HVACR BUSINESS NOVEMBER 2020 by HVACR Business

What’s Your Management Style? Pete Grasso 5

Establish a Culture of Social Responsibility Kelly Borth 12

Hire Top Sales Representatives Patrick Valtin 14

Are You Really Protected? Keven Prather 16

Build Your Relationship with General Contractors Jenn Said 18

When You Hate Numbers Shane Rau 20

HVACRBUSINESS.COM NOVEMBER 2020 / VOL.15 / NO.11

R-32 MYTHS BUSTED

As more manufacturers shift toward low GWP refrigerants, it’s important to look at some of the misconceptions surrounding them. Page 8 ALSO INSIDE » Industry News .................................................................. 6 Ruth King Wealth Rule No. 6 ....................................................................15 Product Focus ................................................................... 21 20 Questions with Nathan Walker Senior Vice President with Goodman Manufacturing...... 22

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CONTENTS

NOVEMBER 2020 / VOL.15 / NO.11

F E AT U R E S

8 12 14

Special Report: R-32 Myths Busted A closer look at some of the misconceptions surrounding low GWP refrigerants. By Pete Grasso

Establish Culture of Social Responsibility Being a good corporate citizen impacts your bottom line in a positive way. By Kelly Borth

The Secret to Hiring Top Sales Representatives You may be impressed with a candidate’s personality, but that doesn’t necessarily indicate success in selling. By Patrick Valtin

C O LU M N S

D E PA R T M E N T S

Wealth Rule No. 6: Save Cash Every bank deposit should have one percent of the deposit amount transferred to a savings account. By Ruth King

When the Worst Happens, Are You Really Protected?

Build Strong Relationships with General Contractors

When You Love Your Business, But Hate Numbers

The vast majority of business owners don’t have any type of disability insurance in place to protect themselves. By Keven Prather Being open, honest and transparent will build trust and respect and increase the odds of repeat work. By Jenn Said To be successful as a business leader, you have to have a grasp of the basics. By Shane Rau

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Editor’s Notebook

We all have a management style, but we often don’t think about what that might be until we’re asked to describe it. By Pete Grasso

Industry News

Product Focus

20 Questions with Nathan Walker Senior Vice President, Corporate Marketing for Goodman Manufacturing

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HVACR BUSINESS NOVEMBER 2020

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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

ADVERTISING STAFF ERIC Hagerman National Sales Manager Tel 216-409-3246 Fax 440-731-8750 ehagerman@hvacrbusiness.com TERRY Tanker Publisher Tel 440-731-8600 Fax 440-731-8750 ttanker@hvacrbusiness.com

BARBARA Kerr Executive Assistant bkerr@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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What’s Your Management Style?

We’re good. We’re done. We’re friends again. Everything’s clean. I don’t look to hold onto things like that. Trying to create my leadership skills has been hard, but I’m focused on that process and want to continue to get better.”

Our conversations revolve around a variety of subjects, but often times the topic of leadership and management come up.

“I am not someone that’ll micromanage someone’s job. I use the expression quite candidly that if my son told me he brushed his teeth, I don’t go check the toothbrush to make sure it’s wet. We live on the honor system. If you say, ‘It’s done,’ it’s done. If you say, ‘It’s not,’ be honest with us. Nothing’s perfect.”

ne of the great joys of my job is when I get to speak with contractors — the entrepreneurs of this industry. Whether it’s through research for an article I’m writing, an interview for a feature or our 20 Questions column, or simply a casual conversation at an industry show, I learn the most when I’m speaking with you.

It’s a topic which always garners the most readers whenever we feature it in the magazine or online — and is always at the top of the list when we poll our readership on what they’d like to learn more about.

David Indursky, Encon Mechanical

We all have a management style, but we often don’t think about what that might be until we’re asked to describe it.

One of my favorite questions to ask is one that always seems to give pause (which means I know I’m going to get a thoughtful answer): What’s your management style?

