HVACR Business MARCH 2020 by HVACR Business

Leadership is Ongoing Pete Grasso 5

Preparation is Key Jodi Peter 15

The Foundations of Your Rock-Solid Estate Plan Keven Prather 16

M&A Runs Hot for HVACR Brooks Crankshaw 18

All About Smart Maintenance Joe Samel 19

HVACRBUSINESS.COM MARCH 2020 / VOL.15 / NO.3

THE ART OF ADVERTISING:

GETTING IT RIGHT

Fleet Management Protects Your Bottom Line pg 10 Transition from Truck to Desk pg 12

ALSO INSIDE Â» Ruth King on the Laws of Profit ....................14 Industry News.............................................................20 Product Focus................................................................21 20 Questions with Danielle Putnam President of The New Flat Rate .....................22

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CONTENTS

MARCH 2020 / VOL.15 / NO.3

F E AT U R E S

The Art of Advertising: Getting it Right The goal of your advertising should be to stand out from your competition, offer a compelling solution and increase brand recognition and sales. By Kelly Borth

Protect Your Bottom Line with Fleet Management

How to Stop Turning Wrenches (And Grow Your Business)

Advanced fleet management technology can help HVACR businesses manage the many pressures of handling a fleet of vehicles. By Kevin Aries Time is finite and, when you absorb all the roles in your company, you’re spread too thin and likely not doing any of the tasks well. By Patrick Lange and Michael Scirocco

C O LU M N

Wealth Rule 2: Separate Business Expenses from Personal Expenses You can enjoy the fruits of your labor. Just don’t do it to the detriment of your company. By Ruth King

Preparation is Key

Wills and Trusts: The Foundations of Your Rock-Solid Estate Plan

Despite Economic Slowdown, M&A Runs Hot for HVACR

5 Things to Know About Smart HVACR Maintenance

If you don’t have a good process, profits will suffer and customers will not be taken care of in a timely manner. By Jodi Peter As with any decision, there are both positives and negatives to a will. The benefits of writing a will far outweigh the drawbacks. By Keven Prather HVACR business owners should explore the options for selling their business or acquiring others today. By Brooks Crankshaw With today’s technology your firm can now offer detailed, customized information on a homeowner’s system, driving engagement and renewals. By Joe Samel

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20 21 22

Editor’s Notebook Never stop learning — and never stop developing your leadership skills. By Pete Grasso

Industry News Product Focus 20 Questions with Danielle Putnam President of The New Flat Rate and Immediate Past President of Women in HVACR

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THE HVACR MANAGEMENT MAGAZINE

EDITOR’S NOTEBOOK

BY PETE GRASSO TERRY Tanker Publisher ttanker@hvacrbusiness.com PETE Grasso Editor pgrasso@hvacrbusiness.com MEGAN LaSalla Art Director mlasalla@hvacrbusiness.com BRUCE Sprague Circulation Manager bs200264@sbcglobal.net BARBARA Kerr Executive Assistant bkerr@hvacrbusiness.com

ADVERTISING STAFF EAST COAST/SOUTHEAST JIM Clifford Regional Sales Manager Tel 201-362-5561 Fax 201-334-9186 jclifford@hvacrbusiness.com MIDWEST ERIC Hagerman Regional Sales Manager Tel 216-409-3246 Fax 440-731-8750 ehagerman@hvacrbusiness.com WEST COAST TERRY Tanker Publisher Tel 440-731-8600 Fax 440-731-8750 ttanker@hvacrbusiness.com

HVACR Business, founded January 1981, is a monthly national trade magazine serving contractors, mechanical engineers, manufacturers, manufacturer representatives, wholesalers, distributors, trade associations, and others in the heating, ventilating, air conditioning and refrigeration (HVACR) industry primarily in the U.S. The editorial focus and mission of HVACR Business is to provide business owners and managers with the very best business management concepts available. Critical topics covered include leadership, management, strategy, finance, sales, marketing, training, education, staffing, operations, human resources, legal issues, customer service and more. We are dedicated to helping contractors master these key management skills and provide them with the resources necessary to build strong, profitable companies. Every effort is made to provide accurate information, however, the publisher assumes no responsibility for accuracy of submitted advertising and editorial information. Copyright©2020 by JFT Properties LLC. No part of this publication may be reproduced or retransmitted in any form or by any means, including, but not limited to, electronic, mechanical, photocopying, recording or any information storage retrieval system, without the prior written permission of the publisher. Unauthorized copying may subject violators to criminal penalties as well as liabilities for substantial monetary damages up to $100,000 per infringement, costs and attorneys’ fees. This publication should not be utilized as a substitute for professional advice in specific situations. If legal, medical, accounting, financial, consulting, coaching or other professional advice is required, the services of the appropriate professional should be sought. Neither the authors nor the publisher may be held liable in any way for any interpretation or use of the information in this publication. The authors will make recommendations for solutions for you to explore. Any recommendation is always based on the authors’ research and experience. The information contained herein is accurate to the best of the publisher’s and authors’ knowledge; however, the publisher and authors can accept no responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof. Subscription Rates: Free and controlled circulation to qualified subscribers. Non-qualified persons may subscribe at the following rates: U.S. and possessions: 1 year $48; 2 years $75; 3 years $96; Canadian and foreign, 1-year $108 U.S. funds only. Single copies $8. Subscriptions are prepaid, and check or money orders only. Subscriber Services: To order a subscription or change your address, write to HVACR Business, 31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039 or call (440) 731-8600; or visit our Web site at www.hvacrbusiness.com. For questions regarding your subscription, please contact bkerr@hvacrbusiness.com. HVACR Business (ISSN 2153-2877) Copyright ©2020 is published monthly by JFT Properties LLC,31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039, Phone: 440731-8600. Periodicals postage is paid at North Ridgeville, OH and additional mailing offices. (USPS 025-431) POSTMASTER: Send address changes to HVACR Business, 31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039.

31674 Center Ridge Road, Suite 104 North Ridgeville, OH 44039 Tel: (440) 731-8600 Fax: (440) 731-8750 Web site: www.hvacrbusiness.com (ISSN: 2153-2877)

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Leadership is Ongoing

ver the years, we’ve published many articles on the topic of leadership. It seems to be one category no one can learn enough about. Month after month, leadership (along with financial) articles consistently rank amongst the most read content on hvacrbusiness.com. When speaking with contractors, the topic of leadership often comes up as something they’re interested in reading about. While we’re comitted to providing new content every month, our entire library is available online and much of it is a good refresher. After browsing through some past leadership articles recently, I thought it would be a good reminder to share some of these nuggets of wisdom here.

LEADERSHIP VS. MANAGEMENT Managing people also means looking after them and their needs, listening, and involving them whenever possible. For most HVACR business owners or general managers, filling the role of manager means generating revenue, assigning work and financially managing the company. Growing a business and keeping it profitable requires tremendous time, energy and stamina, and it can seem natural to focus on the work that needs to be done, rather than the people who will be doing the work.

THE RIGHT PEOPLE IN THE RIGHT ROLES Matching individual talent with a role is not an easy task. Top performers in one environment can be mediocre in another. Conversely, mediocre performers may thrive in a new environment. Intangibles, such as attitude, culture and behaviors, however, ultimately determine a candidate’s success. Similarities in intangibles between your team and your company will create a higher engagement level, leading to greater productivity and better retention. — Mike Abrashoff, December 2017

EMPOWER YOUR MANAGERS Leading managers is different and more challenging. It requires more patience and more coaching. Nobody wants someone to consistently be watching over them, they need the freedom and flexibility to do things their way. A common mistake is to skip a level of management and go directly to the people because you have no faith in your managers. Do not meddle. Coach, teach and train.

