Hal started his Heating, Ventilating and Air Conditioning (HVAC) repair shop called Hal’s Heating ten years ago after leaving Heating Incorporated. At Heating Inc., Hal was tired of being an employee and always felt like he could do better on his own. When Hal first started, he sent out some flyers in his local community and started getting recognized. He then added a few discount coupon advertisements in some bulk mailers that got him a few more clients on a monthly basis.
Early on in Hal’s new business, he decided to lease an office facility with a small warehouse and loading dock and hired two more technicians. At present, Hal’s Heating employs 8 technicians, each with their own van, and three office staff to handle invoicing, general book keeping and dispatching service technicians. Hal’s company has all of these employees, and yet, he seemed to be working longer hours than ever; and is constantly worried about keeping his staff busy. While Hal’s Heating was always busy during the start of the heating season and the start of the cooling season, there were several idle technicians on the slow days…. to the point that Hal seriously considered laying off a few technicians. While his business had gained some momentum over the past few years, Hal found himself working longer hours than he had ever worked with Heating Inc.; and he wasn’t doing the work he loved.
Hal felt his poor management and lacking decisiveness in business were the primary cause of the poor profitability of Hal’s Heating. He’d been in business for 10-years and had revenues of close to $800,000 per year and he couldn’t seem to make a reasonable profit.
Hal didn’t get it. Other HVAC service companies seemed to do okay. How could they manage with the ups and downs; and still keep their technicians employed and making money. In fact, he was sure that his competitors were charging more money; paying their service technicians more; and still their owners seemed to have lots of money to spend on themselves and their families.
If it wasn’t bad enough that his company wasn’t making money, he had to hear complaints from his wife constantly on how he never took vacations or spent enough time at home.
Hal was surfing the net trying to find out how to better manage his business when he ran across a workshop being hosted by Coach Russ, a local business coach. The workshop was entitled “Balancing Profits & Happiness” and it was only 2-hours. Hal attended the workshop out of curiosity more than anything.
Hal was intrigued. Russ indicated that it was fully possible to enjoy your work and spend quality time with your family. Hal spoke to Russ at the end of the group session to see if Russ could help him improve the profitability of his company while being able to take time to enjoy his family. Russ agreed to meet with Hal for 30-minutes to see if there was any way he could help Hal with his company.
Hal started, “Russ, I really liked some of the questions you posed to the group during your workshop, but feel like my situation is different.”
Russ responded, “Tell me about your situation, Hal.”
“I’ve been in business for 10-years, have 8 technicians and an office staff and cannot seem to make enough money to spend time with my family.”
Russ smiled as if he’d heard this story before, “Tell me about your business plan.”
Hal gave a sheepish grin, “I did a business plan, but really haven’t looked at it much. Our HVAC service business is pretty straight forward.. handle calls and keep customers happy… and make sure they pay their bill.”
“What would happen if you raised the prices that you charge your customers?”
“We’d lose the customers we have. I’m in charge of sales and my customers tell me that the reason they are picking us is because our competitors are too expensive.”
“What would happen if you set your prices to be the same as your competition?”
“Russ, I just told you. We’d lose customers!”
“Hal, why are your competitors not losing customers with their higher prices?”
Hal thought for a minute, then responded, “Because they have great name recognition. Many of them are owned by large corporate HVAC equipment manufacturers.”
“Why does the name of your competitors matter to your clients?”
“Because customers know that company will be around for quite a while and be able to follow up on any warranty issues.”
As the pricing discussion wore on, it was apparent to Hal that he was simply making excuses for having lower prices than his competition. He realized that he could probably raise his prices, but was now trying to rationalize why he had to have low prices to Russ. At the end of their 30-minute introduction, Russ outlined the thinking that was most likely causing Hal’s predicament of low or non-existent profits along with a non-existent family life.
After hiring Russ, Hal and Russ met weekly to talk about various aspects of his business. After each session Russ would assign Hal homework; and Hal would try to complete his weekly homework. It was extremely stressful at first. Russ was not spoon-feeding Hal answers. Hal had to develop his own answers through his homework assignments. The first task for Hal was to develop a business plan based on the profitability he desired for his company. Hal realized that he was underpaying his technicians; and he was undercharging his customers. Hal’s next assignment was to create a plan to increase his prices and increase wages to his staff.
It seemed simple to raise his prices on paper, but Hal had difficulty selling his higher prices to his customers. Every time he would meet with a prospect, he was convinced that his prospective client would claim his quote was too high. When Hal thought this, he’d fall back to his old habit of discounting. It took several sessions for Hal to realize how he was harming himself and his business… and even losing customers due to his under-pricing habits.
Within six months, Hal saw his numbers turning around and Russ was now working with Hal on spending more time at home. As Hal had more time to spend with his wife, he found that their relationship had been difficult to get back to the place it was when they were first married. Hal and his wife had become so used to spending time apart, they needed to learn how to communicate and act when they now had the time they needed as a family.
After two years of coaching, Hal felt like he was in a place where he could leave his business for weeks on end without worrying that it would crash. His HVAC business was generating $1,000,000 per year in revenue with almost the same customers and staff with one exception. Hal hired a sales person to take his place. The fact was that Hal really didn’t need to come to work at all if he didn’t need to; but Hal had bigger dreams. Now that Hal’s Heating was firing on all cylinders, he wanted to duplicate his success with some additional branches. Russ helped Hal plan out an acquisition strategy to buy some HVAC service companies who were in Hal’s exact same spot only a few years earlier. The plan was to turn them around the same way they had turned around Hal’s Heating.
Hal could not believe the progress he had made in only two years of simply looking at his business differently. He was profitable, growing and could spend as much time as he wanted with his family.
As a business coach, I help my business owner clients generate the profit they need and the time they currently don’t have. I become super-excited when one of my clients has an epiphany that makes all of the difference in their company and their personal life. If you’re serious about moving your company forward, please download my 5-Part Formula to Business Success eBook below.
Note from the Author
My name is Jeff Schuster. I am a certified Life and Business Coach serving small business owners, corporate executives and others who want to transition from “expert” to “entrepreneur”. I have been a small business owner for most of my 30-years in the workplace. I grew an energy efficiency and renewable energy engineering and construction company from nothing to over $10-million/year and sold it in 2013. I now help other business owners make amazing progress toward their own dreams of business ownership independence and success.
As a long-time small business owner, I know how hard it is to create the business of your dreams while struggling with the financial realities of attracting prospects, converting those prospects into high-paying customers, and making money for you and your family. My biggest mistake in my past was not seeking the advice of wise counsel sooner than I did. I don’t want you to make the same mistake. I use a simple 5-Part Formula to Business Success in my approach to coaching business owner clients that will help you immediately improve your business’s profitability. Download this eBook to see how this 5-Part Formula will work for you.