Successful contractor entrepreneurs must keep one eye on the current season, with the other looking toward the next.
August may be smack dab in the middle of cooling season — with phones ringing off the hook from customers looking for A/C — but savvy contractor entrepreneurs know heating season is right around the corner and soon those calls will turn from “A/C service calls” to “heating calls.”
Transitioning between the seasons can be tricky if you don’t have the right processes, training and cooling/heating equipment to recommend to customers.
In this special report, I spoke with a panel of top contractor entrepreneurs from around the country about how they prepare for heating season during the throes of a hot humid summer, what equipment they recommend, and why manufacturer support is critical.
The panel includes Ken Goodrich, CEO of Goettl Air Conditioning in Las Vegas; Lanny Huffman, owner of Hickory Sheet Metal in Hickory, N.C.; Eric Knaak, general manager of Isaac Heating & Air Conditioning in Rochester, N.Y.; and Darryl Robinson, owner of Robinson Air in Lawton, Okla.
Here’s what they had to say.
How has business been this summer, amid the coronavirus pandemic, versus past cooling seasons?
Goodrich: Our summer season is on plan and significantly over 2019. January through May numbers were significantly over plan, and June was on plan.
Huffman: Amazingly, the replacement sales are better than last year and new HVACR commercial projects are about the same as last year.
Knaak: The season has been a strong once since Memorial Day. Very warm temps in the northeast have caused the residential market to explode and commercial construction has picked up. Commercial retail is still light, so our commercials service group is behind last year.
The continued heat and temperatures of 90F+ are unusual here and we have had a number of days strung together that exceeded 90F. We have everyone back and we are hiring, so it’s all good.
Robinson: We have had our busiest June of record. Partly because of the heat, but also because so many of our customers are staying home and running their air conditioning systems longer.
Are you having a difficult time keeping up with cooling demand?
Goodrich: Yes, as it has been for the last 35 years. There is always more HVACR demand than can be met.
Huffman: Indeed, we are.
Knaak: For service we have been scheduled out 3-4 days for some clients, but that is so we leave room for our service agreement clients to receive same day service. For installations we are booked out a few weeks but doing evenings and weekends to keep up.
If we had 10 more installers we could probably install 10 more systems every day for the next several weeks. There is creative scheduling and moving of pieces to maximize the season and so far the team is doing amazing.
Robinson: Although we have obviously not planned for or expected this pandemic, we have planned for growth this year and have hired the help we’ve needed in order to do so. We have continued to hire throughout this time to make sure we are staffed to serve as many customers as possible.
What problems, if any, have you run into this cooling season?
Goodrich: COVID19 training and personal protection equipment for our field personnel is a new challenge, as well as constant monitoring of their health and safety.
Our retail credit approvals have been impacted, as well as minor HVACR equipment shortages due to various factories closing during late Q1 and early Q2.
Huffman: The number one problem is finding qualified employees. We work with the community colleges, our chamber of commerce and several staffing agencies. The other problem, we are seeing longer lead times on equipment.
Knaak: Some equipment and service parts have been in short supply due to COVID19 and factories being closed. This has created a few issues, but nothing crazy. Our team has switched providers and parts to make it work.
Our vendor partners have done a great job of getting us what we need and adjusting shipments from various locations to meet the demand and we couldn’t do this without them. Our suppliers rock.
Robinson: Fortunately, we have not had as many cancellations as we expected with customers not wanting someone in their home.
We check the temperature of each coworker daily and have had a few that we’ve had to send home, then to get tested for COVID19. We pay them for the few days they are out waiting on results.
Again, fortunately, all who have been tested so far has had negative results and get right back to work. We have had delays in shipping and a few indoor air quality (IAQ) products have been hard to get.
With heating season right around the corner, how do you begin to prepare while demand for AC is still so top of mind?
Goodrich: We stay focused on our annual plan and pivot to the seasonality as needed.
Huffman: Our service manager has a heating season truck inventory and a cooling inventory. The first week in August, he starts pricing truck stock items.
Knaak: Our Isaac Training & Education Center (ITEC) is already preparing the fall classes and schedules are being created to handle the technical component. For the sales and operations staff, it’s a fairly seamless transition as many of the systems we sell in the summer include new heating equipment as well.
Inventory needs to be adjusted and min-max number adjusted, but that’s all behind the scenes work that’s being done.
Robinson: We are working on different specials such as “Free Upgrades” to new systems. Our “Pick One” specials will allow the customer to choose with each system purchase an additional free item. This may include free blown-in insulation, standard water heater, zero percent financing, whole home air cleaner, etc.
It feels like recording a Christmas album in the middle of July, but we have to think at least that far ahead.
What training is involved with preparing technicians for the switch from cooling to heating?
Goodrich: Our training on gas heating and heat pumps begins September 1, as well as IAQ, duct system upgrades and insulation. IAQ has been strong this year and we expect it to continue through the foreseeable future.