Never stop learning, and never stop developing your leadership skills.

This is where leadership comes in. To make your business successful in the long term, it’s important to nurture leadership traits in yourself and in potential leaders for your company’s future. — Mike Moore, January 2019

THE GENIUS OF LEADERSHIP The amount of energy, time, desire, passion and sheer will required to make your business grow and prosper is enormous. Yet, rarely do you see the owners working on improving his/her own leadership skills — to grow themselves personally so that, as the business grows, the owner stays ahead of the needs of the business and the people inside of the business. You need to frame your leadership practices to be responsible to your people, not for your people. As a leader, you have to be able to hold them accountable for the work they perform at the standards you’ve established, and that means you have to create an environment of accountability and standards in the first place. — Gary Elekes, March 2018

— Bob McEwan, November 2017

HOW TO GROW AS A LEADER The many great leaders who have impacted their organizations in such profound ways all over the world have taught us that leadership is about service to others. The ability to show humility is one of the greatest strengths a leader can have and allows them to build trust and respect from their team. It’s our job as leaders to create an environment in which our team members feel comfortable enough to fully engage themselves, which will ultimately result in a strong culture. A strong culture will lead to long-term success. — Jeremy Noll, August 2017

DON’T BE AFRAID TO BE THE BOSS As much as we hate to admit it, our relationship with our employees sometimes resembles the parent/child relationship. We’re responsible for the actions of our employees, we give them direction and they often come to us for advice, both professionally and personally. As leaders, we’re often tasked with pulling out the highest quality and most productivity from our team. This requires us to be purposeful and diligent. At the same time, we usually end up having feelings of care and compassion for our co-workers. — Steve Schmidt, July 2015

HVACR BUSINESS MARCH 2020

THE ART OF ADVERTISING:

GETTING IT RIGHT

The goal of your advertising should be to stand out from your competition, offer a compelling solution and increase brand recognition and sales. BY KELLY BORTH

reat advertising needs to accomplish a multitude of things — and in just a few short seconds. It needs to deliver the right message to the right audience at the right time when there is a need. It is a mash-up of research, competitive advantage, an appeal of emotions, the offering of a resolution that demonstrates how your audience can triumph over their issue — oh, and you need to place that advertising where your target market will consume it. It is both a science and an art. How is that for a challenge?! Balance all these things, and you’re on your way to having effective advertising that will garner results. It is not rocket science, but it does take the right amount

You need to be able to deliver key messages that position your company differently in the marketplace. of effort to get it right.

UNDERSTAND YOUR AUDIENCE If you could live a day in the life of your prospective audience, what would you experience? What are their daily frustrations like? What determines a good day and what contributes to making it a bad day? What do they want? What would improve their situation? What do they need to change their current circumstances?

HVACR BUSINESS MARCH 2020

Understanding your audience is imperative to being able to offer a solution that incites action.

KNOW YOUR DIFFERENTIATION If you are unsure of how your products or services are different than what competitors can offer, you should begin with uncovering your company’s unique distinction. If you don’t, you will risk looking like — and sounding like — your competitors.

You need to be able to deliver key messages that position your company differently in the marketplace. The goal is to stand out from your competition, offer a compelling solution and increase brand recognition and sales. Do you offer a simple three-step process? A simple solution? Is your service comprehensive? How can you make that part of your differentiation? Do you specialize in uncommon services? Are your service technicians factory certified? Do you offer one-day service? Create a toolbox of differentiating factors and leverage them in your advertising. But first, consider how that differentiation makes a difference in the world of your target buyer — how does it

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solve a problem, satisfy a need or a desire? So, before you commit to the expense of advertising, be sure you can answer a few questions:

Frequency of advertising is a factor — rarely does running a single ad get the results a company desires.

• How is your company different from your competition? • Are your products or services better? How? Why?

It is when you have an intimate understanding of your audience, when you link your company’s unique offerings and promote your products or services with a message and imagery that elicits an emotional appeal in a creative, meaningful and memorable way, that people will respond.

• Is your company more innovative? How? Why?

And, of course, have a call to action. Tell them what to do next to help you solve their concerns.

• Do you have a proprietary procedure that is exclusive to you?

BE WHERE YOUR AUDIENCE HANGS OUT

EMOTIONAL APPEAL CREATES ENGAGEMENT

Know all the places where your prospective customers are engaging. Know when they are engaging. Know how frequently your company needs to be showing up to build name recognition and advertising recall to elicit action — rarely does running a single ad get the results that a company desires. So, frequency of advertising is a factor.

In 2015, REI — a specialty outdoor retailer headquartered near Seattle — announced its #OptOutside campaign, closed all of its retail stores on the biggest shopping day of the year, gave employees the paid day off on the Friday after Thanksgiving, and encouraged everyone to enjoy a day outdoors with their families. Since then, the wildly popular #OptOutside has grown from one Friday in November to a whole source of online content on REI’s website, where people can find resources for outdoor activities near them, learn about REI’s partnership with state and federal parks and participate in REI’s Opt to Act Plan program. The program challenges people to make a difference 52 weeks a year by taking action to reduce their impact on the planet, such as committing to using half as many single-use plastic items, buying food in bulk and taking your own reusable bags to the grocery store. REI sells sporting goods, camping gear, travel equipment and clothing to people who love the outdoors. It also offers other services, such as outdoor-oriented vacations and encourages people to enjoy the outdoors. Other competitors do the same. So, what makes them different? When answering “why,” you’re selling the purpose, the mission and the vision of your company — the emotional explanation of why your business matters. This is the core of your brand and is what ultimately compels brand loyalty. This is what attracts customers who share the same beliefs and values — the customers who will become the company’s brand advocates. REI’s “why” might state, “We’re in

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business to encourage people to enjoy the outdoors. We have a responsibility to encourage people to reduce our impact on the Earth, get active and leave the world a better place to help improve the lives of others. We help people #OptOutside.”

That advertising might have gotten a few laughs and was memorable from a recall perspective, but it was not effective in getting the phone to ring. Your goal is for people to not only remember your ad but remember your company as well.

Using another company as an example: TOMS Shoes might offer a large assortment of comfortable shoes for men, women and children that are wearable from day to night. Yep, a lot of shoe manufacturers can claim this same thing.

That’s where meaningful advertising comes into play. Memorable and meaningful advertising compels an emotional response from the receiver. It can be humorous. It can spark empathy. It can address fears. It can elicit guilt. It can show affection. It can promote patriotism. It can exemplify unity.

A “why” message for TOMS Shoes might state, “We’re in business to help improve lives. Many children in Third World countries don’t have adequate shoes to protect their feet. With every product you purchase, not only will you enjoy a comfortable pair of shoes you can wear all day long, but TOMS will also give a new pair of shoes to a child in need. One for One.” So, understanding how your solution, what you have to offer your target audience and how you can address their greater needs, concerns and issues, helps your advertising to have an emotional appeal that engages people with your brand and provides a greater reason for brand loyalty.

BE MEMORABLE IN A MEANINGFUL WAY Think Super Bowl. Think about a great commercial or ad that you saw. Have you ever caught yourself talking about a hilarious commercial but forgetting which company or product it was promoting?

It demonstrates its understanding of the needs, wants and desires of the target audience and it shows that audience how that resolution can triumph over their issues. So, beyond entertaining and engaging, it is demonstrating how it makes their life or their situation better. Some good examples of memorable advertisements are Geico’s funny gecko, Allstate’s Mayhem character and Flo from Progressive Insurance — all raised the bar for advertising in the insurance industry.

