Episode 2 – What are your challenges
Welcome back to the HVAC Accelerated Success Program. In aviation there are 4 main forces that interact on an aircraft, lift, gravity or weight, thrust, and drag. By controlling the relationship between these forces, you can guide the aircraft anywhere you want to go. When the relationship becomes uncontrolled a stall which can lead to a spin occurs. It is the pilot’s job to get the aircraft back under control before it is too late. Business’s also have 4 main forces that determine the company’s outcome, demand, expense, product, and competition. Just like in aviation when you are able to manage the balance of these forces it enables you to fly your business wherever you would like to go. When these forces become uncontrolled this is when in aviation or business, you lose control and unless you restore control you may be in for a disastrous outcome. This week we will explore specific indicators of these forces and look for opportunities to improve performance for each of the 6 companies participating in the Accelerated HVAC Success program. Once these areas have been identified we will look for the greatest opportunities for restoring balance. As business becomes more and more complex, we have more and more specialist available to help you succeed. The problem with specialization is we do not live in a world where one single quick fix can solve these complex problems. An aircraft and a business is a system and it is all about maintaining balance in order to accomplish your goals. The HVAC business cycle is a representation of this balance that must be maintained.
Season 1 Episode 2 – What are your challenges
In aviation four main forces affect the aircraft; life, weight, thrust and drag. Any one of these forces out of sync will cause the aircraft to spin out of control. It is the job of the pilot to get the aircraft back under control before time runs out. HVAC businesses also have four main forces that affect how they operate and determine their success.These forces are demand, expense, product and competition. Managing the balance between these forces will allow you to fly to new heights. When any one of these is out of sync it is the business owners job to get them back under control.
Unfortunately we do not live in a world where one quick fix can solve all the problems of a business. A business is a system and maintaining balance is the only way to accomplish your goals.
What are your challenges?
The question was posed to the participating contractors. An increase in income is always one of the primary goals for any business. While bringing enough in to sustain the business is a good place to be, making a profit is the goal of any business.
Are gross margins within range?
Overhead expenses need to be taken into account when calculating the gross margins. There is a difference between a gross margin and a profit. There are two types of expenses; working capital and operating expenses. Everything you need to pay your equipment, installers and material is the cost to deliver. Sales minus that equates to your gross margin. The cost of your overheads must be deducted off this gross margin to reach your profit.
Closing 50% of replacement leads?
Keeping track of your leads generated against the leads converted is important. If you aren’t closing deals you need to evaluate the process and find a resolution for areas that need work. It is vital to close at least 50% of your leads in order to grow successfully. If you aren’t then there is a glitch in your process.
Profitable company structure?
Being sustainable as a business is extremely important. You don’t want to be paying in just for the business to run. If that is the case then you need to re-evaluate and create a new strategy going forward.
Completed business forecast?
When you start a business you have goals that you would like to reach. Usually this equates to a monetary value. Each year your goals should increase and adjust as your business grows. It is important to stay on top of those goals and make changes in order to reach them. Max Air has surpassed the goals that they set for themselves by double which is a huge feat and one that deserves recognition.
Other question of importance
l Do you have a Google relevant website?
l Replacement using menu pricing?
l Do you make use of perfect pitch presentation?
l Have you established KPI’s for replacement and sales?
l Do you have a financial strategy in place?
Service and Maintenance
When it comes to service and maintenance do you have a call conversion strategy in place? It is important to have a plan to convert sales and to track those sales accordingly. This is how you gauge whether or not you need to readjust your operation in any way.
Financing replacements is something that should be offered due to the high costs of such a task. Many customers will opt for this in order to get what they want now but at an affordable monthly payment. In reality you should be financing at least 70% of your replacement jobs.
In order to be an option you need to be visible. Claiming the top spot or at least a spot on page one of Google is your highway to leads. In order to cement your position you need to establish keyword phrases on Google. Do you have any keyword phrases established on Google already?
Just as you measure the leads and conversions for replacements or installation of new units, it is also important to keep track of your service and maintenance calls. Establishing KPI’s for this area of your business is a key step in gaining an overall view of your business and how it is actually functioning and to gauge how profitable you are.
Keep track of service leads that come in and whether or not they convert. If they don’t convert you need to establish the why behind that. In this way you can identify where changes need to be made.
Are you making use of any software?
The use of software makes your business more streamlined, manageable and easy to monitor.
Do you have a branding strategy?
Building a brand is something that sets you apart from the rest in the industry. How you make customers feel when they recognize your brand is key to developing loyal relationships.
Do you have a recurring business strategy?
Recurring business is usually in the form of service plans. This kind of business is important as it is business that you are guaranteed to have for a period of time.
Is your marketing of a call to action nature?
This kind of marketing is the type that influences the customer to call you immediately. You basically put a value against the customer calling now. Provide something for free if they call for a certain service now.
Are you converting over 80% on inbound calls?
Converting inbound calls is important to your business. Many people request the call out to offer a price but when they are given the numbers they decline. It is time to start evaluating if you are sure that your price is a good one. There may be other issues at hand. Your delivery could be what sways the customer against you for instance. Rethink your strategy. Customers like to be given choices so that is exactly what you should provide them with as is the case with Good/Better/Best. If a customer is given the opportunity to choose for themselves chances are that they won’t sell the lowest price. People don’t want to be told what they should select. A good price is the price that the customer is happy with, you are happy with and one that allows you to cover all the bases.
Do you have an employee recruiting strategy?
Finding employees that are suited to your company and brand is not an easy feat. It is best to hire your employees young and train them according to your business and the service that you want to deliver. When you need people really badly, you hire bad people and that’s a fact. You take whoever comes your way in order to fill the position. Develop a process that allows you to have the ultimate person in every position within your company. Put together your idea of your perfect employee and use those guidelines when making the selection.
Do you know your customer?
You have to know and understand your customer or the customers that you want to attract. You have to hire people who believe what you believe. Your staff need to convey your attitude and message to your customers as if it was you speaking. By understanding your customer you will better communicate with them. How your company is portrayed to the public will affect your credibility within the community and among your customers.
Ensuring that your staff are happy in the work environment will affect your business operation and service of customers. Open communication lines are a vital key. Having a good relationship with your staff will only improve your business.
Challenges are made to be overcome. Be willing to work on the issues and put strategies in place to make the changes and increase sales. Build your business from the inside out, and if you ever need help, reach out to CI Web Group.