HVACR Business JULY 2020 by HVACR Business

Safety is Your Priority Pete Grasso 5

Marketing’s Biggest Secret Revealed Justin Jacobs 14

Monitor Profitability & Cash Ruth King 16

Create a WeatherEnhanced Business Scott Brinkley 17

What to Do if You’re Over-Insured Keven Prather 18

HVACRBUSINESS.COM JULY 2020 / VOL.15 / NO.7

FORECASTING THE FUTURE Analyze trends regularly and frequently to develop a vision for your company’s growth and advancement. pg 8

ALSO INSIDE » Industry News ............................................................. 6 Special Report: Software for Business...... 10 Product Focus .............................................................. 20 20 Questions with Eddie McDonald Owner of Zen Air Heating & Cooling....................... 22

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CONTENTS

JULY 2020 / VOL.15 / NO.7

F E AT U R E S

Forecasting the Future

D E PA R T M E N T S

Analyze trends regularly and frequently to develop a vision for your company’s growth and advancement. By Kelly Borth

Special Report: Software for Business

Marketing’s Biggest Secret Revealed

Contractor entrepreneurs discuss the many options and decisions when it comes to buying software to run their businesses. By Pete Grasso It doesn’t take magic to build a brand. By Justin Jacobs

Editor’s Notebook

Industry News

Product Focus

20 Questions with Eddie McDonald

Safety starts at the top and should be the priority of everyone, for the sake of your business and your customers. By Pete Grasso

Owner of Zen Air Heating & Cooling in Suwanee, Ga.

C O LU M N

Monitor Profitability and Cash

Create a Weather-Enhanced Business

What to do if You’re Over-Insured

You need to create your updated P&L to show at least a few dollars of profit at the end of the year. By Ruth King You may be getting more calls than usual — that’s normal for a busy season. It happens every year. But that doesn’t mean you have to run them all. By Scott Brinkley You’ve got options — from sticking with your current coverage to restructuring it into a new policy to eliminating it altogether. By Keven Prather

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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)

www.hvacrbusiness.com www.HVACRBUSINESS.com www.hvacrbusiness.com www.hvacrbusiness.com

Safety is Your Priority

ack in March, as the coronavirus pandemic began to take off in the U.S. and events were cancelling while many businesses scrambled to shift to a remote workforce, we were in the midst of putting together our April issue.

This is great news for Stack, who told me just three long months ago at the start of the pandemic that he had to lay off employees due to the lack of work. Unfortunately, COVID-19 does still exist and it doesn’t appear to be going away anytime soon.

I remember a conversation I had with our publisher and the rest of the staff, where we discussed whether or not we should address the changing landscape. On the one hand, being a monthly publication, we have to tread carefully when covering anything hyper-topical for fear it would be passé or outdated once we were printed.

I’ve heard similar stories from many contractors I’ve spoken with and, while the demand for their services continues to grow, sadly, so too does the spread of coronavirus.

On the other hand, we agreed COVID-19 was a world health issue and as such it would be prudent for us to cover this important topic. With issue content planned out well in advance, we rarely have to make major adjustments at the last minute.

What we all thought — hoped — would be gone by the start of summer when states began to ease restrictions has, in fact, become more resurgent in many parts of the country (and the world).

Safety starts at the top and should be the priority of everyone, for the sake of your business and your customers.

We felt it was necessary in this case because helping you navigate the uncertain business climate during this time was the right thing to do, not only for the sake of your business, but for the safety of your employees and customers.

Our cover story that month was written by Chris Hunter, then-president of Hunter Super Techs in Ardmore, Okla.; and it dealt with how to lead during a crisis. I also wrote on this very page on the importance of communication during a pandemic. That seems like ages ago. At the time, I don’t think anyone thought we’d still be talking about how to do business in the midst of a pandemic in July. Yet, here we are. In the past few months, I’ve spoken to dozens of contractors from different parts of the country. While doing business today certainly has its challenges, we’re lucky to be in an industry that has not only been deemed “essential,” but one which is also in high demand. One morning last week, I had to run a quick errand and while out for a seemingly short amount of time, I saw no less than six Stack Heating, Cooling & Electric vans on the road.

Back in March and April, customers were cancelling maintenance appointments for fear of letting someone from the outside into their homes. Many of you responded by bolstering your communication efforts to ensure your customer base that you are taking proper precautions to protect their safety.

Now, as temperatures continue to soar — and with many of your customers still working from home — calls for AC will only keep growing and it’s more important than ever for you to take proper safety precautions. Don’t be fooled by the high demand for your service, customers still want to do business with a company they can trust. Communicate openly with your customers about how you’re ensuring not only their safety, but the safety of your employees and your community. Are you taking employee temperatures at the start of each shift? Are you cleaning trucks and equipment every day? Are your technicians required to wear masks, gloves and shoe coverings? Make sure your customers and prospects know that! Put their minds at ease before they even pick up the phone to call you. This is a service industry, but if the safety of your employees and customers isn’t a priority, you’re not doing a service to anyone. u

I mentioned this to Brian Stack during one of our conversations for this month’s Special Report on Business Software (pg. 10) and he said, “Ever since that heat wave Memorial Day weekend, we have been slammed … almost like COVID-19 doesn’t exist anymore. Everyone wants their AC!”

HVACR BUSINESS JULY 2020

INDUSTRY NEWS » NAVAC Highlights Three Models Ideal for Industrial and Commercial Operations LYNDHURST, N.J. — NAVAC is introducing a set of solutions designed to significantly reduce the hassle and time needed to service large industrial and commercial HVAC systems. Industrial and commercial HVAC systems typically contain exceedingly high amounts of refrigerant to be removed. Many also have a lengthy heavy-duty cycle, requiring HVAC tools servicing them to run continuously for extended periods – often days rather than hours. Another servicing challenge for recovery units and vacuum pumps is the frequent presence of moisture and other contaminants found in these systems. Considering these factors, premature equipment failure has been an all-too-common occurrence. It is exactly these obstacles that the NAVAC units address. Designed to overcome tough commercial and industrial applications, the solutions include the market’s first four-cylinder recovery unit, and an industry-leading commercial and industrial grade vacuum pump. For example, NAVAC’s NRDC4M, as the world’s first DC inverter 4-cylinder recovery unit, is the fastest and most powerful machine of its kind on the market. Operating up to 40% faster than 2-cylinder units, the NRDC4M utilizes an efficient brushless DC motor and ultra-effective condenser with an oversized microchannel coil and three cooling fans. Featuring dual oil-free compressors, the unit is suitable for all commonly used refrigerants. The NRDC4M recovery unit is ideal for large tonnage commercial and industrial HVAC systems. NAVAC also offers two vacuum pumps ideal for heavy duty applications. NAVAC’s NP12DM Vacuum Pump features an industrial-grade design for a rare blend of durability, speed, and power. The unit also offers a flow rate of 12cfm for accelerated industrial

performance, and its brushless DC-motor technology maintains peak efficiency while yielding a superior starting performance under low starting amperage and soft-starting down to 30F. The NP12DM’s two-stage functionality and precision manufacturing provide an industry-leading ultimate vacuum down to 5 microns. With its integral pump structure and advanced oil management system, the NRD16T Vacuum Pump thrives in demanding operating environments. The unit comes with a carrying cart for easy portability and can perform evacuations even on large systems in matter of hours; competing units often take days. Its impressive flow rate of 12cfm provides fast, robust performance. “The servicing of commercial and industrial HVAC systems is a market segment in particular need of new solutions to longstanding issues – especially overall job duration and premature equipment failure,” said Stephen Rutherford, VP of HVAC Tools Business for NAVAC. “Aligning with our goal of providing user-friendly equipment and tools that are less complicated and save time, our portfolio of heavy-duty HVAC units offers expedited servicing with enhanced equipment reliability.” >> navacglobal.com