And don’t forget the part of the formula where a company needs to show up when that prospect has a need. That is a tricky one, but Google has solved that for a lot of consumers. But don’t get fooled by thinking Google alone is the answer. Be sure consumers know your name and understand what your brand stands for when that need does arise. Create a compelling reason why — in a sea of options — a prospect in need should choose your company. u

Kelly Borth is CEO and chief strategy officer for GREENCREST, a 30-year brand development, advertising, strategic and online marketing and public relations firm that turns market players into industry leaders. GREENCREST works with companies to establish strong brands that increase sales and grow brand value for their businesses. Contact 614-885-7921, kborth@greencrest.com, or for additional information, visit greencrest.com.

At the same time, ASPCA’s sad images of neglected and abused animals with the unforgettable Sarah McLachlan song playing in the background was such a successful campaign that it raised $30 million and has been referenced in many television shows and movies. A memorable ad often becomes a part of pop culture. Can you hear me now?

HVACR BUSINESS MARCH 2020

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PROTECT YOUR BOTTOM LINE WITH FLEET MANAGEMENT

Advanced fleet management technology can help HVACR businesses manage the many pressures of handling a fleet of vehicles.

BY KEVIN ARIES

VACR professionals and owners have to be ready for anything while on the job â&#x20AC;&#x201D; from helping ensure quick customer communication in the winter when there are heating issues, to helping keep technicians safe on their journeys to and from job sites. These concerns often play out in how a company invests in technician vehicles, technology and even training that has long term implications on the bottom line.

HVACR businesses can utilize fleet management software in combination with video dash cam technology to help protect against false claims in the event of an accident. For instance, while businesses may aim to increase the number of customers reached in a day, they must strike a balance in order to help keep drivers safe while still

HVACR BUSINESS MARCH 2020

servicing customers quickly and efficiently. Advanced fleet management technology can help HVACR businesses manage the many pressures of managing a fleet

of vehicles. At its core, fleet management software is a mobile workforce management platform that leverages GPS tracking technology to provide fleet managers visibility and insight into vehicles and asset location with near real-time precision. In addition to tracking location, it can provide road conditions, monitor unsafe driving behavior and track vehicle maintenance history. Implementing this technology is one way HVACR fleet managers can prioritize

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safety and help improve customer satisfaction, while also helping to improve the bottom line. Here are five ways this technology can help.

IMPROVE EFFICIENCY

Fleet management technology tracks data from the vehicle’s engine control module and can share service alerts with a fleet manager.

Service companies are on the lookout for ways to improve productivity, while maintaining high quality work and customer satisfaction. With fleet management technology, route optimization software allows fleet managers to create strategic routes for drivers, which can help decrease the overall number of routes, while increasing the number of customers serviced. This also helps to save on fuel costs and can help balance jobs dispatched across drivers.

When businesses actively work to improve efficiency, service and results, it can help bring better business results and increase customer referrals. Overall, fleet management technology provides businesses with the necessary tools to help improve safety, protect assets and increase productivity — from monitoring driver behavior, tracking vehicles and assets with the GPS capabilities, to utilizing route optimization. With these capabilities, HVACR businesses are better equipped to future-proof the business today. u

Fleet management technology can also help businesses react to and manage unanticipated situations. For example, inclement weather and road closures can have serious implications on the safety of technicians.

Kevin Aries leads Global Product Success for Verizon Connect, helping build software solutions that optimize the way people, vehicles and things move through the world. Working predominantly with field service businesses, Kevin spends his time understanding the problems and solutions of the service industry to improve customer experience. For additional information, visit verizonconnect.com.

Fleet management technology provides weather and traffic overlay information, so managers have the visibility and insight to help drivers navigate new routes and avoid traffic jams or weather-related road closures. This not only helps to protect drivers when they need to concentrate on the road but helps to limit delays during such instances.

LOWER INSURANCE COSTS

PROTECT ASSETS FROM THEFT

The data provided by fleet management technology can also be used for insurance purposes. For example, fleet managers can share driver performance and vehicle use reports with insurance companies to negotiate lower rates and discounts. This data illustrates that a company is prioritizing safety and is taking the necessary steps to help prevent future accidents.

GPS tracking can also help reduce vehicle theft and unauthorized vehicle usage, all of which can affect insurance costs. The tracking technology can pinpoint the location of assets and vehicles, and in the case of theft, help authorities recover the stolen property.

Moreover, HVACR businesses can utilize fleet management software in combination with video dash cam technology to help protect against false claims in the event of an accident. In instances where a driver is accused of being at fault in an accident, owners can use video data for a clearer understanding of what happened. In some cases, companies have leveraged video data to completely overturn incorrect police reports that held a company liable for an accident. Video data is increasingly becoming a company’s first line of defense against costly legal action.

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By using GPS tracking, fleet managers can help improve arrival times, enhance driving routes, save time through automation and digital reporting, and track driver location, which all help to deliver better customer results and experiences.

While there is no theft-proof solution, leveraging fleet management technology adds an extra layer of defense and can give fleet managers and HVACR business owners additional peace of mind, while also reducing the costs of replacing vehicles or increased insurance.

REDUCE VEHICLE MAINTENANCE Making sure vehicles are in working order is an important part of keeping drivers safe, but vehicle maintenance can also become a costly business expenditure. Fleet management technology tracks data from the vehicle’s engine control module and can share service alerts with a fleet

manager. These alerts can help extend the life of a vehicle and prevent breakdowns by tracking vehicle health and scheduling maintenance in advance. In addition, fleet management technology tracks harsh driving behavior at the vehicle level, specifically harsh braking, harsh acceleration, excessive idling, excessive speeding and speeding versus the posted speed limit. Fleet managers can use the empirical harsh driving data to coach drivers on unsafe behavior, which over time can increase vehicle wear and tear if unchecked. Ultimately, driver coaching paired with data from GPS fleet tracking can help reduce unnecessary repairs.

IMPROVE CUSTOMER SATISFACTION A key aspect of business is satisfying clients, so finding ways to improve the customer experience should be top of mind for businesses.

HVACR BUSINESS MARCH 2020

HOW TO STOP TURNING WRENCHES (AND GROW YOUR BUSINESS)

Time is finite and, when you absorb all the roles in your company, you’re spread too thin and likely not doing any of the tasks well.

BY PATRICK LANGE AND MICHAEL SCIROCCO

ost HVACR businesses start with an ambitious and talented technician that dared to take the leap and open their own shop. Somewhere along the way, they will get frustrated and realize their income is capped by the hours in the day. One man working for an hourly rate can only bill so much. The more lucrative route is to lead the business and other technicians by being a true CEO. Understand that time is finite and despite your best efforts, you can’t do it all.

The reality is, if you only make money when you are billable, you don’t have a business, you have a high paying job. When you are in the field doing technician work $45 net per hour x 2080 work hours in year = $93,600 owner benefit When you have 5 technicians working for you while you manage as the owner $25 net per hour x 5 technician x 2080 work hours per year = $260,000 owner benefit

When you absorb all the roles in your company (salesperson, technician, bookkeeper, and procurement), you are spread too thin and likely not doing any of these tasks well.

Other than the take-home pay, there’s another benefit too. Your business becomes sellable.

Instead, set a goal to get out of the truck and train others your way of doing business. If building a business and making more money is your goal, consider this simple math example.

The ‘one guy and a truck” business is nearly impossible. The reality is, if you only make money when you are billable, you don’t have a business, you have a high paying job.

