your competitors.
Mini Split for Cold Climates
Many people are having trouble when using a mini split in cold climates. If your technicians have the knowledge to select a mini split with the appropriate operating temperature, you can expect new customers to reach out to you.
Return on Investment
By focusing on skills that are useful and relevant for the future of your HVAC business, your return on investment becomes very attractive. Nevertheless, you need to find ways to retain your technicians. Otherwise, your company will become a free training center.
A good way to retain your technicians is by forming an employment contract. It'll ensure that your technicians stay with you for 5 years or more after the training is done thereby securing your investment in them.
However, forcing your technicians to sign the contract is not a long-term solution. Instead, you can build a safe and supportive environment (culture) so that your technicians stay no matter what your competitors offer to them.
2. Take Advantages of Low Seasons
HVAC companies have always been faced with concerns over seasonality. Many of them deal with it by reducing their marketing efforts, which in turn, make these seasons even slower.
Hence, you need to put efforts into low seasons and make your business predictable and stable throughout the year.
Create Special Offers
Even though it sounds counterintuitive, amping your marketing efforts before the slow season begins is the best approach. For example, you can create special deals to attract more clients. Try pitching services to other seasonal businesses and providing them a “special offer” for HVAC check-ups and maintenance.
Sell to Existing Customers
Another strategy is to reach out to your existing customers. Instead of focusing too much on finding new customers, it's less costly and more effective to market your services to your current customer base.
Use social media to promote your HVAC business and interact with your customers. It is proven to be more cost-effective than traditional marketing.
Another helpful tactic is to adopt a contra-cyclical strategy for promotions focusing on your clients' heating challenges during the late summer and early fall seasons and shifting the messaging to a cooling focus at mid-winter so that you’ll be top of mind when the seasons change and folks are ready to buy.
Personally, I find this strategy relatable when I was working as a service manager. Many folks are looking to service their air conditioners or heat pumps before the next season comes, especially hotels.
While your competitors are reducing their marketing efforts, you can take this opportunity to gain more market share. However, you must be able to retain your customers by focusing on service quality.
3. Focus on Your Service Quality
Every HVAC business owners understand that it is important to keep a high standard of service quality because when it comes to marketing, word-of-mouth is still king. Meaning, every customer you encounter will have but good words to say about your business.
The principle here is to make your customers ever so satisfied that they will be much more willing to tell their family and friends about your company. However, it is easier to said than done.
All HVAC companies throw bells and whistles in an effort to satisfy their customers. So, how can you stand out from the crowd?
Strengthen Your Reputation
One way to beat the competition is to manage your reputation. Hold fast to your core values. Find employees who embody and represent your core values. You should be working together to create a solid reputation that customers will look up to.
Reputation comes with consistency. Your technicians must be consistent in their service quality in order for you to build your reputation. Hence, you can create some sort of technician rating system or customer feedback system to keep your technicians accountable.
Whatever you do, ensure that you're offering value to your customers. Value-based services are those that lead to lasting customer relationships.
Instead of performing basic checkups and maintenance, try to provide little advice here and there that will help your customers to avoid troubles. Do not inject the mindset to your technicians such that they don't tell problems so that you got more businesses to do in the future. It is a toxic culture and your customers will find out sooner than you expect.
In order for your technicians to be able to point out flaws and give suggestions and advice to your customers during visits, your technicians need to master the skills. In other words, they need to be specialized.
Rather than providing all types of HVAC services, focus on a few specializations. This allows you to focus on high-quality services and introduce technological innovations that can make your business more efficient.
Often, specialized services have a higher chance to impress your customers and exceed expectations which can potentially bring you more customers through word-of-mouth.
4. Enforce a Good Inventory Management System
HVAC companies rely on tools and equipment to provide exceptional services. However, the biggest challenge is keeping organized and on track of inventory.
You know how it can be extremely frustrating when you can't find the tool or part of what you need for a job because your warehouse is cluttered.
There are many ways to manage your inventory including manually recording each transaction on a book which is not a systematic way.
Instead, try to follow the 6S of HVAC business:
- Sort – Keep your workplace organized. Sort out the tools that have been sitting everywhere and create an area where all of the extra tools you need are securely placed.
- Set in Order – List down all your tools and where to access them. Use labels for containers or storage areas for easier access.
- Shine – Create cleaning stations for everyday use. A cluttered workplace makes things harder to find. If daily is too much, do it weekly is fine.
- Standardize – Train and inform your team about handling, storing, and cleaning tools and equipment rules. Print diagrams and checklists for your team to ensure that everyone is on the same page.
- Safety – Provide training and information on how to use tools and equipment safely.
- Sustain – Ensure that the new inventory management approach is strictly enforced. Consistency is the key to ensure your staffs stick to the new system.
Meanwhile, try not to create too many forms, checklists and processes. Based on my experience as a service manager, I find it very difficult for technicians to follow complicated processes. It is inefficient.
Hence, I try to summarize things and make them as simple as possible. I like to use the “one-page clarity” approach which is to put all different categories of transactions into one single page on Google Sheets.
I prefer to use Google Sheets rather than Microsoft Excel because everyone can edit and record at the same time. It is all synced in real-time.
Furthermore, your store or warehouse should be responsible by only one person. Make that person accountable and all staff must go through the person in charge before taking or putting any stuff in the store/warehouse including yourself.
Otherwise, frequent overriding will mess up the whole record and you can't manage your inventory properly.
5. Utilize Technology to Control Operating Costs
Reducing costs has always been a challenge not just in the HVAC industry but in all other industries. For HVAC businesses, costs include marketing, insurance, vehicles, special equipment, and labor.
The best way to battle the high costs of running an HVAC business is to plan and organize all your expenses.
Here are some ways to reduce your business costs:
- Make sure your pricing is up to date – You should be charging right for every service you offer. Revisit your pricing guideline and check if you’re on par with the competition.
- Track expenses accurately and regularly – Use accounting software systems to easily manage your cash flow. Otherwise, a detailed Google Sheets can do the job as well.
- Maintain equipment – Create a plan for keeping your HVAC tools and equipment in good condition to prevent untimely replacements. You can save on HVAC tool and air handling unit costs by following regular preventive maintenance routine checks.
- Cut staffing costs – Consider part-timers and on-call employees during low seasons to lower your overhead and labor costs. Also, invest in hiring top talent who are less likely to make costly errors.
If you are still running your business using multiple software platforms that slow your efforts rather than streamline them, you should consider re-engineering your workflows.
At the very least make sure your teams have the tools to create, share, collaborate and store key documentation easily and securely. You can start with something as simple as Microsoft teams or Google Workspace. Or, consider the Design Engineer Starter Pack to boost your team's overall technical skills.
Nowadays, lean management approach is adopted by many successful organizations. Perhaps, you can consider transforming your company if your overhead cost is too high.
The HVAC industry is growing. The market is expected to reach $367.5 billion by 2030, with a CAGR rate of 3.9 percent. Even so, the industry is not without any challenges. HVAC companies need to be prepared for these challenges so they can continue to grow their business and succeed.
Nonetheless, challenges are part of any business. The good news is, you can turn those challenges into opportunities. With the right mindset, careful planning, and strategy, you can grow and thrive in your HVAC business amidst the challenges that lie ahead.
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