Women in HVACR Conference Goes Virtual DAMASCUS, MD. — Following months of careful consideration, Women in HVACR has decided to make its WHVACR 17th annual conference a virtual one. After considering multiple location options, looking into social distancing measures for its event, and monitoring the current national climate, it was unable to find a satisfactory way to balance both value and attendee safety for a full in-person conference. Its focus this year will still be on leadership and it will be meeting September 9-10 for a few hours each day. It will feature two keynote speakers and two different breakout sessions with three unique tracks in each breakout. In addition to this year’s virtual conference, it will also host two to three small regional events this fall and winter. Please stay tuned for more details and registration information to follow in the next few weeks. >> womeninhvacr.org

ServiceTitan Announces Mandy “Bear” Rennehan as Keynote Speaker for Pantheon User Conference LOS ANGELES — ServiceTitan has announced that the 2020 Pantheon user conference will pivot to an entirely virtual event in order to guarantee the health and safety of customers, employees and speakers. This year’s fourth annual event, scheduled for August 12-13, will feature the BlueCollar CEO and pioneering retail maintenance executive Mandy “Bear” Rennehan, who will deliver a presentation titled “Does the Color of Your Collar Define Success?” as the first day’s headlining speaker. “Mandy may not fit the stereotype of a blue-collar worker, but she has all the qualities that have made the trades the backbone of the American economy — grit, determination, authenticity and outside-the-box problem solving skills,” said Ara Mahdessian, cofounder and CEO of ServiceTitan. “She’s really shaking up the industry in a positive way. Her message about overcoming obstacles and valuing blue-collar professionals is a powerful reminder that, as an industry, we need to identify nontraditional solutions for some of the ongoing challenges we face.” Even as a virtual event, Pantheon 2020 is expected to be ServiceTitan’s biggest user conference yet and one of the premier industry events of the year. Pantheon offers indepth training sessions, presentations from industry experts and ServiceTitan executives and an unparalleled networking opportunity for decision makers. >> servicetitan.com/pantheon

HVACR BUSINESS JULY 2020

www.hvacrbusiness.com

Your business is your life’s work. Let’s protect it. Breaking Records in Trying Times Seven years ago, if you’d told Nathan Engelsma, owner of Grapids Heating & Cooling, that he’d have a record-breaking April during the 2020 crisis, he’d have laughed. April is historically the lowest-performing month. Forget about it.

But Nathan and his team: • Joined Nexstar in 2013. • Worked with their coaches, implemented Nexstar practices, and networked with other members. • Turned the small, HVAC-only business into an 11-truck, $9M industry leader. Even through a pandemic.

“ There’s no way this kind of growth could have happened without my coaches and peers at Nexstar.” – Nathan Engelsma Grapids Heating & Cooling – Member since 2013

888-240-STAR (7827) www.NexstarNetwork.com membership@nexstarnetwork.com

FORECASTING THE FUTURE Analyze trends regularly and frequently to develop a vision for your company’s growth and advancement.

BY KELLY BORTH

o remain competitive and relevant, CEOs need to see far into the future and implement change in their organizations long before trends become mainstream. Envisioning where your company will be at the end of this year is standard practice. Envisioning where it will be in two, five or 10 years takes research, analysis and a commitment of time and resources — not a crystal ball. So how do CEOs find this vision? How do they prepare their businesses for the next big change so they don’t miss the next big opportunity? Many seek advice from trend analysts. Some engage their leadership team to be

HVACR BUSINESS JULY 2020

It takes commitment, time and resources to help see what the future may hold. innovative. Most are voracious readers of trade journals and business books. And, others spend time researching the marketplace and assessing trends to find insight and inspiration. Here’s how to make trendspotting a vital part of making your vision come to fruition.

LOOK BACK TO SEE AHEAD Advertising and marketing, for example, has seen an enormous degree of change over the 30 years I’ve led my company. We’ve retooled our businesses

with the birth of the Internet and the market demand for commerce websites. Media channels have proliferated, consumers have thousands of choices now for what to watch and listen to, the vast majority of people have adopted social media and more and more of life moves to mobile apps every month. We used to have a one- to two-year lead time before some of this change hit mainstream. Today, we are lucky if we have six months. And, the rate of change seems to

be coming nonstop at an accelerating pace. Looking back, it is easy to see the degree of change. Looking forward, the vision is not as crystal clear. How do you bring it into sharper focus? It takes commitment, time and resources to help see what the future may hold.

UNDERSTAND THE COMMITMENT It’s important to understand what it takes to gather the information needed to start seeing what can be ahead for your company, as well as to analyze it, interpret it and identify the key points that can positively or negatively affect your company. It’s probably more than you realize.

www.hvacrbusiness.com

To research and gather all the information, you could develop a research committee within your organization or you could outsource this function. Either way, the key is to prioritize it and make it the sole focus of an internal committee or an external contractor or agency. Once you have a critical mass of research, set aside some time yourself to thoroughly review it or assign the task to an internal or external resource who has the ability to interpret the information from a strategic mindset. This can be challenging because these individuals are probably part of your C-suite and are the ones who rarely find the time for this type of lengthy reading project. You’ll need the right eyes on the job, however, or you risk allowing important and meaningful information to be missed. You need the right interpreter of the information that has been uncovered — someone who is curious to dig deeper into the details and connect the dots. The way I approach this is by participating in industry peer groups led by consultants who are charged with helping agency owners grow our businesses and stay ahead of the curve. These consultants stay current with industry analysts and bring speaker resources to meetings to enlighten us on what we need to know. I also belong to business peer groups that offer ongoing articles and speakers on industry trends. One group I belong to distributed a recent article titled “12 Trends That Will Define Business in the New Normal,” which was based on a book written by noted trend analyst William Higham called “The Next Big Thing — Spotting and Forecasting Consumer Trends for Profit.” Higham’s top five vital trends include 1) Brand Aid, 2) Simplicity, 3) Short Termism, 4) Conscious Consumerism and 5) Customer Profiling. This peer group also brought in a speaker to our local market who led us through a trends exercise to analyze how Social Change, Technology, Business Processes, Education, Geopolitical and Green Energy would affect our businesses. These types of experiences help me to understand trends that will impact the vitality of my business into the future. All this takes a tremendous commitment of time and resources, but it prepares me to lead my company into the future. However you choose to provide the

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The key is maintaining consistency so that the research and information is gathered constantly or at least in one focused annual initiative. manpower, the key is maintaining consistency so that the research and information is gathered constantly or at least in one focused annual initiative.

RESEARCH THE FUTURE When beginning the process of forecasting the future, the amount of data available is vast. Many industry associations report on industry trends and may have an affiliated research arm. Look for annual reports or recent white papers they may have. Some business schools specialize in areas of research, industry analysts report on trends and some vertical consulting groups prepare annual reports to the industry. Often these reports are available online or the findings have been written about in media stories. Public libraries also have business researchers and some chambers of commerce have robust research departments. Many times, that research can be yours just for the asking. And, as you find the best sources for trends in your industry, you can subscribe or set up alerts so that you are getting the latest information consistently.