HVACR BUSINESS MARCH 2020

It’s okay if that’s what the business owner wants, however, understand when you go on your last service call someday, at the end of your career, that’s it. There’s no payday at the end. Buyers are scared off from a business like this because it is never big enough to attract a substantial interest, and customer relationships are in danger of evaporating if the previous owner isn’t servicing them post-sale.

they are the best technician, with the best customer service skills and nobody can do it as they can. And they’re probably right. Thinking like an owner is much different than making decisions as an employee. You must move beyond this mentality, however, and understand that there are plenty of other capable people that can do the job just fine. The key is to train them in your shadow and follow through on your companies promise to customers.

HAVE FAITH AND LET GO Being the sole breadwinner for your company can be exhausting when others are counting on you.

TRANSITION FROM TRUCK TO OFFICE

Eventually, you will burn out because it’s not a challenge anymore.

Transitioning from the service truck to the front office is among the most difficult things to do for a growing business.

By not growing behind ‘a guy in a truck’ means you’re limiting your personal and financial potential. Be willing to get out of your own way.

Almost always the owner feels like

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GROOM YOUR REPLACEMENT Grow your talent. Find someone interested in the industry that may have some formal training and be their mentor. Go on calls together and focus on passing your expertise and philosophy to them.

You’ll make some mistakes, just try and not make the same one twice. Over time, you’ll have a wonderful business that someday can be sold for much more than you ever could make working for someone else. u

Patrick Lange is an experienced HVACR specific business broker with Business Modification Group based in Horseshoe Beach, Florida. For additional information, visit businessmodificationgroup.com.

Michael Scirocco has grown East Coast Air from one service vehicle and operating out of his home to building a facility in Surfside Beach, S.C. You can reach him at moving_mountains@aol.com.

Over time, you will gain more confidence in their abilities and they can run their own truck. Hiring junior people allows you to be able to afford them and not bring the bad habits learned at another company.

Setting designated times during the week doing site visits, providing leadership on complex jobs and interacting with key customers is a good use of time and what effective HVACR leaders do. SET TIME TO BE IN THE FIELD Most HVACR owners got started in the business because being outside and working with their hands was fun and rewarding. The thought of being chained to a desk makes them cringe. But being a good CEO doesn’t mean you have to be a slave to your laptop. Setting designated times during the week doing site visits, providing leadership on complex jobs and interacting with key customers is a good use of time and what effective HVACR leaders do. Avoid the temptation of getting sucked back into turning wrenches, however. Firmly stick to your blocked off field times. Growing a business is extraordinarily difficult and the reality is, most fail, but having bigger goals and scaling beyond yourself can bring peace of mind, flexibility and generational wealth. Along the way, there will be mistakes made by others that never would have happened if you were the technician doing the job but try to look at every hiccup as an opportunity to fine-tune your processes and train your team.

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HVACR BUSINESS MARCH 2020

FINANCE

BY RUTH KING

Wealth Rule 2: Separate Business Expenses from Personal Expenses

hat does separating business expenses from personal expenses have to do with wealth?

You can enjoy the fruits of your labor. Just don’t do it to the detriment of your company.

Building cash is critical for building wealth. Some HVACR owners use their business as a personal checkbook. They mix business expenses with personal expenses. When they need to pay for something personal, they write a check out of the business checkbook.

It is impossible, as the company grows, to build wealth if all of the funds are co-mingled. To have a business, you need a business checking account. Have separate business and personal credit cards. Even if all of the credit cards are in the owner’s name, have some that are used strictly for business and others that are used strictly for personal expenses.

In this case, it is difficult to tell whether their business is earning a profit or has a loss. Without profit, they cannot build wealth.

Many contractors go further when they issue credit cards to employees. They have specific restrictions on, for example, gasoline credit cards, in terms of what can be charged to that card.

Some have really great years with a lot of cash and go to “The Big Boys Toy Store.” Turning their business cash into personal enjoyment. You can enjoy the fruits of your labor. Just don’t do it to the detriment of your company. Make sure that you always have at least three months of operating expenses in cash.

Then, your bookkeeper MUST reconcile the credit card statements with the receipts for purchases turned in by employees. If there is not a receipt, then the employee pays the expense out of payroll deduction. This should be a policy put in place and signed off by the employee when he or she is issued a credit card.

In addition, I’ve seen business owners use business credit cards for personal expenses. The business pays for the credit card expenses, both business and personal. Yet, you say, “It’s my business and I can run it as I please.” That is true. Don’t fool yourself, however, when you review your financial statements every month. You cannot tell whether the business is earning a true profit when business and personal expenses are mixed.

CAUTIONARY TALE Here is Zack and Anna’s story, a husband and wife team who own an HVACR company. Zack and Anna started and operate an HVACR company with 10 employees. The owners and several of the employees have company credit cards. There were no controls on the credit cards. The employees took the clues from the Zack and Anna’s actions. When they got gas they also got food. When they went to pick

from personal is having a business and a personal checking account. This seems obvious to most contractors. There are many contractors, usually smaller ones, who have one checking account.

up supplies, they also got a few things for themselves. Employees saw Zack and Anna regularly put their personal expenses on the business credit card including travel, entertainment, PayPal purchases, Amazon purchases and more. In addition, they paid their personal utility and other expenses for their children and their homes through the business. Employees felt they could do the same. They were taking clues from the owners. Zack and Anna couldn’t understand why the company wasn’t earning as much profit as it should. They considered raising prices. Yet, they knew that wasn’t the answer.

HVACR BUSINESS MARCH 2020

KEEP PERSONAL EXPENSES PERSONAL With my help, controls were put in place. The company credit card was taken away from a few employees. Credit card statements were scrutinized. Receipts became required. Payment of personal expenses through the business stopped. And yes, Zack and Anna gave themselves a raise so that they could personally pay for personal expenses. What happened? For the first time, the owners could see if the company was profitable. Profitability actually increased because employees’ and owners’ expenses were not paid out of the business. At this point, the business could start building wealth knowing the profits were there. The first step in separating business

If you have been using your business for personal expenses, then give yourself a raise to cover the expenses that the business has been paying. Start thinking business wealth. And, if you want to build personal wealth too, then when profitability is continuously good, consider taking cash out of the business to start building personal wealth. But, remember to leave at least three months of operating expenses in cash in your business. u

Ruth King has more than 25 years of experience in the HVACR industry and has worked with contractors, distributors and manufacturers to help grow their companies and become more profitable. Contact Ruth at ruthking@hvacchannel.tv.

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MANAGEMENT

BY JODI PETER

Preparation is Key

t’s March and the calendar says it’s spring. But if you’re the owner or general manager of an air-conditioning business, summer is likely already on your mind. Air-conditioning companies make up to 70 percent of their profits during the summer months.

If you don’t have a good process, profits will suffer and customers will not be taken care of in a timely manner.

You’re undoubtedly working hard to find employees, review your business systems, and execute your marketing plan in advance of the most important 12 weeks for you this year. You know you need to grow revenue during this short window to make your goals for the year. You know you need this summer to build customer relationships and provide the customer service that makes a positive first and lasting impression. You know one misstep or unplanned event can have a tremendous impact on your ability to increase profit. You also know the need to prepare for your busiest season doesn’t change from year to year. You’re aware that the time to prepare for summer is now, before customers start calling. Here are the top six areas to focus on ahead of time to ensure you maximize your earnings potential for the entire summer season.

LEAD GENERATION Make sure you have a process in place to get the right technician to aged equipment calls; don’t forget to track the results! Properly trained techs know how

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A good place to start is to skillspractice scenarios from call center training with anyone who may answer the phones during regular or extended hours. Customers should never feel like they are talking to your “B” team, no matter what time they call.