We all have a management style, but we often don’t think about what that might be until we’re asked to describe it. And while everyone has a somewhat different approach to management, there are common threads throughout the styles of those leaders who are most successful. Sometimes, when you really think about your management style, you end up taking a closer look at how you lead your team — and how you want to lead your team. I have no doubt that hearing how other successful contractors describe their own management styles can have a profound impact on how you shape your own. So I thought it would be nice to pull some of the answers I’ve gotten from this question over the past year and reprint them here.

Eric Knaak, Isaac Heating & Air Conditioning

“It’s evolved. I like to be hands off and allow our managers and leaders to make decisions and to make the mistakes the same way that I did. I’ve learned that, as a leader, once we give you thoughts or opinions, it seems like a lot of people will start to shut down because you’ve already said what it should be.”

William “Bill” Lewis, Southern Air Pros “I’m more of a team player. Anybody we hire, we hire them based on their attitudes and then we train them up from there. It’s pretty much a two-way street. If one of the guys catches me shortcutting, they’re welcome to speak up and say, ‘Hey, that’s not how you taught me to do it.’ So that’s the style. I don’t do a lot of micromanaging, but I spend a lot of time training up front.”

Eddie McDonald, Zen Air Heating & Cooling

Take a look at them. Then ask yourself what your own style is, before someone else asks you.

“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.”

Mike Grassle, Hetter Heating & Cooling

Rob Minnick, Minnick’s

“It’s very grassroots … I try to keep my finger on the pulse of this company throughout the day. I’m a huge ‘numbers guy’ and I believe numbers don’t lie. I watch all of the numbers every day.”

“We have operation manuals for every position that we have here. That was one of the things that the consultants brought on board and it makes it really simple. It takes away from all the, ‘Well, I told you this, I told you that. Why are you calling telling me this or that?’”

Corey Hickmann, Comfort Matters “I should be more flexible, because I’m sometimes a little brash. I’ve learned to really hold back on a ton of stuff. It’s pretty amazing what toleration can get you. I don’t take things personal, so I can have a hard conversation with someone and we’re done after that conversation. That’s it.

Michael Rosenberg, Rosenberg Indoor Comfort “I like to communicate with the individual and tell them, “This is what I expect and this is what your goals are,” and then I leave them alone and let them do what they need to do. I don’t micromanage.” u HVACR BUSINESS NOVEMBER 2020

INDUSTRY NEWS » AHR Expo Cancels 2021 Event WESTPORT, CONN. — AHR Expo Show Management announced the cancellation of the 2021 AHR Expo after working with McCormick Place to tentatively reschedule the Show for March 2021. With roadblocks set in place by the ongoing COVID-19 pandemic and resulting current state and local restrictions that prohibit mass gatherings over 50 people, an in-person event will not take place in 2021. Instead, Show Management will shift its focus to 2022 and prepare for an in-person event in Las Vegas, NV. “We’ve examined every scenario and questioned every roadblock to see how we might hold an in-person event in 2021,” said Mark Stevens, show manager. “Unfortunately, the pandemic continues to present unpredictable challenges and other variables that are beyond our control.” The AHR Expo will return January 31 - February 2, 2022 at the Las Vegas Convention Center in Las Vegas. Registration is expected to open in the summer of 2021. >> ahrexpo.com

Lennox Installs 210 HVAC Units for Feel the Love Program RICHARDSON, TEXAS — Lennox International installed 210 HVAC units across the United States and Canada at no cost recently, bringing fresh air and comfort to many medical professionals, frontline workers and local heroes. Each year, Lennox honors recipients facing physical, mental or social disabilities, financial challenges or those who have made an impact through military or community service. In 2020, Lennox dedicated more resources to benefiting first responders and those keeping us safe during the COVID-19 pandemic. “Through our Feel the Love program, Lennox has made an annual commitment to give back to everyday heroes in the best way we know how — by providing clean, perfect air,” said Stephanie Bond, director of marketing at Lennox Residential. “As many prepare for a winter working and learning from home, a new HVAC unit can make a significant impact on one’s health, comfort and happiness.”