GO BEYOND YOUR INDUSTRY Now that you’ve collected a trove of information on trends within your industry, you have the first part of your research done. But a single-industry look is rarely a complete picture from which to develop a market-leading strategy, so you’ll want to expand outside of your immediate industry. Start thinking about bigger picture trends, such as: • What about social trends like mobility, web-based solutions and so on? • What trends can be applied to future generations of buyers of your products or services? • What trends are related to automation? • Are there pending or emerging government regulations to consider? • And what about the recent trends that have changed the way we work due to the global pandemic?

Understanding all the trends that may impact your business and finding and analyzing the data is what gives you keen insight for developing market-leading strategies to stay ahead of the curve.

LOOK FOR OPPORTUNITIES, THREATS During this deep dive, understanding your company’s strengths and weaknesses is a good platform from which to view opportunities and threats. Where your company has a position of strength — and your competitors do not — is often where some of the best strategies develop. Consider the following questions when evaluating opportunities and threats in your trend analysis: • What trends are important to your business? Your competitors? • What are your current strengths and weaknesses? • What are your competitors’ current perceived and real strengths and weaknesses? • How will trends affect these strengths and weaknesses? • How do these trends affect your industry culture, labor force, marketing channels, etc.? • What changes can your organization execute with excellence and speed to maintain relevance, market share and keep or grow customer loyalty? Look through a lens that gives you a clear focus on what you can execute with excellence and speed. Catch competitors off guard to provide the advantage of firstto-market opportunities. From that same lens, view threats that will impede or make obsolete the way you do business today. These will become important in maintaining relevance, market share and keeping or building customer loyalty.

practices have an equally important discipline that should be adopted and cultivated — how to effectively communicate the vision and forecast to the team for optimum buy-in. Focusing on the top three to five most impactful trends will allow CEOs to share these with their internal teams and focus on innovations and solutions that their company can bring to the marketplace without overwhelming the team. Consider creating an annual Vision Report to paint the landscape of where the company has been, where the company needs to go and to challenge your team to engage in what action and mindset is needed to get there and profit once goals are achieved. This process can turbo-power your company’s ability to stay relevant and ahead of the curve. Benjamin Franklin is known for once saying “By failing to prepare, you are preparing to fail.” As we continue to live in a world of global and technological advancement, it is hard to say what the 21st century may become known for, but what we do know is that we are doing business in an ever-changing world that is challenging us to keep pace. Lead the pack in your industry by diving deep into the extensive amount of research available, analyzing local, national and global trends and bringing the vision and the strategy to your leadership team while illustrating how the organization as a whole can capitalize on these trends to drive the organization’s future. u

Kelly Borth is the CEO and chief strategy officer at GREENCREST, a 30-year-old brand development, strategic and online marketing and public relations firm that turns market players into industry leaders. Kelly is one of 35 certified brand strategists in North America. Reach her at 614-885-7921 or kborth@greencrest.com or visit greencrest.com for additional information.

BRING VISION TO INTERNAL TEAM As a discipline, CEOs need to find the time to analyze trends annually and determine which ones are likely to impact their business going forward. These annual

HVACR BUSINESS JULY 2020

SPECIAL REPORT: SOFTWARE FOR BUSINESS Contractor entrepreneurs discuss the many options and decisions when it comes to buying software to run their businesses.

BY PETE GRASSO

hoosing new software to help you run your business can be a daunting task. First, there’s software for seemingly every aspect of your business, from financial and accounting to field service management, to sales and service. Not to mention all the software capabilities you never thought about! Maybe you’re happy with your current company software, or maybe you simply don’t know what’s new and available. Whatever the case, with so many software solutions available today, finding the right one for your business can make all the difference in the world. Perhaps the best way to research software is to hear from your peers — those who run similar businesses who have been through it already. I recently interviewed a panel of top contractors from around the country to get their thoughts on business software and how they make decisions on the purchasing software for their businesses. The panel includes Linda Couch, COO of Parrish Services in Manassas, Va.; Karly Rolls, service administrator for L.J. Rolls Refrigeration Co. in Fenton,

HVACR BUSINESS JULY 2020

“There are many ways that you can manipulate how you use software. Support helps you find the most efficient ways to use it.” — Brian Stack Mich.; Michael Rosenberg, president of Rosenberg Indoor Comfort in San Antonio; and Brian Stack, president of Stack Heating, Cooling & Electric in Avon, Ohio. Here’s what they had to say.

What kind of software do you use to run your business? Couch: We use ServiceTitan for service operations, QuickBooks for financials, Microsoft O365 for email, spreadsheets, collaboration, forms and databases. We also use XOi for remote support and service, Podium for reviews and customer chat, and RingCentral, which we’re going to replace with functionality from ServiceTitan and O365. With the exception of XOi, which we started using in 2018, we’ve been using these software platforms for about five years now.

Rolls: Sage 100 Contractor, which we just started using a year ago. Rosenberg: We use S2000 by Davisware for our service management and dispatching and Fieldesk by Mobilogic for our mobile field invoicing. We use QuickBooks for our accounting and financials, Wrightsoft for load calculations and OnCall Air for replacement proposals, which is cloud based. We started using the DOS version of S2000 in 1988. Eventually we upgraded to the windows version. We started using Fieldesk for our mobile invoicing 10 years ago. We have used Wrightsoft for 25 years and QuickBooks for 17 years. We started using OnCall Air air 3 months ago. Stack: We use FieldEdge, which we just switched over to about three months ago, QuickBooks and Sales Builder Pro.

What prompted you to choose that software? Couch: Overall, we had been on a strategy since 2009 to migrate all our software to web-based so that we could work from home and improve our business resiliency; and be paperless. Every purchase fit into that overarching strategy. We’d been paperless since 2010, so the web-based design of ServiceTitan fit our strategy. It was more expensive than what we had, so the single feature that made it worth switching was the visual price book. We believed the incremental sales would more than pay for the difference in cost. We were forced to move to QuickBooks when we chose ServiceTitan. Rolls: The mobile tech platform and the detailed job costing capabilities is what convinced us to go with Sage 100 Contractor. Rosenberg: We learned about S2000 from the original owner and developer at an ACCA meeting in 1986. One of our MIX Group members was also using S2000 and they were happy with it. Stack: We were looking for a software package that provided a better mobile experience for our technicians and our customers.

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When considering new software, what factors your decision? Couch: 1) Is it cloud-based? 2) Does it integrate with what we already use? 3) What’s the financial impact (i.e., how much incremental revenue can it bring OR what efficiencies will we achieve OR both)? 4) What is support like? 5). What’s the learning curve for users? 6) Cost — which can totally be overcome by Nos. 3 and 4. Rolls: Price point versus capabilities … what is the ROI on the software? Also, it’s important to understand the availability of use, i.e.: how many remote employees can access this? Rosenberg: What type of contracting business do you have? Do you do mostly service or do you perform a lot of new construction work? Different software has its strengths and weakness in both areas. Another factor is cost and whether or not the additional features will benefit your business and help pay the increase in cost.

Rolls: The importance of this cannot be understated, especially during the migration process. Being able to switch software with minimal downtime and minimal corruption is priceless. Rosenberg: Software support is very important to us. We call S2000 for help with custom report writing and they help us if we have an accounting question. We also use support with Fieldesk when a unit is not communicating or when we need a customized form. Oncall Air has a live support Bot on their software. It makes getting answers to questions very efficient.

a e s a h ld Purc Manifo to l a t up i e g i v i D rece ! k c a b and cash $75

Stack: Support is very important, especially when first starting off. There are many ways that you can manipulate how you use software. Support helps you find the most efficient ways to use it.

What is the best thing about your current software? Couch: It’s web-based, integrated with other applications, easy to learn and well-documented.