FLEET & EQUIPMENT Nothing can stall a good summer season like having a truck break down. Make sure you have your entire fleet serviced ahead of time to prevent or fix any minor problems. Inspect your current equipment and make plans now to bring in any additional inventory or equipment you might need.

STAFFING At the end of the day, the biggest key to a good summer is having the right people doing the right jobs. Quality technicians and installers have completely different jobs. Your job is to make sure your employees are in the right jobs so they can be successful. If you take the time to focus on these six areas now, you’ll be well prepared for summer when the customers start calling! u

PRICING In order to meet your profit goals, you need to make sure your services are priced correctly. Calculate your break-even and desired profit and figure out what you need to charge. Your pricing needs to be strategic; it shouldn’t just be what you believe your market can bear, or a random dart on a dart board. Set realistic goals for the company and every revenue producer in your company.

emergency service calls. Then make sure you have staff trained in customer service working the extended hours.

to educate customers on all their available options, including replacement. They’re masters when it comes to explaining how customers could be overpaying utility companies by keeping a less efficient system running vs. replacement options. The details matter.

Include a close look at your transfer process for handing off an installation from your salesperson to your install manager and driving next-day installs.

INSTALLATION PROCESSES

HOURS OF OPERATION

Review your entire installation process with your staff. Revisit the technician training your staff has had or still needs.

Before summer arrives, establish whether you’re going to extend your hours of operation and how you’re handling

If you don’t have a good process, profits will suffer and customers will not be taken care of in a timely manner.

Jodi Peter, Nexstar Network’s Content Specialist, began her career in the trades as a service manager. Previously Nexstar’s Business Coach Manager, she’s delighted in helping businesses succeed since 2008. For additional information, visit nexstarnetwork.com, call 888-240-7827 or email membership@ nexstarnetwork.com.

HVACR BUSINESS MARCH 2020

ESTATE TAXES

PROVIDED BY KEVEN PRATHER, CFBS

WILLS AND TRUSTS

The foundations of your rock-solid estate plan

or so many of us, family is paramount. You probably expect to use your wealth to take care of your family in the here and now— health care, travel, college tuition and the like. But chances are you haven’t thought nearly as much about positioning your assets so they’re ready and able to help the people you love after you’re gone. Even if you have made some headway in this area, your plan for your estate is probably a little—and maybe a lot—out of date. If that describes your situation, don’t fret. Even if you have many moving parts to your finances, you can get on track by focusing on two main areas of estate planning: wills and trusts. Here’s how to do it.

WHERE THERE’S A WILL, THERE’S A WAY Read this next sentence three times in a row: Everyone should have a will. Got it? A will should be the basic foundation of every estate plan—the starting

As with any decision, there are both positives and negatives to a will. That said, we strongly believe the benefits of writing a will far outweigh the drawbacks. point for a well-conceived strategy to transfer assets at death. A will identifies precisely what you want to have happen to your assets and estate. Dying without a will means you have decided that the state knows what’s best for you and your family. In addition, dying without a will means you want to make the settling of your estate as difficult, as costly and as public as possible. As with any decision, there are both positives and negatives to a will. That said, we strongly believe the benefits of writing a will far outweigh the drawbacks.

Advantages: • You decide on the disposition of your hard-earned wealth. • Estate taxes are mitigated—especially when the will is part of a broader estate plan. • You specify who the fiduciaries will be.

Disadvantages: • You have to accept that one day—far in the future—you just might die. • There is a legal cost associated with writing up a will and with estate planning.

TRUST IN TRUSTS The second component of a smart estate plan is often a trust. A trust is nothing more than a means of transferring property to a third party—the trust. Specifically, a trust lets you transfer title of your assets to trustees for the benefit of the people you want to take care of—aka your selected beneficiaries. The trustee will carry out your wishes on behalf of your beneficiaries. Broadly speaking, there are two types of trusts: living (established while you are alive) and testamentary (created by your will after you’ve passed). Living trusts are becoming more and more popular to avoid the cost of probate. In the probate process, your representatives “prove” the validity of your will. The probate process also gives any creditors the opportunity to collect their due before your estate is passed to your heirs. There may be a long delay in settling your estate as it goes through probate. To add salt to the wound, probate can be costly.

COMPARING WILLS AND LIVING TRUSTS

WILLS

LIVING TRUSTS

Are viable only at death.

Can have uses while you’re alive.

Are public.

Are private.

Are not very good when you’re dealing with more than one state.

Are good in every state and not encumbered by states.

Must go through probate.

Can generally avoid probate.

Are less expensive to put in place.

Are more expensive to put in place and administer.

HVACR BUSINESS MARCH 2020

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IS A TRUST FOR YOU? 1. Are your beneficiaries unwilling or un-able to handle the responsibilities of an outright gift (investing the assets, spending the gift wisely, etc.)? 2. Do you want to keep the amount and the ways your assets are distributed to heirs a secret? 3. Do you want to delay or restrict the ownership of the assets by the beneficiary? 4. Do you need to provide protection from your and/or your beneficiary’s creditors and plaintiffs? 5. Do you want to lower your estate taxes? If you answered “yes” to any of the five questions, you may find it beneficial to set up a trust.

A living trust can avoid or mitigate the effects of probate. It is a revocable trust that you establish and of which you are also typically the sole trustee. The assets in your living trust avoid probate at death, and are instead distributed to your heirs according to your wishes. Living trusts are sometimes said to be superior to a will, but that is certainly not the case for everyone. It’s important that you understand how they compare. Is a living trust for you? It depends on

Keven Prather specializes in serving the complex needs of business owners through Financial Planning and Business Transition/ Exit Planning. Using a Total Wealth Planning approach, Keven’s objective is to turn complex problems into actionable, understandable and manageable steps, by collaborating with business owners, their family, and strategic partners.” Keven can be reached at (216) 592-7314 or kprather@financialguide.com. www.TransitioNextAdvisors.com.

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your particular situation. Nevertheless, you should certainly consider it in consultation with your advisor or wealth manager.

strategy, and make recommendations for getting your solutions current and in accordance with your wishes.

YOUR NEXT MOVE

For more information please call me at (216) 592-7314 or send me an email at kprather@financialguide.com.

We recommend that your estate plan be reviewed every year or two. The review should be conducted by a high-caliber wealth manager or tax professional—one who takes the time to learn what’s changed since you put your solutions in place, assess how those changes might impact your

Securities and investment advisory services offered through qualified registered representatives of MML Investors Services, LLC. Member SIPC. www.SIPC.org. TransitioNext AdvisorsTM is not a subsidiary or affiliate of MML Investors Services, LLC, or its affiliated companies. Supervisory Office: 2012 West 25th Street, Suite 900 Cleveland, OH 44113. 216.621.5680. This report is intended to be used for

ACKNOWLEDGMENT: This article was published by the VFO Inner Circle, a global financial concierge group working with affluent individuals and families and is distributed with its permission. Copyright 2017 by AES Nation, LLC.

informational purposes only. Neither MML Investors Services nor any of its employees or agents are authorized to give legal or tax advice. Consult your own personal attorney legal or tax counsel for advice on specific legal and tax matters. CEG Worldwide, LLC. is not a subsidiary or affiliates of MML Investors Services, LLC or its affiliated companies. VFO Inner Circle Special Report By Russ Alan Prince and John J. Bowen Jr.

Keven P. Prather is a registered representative of and offers securities, investment advisory and financial planning services through MML Investors Services, LLC. Member SIPC. www. sipc.org. Supervisory Office: 2012 West 25th Street, Suite 900 Cleveland, OH 44113. 216.621.5680. TransitioNext Advisors® is not a subsidiary or affiliate of MML Investors Services, LLC or its affiliated companies.