Trane Technologies and Habitat for Humanity Partner on New Initiative DAVIDSON, N.C. — Trane Technologies plc (NYSE: TT) and Habitat for Humanity International have teamed up on a national initiative called Indoor Climate and Maintenance Education (I-CLIME), which will equip new Habitat homeowners with resources for maintaining comfortable, healthier and energy-efficient homes without breaking the bank. “Our commitment to sustainability extends to the communities where we live and work; this is why we’re partnering with organizations like Habitat for Humanity to increase economic mobility and access to safe, affordable, and healthier housing,” said Jason Bingham, president of Trane Technologies’ Residential HVAC & Supply business. “I-CLIME means empowering new homeowners to take care of their homes. The goal of this program is to help families succeed, revitalize communities and contribute to a healthier planet.” I-CLIME will launch in Charlotte, N.C. with a series of educational resources for Habitat homebuyers focused on topics including preventative maintenance, appliance care, and warranties, as well as strategies for energy efficiency and indoor air quality. Habitat for Humanity and Trane Technologies expect the partnership to expand to additional markets in 2021 to benefit hundreds of families, helping to reduce the energy intensity and greenhouse gas emissions for those households served. >> tranetechnologies.com.

Sonnhalter Offers COVID-19 Information Resource CLEVELAND — Sonnhalter, a communications firm marketing to the professional tradesman in the construction, industrial and MRO markets, created a comprehensive resource guide full of information regarding COVID-19 and its effects on the Businessto-Tradesmen (B2T) niche.

Comfort Supply Announces Change to Flagship Brands

Through extensive research and interviews with a number of key industry stakeholders, Sonnhalter created content at the start of the COVID-19 pandemic and continued throughout the ensuing months to examine the effects and compare them to effects that were initially predicted for the future of the industry.

NASHVILLE, TENN. — Tennessee HVAC wholesale distributor Comfort Supply announced that it has added two Carrier brands — Bryant and Payne — to its product lineup. The new lines will replace Ruud brand equipment previously carried by Comfort Supply.

The coverage of the topic includes a five-part series with several editors, publishers and key personnel from the trade media industry, a three-part series of interviews with industry influencers, advice for COVID-19 internal and external communications and content and interviews from the distributor’s perspective.

“By offering the Bryant and Payne product lines, we will be able to meet all price points in the industry and offer our customers a better selection of products with higher owner satisfaction,” said Clay Blevins, Comfort Supply president. “From air conditioners and heat pumps to ductless systems and commercial products, the Bryant and Payne product lines offer variety that we know our contractors and their customers will love.”

>> sonnhalter.com/covid-19-tip-sheet

>> feelthelove.com.

>> comforttn.com

DalFort Capital Partners Announces Acquisition of Evergreen UV LLC MEMPHIS, TENN. — United Enertech (UE) announced it has acquired Evergreen UV LLC (Evergreen UV), a Tennessee-based privately held manufacturer of Ultraviolet Germicidal Irradiation (UVGI) products. “We are extremely excited to be part of the United Enertech family of companies,” said David Skelton, president of Evergreen UV. “We already can see the difference in our ability to produce and deliver products — especially in this critical COVID environment — and look forward to better serving all of our customers for new and existing buildings now and in the future.”

HVAC Excellence Releases 2021 Conference Presentation Lineup MOUNT PROSPECT, ILL. — HVAC Excellence has officially announced its lineup for the 2021 National HVACR Educators and Trainers Conference. This virtual event will bring more breakout sessions than ever before, directly to instructors. Knowing that HVACR instructors are often tasked with teaching technologies that they themselves have never encountered in the field, they now need to adapt to teaching online. To help them meet these challenges, HVAC Excellence is hosting the 2021 conference as a virtual event. This will make it easy, safe and affordable for all to attend. Although the conference will be broadcast March 15-26, 2021, HVAC Excellence realizes that each instructor’s professional development needs vary, as do their availability for training.