“I can’t stress enough how important it is to start with requirements and to gather them from everyone who will touch the software.” — Linda Couch For example, if your software has a really good business follow-up feature for additional work, this could help your business earn additional revenue to pay for your software. The quality of support and ongoing software enhancements are also important factors in choosing a software package. Stack: Ease of use, good flow through a work order, being able to get meaningful reports and good mobile solution for the technicians are all important factors.

How important is manufacturer support? Couch: Very, but the ‘support’ doesn’t have to be you answer my phone call on the first ring. If the application is welldesigned, the training is effective and the product documentation is thorough, upto-date and easy to use, that’s more than enough for us.

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Rolls: The software is fluid, meaning the information needed is only ever one click away. This allows us to work more efficiently and well educated. It also is scalable — we started with 45 employees using it and moving to 60 was a breeze. Rosenberg: It gives us what we need to run our business accurately. It also does not crash very often … it’s reliable. Our annual software support is reasonable compared to some of the other software solutions out there. Stack: I believe that every software package has its glitches or things that you wish it would do that it doesn’t do. That being said, you have to find the one that works best for you 80 percent of the time. Technicians need to be able to move through their day easily on a phone or tablet. continued on page 12

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HVACR BUSINESS JULY 2020

What is your current software lacking?

We like to dig into our data, so I would like to be able to connect directly with the database and use our own database reporting tools.

Couch: I HATE the reporting functions. They’re clunky and unsophisticated.

Rolls: We are 110 percent satisfied with our software.

continued from page 11

Rosenberg: My current software does not have a live KPI dashboard that displays daily, weekly or monthly sales numbers or goals. It also could do a better job at automated marketing letters and send automated reviews.

Stack: I’m still learning how it all works, so it would be unfair of me to say that FieldEdge is not doing something yet that I may not understand that it does.

How do you research business software? Couch: We’ve used Capterra, an online tool that lets you find and compare software. We’ve also done product demos, consulted our IT company and talked with current users of the software we’re researching. Rolls: We spoke with other contractors of our size, field and volume. From there, it is important to evaluate what your needs are and to schedule demos. Being able to see others navigate the software helps you understand the workflow of each platform.

“Software should allow you to work more efficiently and potentially have room to expand, so you should make sure you do not outgrow the platform.” .66 AD

— Karly Rolls Rosenberg: I read trade magazines and learn about new software from networking through Service Roundtable, ACCA and my ACCA MIX Group. Stack: Talking to other contractors is the best way to research software. Call the referrals they give you and ask lots of questions. Most contractors are willing to talk and give you their honest feedback. I learned a lot from my ACCA MIX Group members. They use a variety of different software packages and we are able to learn from each other what works and doesn’t work.

Have you ever bought a software in the past and found out it didn’t do what you wanted it to? Or regretted the decision? www.TacoComfort.com

HVACR BUSINESS JULY 2020

Couch: No. We start all software purchase questions by first identifying our requirements for all stakeholders. That means the first question we’re asking is if the product is going to do what we need it

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to do. If it’s something free, we might just play with something before going to all the trouble. But for a purchase, never. Rolls: Yes, we previously used one and we quickly outgrew its capabilities. Software should allow you to work more efficiently and potentially have room to expand, so you should make sure you do not outgrow the platform. Rosenberg: We have purchased several replacement proposal platforms that we ended up moving away from. Stack: Yes. We actually had purchased another package last fall. That only lasted about three months before we figured out this was not going to work for us.

What is the most important thing a business owner needs to consider before investing in new company software? Couch: Stepping back for a minute, you want any investment to be consistent with your business strategy. If you’re a lowcost provider, you need to buy more costeffective products. If you’re differentiating

The learning curve and the initial loss of productivity are not trivial. Talking to references can help you gather information about this.

“The quality of support and ongoing software enhancements are also important factors in choosing a software package.” — Michael Rosenberg your services and charging a premium, you need to buy software that will help your company stand out.

are and how your team will ensure the information is accurately and consistently entered into the software.

I can’t stress enough how important it is to start with requirements and to gather them from everyone who will touch the software. It’s easy to get caught up in the vendor’s gee-whiz features, and before you know it, you’ve bought something that doesn’t work for you. Also, most companies use only about 20 percent of a product’s functionality, so you end up spending money on features that you don’t use. Finally, getting input from all your users helps create buy-in for when you make the change.

Rosenberg: Check references, make sure they are a secure company and will be around a long time, make sure the software is going to accomplish everything you need for your business.

Rolls: Software is only as good as the information that your team puts into it. It’s important to consider what your KPIs

Stack: You need to realize that software will not always be able to do 100 percent of what you would like it to do. You need to be willing to adapt and change a bit to utilize the software to its full potential. Find one that fits most of your needs.

While we haven’t had the case where the software didn’t perform as expected, we did have the problem where a third-party vendor told us they would do something that they didn’t end up doing. We believed them and didn’t build a contingency plan. That was a mistake. Along the same lines, we bought software that worked as described, but our hardware didn’t work as expected. If you’re making a big decision, talk to lots of references or try to beta test something before taking the plunge. u

Pete Grasso is the editor of HVACR Business magazine. Email pgrasso@hvacrbusiness.com to connect with him.

Anything else you’d like to add? Couch: It’s important to identify the switching costs of replacing software.

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A M E R I C A N

M A D E

HVACR BUSINESS JULY 2020

MARKETING’S BIGGEST SECRET REVEALED It doesn’t take magic to build a brand.

BY JUSTIN JACOBS

ou might remember a TV show back in the 1990s that caused a lot of buzz. It premiered on FOX and was called, “Breaking the Magician’s Code: Magic’s Biggest Secrets Finally Revealed.” The original was a four-part series where a magician would act out the illusions performed in magic shows then slowly reveal the wires, trap doors and special ways the assistants contorted themselves to make the trick possible. The public was enthralled and the show became water-cooler talk all over the country. It definitely didn’t come without controversy, however. During the entirety of the show the

HVACR BUSINESS JULY 2020

You don’t have to BE big to APPEAR big. A good brand can do the work. magician had to wear a mask and his identity was kept anonymous. The show stated this was, “for his own protection” while he exposed the tricks a billion-dollar industry used to make their living. He definitely made no friends in his profession by revealing the truth to an eager public. Magic is built on the study of the human mind, slight-of-hand and skillfully steering the perception of the audience.

And I hope I don’t have to wear a mask or go into witness protection after telling you this, but I want to reveal some secrets about marketing that could upset a lot of companies trying to get you to spend an unnecessary boat-load. Marketing too is all about perception, but there are no smoke and mirrors. You decide how the public views you and quite honestly, it doesn’t have to be hard or expensive to build the brand you want.

PULLING BACK THE CURTAIN HVACR contractors are in a unique position in the marketplace because, when called upon, you go to them. Your customers rarely (if ever) will visit your physical location, so how does a homeowner with no previous experience form an opinion of you? The only way they can — through the identity you project in your marketing — and their opinions can be influenced much easier than you think. The huge reveal: You don’t have to BE big to APPEAR big. A good brand can do the work. Here are five steps to build a brand that wows.

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“ALWAYS HAVE” IS ALMOST ALWAYS OUTDATED I speak with contractors every day and you wouldn’t believe how often I have some version of this conversation: “We send out the same postcard, emails, reminders, etc. at X time every year.”

Is that always fair? No … but it’s happening. If everything the customer sees from you shows attention to detail, you’ll be able to demand more of a premium.