©Copyright 2018 by AES Nation, LLC. All rights reserved. This report is reprinted with permission from VFO Inner Circle. Unless otherwise noted, the source for all data cited regarding financial advisors in this report is CEG Worldwide, LLC. The source for all data cited regarding business owners and other professionals is AES Nation, LLC.

HVACR BUSINESS MARCH 2020

MERGERS & ACQUISITIONS

BY BROOKS CRANKSHAW

Despite Economic Slowdown, M&A Runs Hot for HVACR

urrent media tells a story of financial markets volatility, global economic ambiguity, trade wars, and health crises. Much of American business faces uncertainty in their outlook for 2020 due to these macro issues. HVACR equipment manufacturers sourcing inputs from Asia are particularly at risk, for example. But in the HVACR services market, which in most cases is managed on a local level, business is less variable and more predictable. This stability makes it possible for HVACR service companies to consider selling their business or acquiring others at attractive values. Even if a more general economic slowdown materializes, and HVACR customers decide to postpone elective maintenance or larger projects, revenues from maintenance contracts and emergency work will continue. Due to this predictability of revenues, as well as the resources available to acquirors (cash in the bank, credit availability, and a strong supply of financial partners), HVACR businesses will remain

HVACR business owners should explore the options for selling their business or acquiring others today. attractive to buyers in 2020. As is the case in the entire mergers and acquisitions market, no two transactions are ever the same. Completed HVACR acquisitions in 2019 illustrate this phenomenon, particularly for these midsize examples: CoolSys acquisition of ABC Refrigeration & HVAC. CoolSys is owned by private equity firm Audax which pursues a strategy of acquiring HVACR companies to increase scale and combining them under the CoolSys name. ABC, located in East Syracuse, NY, specialized in commercial refrigeration and air conditioning services. The transaction stands out as an acquisition by private equity firm with existing experience in the industry. Caltius Equity acquisition of Air Conditioning Innovative Solutions (“ACIS”). Caltius, another private equity

firm and new entrant into the HVACR industry, specializes in industrial business services generally. ACIS, based in McKinney, TX, evolved from a small service-and-repair company to become the leading provider of HVAC and Plumbing maintenance services in the Dallas/Fort Worth area. The transaction represents an example of a financial investor buying into the industry for the first time. ACCO Engineered Systems (“ACCO”) acquisition of Smith Electric Service. ACCO, a private employee-owned mechanical contracting company, sought to expand in the central coast of California. Smith, based in Santa Maria, CA, was chosen based on their reputation for customer service in the region. This transaction stands as an example of a company already experienced in HVACR expanding their territory and acquiring experienced technicians.

Most if not all of the HVACR service company owners that contact us have a nonstop flow of meeting requests and acquisition proposals from potential suitors. Having an exit strategy based on advice from an experienced deal attorney, accountant, wealth manager and banker helps to reduce the noise and allows owners to thoughtfully evaluate their options. Given that the market value of mid-size businesses remains high compared to historic experience, HVACR business owners should explore the options for selling their business or acquiring others today. u

Brooks Crankshaw is an HVACR specialist and Partner of The Chicago Corporation, an investment bank enhancing shareholder value by advising clients on mergers, acquisitions, debt and equity raising. For additional information, visit thechicagocorp. com. Securities transactions conducted through TCC Securities, LLC, an affiliated company, registered Broker/Dealer and Member FINRA/SIPC.

ENTER YOUR FLE ST ET DE E T N SIGN CO 18

HVACR BUSINESS MARCH 2020

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MAINTENANCE

BY JOE SAMEL

5 Things to Know About Smart HVACR Maintenance

he HVACR industry has been doing service the same way for decades. Today, sensor technology has made monitoring and remote diagnostics possible, making smart maintenance the future of HVACR service. If your company is using smart HVACR maintenance to give your customers confidence in your work and peace of mind about their systems, there are a few things you may want your technicians to know. New to smart HVACR maintenance? Maybe you don’t even know about it yet, but you can get smart about smart maintenance and help your company grow.

MONITORING Think about smart HVACR maintenance like the check engine light in your vehicle and the way automotive technicians can run a system check to identify maintenance issues for your car. With sensors on the HVACR system monitoring performance 24/7, homeowners and their contractors can be alerted to issues and help protect against system failure.

With today’s technology your firm can now offer detailed, customized information on a homeowner’s system, driving engagement and renewals. MAINTENANCE PLANS Fewer than 20 percent of homeowners buy a maintenance plan and up to onethird cancel each year. Many traditional maintenance offerings don’t bring peace of mind or enough perceived homeowner value. With today’s technology your firm can now offer detailed, customized information on a homeowner’s system, driving engagement and renewals.

PERFORMANCE CHECKS More than 40 percent of newly installed residential HVACR systems are not installed correctly per the EPA. Smart maintenance helps drive accurate installs and repairs. By running performance checks, technicians can confirm their work while

reducing callbacks and increasing productivity. Diagnostics from smart sensors can be enhanced to confirm and solve system errors, helping technicians perform with confidence on site.

your offering from other contractors. Offering a system featuring sensor technology and the ability to diagnose problems remotely positions you as the right partner for homeowners who are increasingly expecting their home appliances to be smart. HVACR is a big investment for a homeowner and smart maintenance provides peace of mind and a better service experience. The future of HVACR has arrived. Upgrade to smart. u

KNOW BEFORE YOU GO When your customers have smart HVACR maintenance installed, you can analyze a system’s problems remotely to “know before you go.” By analyzing sensor data, you can grab the right part and send the right tech for the job.

Joe Samel is the head of marketing commercialization for Sensi Predict, Emerson’s new smart maintenance solution. For additional information, visit sensipredict.com.

This helps with managing labor and reducing time on site. You can be a hero to your customer by not spending extra time running for parts or diagnosing the issue.

DIFFERENTIATE YOURSELF Selling new systems with smart maintenance gives you the ability to differentiate

FLEET DESIGN hvacrbusiness.com/topsintrucks

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HVACR BUSINESS MARCH 2020

INDUSTRY NEWS » Honeywell Launches Autonomous Building Sustainability Solution ATLANTA — Honeywell announced the launch of Honeywell Forge Energy Optimization, a cloud-based, closed-loop, machine learning solution that continuously studies a building’s energy consumption patterns and automatically adjusts to optimal energy saving settings without compromising occupant comfort levels. Honeywell Forge Energy Optimization, the first autonomous building solution focused on decreasing energy consumption, may deliver double-digit energy savings, decrease a building’s carbon footprint, and can be implemented without significant upfront capital expenses or changes to a building’s current operational processes. During a pilot at Hamdan Bin Mohammed Smart University (HBMSU) in Dubai, United Arab Emirates, Honeywell Forge Energy Optimization demonstrated an initial 10 percent energy savings. HBMSU is the first accredited smart university in the UAE and is known for its technology and innovation programs. Honeywell Forge Energy Optimization was applied to HBMSU’s existing building management system, which uses competitor technology to demonstrate the platform’s open architecture and hardware-agnostic capabilities. The additional energy savings is especially significant because HBMSU is regarded as a highly smart, energy efficient building with fully connected lighting, cooling, building management, power and efficiency control that is optimized based on real-time occupancy. The pilot also uncovered local control issues with the chiller plant and fresh air handling unit that were not adjusting to set points. “Buildings aren’t static steel and concrete — they’re dynamic ecosystems and their energy needs fluctuate based on ever-changing variables like weather and occupancy,” said David Trice, vice president and general manager, Honeywell Connected Buildings. “With Honeywell Forge Energy Optimization, we’re evolving building operations far beyond what would be possible even with a robust team of engineers and the rules they code in their building management system. By employing the latest self-learning algorithms coupled with autonomous control, we can help building portfolio owners fine-tune their energy expenditures to drive efficiencies and create more sustainable practices for our customers.” >> honeywell.com