UE now operates four manufacturing facilities consisting of 400,000 sq. ft. of space across Ala., Ariz. and Tenn. Evergreen UV joins United Enertech, Air Performance and Metal Form as part of a growing portfolio of commercial building product manufacturers.

To provide flexibility in viewing breakout sessions, the classes listed in the schedule will be available for the entire day, as well as for an additional 120 days after the conclusion of the conference. This flexibility allows conference participants to watch the 50-minute sessions in any order, as many times as they wish. Upon completion of a session, attendees will be prompted to download a continuing education certificate, which they can print or file electronically.

>> dalfortcapital.com

>> escogroup.org

HVACR BUSINESS NOVEMBER 2020

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REASON DiversiTech Acquires SPIN Tools from Cimport DULUTH, GA. — DiversiTech Corp has acquired SPIN Tools from Cimport, a Brazilian company with more than 20 years experience in the HVACR market. The acquisition was completed on September 30, 2020. Introduced to the HVACR market in 2014, SPIN Tools feature a technology to flare or swage copper tubing in seconds. Known for being 10 times faster than conventional tools, SPIN Tools were designed to use a high temperature method for shaping metal materials without changing the underlying properties of the copper. The SPIN Tools product is sold through HVACR wholesalers globally. “With the addition of SPIN Tools to the DiversiTech portfolio we have further bolstered our presence in the HVAC/R Tools market,” said Andy Bergdoll, DiversiTech CEO. “The integration of SPIN Tools enables our wholesale partners to consolidate their orders with other DiversiTech products, simplify their logistics and reduce their freight costs.” >> diversitech.com

CoolSys Acquires Carolina Refrigeration BREA, CALIF. — CoolSys has acquired Carolina Refrigeration Services Inc, a commercial HVACR company which serves customers in S.C, N.C, Tenn., Ala. and Ga. With this acquisition, CoolSys further expands its foothold into the southeast. “While we currently perform work in the states they cover, acquiring Carolina Refrigeration Services gives us the critical mass required to provide our current customers the support and resources they deserve and to offer our entire solutions portfolio to new customers,” said Adam Coffey, CEO of CoolSys. “Carolina Refrigeration’s excellent service has earned them an outstanding reputation that will serve as a critical part of our growth strategy in the Carolinas and the southeast,” he adds.

Nonproprietary.

Carolina Refrigeration services and installs commercial HVAC and refrigeration equipment in supermarket chains, industrial processing plants, convenience stores, wholesale clubs and restaurants.

R-32 is readily available from multiple suppliers.

>> coolsys.com

Malco Products, SBC, Recognizes 2020 HVAC Trade-Pro of the Year Award Winners ANNANDALE, MINN. — Malco Products, SBC, announced the winners of its annual HVAC Trade-Pro of the Year Award program. The HVAC Trade-Pro of the Year Award recognizes and celebrates outstanding, experienced HVAC professionals who are dedicated to the industry and on-the-job safety, as well as giving back to their communities. The program recognized five top HVAC contractors and technicians from across the U.S.: • • • • •

Pablo Estrada, service technician, Infinity Heating & Cooling, Las Vegas Shannon Godlewski, technician, Service Unlimited Inc., New Castle, Del. Tyler Norton, lead technician & owner, Tight Lines HVAC, Syracuse, Utah Dan Sorenson, assistant service manager, Any Hour Services, Orem, Utah Michael Williams, mechanics helper, TA Woods, Wilmington, N.C.

T H I S I S J U S T O N E O F 3 2 G R E AT R E A S O N S TO C H O O S E R -3 2 R E F R I G E R A N T. S E E T H E M A L L AT R 3 2 R E A S O N S . C O M .