Try using images that are appealing to a homeowner and don’t tip your hand about being a sales piece too quickly.

IT’S NOT ALL ABOUT NEW CUSTOMERS No one is arguing that you need new homes added to the base consistently in order to survive but that’s not the only, nor the cheapest, way to grow. You can also get your existing customers to buy more frequently, use multiple services, buy larger tickets or all three.

And to that I simply ask, why? I know it’s easier to just do what you did last year, but before you realize it you’ve been stuck in the same stale rut with steeply declining returns each season. If you give the impression you don’t care enough to provide something exciting and new, your prospects will return the favor by not caring enough to call.

They’re also your only source for reviews and referrals, so don’t toss them out thinking you’ve “got them” and they have no further potential than hopefully an annual tune-up call.

GIVE YOUR MARKETING A LOUDER VOICE The average consumer is hit with over 5,000 marketing solicitations every day and companies are constantly asking us to buy, click, subscribe, follow or call. When our brains get overwhelmed with calls to action most of it just becomes white noise in the background of our lives. A confused or overwhelmed mind will always be hesitant to act. What does it take to break through to cluttered minds? Clarity and repetition. There’s a reason the largest brands in the world use organized campaigns to promote themselves to the market. When McDonald’s wants to sell you a Big Mac you see it, along with its catchy slogan, everywhere. They’re pushing one clear message and all their marketing firepower works together to get you to the drive-thru. Far too many contractors send out something in the mail, something different in an email blast and have eight different offers running on their websites all at once. It just adds to the clutter and is easily dismissed. When you speak with one voice and let all your media push for one unified goal over a period of time, that voice becomes much harder to ignore.

ADVERTISE TO THEM, NOT YOURSELF If you get their attention what are you saying? You can easily recognize 99 percent of contractor marketing from a mile away. Smiling technician standing by an A/C system or a truck, tag-line of “15 years

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in business,” and a vague XX percent off coupon. Switch out the logo and that piece would be interchangeable with every contractor in most cities. See above as to why most homeowners trash it without a passing thought. If it’s immediately recognizable as a contractor marketing piece your prospect could already decide they don’t need you before ever getting to the sales copy. Remember, a homeowner is not drawn in by equipment photos or industry jargon. We know about SEER ratings and condenser coils because it’s our world, but homeowners hope they never have to think about their comfort system at all. They care little about your knowledge and certifications if you don’t make a connection to how it benefits their family. Try using images that are appealing to a homeowner and don’t tip your hand about being a sales piece too quickly. Get their interest, then let the good sales copy do the rest.

YOU SET YOUR PRICE POINT WITH YOUR IMAGE When aiming to increase leads most marketers will immediately advise you to drop your price. There will always be a guy out there with a phone number spraypainted on the side of his van who will do it cheaper, so don’t fight for the bottom of the barrel.

Have you ever noticed the largest contractor in an area is rarely the cheapest? They aren’t selling price, they’re selling what their clientele views as added value justifying the added expense … whether it’s actually there or not. Who says the guy in the spray-painted van isn’t a better technician? No one knows, but the thought is in everyone’s mind he’s more likely to disappear with your money when the job is half finished. Two watches are side by side: a Fossil and a Rolex. Which tells time better? They both tell time, right? Yet, one costs about $80, the other thousands. What people are willing to pay is built through public perception of your image and how trustworthy you appear as a wise spend of their money. According to a Forbes.com study, a visitor needs around three seconds to form an opinion on a business’s credibility based on their website. What could someone possibly learn about your credibility in three seconds? Nothing really. But remember this is their perception not reality and if it influences whether they call you or not it makes all the difference in the world.

How many times does your customer base hear from you during the year (and wait before you answer) when you’re NOT asking for them to buy something? Active customer retention and regular communication is a huge part of any successful brand. Find ways to add value to being a customer of yours and, not only will you stay top of mind and get repeat business, but you’ll quickly develop a fan club that further helps to boost your image. Sorry, there’s just no secret formula or magic bullet to make all your marketing dreams come true. What it really comes down to is giving your prospects the impression that you care: about your business, your image and most importantly, about them. And caring doesn’t have to cost a fortune. At the end of the day it costs almost the same to place a strong, results-driven ad in the right places as it does to put an ineffective ad in the wrong places. But the stronger ad will return so much more. Take pride in what you’re putting out there and build a brand that people will flock to. u

Justin Jacobs is a marketing coach with Hudson, Ink, a national marketing firm for contractors. To request a free Marketing Assessment Plan, email freestuff@hudsonink. com or call 800-489-9099.

If your website is slow to load, you must be slow. Your postcard looks like it was designed in MS Paint? You’re outdated and can’t use technology.

HVACR BUSINESS JULY 2020

FINANCE

BY RUTH KING

Monitor Profitability and Cash EDITOR’S NOTE: Due to the unprecedented situation we are finding ourselves in with COVID-19, Ruth King is suspending the Rules of Wealth and writing about actions that can help you survive these times and prepare for the future. This is Part 3 of How to Salvage 2020 Profitability. Once this pandemic is over, she will resume the rules of wealth series.

You need to create your updated P&L to show at least a few dollars of profit at the end of the year.

inancials start with first understanding cash flow, then creating a revised profit and loss statement, then creating a cash flow budget. In the first segment of this series I started with cash is now emperor rather than just king. It is critical to monitor profitability and cash.

You may prepay some expenses like insurance. That means, even though from an P&L perspective, the expense is 1/12 of the total, the cash outlay is the total amount paid in the month insurance is due. For example, if your liability insurance is $12,000 and it is due each August 1, then even though the monthly expense on the P&L is $1,000, your cash outlay will be $12,000 on August 1.

Look at the figure and you see a spigot on top and a drain out the bottom. In between is the tank of water. Assume the tank holds money instead of water. There is a certain level of money in the tank when you start the day, the week, the month or the year. Let’s assume you are tracking cash on a weekly basis. You open the spigot and you get cash in. How do you get cash in? Well, it’s not from sales, it’s from the collections of those sales. You could send Mrs. Jones an invoice and if she doesn’t pay you for 30 days, it’s a sale, but you don’t get the cash.

Then the process starts over again. That’s cash flow.

The cash is really, really, really important. So, you get cash from collections on sales and you get a little bit interest, on your savings account, which is good. And you might get some cash from your line of credit or you might sell an asset.

CREATE REVISED P&L

There always has to be at least a drop of cash in the tank at the end of the time period. That’s why negative cash on your balance sheet is not real.

These are the major ways you get cash in the door. The level of money in the tank rises.

This should probably be a realistic view of what you want to happen for the rest of 2020. You need to create your updated P&L to show at least a few dollars of profit at the end of the year.

Then you open up the drain to pay your bills, payroll, rent, etc. Money drains out of the tank. There has to be some money left in the tank at the end of the week.

A net profit per hour equal to what you can earn at a fast food restaurant should be the lowest net profit you should budget for.

HVACR BUSINESS JULY 2020

So, if you do the work in January and it is billed before January 15, you will receive payment for that work in February. Bills sent after January 15 will, on average, be paid in March. Budgeted revenues on the profit and loss statement become collections 45 days later. On the payment side, your direct expenses for equipment and material are generally due the following month from the purchase. Overhead expenses are generally paid the month that they are incurred.

WHAT IS CASH FLOW?

45 days, that means that it is 45 days from the time you send out an invoice to the time you get paid.