Huffman: The Air Conditioning Contractors of America (ACCA) has several quality assurance programs we use along with manufacturer training videos.
Knaak: The ITEC provides our Isaac University internal training as well as training for other companies who chose to send team members. Our fall schedule of classes usually includes Gas Heat 1, Gas Heat 2, Hydronics, Oil Heat and Heat Pumps.
These are 30-hour courses with a combination of classroom theory and hands on, with five classrooms and six labs we are able to provide a superior training and education experience to our team.
Robinson: We are really focusing now on Comfort Club sales. We will need to get these customers signed up so when the initial heating season does hit, they will be familiar with our service and what they can expect from us.
The more relationships we build in the shoulder seasons, the better our chances of gaining loyal customers in those busy times where the first company that shows up gets the call.
What equipment — both for cooling and heating — are you recommending to your customers?
Goodrich: We recommend Goettl HVACR Equipment.
Huffman: Primarily, we are Lennox and Trane dealers. In certain applications, however, we may use a different brand that may be a better ”fit.” We prefer to give our customers as many options as possible without confusing them.
Knaak: We use Lennox and Rheem for HVACR and Mitsubishi or Gree for mini-splits
Robinson: Our main line of equipment is Amana. Amana’s Lifetime Unit Replacement warranty gives us an edge over any other manufacturer.
Have you seen an uptick in customer demand for split systems?
Goodrich: In the Southwest U.S., the mix is approximately 57 percent split systems to 43 percent packaged equipment.
Huffman: No, most of our residential systems are split systems units.
Knaak: It’s the same as any other year. Again, much of what we install are complete and matched systems.
Robinson: We have seen an increase in demand for replacement systems. The fact that R-22 is no longer being produced has helped to move customers from a “repair decision” to a “replace decision.”
How critical is manufacturer support when switching seasons?
Goodrich: I find that the manufacturers are generally ahead of the contractors in that regard.
Huffman: Manufacturer support is critical any season.
Knaak: Manufacturer support is important, but the vendor relationship is critical. That’s why it’s so important for ACCA, Heating Air-conditioning Refrigeration Distributor International (HARDI) and Air-conditioning Heating & Refrigeration Institute (AHRI) to work closely together … the three-legged stool.
Robinson: When it comes to moving new equipment, we are in the same boat as the manufacturer, so it benefits us both to work together. For instance, we have in years past ran a “free furnace” special where our equipment supplier gave us special pricing on certain pieces of equipment for a limited time to help our sales and also reduce their inventory before the end of the year.
The trick is to find a solution, program or special that benefits us, the manufacturer and the customer.
What do you rely on most from your manufacturer partners?
Goodrich: Adequate inventory, on time delivery and after-hours availability.
Huffman: Warranty support, technical and training support, timely undamaged delivery of their product and competitive pricing.
Robinson: Good pricing is just the cost of entry. It is a given. Beyond that would be a good line of communication. For instance, are they having difficulty keeping up with the equipment they stock for us? Are there price increases on equipment or refrigerant coming soon that we need to prepare for?
Technical training on high end systems or service bulletins that correct problems in the field.
How will you use the lessons you learned servicing and installing AC during the coronavirus pandemic to address concerns for heating season?
Goodrich: Safety first, then discussing IAQ and system reliability with each and every customer.
Huffman: As to our employees, we have established protocols for interacting with the customer as well as protection while servicing HVACR equipment. We will also continue offering ionization, higher MERV filters, evaporative coil sanitizing and ensuring outside air requirements are set correctly.
Knaak: We will continue with the personal protective equipment (PPE) procedures, sanitizing and protecting our clients and team members the best we can.
We also offer a home disinfecting solution that is applied using a misting device that can add an additional layer of protection from viruses.
Robinson: We have gotten a pretty good handle on what our customers feel is important during this pandemic. Have we taken precautions with the health of our coworkers before we send them out? Are we using personal protection equipment to protect both our coworkers and our customers while in their homes?
The IAQ conversation seems to be much easier now so this gives us a great opportunity to educate the customer on what we can provide. The need is obviously there.
What steps are you taking to ensure employee, customer and community safety?
Goodrich: We installed more than 1,000 UVC lights in our employees’ homes for their families’ IAQ and peace of mind. We purchased 300,000 custom face masks and provide them to our customers, their families and anyone who needs one in the communities we serve.
In addition, we installed IAQ in each of our six office locations for our employees’ further protection.
Huffman: We adopted protocols the Centers for Disease Control and Prevention (CDC) recommends and information that ACCA has published in regard to COVID19. We also call our customers a day ahead to make sure they are healthy and are comfortable with us coming to their home or business.
Knaak: Education and enforcement on the proper use of PPE, hand washing, sanitizing and social distancing. There is zero tolerance for non-compliance. There has to be. Our supply chain and operations managers are sourcing so that we have a proper supply of everything we need.
Robinson: We continue to wear our PPE, wipe down surfaces, maintain a safe distance from customers and monitor coworker temperatures. We believe this will be the new norm.