“The 2020 HVAC Trade-Pro of the Year winners are some of the finest nominees we’ve ever seen,” said Mardon Quandt, president and COO of Malco. “These elite contractors and technicians are making a difference in the field and in their local communities and are continuing to advance the industry’s reputation for safety and top-quality customer service.”

WITH MORE THAN 100 MILLION UNITS INSTALLED WORLDWIDE, R-32 IS ENDORSED BY:

Each of the winners will receive a Malco tool kit valued at $1,000, awarded by their local distributor. Nominations for Malco’s 2021 HVAC Trade-Pro of the Year program will open in February 2021. >> malcoproducts.com www.hvacrbusiness.com

HVACR BUSINESS NOVEMBER 2020

SPECIAL REPORT: R-32 MYTHS BUSTED As more manufacturers shift toward low GWP refrigerants, it’s important to look at some of the misconceptions surrounding them.

BY PETE GRASSO

he industry is making the steady shift towards low GWP refrigerants, and one that is emerging as a “go-to” refrigerant for many equipment manufacturers is R-32, classified as A2L (lower flammability). Flammable refrigerants are new to the U.S. air conditioning market — but not to the world. As categorized by ASHRAE, A2Ls are the class of low-GWP refrigerants expected to replace HFCs in many applications and while new to the U.S. market, A2Ls have been used safely in other parts of the world for years. According to ASHRAE, more than eight million mini-split systems around the world are using the R-32. While initial reactions are to shy away from something that is considered “new,” the statistics shows that R-32 isn’t really new and is

R-32 has become the de facto global standard to replace R-410A in many HVAC applications. much safer than you might think when you hear “flammable.” “The current standard refrigerant for HVAC applications is R-410A, which is a blended refrigerant comprised of 50 percent R-32,” says Philip Johnston, PEng, GM, Low GWP Program Leader at Daikin Applied. “Being non-proprietary, it’s available from many chemical suppliers, and that has helped R-32 become the standard around the world as a replacement to R-410A refrigerant.” Johnston adds that mechanical contractors and service technicians are already knowledgeable and skilled in its safe and effective handling in many

HVACR BUSINESS NOVEMBER 2020

HVAC applications, including residential splits, VRF, scroll chillers, rooftops and window units. “R-32 has become the de facto global standard to replace R-410A in many HVAC applications,” he says. There are quite a few misconceptions about R-32 — and that’s exactly what they are: misconceptions. Here we’ll address some of the main concerns about R-32 and dispel the myths surrounding the industry new, go-to refrigerant.

FLAMMABILITY One of the biggest concerns about R-32 is that it is dangerous because it is

flammable. “The question has always been about its flammability and would an industry that had grown up with refrigerants that were completely non-flammable, would they accept a refrigerant that had some flammability characteristics to it?” says Mark Menzer, retired director of public affairs for Danfoss and current volunteer for Citizen’s Climate Lobby. “As the industry has looked at what all the other options are, they realize that refrigerants with some measure of flammability, albeit, low flammability, are basically what’s going to be available in the future.” But let’s be clear: R-32 is not considered highly flammable — it is classified in the A2L category or “mildly flammable” according to ASHRAE, which has various flammability limits, with 1 being

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non-flammable and 3 being highly flammable (propane is considered a 3). Taking a closer look at what falls between 1 (non-flammable) and 3 (highly flammable), ASHRAE realized the need to divide that between flammable and mildly flammable, so they came up with the designation 2L — L for lower flammability. “Low flammability has the certain requirements about how much ignition power it has and how fast the flame moves,” Menzer says. “Basically, what it means, is that something that’s flammable, you put a match to, take the match away and boom, it sustains a flame. “Something that has lower flammability, you can put a match to, it will burn while the match is there. Take the match away and the flame would go out,” he explains. “It doesn’t have enough energy to keep a flame going … it’s flammable but has low flammability.” This is the characteristics of R-32, which is why it fits into the A2L category. “R-32 has a low burning velocity