Johnson Controls Announces Rooftop Unit Roadshow MILWAUKEE— Johnson Controls announced its 2020 “Game On” Roadshow, featuring rooftop HVAC systems from Johnson Controls, TempMaster and YORK. Beginning March 4th in Richmond, Va., this tour will bring the comprehensive and newly extended rooftop unit portfolio to locations across North America, including Los Angeles, Toronto, Atlanta, and more. As part of the tour, the 53-foot “Game On” trailer will house full-size displays of Choice 15-27.5T and Select 27.5-50T units to give visitors hands on interactions with the equipment. The agenda will also include engaging interactive experiences featuring the Premier 25-50T rooftop platform, Variable Air Volume Products (VAV), the Verasys Building Controls System and the Rooftop Center of Excellence for design and manufacturing. “Featuring cutting-edge efficiency, high performance and unbeatable reliability, Johnson Controls, TempMaster and YORK rooftop units are being implemented to build smarter and more comfortable environments,” said Matt Shaub, VP and GM of Commercial Ducted Systems. “The ‘Game On’ Roadshow will bring these products and information directly to our customers in a meaningful way and provide opportunities to learn about the latest technologies and developments in the HVAC market.”

Students Experience Engineering Firsthand at Trane DAVIDSON, N.C. —Trane collaborated with the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) and the Coulee Subsection of the Institute of Electrical and Electronics Engineers (IEEE) to encourage La Crosse, Wis., students to consider careers in Science, Technology, Engineering and Mathematics (STEM). Nearly 250 eighth grade students from 11 local middle schools visited Trane’s La Crosse facility this week, taking part in a competitive activity in which they designed a LEGO vehicle and provided detailed instructions to human “robots” to recreate it. Volunteers from Dairyland Power Cooperative, Michaels Energy and HSR Associates acted as the human robots, and provided supplies and planning support for the event. Students also toured the Trane laboratory and acoustics facility, learning about various career opportunities within the STEM fields, and experienced firsthand the engineering and programming opportunities in the heating, ventilating and air-conditioning (HVAC) industry. “This was a perfect opportunity to share the exciting world of engineering and other STEM fields with young students when they’re old enough to be considering careers, but still young enough to be making choices for their high school coursework,” said Kristin Sullivan, compressor design team leader for Trane. “These students may become the scientists and engineers who solve the climate and sustainability challenges of our future, and it was a great experience to see how enthusiastic these students were to learn more and get involved.” >> trane.com

Navien, Inc. Announces a Major U.S. Expansion VIRGINIA — Navien, Inc. will establish its first U.S. manufacturing and assembly operation in James City County, Va. The 300,000 square foot facility will be used as a distribution center for the first two years and begin the transition process & preparation into manufacturing operation in 2022 with the first stage of manufacturing expected to begin in 2023. “Navien’s decision to locate its first U.S. manufacturing operation in James City County demonstrates the competitive advantage that Virginia offers to international companies looking to expand into new markets,” said Governor of Virginia, Ralph Northam. “This project is an important win for the Greater Williamsburg region and our Commonwealth, as Navien will bring a key facility back into productive use, create 180 high-quality jobs, and utilize the nearby Port of Virginia as its gateway to the world.” Contingent upon regulatory permits and approvals, Navien’s current plans are to expand the existing facility starting in 2023, which will triple the footprint to nearly 900,000 square feet by 2026. “The close proximity of this property to the Port of Virginia and the flexibility to expand and allow for Navien’s continued investment over time helped us make this decision,” said Navien CEO Sangkyu Lee. “Establishing an East Coast facility will support Navien’s growth and allow for faster delivery to primary eastern markets while balancing current shipments coming into California. We look forward to working with the Virginia Talent Accelerator Program as we grow this facility and its importance to Navien’s overall leadership position in North America.” Distribution of Navien products from the new Virginia facility is slated to begin in April 2020. >> navieninc.com

With events held in more than 25 states, the “Game On” Roadshow is part of Johnson Controls overall commitment to customer success and innovation, including the recent opening of their Norman, Okla. Rooftop Center of Excellence, a 900,000 square foot laboratory and manufacturing space. >> johnsoncontrols.com/gameon

HVACR BUSINESS MARCH 2020

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PRODUCT FOCUS »

DAIKIN

DANFOSS

EMERSON

GREEN LINK

At the heart of the Daikin One ecosystem is the Daikin One+ Smart Thermostat, engineered to communicate seamlessly with all Daikin One ecosystem components. The Daikin One ecosystem includes the Daikin Fit system with communicating furnaces, evaporator coils and air handlers, the Daikin One Premium Air Cleaners, and the new Daikin One Home Air Monitor.

The Danfoss DSH 50TR with IDV technology extends the company’s range of scroll compressors for air-cooled and water-cooled chillers up to 150 TR per circuit in trio configurations, where traditional designs would otherwise require quadros or additional circuits.

The ASCO Series 158 Gas Valve and Series 159 Motorized Actuator is designed specifically for burner-boiler applications. The new products give OEMs, distributors, contractors and end-users a new combustion safety shutoff valve option that increases safety and reliability and enhances both flow and control.

Green Link Engineering has increased support strength by 40 percent on its Knuckehead universal base in response to customer needs in areas with high winds, seismic activity and other environmental fluctuates that can affect rooftop installations.

The Daikin One Home Air Monitor detects indoor air quality (IAQ) events and sends information to both the Daikin One+ Smart Thermostat and the optional Daikin One Home App where the IAQ levels of particles and chemicals are visualized.

Even with the new large tonnage available, the Danfoss DSH 50TR fits under standard coils by using same frame as smaller 30-TR and 40-TR scrolls while still maintaining all of the latest Danfoss scroll technologies — IDV, Schnorkel, organ pipe — for enhanced part-load efficiency of up to +10 percent compared to standard scroll designs. >> danfoss.us

>> daikincomfort.com/go/fit

The new valve offers a higher close-off pressure of 75 psi (5.2 Bar) ensures a safe shutoff in the event of a fuel train system failure and eliminates the need for additional safety components. The valve offers a flow rate which is twice that of other combustion valves on the market.   >> emerson.com

Green Link Engineering’s retooled Knucklehead universal base now offers an improved attachment feature for more secure installations. The universal base, which accepts a range of head designs, originally featured two holes for securing the base using screws that penetrate to the roof deck. The retooling now features four holes which allows for the doubling of mechanical fasteners. >> greenlinkengineering.com

LESLIE CONTROLS

NU-CALGON

PANASONIC

WARREN CONTROLS

The Constantemp steam-water heater is a completely pre-piped system, supplied with properly sized accessories. The Constantemp’s central component is its feed forward blending valve, activated by a differential pressure sensing head.

Nu-Calgon has launched a new Complete Care Mini-Split Maintenance Kit that contains everything a contractor needs to clean up to four mini-split units.

Panasonic’s new ClimaPure XE ductless heat pump system is comprised of an air purification technology, nanoe X, that sets a new standard in air quality for the U.S. ductless heat pump market.

Warren Controls launched the ARIA as an upgraded version of its AmurAct. The newly improved actuator is designed for 1.5 million cycles and can withstand ambient temperatures up to 140F, with travel speeds at 12 seconds per inch (nine seconds for ¾-inch stroke valves).