CREATE CASH FLOW BUDGET Your cash flow budget is dependent on your profit and loss budget. For example, residential service is COD. You receive the cash in the same month that you do the work. You pay the technicians the same month as you do the work. You probably pay your suppliers the following month. So, collections on revenue and labor expense go in the same month. Supplier payment for that work goes in the following month. Commercial service is generally not COD. If you do work in one month you probably will get paid the following month or later depending on your average receivable days. If your receivable days are

Like the first time you read a wiring diagram, the first time you create a cash flow budget might be a little frustrating. It will become easier and easier as you do it. If you would like a copy of a sample P&L and cash flow budget, send me an email (ruthking@hvacchannel.tv). You can survive and thrive after this pandemic. Make sure you have profitable sales, a strong maintenance program, save money and watch your cash! 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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STAFFING

BY SCOTT BRINKLEY

Create a Weather-Enhanced Business

’ve seen it time and again — summer comes around and a shop that normally runs 3-4 service calls per technician per day gets a wave of customer calls. As an owner or manager, you think your business needs to take advantage of the influx of business, so you start scheduling technicians for 5-6 service calls per day.

your company and the best use of your techs’ time.

You may be getting more calls than usual — that’s normal for a busy season. It happens every year. But that doesn’t mean you have to run them all.

Here’s the key to maintaining a hard maximum of calls, no matter the season: 33 percent of all the calls you take each day must include an opportunity for a larger job. That’s 1/3 of all calls — roughly 11 of your 30 calls per day. When you’re selecting which service calls will be run each day, ensure that 33 percent of them will be for equipment that’s at least 10 years old.

WHAT COULD GO WRONG? Everything, that’s what. Your technicians can only run so many calls in a day and give each customer the service expected from your business. If asked to run more calls and give the same service level as usual, technicians will have to work too many hours to keep up with the calls. No one can work overtime every day — your technicians will get overwhelmed and begin calling out. When your technicians call out, your business will be understaffed. Meanwhile, the customer calls will keep pouring in. What will you do? You’ll ask your technicians to run more calls in less than the usual amount of time. But if you do this, you’ll find a new wave of problems. Customers won’t be getting the full value of your business’s services because your technicians will feel rushed; customers will sense this and also feel rushed. Constant rushing makes for — you guessed it — overwhelmed techs and what do overwhelmed technicians do? They call out. Or quit outright. I know of a company whose technicians ran an average of four calls per day. When summer hit, they asked their technicians to run an average of six calls a day. After one month of this new schedule, six technicians quit, all in the same week. Six! You know how it goes: one technician feels resentful and starts complaining and the others listen and follow. But the technicians aren’t actually to blame — a business that focuses solely on running as

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Does this always create a larger job? No. But at least the opportunity is consistently there, day in and day out.

many calls as possible creates a workplace culture where money is more important than people. And that’s not a sustainable business model. You don’t make money by running from one call to the next. You make money by slowing down, listening to customers, uncovering their wants and needs and selling products and services to meet their needs. When your technicians are only focused on getting to the next call, it creates service inconsistencies within your business. It also doesn’t give them time to grab the low-hanging fruit for your business — the calls that could be juicy if only enough time was taken to find out what a customer truly needs and wants.

WHAT DO YOU DO? You plan. Your busy season comes every year. You need to create a weatherenhanced business instead of a weatherdriven business.

When you make your yearly budget, decide how many calls your business will run each day. Then, stick to that number. Work hard to hire the people you need in advance to prepare. What if you didn’t see running extra calls as an option for your techs, unless they volunteered for extra hours? What would your company’s service look like? It would be consistent, year-round. And your technicians wouldn’t get burned out and quit. But what do you do with all those extra hot-season calls? You have to classify your calls by determining the best opportunities for your company. Let’s say your technicians normally get to 30 calls per day and you’ve committed to 30 calls as your company’s maximum per day. If you get 50 calls per day during your busy season, you need to decide which calls are going to be the best calls for

If you’ve already committed to not going over your maximum of 30 calls per day, whatever the season, the extra 20 calls will need to be rescheduled in the nicest way possible. The 30 calls you do take should be chosen intentionally. You may be getting more calls than usual — that’s normal for a busy season. It happens every year. But that doesn’t mean you have to run them all. I’ve seen shops run too many calls, burn everyone out and then not have any technicians left to generate revenue during the busiest season of their year. Every time you lose a tech, the problem compiles. Don’t be like this. Be choosy. You are the one in control; you need to plan to take the right steps to become a weather-enhanced business instead of a weather-driven business. u

Scott Brinkley is a Business Coach with Nexstar Network. A former Nexstar member, he has worked in the plumbing, heating, cooling and electrical industry for more than 23 years. For additional information, visit nexstarnetwork.com, call 888-240-7827 or email membership@nexstarnetwork.com.

HVACR BUSINESS JULY 2020

ESTATE TAXES

PROVIDED BY KEVEN PRATHER, CFBS

Too Much of a Good Thing? What to Do If You’re Overinsured

uess what? You may be sitting on life insurance you no longer need — a lot of it, potentially. With some digging and the right analysis, you could possibly free up significant sums of money. The reason: the tax law that was passed at the end of 2017, which raised the estate tax exemption to approximately $11 million for individuals and approximately $22 million for couples (until 2026). If you’re among the many who bought permanent life insurance for the purpose of one day paying estate taxes, this boost in the exemption could mean you won’t likely have an estate tax bill to pay. If so, you could find yourself with an insurance policy that has far more cash built up in it than necessary. That said, even if you’ve got insurance for other reasons beyond an estate tax bill, it makes sense to revisit and “stress test” your coverage so you can determine if you’re set up for long-term success. Here’s how to do it.

REVISITING YOUR WEALTH PLANNING The new tax law and its many changes are perfect reminders of the importance of revisiting your wealth plan from time to time. It’s certainly very common for the Super Rich (those with a net worth of $500 million or more) to regularly reevaluate their wealth planning — indeed, it’s a hallmark of the way the Super Rich make certain they are taking advantage of the smartest solutions available to them. Therefore, it makes sense to emulate this Super Rich behavior in your own life. The Super Rich’s evaluations almost always involve a review of their life insurance portfolios — the various policies they require to get the necessary amount of coverage. Often, they conclude there’s a need to make adjustments. Likewise, when

HVACR BUSINESS JULY 2020

• Tax law changes could impact your insurance situation—leaving you with more insurance than you need or want. • Adopt the Super Rich strategy of “stress testing” your insurance strategy to determine what, if any, changes should be made. • You’ve got options—from sticking with your current coverage to restructuring it into a new policy to eliminating it altogether.

those less wealthy take the same approach, it is not uncommon for them to need to make adjustments. Where there is the possibility of having more death benefit than necessary, there are ways to significantly benefit by making sure what you need and what you have are in sync. For many affluent individuals, reassessing their life insurance needs and what they have is even more important. Occasionally, families are “oversold” life insurance. Consider the scenario where the life insurance agent projects the size of a person’s estate. This is not a bad approach, presuming the growth rate is conservative and reasonable. Unfortunately, there are many times when that is not what happens. This leads to people getting more life insurance than they are going to need. Without a full re-evaluation, it is very likely they would not know.

Step #1: Assess your policy When you bought your insurance, you were given estimates about its future cash value and death benefit at various times. So your first step is to see if your policy is performing as you were told it would. That means getting what’s known as an inforce illustration — a report that spells out key financial information about your policy. You may discover that your policy has built up value and benefits at a faster (or slower) rate than expected, or that it’s performing as designed. Note: Interpreting inforce illustrations can be difficult — clarity is often not insurance companies’ strong suit. Indeed, even trained CPAs can end up scratching their heads over the data and how it’s presented in these reports. That means you’ll want to work with a financial professional who can help you navigate the information, draw conclusions and evaluate next steps.