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Safety standards have been modified to address the use of A2Ls by requiring equipment and systems are engineered with various features that enhance safety. and requires higher minimum ignition energies (MIE) to ignite,” says Scot Swan, global marketing manager, HVACR for Arkema. “As a result, R-32 is difficult to ignite with most spark sources, and usually only ignites with open flames.” Going a step further, not only is R-32 safe, equipment manufacturers are instituting various protocols to ensure safety. “For many years HVACR technicians have installed systems using natural gas, propane and high voltage electrical connections,” says Nathan Walker, senior vice president, corporate marketing for Goodman Manufacturing. “All are rated more volatile than R-32 refrigerant. “National and international safety standards have been modified to address the use of A2Ls by requiring HVAC equipment and systems are engineered

with various features that enhance safety,” he says. “More than 100 million R-32 units are operating safely worldwide in chillers, packaged rooftops, VRF, residential splits and window air conditioning units.”

TRAINING As with anything new, there is a learning curve. Many contractors worry that a new refrigerant means new, extensive training for their technicians. But, while there will need to be some training, it isn’t something Menzer would call “extensive.” “For the professional contractor and technician, this is a real opportunity again, to differentiate yourself, being able to use these,” he says. “So, it requires training, but I would not call it extensive training.” The good news, according to Swan, is that many organizations, such as Air Conditioning Contractors of America

(ACCA) and Air-conditioning, Heating & Refrigeration Institute (AHRI), as well as many OEMs, are putting together training manuals now to ease this transition. “When the HVAC industry experiences a refrigerant transition or the introduction of a new technology, HVACR technicians receive training from manufacturers and distributors,” Walker says. “A shift to R-32 refrigerant will follow that successful path. We expect technicians will find many available training programs and educational resources.”

EQUIPMENT Similar to the fear of sinking valuable resources into training, so too is there a fear of having to invest heavily into new equipment to handle R-32. Fortunately, you won’t have to go out and completely re-equip your technicians. “Some tools need to be specifically designed and rated to handle A2L refrigerants,” Swan says. “Vacuum pumps, recovery machines and leak detectors need continued on page 10

HVACR BUSINESS NOVEMBER 2020

continued from page 9

to be designed to handle A2L products, but not necessarily basic tools or gauge manifolds. If gauges are rated for R-410 then they are most likely acceptable for R-32.” Because R-32 is a pure, single-component refrigerant, Johnson points out, service technicians can be confident that the composition has not changed over time, so it is easy to top off during a service call. “With non-azeotropic blends, it is generally not recommended to top off,” he warns. “The system may need to be evacuated and then recharged with new refrigerant, which can be costly in terms of materials and labor.”

EFFICIENCY In the past, one reason the refrigerants used by the industry were chosen was because they were efficient refrigerants. When the discussion started about switching to low GWP refrigerants, many said, “Well, one thing we’re going to have to give up is some efficiency.” Not so fast! “And as it turns out, (R-32 is) by nature a more efficient refrigerant,” Menzer says. “And then you can redesign equipment to take advantage of its properties and get even more efficiency. So, we don’t lose anything in efficiency and, in fact, we gain something by using R-32.” Johnston expands on this notion, stating test data from Daikin’s labs of inverter-driven compressors for rooftop units and water-cooled chillers that found

Not only is R-32 comparable in cost to today’s R-410A, it is much more economical than other R-410A alternatives. TOXICITY In terms of toxicity, this is another big myth surrounding R-32. In addition to having 1, 2 and 3 categories for flammability, ASHRAE also has an A and B category for toxic and non-toxic. “R-32 is classified in the ‘A’ toxicity category by ASHRAE, meaning it has the lowest toxicity classification,” Swan says. “R-32 has the same toxicity classification as R410A, R-22, and R-134a.” It’s important to point out that R-32 does not present any new health concerns over R-410A, and Swan cautions technicians to always read the Safety Data Sheet (SDS) before working with any refrigerant.