With accuracy of ± 3F, the Constantemp steam-water heater is available for flows up to 120 gallons per minute (GPM) and temperatures adjustable from 105F to 180F. Available in either single or double wall exchanger models, Constantemp steam-water heater options include skid-mounting, a recirculation kit, and an automatic descaler, as well as an insulated cover and pressure gradient monitor. >> circor.com

This easy-to-use kit ensures mini-splits can be cleaned of dirt and debris, while protecting surrounding walls and floors of the living space. The Complete Care Mini-Split Kit makes cleaning and servicing mini-splits easy by providing a complete line-up of necessary chemicals and tools. >> nucalgon.com

The patented technology disperses OH radicals through the air and deep into fabrics to effectively decrease common odors and pollutants in the indoor environment. As an added benefit, nanoe X also helps retain skin moisture and reduce dryness issues for occupants. With its quiet operation, the ClimaPure XE system offers occupant comfort in residential, institutional and light commercial settings. >> us.panasonic.com/hvac

It is equipped with an electric spring fail safe (when opened or closed), robust enclosures with IP67 / NEMA 4X enclosure and water tight ½-inch NPT fittings, and has split range input capability for 1/3-2/3 high/low applications. Warren Controls created the ARIA Series with customers in mind. Four belt sizes are available with the ARIA actuator for customized use >> warrencontrols.com

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HVACR BUSINESS MARCH 2020

20QUESTIONS >>

with DANIELLE PUTNAM

We sat down with Danielle Putnam, president of The New Flat Rate and immediate past president of Women in HVACR. Putnam discussed growing up in the industry, learning to lead a business and recruiting women into the field. 1. What’s your industry background? My dad started his own electrical company when I was seven. And so, my siblings and I spent that summer passing out flyers everywhere in town. We had an early introduction into the trades. Later on, he bought an HVACR and plumbing company as well.

2. Did you work at the business?

I did. In high school my junior and senior year, I was homeschooled, so I was able to work full time in the office. At 17, I worked in the office, ran parts and even worked inventory in the warehouse.

3. What did you do after high school?

I went to Bible school in Texas for four years. It was an internship; so, I worked in the marketing department out there and they took a lot of students around the world on mission trips. I learned a lot.

4. How’d you get back into the trades? After those four years, my dad called and said he needed some help. I went and worked with him for another year. After that, I went up to Portland, Ore. for a year and worked for a contractor doing marketing for them.

5. But then you got into tech?

Yes, after Portland, I ended up in Southern California working for a tech company in 2005. It was a startup; I was the second employee. We went public in 2007 and I was doing business development, flying all over the U.S.

6. What was it like at a startup?

We did a lot of really cool, fun things. Being a startup company, we were just learning and struggling forward. My career was a lot of trial and error. After five and a half years, they got bought out by a large company.

7. What was your next career move?

My dad called and told me about an idea he had. He kept calling and calling with these ideas for the New Flat Rate. I told him to quit giving away all his ideas for free and start a company. And he says, “Well, I can’t do it without you. I need your help.”

8. So you started a new company?

I loved my career path, I loved the company I was with, and I was really set up well in the merger. But, I knew if I didn’t help my dad I’d regret it for the rest of my life. I turned in my resignation, moved home to Dalton, Ga., and my dad and I spent all of 2011 working in his garage for 12 hours a day, seven days a week, building the New Flat Rate. And by 2012 we had a product to sell.

9. What was your first step?

My dad had been working with Jay Abraham, a top marketing and business consultant, who said, “You have an idea, but that means nothing until you beta test it. I have to see some proof.” So, my dad shot a message out to Service Roundtable, saying we’d developed a new pricing system and asked if anyone would test it for us.

HVACR BUSINESS MARCH 2020

10. How did the beta testing go?

A bunch of companies responded, but eight came into the first round of beta tests. We took a bunch of sheets of paper and laminated them and three hole punched them and mailed out three ring binders to these eight companies. We said, “Hand these pages to your technicians, have them go into the home, but don’t try to sell the customer, just present the page and let the customer choose and then report back to us every Friday for four weeks.”

11. And what happened?

Every Friday we met with these eight companies. There was no training, no handholding, nothing ... but they were all seeing an average increase of $200 per service ticket. The beta test showed that the system put more money in contractor’s pockets, and that’s what we wanted to do and why we wanted to go into business anyway.

12. How important was feedback?

We had to have it. After barely a year, we started to get requests from contractors to come out and train them. We’d never thought of that. And then they started asking for training and coaching onsite. So, we started doing ride-alongs too. We’re always out in the field with the contractors on the front lines, so we constantly have feedback and are able to advance and tweak and change and add as times change.

13. Can you explain the New Flat Rate?

It’s a menu pricing system. There are five price points for anything diagnosed in the home. There’s no selling required. The technician simply shows the page to the customer and the customer can choose from the five options. Ten to 20 percent of the time, customers are going to choose the bottom options, which is fine because that’s your standard flat rate price anyway. But, 60 to 70 percent of the time they choose in the middle and 10 to 20 percent of the time they choose the top options. Today, we see an average service ticket increase of $246 using our system all across the U.S.

14. Does your dad still own the HVACR business?

He sold it. As you can imagine, we got too busy with New Flat Rate and our poor little HVACR company was getting put on the back burner. But, it worked out awesome because we sold it to my older brother who had been subcontracting all the installs anyway.

15. Any of your other siblings involved? Yes. So, my older brother, Dallas, bought the HVACR company and still runs it today (and my dad consults with him on indoor air quality). My youngest brother is 17 and still in school, but in the summers he works full time for Dallas doing HVACR. I have another brother in his 20s, and he’s Dallas’ lead technician. And then in the New Flat Rate, my brother, Matt, is my vice president and our trainer. I have a sister who is my creative director and she controls all the media.

16. What’s your management style?

Always evolving. I like to do what I call the executive ride along and so my management style is very hands off, not micromanaging. Every once in a while I’ll just show up in your office, sit next to you with my laptop and say, “Hey, I’m working by you today. Don’t freak out.”

17. What’s your involvement with Women in HVACR?

I joined in 2012. I remember being at a Comfortech trade show, walking by a room with a sign that said, “Women in HVACR” and I thought, “Why was I not invited? I’m a woman, I wasn’t invited.” The next year, I was definitely there and joined the board right away.

18. How has the organization grown?

The main differentiating factor that caused tremendous growth was a few years ago when we pulled away from Comfortech and had our own, standalone conference. We went from 30 people attending our annual conference to 60 to 80 to 100. This past year we had 200 attendees and this coming September, we’ll have at least 300 in Chicago.

19. How has the growth helped?

We’ve grown our committees, our partnerships, our mentorship program, which we started a couple of years ago, our ambassador program where we’re creating a curriculum and sending volunteers out into the schools to talk about the opportunities in the trades. Collectively, we’ve been really blessed with a strong board.

20. How is Women in HVACR addressing the labor shortage?

Our mission has really stayed the same of let’s empower women in the industry and support them and grow and network and educate together. We try to connect people where we can. The sponsors have been so supportive. I think everybody’s recognizing the hiring crisis and saying, “Okay, if you guys are willing to do something, we’ll put our money behind you and help.” www.hvacrbusiness.com

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Articles inside

How to Stop Turning Wrenches (And Grow Your Business

Protect Your Bottom Line with Fleet Management

Preparation is Key

The Art of Advertising: Getting it Right

Wealth Rule 2: Separate Business Expenses from Personal Expenses

Editor’s Notebook