EVALUATING YOUR LIFE INSURANCE

Step #2: Evaluate the strategy used to purchase life insurance

There are three steps to evaluating your current life insurance situation.

Many times, people pay life insurance premiums out of pocket. Other times,

they might use a wealth planning strategy. One example is premium financed life insurance, which uses borrowed money to buy a life insurance policy. The point: Not only does the life insurance policy itself need to be evaluated, but so do the underlying assumptions behind the financing approach.

Step #3: Determine what you need and want The most difficult part of the process is determining how much death benefit is “just right.” A good starting point is to review why you purchased the life insurance in the first place and how you came up with the size of the death benefit back then. Ask yourself: Are those reasons still viable, or have circumstances changed? Additionally, you’ll want to assess whether any new laws or broader developments outside your own life that could change the picture have occurred. As noted, the modification to the estate tax under the new tax law means that a lot of people who once purchased life insurance to pay federal estate taxes may no longer need the coverage. Finally, you need to assess how much death benefit you require going forward, based on your evaluation thus far. That means getting clear on your goals (Do you want to leave money to heirs, for example?) and your expectations for the future (For example, do you think the current estate tax exemption amount will remain in place ten years from now?). Advice: A professional advisor who understands life insurance well can help you determine your goals as well as spell out the various options you have with your current policy. As just one potential example, a policy that is no longer needed for estate tax payments could potentially be used to pay for a buy-sell agreement with a business partner.

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ACTION STEPS TO CONSIDER TAKING Assuming you find that your current insurance isn’t firing on all cylinders or it simply no longer reflects your current situation and the situation you’re likely to find yourself in down the road, there are action steps to consider.

1. Compare alternatives. Big picture, you have three choices: • Keep your life insurance policy as is. This might mean you keep paying the premiums. For some this makes sense. Say, for example, you determine you no longer need your policy for estate tax reasons, but you also decide the money could go to your children. In that case, staying the course could be the best route.

To stress test your life insurance, work with an expert in the field. policy to a third party for cash. This approach can potentially give you more money than surrendering your policy. • Restructure or trade your life insurance policy. You may be able to modify your life insurance policy. This could entail reducing the death benefit if you decide you’ll need less money, thereby having the policy fully paid up. Or you might convert your current life insurance policy into another life insurance policy with different characteristics that are more appropriate for your needs and goals.

• Exit your life insurance policy. If your assessment reveals you do not need the money inside the life insurance policy, you can surrender the policy and take the cash inside. Another possibility: a life settlement, where you sell the

Once you see the various possibilities side by side, you can make a more informed decision.

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.

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.

2. Take action. If you have chosen to keep your life

This report is intended to be used for

insurance policy as is, there is nothing more to do. Otherwise, you will probably need to instruct your life insurance agent or other professional to implement your decision — whether it is to exit your life insurance policy, restructure it or trade your life insurance policy for another one.

THE VALUE OF STRESS TESTING If you know you no longer need as much insurance as you currently have — or if you just have an inkling you might be overinsured, or are simply unsure — it pays to “stress test” your situation. Stress testing is a proven way to make sure that you are not being misled because of the lack of expertise of the professionals you are dealing with (or because they are intentionally misleading you in order to make more money). It can also help you spot mistakes you or a professional have

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.

made with your insurance in the past. Example: People often end up buying more insurance than they need due to faulty assumptions about some aspect of the future. Say your business ends up growing at a slower rate than you expected when you bought your policy. In that case, you could find yourself with insurance you simply don’t need. To stress test your life insurance, work with an expert in the field. From getting and interpreting the inforce illustrations to providing alternatives to your current policy, relying on a leading authority is a good idea. Moreover, you will likely want your other trusted advisors involved. Action step: If you think you or a family member could potentially benefit from revisiting and “stress testing” your life insurance coverage, contact your legal or financial professional to explore the topic further. u

©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.

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PRODUCT FOCUS » DAIKIN Daikin’s VRV LIFE system is designed specifically for residential applications. VRV LIFE heat pump system combines several styles of both ductless and ducted indoor models to accommodate design flexibility, including ducted gas furnace for dual fuel operation. Up to nine indoor zones can be accommodated by a single outdoor heat pump, with high heating capacities well below 0F (-18C). >> daikincomfort.com/go/vrvlife/

MITSUBISHI ELECTRIC TRANE Mitsubishi Electric Trane HVAC US (METUS) has expanded the SUZ universal outdoor unit to include Hyper-Heating INVERTER (H2i) technology.

NP2DLM / NP4DLM Cordless Vacuum Pumps – Mobile, Compact and Convenient Featuring DC Technology, these light-weight, highly efficient vacuum pumps are perfect for any job where power supply is inconvenient. With high-performance lithium batteries that provides a continuous run time up to 1 hour, you can use these cordless vacuum pumps on any service call and location.

NEF6Li - The Precise Cordless Power Flaring Tool Equipped with a high-performance, large capacity lithium battery, adjustable speed control, and quick-connect, it makes flaring easy and convenient while guaranteeing accurate and consistent flaring with every use.

The single zone outdoor unit is part of the M-Series product line from METUS, which includes indoor units, outdoor units and controls for residential and light commercial applications. Available in 9,000, 12,000, 15,000 and 18,000 BTU/H capacities, the SUZ with H2i technology delivers indoor comfort in extreme cold weather conditions maintaining performance at outdoor temperatures as low as -13F. At 5F outdoors, the system is designed to deliver up to 100% of its rated heating capacity. >> mitsubishicomfort.com

TRANE RunTru by Trane has introduced a line of ductless systems to join its ducted heating and cooling equipment — all designed for customers seeking simple, dependable solutions at an affordable cost. RunTru now offers single-zone and multi-zone ductless systems to deliver warm or cool air right where it’s needed. Whether improving temperature control in a specific room or replacing an inefficient window unit and space heater, a ductless system offers a solution that’s not only flexible — it’s quiet, efficient, economical, and easy to install. >> runtruhvac.com

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HVACR BUSINESS JULY 2020

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DANFOSS The Danfoss CO2 Adaptive Liquid Management (CALM) solution combines Danfoss’ liquid ejector and adaptive liquid control case controller algorithm to fully utilize the evaporator surface in display cases and cold rooms. This technology provides, without equipment change, up to 10 percent greater energy efficiency in addition to the energy-saving inherent of CO2 refrigeration. The CALM solution works by pulling liquid refrigerant from the suction side and injects it into the evaporator of display cases and cold rooms. Danfoss’ CALM solution aims to assist customers in making the transition to climate-friendly refrigerants while saving energy, maintaining system reliability and ensuring food safety.

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>> danfoss.com/en-us/

PARKER SPORLAN Parker Sporlan’s MTW valve provides building and equipment designers a simplified solution to regulate refrigerant flow for dehumidification and dedicated outdoor air systems (DOAS). The MTW modulates precise flow and temperature control between two outlets or diverts to one outlet while completely closing the other. Simplify design and save costs from a reduction in installation, wiring, controller, and valve.

NRDC4M - The World’s First and The Industry’s Most Powerful Brushless DC Recovery Unit Fast and powerful 4-cylinder structure, and an oversized micro-channel coil with 3 high-speed cooling fans makes it the ideal recovery unit!