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“It is important to become familiar with the specific hazards as well as the PPE required to work with them,” Swan says. “In fact, R-32 is 50 percent of the blend of R410A so the health safety precautions would be similar for R-32 or R-410A.” A2Ls, like R-32, have a permissible exposure limit of >400ppm by volume, which is the same as many other commonly used refrigerants like R-410A. “Low GWP refrigerants are designed to help protect the earth’s ozone layer,” Johnston says. “Without that protective layer, humans are more susceptible to damages caused by solar radiation.”

HVACR BUSINESS NOVEMBER 2020

full-load and partial-load efficiency rating metrics can be improved by up to 12 percent using R-32 instead of R-410A. “R-32 has greater latent heat capacity than R-410A, which means that R-32 can achieve the same capacity at a lower refrigerant flow rate,” he says. “And at a lower flow rate, less energy is required to produce refrigerant flow, resulting in higher efficiencies for R-32.” To Menzer’s point about redesigning equipment to take advantage of R-32’s properties, Swan says this brings exciting possibilities for contractors and homeowners. “It means the unit will use less energy, and the equipment can potentially be downsized and still cool a home as well as a larger R-410A unit,” he says.

COST & ATTAINABILITY With only a minimal investment in training and equipment, one other way some worry R-32 could break the bank is the cost of the refrigerant itself. Here again we’re dealing with a myth. Not only is R-32 comparable in cost to today’s R-410A, it is much more economical than other R-410A alternatives. “In addition, the charge size in a unit is about 20 percent less than a regular

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R-410A unit,” Swan says. “Meaning, you need less refrigerant product in the unit to cool in the same manner as R-410A.” As far as availability goes, rest assured you will have no trouble acquiring R-32. “R-32 is widely available, manufactured by numerous refrigerant producers and distributed globally,” Walker says. “There are no patents on the basic molecule. Certain alternative low-GWP blends can be proprietary to the companies that own the patents, potentially limiting access and supply.” Swan underscores this, stating that Arkema produces R-32 at its facility in Calvert City, Ky. and is currently available commercially.

REUSE One concern with many of the blended refrigerants used today involved reclaiming and recycling. If a technician

isn’t careful, they can knock the blend out of proportion. “You can end up with more of one part than another part,” Menzer says. R-32, however, is a pure refrigerant, which means that it is easily recovered for reclaim. “A huge benefit of R-32 vs. blends, like R-410A, is that it is a single component refrigerant. This,” Swan says. “Reclaimers do not have to separate out other refrigerants and, after removal of oil contaminants, can return the material to refrigerant grade at lower cost.” A single component refrigerant, like R-32, can’t lose its composition like many blended refrigerants and will retain its quality over time. “R-32 can be topped up and recharged in the field, in both liquid and gas phases, without composition changes. It is easy to clean and reuse on-site,” Johnston says. “R32 can be reclaimed and recycled off-site with a simple cleaning process compared to blends with HFOs that are typically reclaimed by being distilled to their base components and then remixed.” u

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

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HVACR BUSINESS NOVEMBER 2020

ESTABLISH A CULTURE OF SOCIAL RESPONSIBILITY

Being a good corporate citizen impacts your bottom line in a positive way. BY KELLY BORTH

s CEOs, you have ultimate authority for earnings, expenses and profits. But you also have responsibility for your employees and the communities in which you do business. Building and maintaining your company’s reputation as a good corporate citizen and as a good place to work contribute significantly to your ability to keep your financial picture looking positive.

Being willing to roll up your sleeves and volunteer or donate right alongside your employees shows you take seriously the obligation successful business owners have. INSPIRE OTHERS

IT BEGINS WITH YOU

Think about other ways you can set an example for your employees — things they can do, too. Maybe it’s leading a group of employees on a fundraising 5K walk or run. Or organizing food or toy drives to donate to local charities. Small things that aren’t burdensome financially or time-wise on rank-and-file workers with families are good places to start.

