How to grow your HVACR business into a million-dollar company
In 2015, I had a good-paying job at a reputable HVACR company. I was a respected commercial service technician, and I enjoyed my job. Although everything was good, I was attracted to what Michael E Gerber calls the “entrepreneurial myth” – more money, more freedom, respect, an abundant life, all of it. So, with four kids and a stay-at-home wife, I quit my steady job and set out to live out the American dream. I had about $20,000 in a retirement account and a couple thousand in my savings account when I took a leap of faith.
In the beginning, about 99% of my work came from a couple of property managers whom I’m pretty sure owned all the worst homes in our area. These were the worst roach-infested, rat-infested homes you can imagine. I’m also positive that I gave a discounted rate to every crazy cat lady in town. It was bad. One time I was working at a rental and the tenant stole my torches out of my van while I was trying to fix their AC. It wasn’t good, but I had a family depending on me. So, through pure pig-headed determination, I made it work.
Finding a Formula to Grow
After about two to three years of working in the worst possible HVACR environments, I realized that the one-man show, being the cheapest guy in town, was not the American Dream at all. I knew I had to find someone who could help. I started listening to business podcasts to educate myself. At first, I listened obsessively to The Home Service Expert Podcast with Tommy Mellow. I noticed you featured this in HVACR Business’ monthly column Management Resource Shelf. It was very helpful for me. He talked about growing your company, delegating, managing, marketing, customer service, and all of the necessary components that go into running an HVAC company. Although I had been in the industry, honestly I had never been exposed to this side and I bet that many newer contractors can relate. In one episode he interviewed Ken Goodrich the CEO of Goettl who gave his story of how reading the E Myth by Michael E Gerber changed his life. After hearing about that interview, I immediately purchased the book. I figured if it worked for him then it could work for me. It did. It has changed my whole perspective.
Running Your Business Like a Franchise
The E Myth approaches building your business as if you plan to franchise it. And to do that, you need documented processes and procedures for everything. By default, if you follow the steps, you then have a very good foundation. So, I followed his advice. Gerber uses McDonald’s as the best processes and procedures example. It is an international multi-billion dollar company yet it still has such good processes that it can be run, in some cases by after-school workers. I took the steps seriously and spent hours writing job descriptions and processes – even for jobs I didn’t even have yet. I covered all the positions – from managers to bookkeepers, marketing staff, warehouse personnel, to every other position I could think of. At the time I was still a one-man show. I had one full-time employee. But the practice of setting up the foundation for my business helped to clarify my vision. I knew that I wanted to work directly with homeowners and get away from the property managers. I could not wait to make this a reality. The first step for me – build an online presence and hire some great people.
Putting Principles Into Practice
Now that I had my job descriptions and some processes, I set about finding people to fill these positions. In 2017, I got lucky with my first hire; he was wanting to change careers. Several of his family members were in the HVAC trade whom I had worked with in the past and he had some experience, so it worked out great. He is still with me today and is my top salesperson and like a brother to me. I hired my stepson as a service technician. He brought several of his friends and I was able to bring a few more of my friends onto the payroll. By 2020 I had seven employees. At that time, we were working out of my home and we rented a storage building to put leftover materials in. In early 2020, we moved into our first building a 4500-square-foot office/warehouse space. It was beginning to feel like a real company but knew I was going to need some help if I was going to take it further.
Get a Coach
In 2020 I signed up for coaching with Business Development Resources (BDR). They were a huge help in training me to be more business-minded which included accurate books, knowing my numbers, presenting options to customers, offering to finance, and how to absorb those costs and also help to redefine those job descriptions and how to manage people which I had never done. Finding some coaching in the areas I just listed is huge if you are trying to go from a technician to a business owner or even grow to the next level. I highly suggest you spend the money and get a coach or mentor to help. I have the hustle, but most of the business end is not common sense or at least it was not for me. Click below to read our 20 Questions interview with Kim Archer VP Training, BDR
By the spring of 2021, having followed all the steps laid out by other successful entrepreneurs, I felt like we had enough customers to end relationships with our property management companies. Today we have a team of twenty-five employees. We have an awesome leadership team, and we continue to grow. We have a warehouse manager, a service manager, an installation manager, and a financial controller. 2023 is looking to be our best year yet.
Money vs. Value
One of the key components, as I grew, was no matter how big my company got, I knew who I was and what I wanted it to represent – my personal and professional values. After you define your processes and procedures, identify your values. I often return to these basic concepts.
I have a couple of values that are firm and I always go back to them.
1. As a Christian, I hold true to the value: Do the right thing. It isn’t always easy because making money at all costs is not one of my values. I try my best to help people. I treat my coworkers, our customers, and our community with respect. I always treat them like I want to be treated, and even when it’s hard, I do the right thing. I feel like that is why good things have come to me.
2. Hire good people who are flexible enough to change. As we grow, we have had to consistently change processes and procedures. Any good company will experience these growing pains at various points. For us, the dynamics have changed as we added new jobs, our customer base changed, and the market fluctuated. Nobody likes to change so it was key for me to have a great group of people who would be willing to change with our growth.
3. Find good coaching or mentors. BDR has been great for me. And we were fortunate to be accepted into the Nexstar Network in late 2022. See our 20Q Interview with Julian Scadden. Our experience with them has been great so far! They have some incredible processes, procedures, and a large network of highly successful contractors. They are also helping us raise the bar on our customer experience. I couldn’t be more excited to continue to take advantage of their resources.
4. Commit to consistent improvement – I read a lot, listen to podcasts, and study the companies and owners I look up to. Tommy Mellow, Ken Goodrich, Ismael Valdez, Chris Yano, Paul Kelly, Josh Kelly, Morris Jenkins, Victor Rancor, Jimmy Hiller, Peterman Brothers, and the list goes on – and HVACR Business Magazine is a great resource. None of the people or companies I follow probably know who I am but I pay close attention to them. I listen to what they say and I try to implement the steps they suggest. These are mentors and they don’t even know it.
The $20,000 I had in my retirement account when I started is still there. I never touched it. We are getting better every year and don’t plan to stop or slow down. No matter what stage you are at, find someone who is doing it well, emulate them and you can get there.
Bart Hawley is Owner, and CEO of Hawley Heating and Cooling.
Bart Hawley shares his journey from tech to inexperienced business owner to successful entrepreneur and adds ways you can achieve the same outcome.
Bart Hawley, Owner and CEO of Hawley Heating and Cooling. He shared thoughts about his management style, the importance of giving back, and big plans for expansion and acquisition over the next five years.
Tips for creating a positive company culture in HVACR
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A pervasive issue in the HVACR industry has been the shortage of qualified talent to fill the demand for work. It’s an industry-wide problem plaguing HVACR business owners. Over the years we have published articles on the need for collective recruiting efforts within the industry, and the difference these efforts do make.