>> sporlan.com

HEATCRAFT The Heatcraft intelliGen Refrigeration Controller is designed to give foodservice or cold storage end-users more visibility and control of their product integrity. The controller helps reduce product spoilage by maintaining better temperature control and provides energy savings through optimizing defrosts. The intuitive interface quickly guides contractors through system configuration in minutes with a full text display and easy-to-use turn and press knob. intelliGen offers optional local and remote monitoring capability via a web browser or through proactive email and text alerts, notifying operators about alarm conditions on their system.

NP12DM - Vacuum Pump Delivering Speed, Robustness and Power

NRD16T - Vacuum Pump Fast Evacuation with Power and Reliability

Enhanced technology and aesthetic design provides swift evacuation for large commercial refrigeration or central AC systems. 12 CFM DC Industrial Grade.

Ultimate vacuum down to 3 microns and industrial grade design, it’s perfect for heavy-duty jobs, with its high speed and maximum durability.

>> intelliGencontrols.com

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HVACR BUSINESS JULY 2020

20QUESTIONS >>

with EDDIE MCDONALD

We sat down with Eddie McDonald, owner of Zen Air Heating & Cooling in Suwanee, Ga. McDonald, who is a 2020 Tops in Trucks Fleet Design Contest winner, discussed moving away from the franchise model, the effects of the coronavirus pandemic on business and working with KickCharge Creative on his winning fleet design. 1. Can you tell us about your background?

I started at Diversitech as the chief information officer back in 1998. I spent 18 years there learning about the industry, at least from a product and distributor perspective. When a private equity company purchased them about five years ago, I decided to evaluate my options.

2. So you went into business for yourself?

Yes, I was initially a Temperature Pro franchisee, for about four years. Earlier this year, I left the franchise and rebranded as Zen Air Heating & Cooling.

3. How did you come up with Zen?

There are so many companies with, ‘Bob’s Heating and AC’ or just the family name or whatever. I wanted something different. I started thinking along the lines of when people are in their home, what is something that represents the state that they want to be in? They want to be in an ideal comfort state. Anyway, Zen just popped into my mind.

4. What’s your business mix?

We’re 70 percent residential, 30 percent light commercial. We don’t do any new construction.

5. How would you describe your management style?

I prefer to delegate and have the right people in place that can do the job, and I let them run with it. At times, I do tend to delve into the details and do a little micromanaging, but that’s not the best way to be successful.

6. How do you motivate your team?

We try to have a lot of comradery, try to make it a fun place to work, motivate them through incentive programs. It’s really about the overall culture of working together and wanting to take care of our customers that gets everyone on the same page.

7. What was the learning curve to owning a business?

It was significant and being part of the franchise helped a little bit, but there’s just such a tremendous number of things you encounter that you can’t learn or can’t be prepared for until you actually experience it. I’m happy to be where I’m at, at this point, but I still have plenty to learn.

9. What do you view as the most important aspect of your job?

14. How did you come up with the color scheme?

10. How has the coronavirus pandemic affected business?

15. What were you looking for?

Keeping my eye on the big picture and trying not to get bogged down with small setbacks and day-to-day issues. I’ve got to stay focused on the long-term plan and work to put the right pieces into place.

I told KickCharge what my color preferences were. Then they came up with a number of different options and then I chose the final one. All the options they came up with were great, but I wanted to convey that feeling of satisfaction or comfort, and I felt this really worked.

It’s definitely slowed business. Of course, the weather has also had an effect … it hasn’t been as hot as normal here in Atlanta. Customers are definitely more apprehensive too. But we have been apple to secure a Paycheck Protection Program (PPP) loan, which has actually helped put us in a more financially secure place in the short term.

I was excited to do something a little different and figured it would be noticeable. There are only a few brands that stand out to me. When I think about particularly in the HVACR, none of the branding in our area really stands out.

11. What precautions have you taken?

That’s part of their normal process, to evaluate the local competition, but a lot of our competition is not very eye catching. Some of the companies have just been around forever. They haven’t focused on rebranding or making their stuff stand out because they’re already well known.

We use full personal protective equipment (PPE) when going into customers’ houses and a contactless invoicing system to make them feel more comfortable.

12. What are your plans for growth in the future as a company?

I’m putting together a three-year plan of revenue growth and profitability, of where I want to be. My plan is to grow but grow profitably. I’m not trying to grow too fast; I want to make sure that we continue to be profitable every step of the way.

13. What was it like to work with KickCharge Creative?

Working with Dan Antonelli and KickCharge has been great. All the designs they’ve done, they tailor. They tailor to your needs, but they still make sure that they’re hitting all the check boxes as far as what draws attention. It needs to be something that’s going to stand out for sure and that people will remember … KickCharge understands that.

16. Did you do research for this design?

17. What kind of feedback have you gotten?

The trucks have been on the road for a little more than a month, honestly, but we’re getting a tremendous amount of positive feedback. One technician said a guy was walking down the road next to him, doing the little symbol that the bear’s doing. I mean, we just had a lot of positive feedback. It’s pretty exciting.

18. How has this new design paid off? At this point, it’s just getting the name out there and trying to reinforce that we’re not a brand new company, we’ve been around and it’s the same great service, but without the franchise aspect.

19. What’s your favorite aspect of this new design?

It’s definitely the bear. I mean, the bear’s just sitting there glowing. I’ve actually been trying to come up with a name for the bear and I haven’t settled on one yet. I was thinking about maybe making it a contest.

20. Do you track leads based off customers who see your trucks?

Yes. We use ServiceTitan, which allows us to track every marketing campaign. The trucks just have our generic number, so when someone calls in off the generic number, we do ask them how they heard about us and we’ll track that as well.

8. What resources have you found helpful?

I’ve recently signed up with BDR, which is a coaching company, and they’ve been very helpful. I’m constantly reading and watching videos, just soaking up as much knowledge as I can.

HVACR BUSINESS JULY 2020

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In This Together The COVID-19 pandemic challenges us to collaborate in ways that were previously unimaginable. The Air-Conditioning, Heating, and Refrigeration Institute (AHRI) salutes our 300+ HVACR and water heater member manufacturers, U.S. and international government agencies, and civil organizations working to keep the industry moving forward during this difficult time.

Across the globe, AHRI has been working diligently to ensure continued health, safety, comfort, and productivity for all, by:

Advocating for the

HVACR industryâ&#x20AC;&#x2122;s designation as essential, both in terms of manufacturing and service;

Providing up-to-the-

minute information on COVID19-related policies and their impacts on the industry via AHRI web platforms; and

Partnering with

agencies around the world working to ensure availability of health-enhancing and life-saving HVACR and water heating equipment.

We WILL emerge stronger and wiser for this experience, but in the meantime, let us celebrate the power of partnership, and the value of our industry to the world.

AHRI is the global source for HVACR and water heating equipment performance standards, certification programs, information, and turnkey solutions that facilitate regulatory compliance and support energy efficiency. Equipment bearing the AHRI CertifiedÂŽ mark assures specifiers and other decision makers of accurate and consistent performance. Learn more about AHRI certification online at ahrinet.org.

Apparently, we’re not supposed to call out competitors, so we’re just gonna say this: This is RunTru by Trane. Designed, built and tested by the name synonymous with reliability—and priced affordably. So now, everyone’s happy. Everyone, except, you know. Find out how to become a dealer at RUNTRUHVAC.COM

HVACR Business JULY 2020

Articles inside

20 Questions with Eddie McDonald

Product Focus

Marketing’s Biggest Secret Revealed

Industry News

Forecasting the Future

What to do if You’re Over-Insured

Monitor Profi tability and Cash

Create a Weather-Enhanced Business

Special Report: Software for Business

Editor’s Notebook