Many of you have served on boards of non-profits and trade groups and have lent your expertise to all kinds of organizations with needs. Setting an example of serving your community in this way is a normal and accepted practice for business leaders. But it’s only the first step.

Being willing to roll up your sleeves and volunteer or donate right alongside your employees shows you take seriously the obligation successful business owners have to their cities and towns and those less fortunate.

Look around at other companies in your field or in your community for inspiration.

It’s a long-term initiative to be a company that does well by doing good, and the investments of time and effort (and sometimes cash, too) aren’t drops in the bucket. So why pursue it? And how?

HVACR BUSINESS NOVEMBER 2020

The renowned business author and speaker Tom Peters has a saying: “Leaders don’t create followers, they create more leaders.” As you take a more active lead role in demonstrating your company’s commitment to giving back, think about how you can inspire others on your team to not just follow along with you, but to initiate their own social responsibility actions.

Some leaders here in Columbus, Ohio, where our firm is located, that I am personally inspired by are the owners

of the largest locally owned salon and spa company, Charles Penzone Inc. The owners, Charles and Debra Penzone, have donated salon and spa services to individuals who are going through cancer treatment, and they have also donated a percentage of sales at various times to a variety of community causes. Their stylists are the ones on the front lines of these donations, and the way the entire company comes together to contribute to these community causes is admirable. Another inspiring organization for me is DesignGroup. Second generation leader Bob Vennemeyer and his founding partners decided to do something big for the company’s tenth anniversary. That year, the partners established a donor-advised fund with The Columbus Foundation. The fund lets DesignGroup give cash grants to a variety of community 501(c)(3) charitable organizations as needs arise. As CEO of my own company, I wanted

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10 REASON

As you widen the community giving initiatives, it’s important to talk to your employees about why you are leading the company to do these things. our firm to give back in both ways — with the talents and skills of our employees, and with cash donations, too. As you can imagine, non-profits have no shortage of need for marketing, design and public relations services.

want your employees to feel like it’s a chore, or just a pet project of yours.

They need to promote the services they offer to make sure they are reaching the populations they serve. They need to get the word out about their fundraising needs. And they need to communicate frequently with their donors and service recipients with all kinds of print and digital collateral.

Including the team in choosing causes or organizations to contribute to is the first step. Making sure everyone is directly involved in the projects — whether in frontline contact with individuals receiving services, or on-site at a volunteer opportunity — is next.

With our team’s creative and artistic skills, we provide in-kind services to a number of special causes in our community, collaboratively chosen by the our team, where we feel passionate that our contributions will make a difference. We try to be selective so we can provide a depth of services that will catapult a non-profit to the next level. In 2007, we opened a donor advised fund at The Columbus Foundation. The GREENCREST Living Hope Foundation does just what the name says — it gives living hope to children and individuals in the community who, due to economic challenges, might not otherwise have the resources to live to their fullest potential. For me, the most rewarding part of leading these efforts is watching the team take the ball and run with it on their own. Throughout the year, our team comes together to dip into our own pockets to provide much-needed items for nonprofits chosen by team members. Our efforts have included gathering personal care items for those experiencing homelessness, piecing together blankets for cancer patients undergoing chemotherapy and gathering books and school supplies to stuff the backpacks for central Ohio students.

PROMOTE THE VALUE As you widen the community giving initiatives, it’s important to talk to your employees about why you are leading the company to do these things. You don’t

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How you communicate about your corporate social responsibility program can impact how fully it is adopted by your team.

The closer your employees can get to meeting or being around the people they have helped, the more inspired they become — it solidifies the effort. And, it is likely to bring them joy, satisfaction and purpose. And, finally, it’s important to announce information about the impact your company’s efforts had — how much money was raised or exactly the kind of difference you made. Recognizing employees who were key in adopting the cause and leading others to get involved helps reward the kind of social responsibility leadership you are trying to inspire at all levels.

Easy to install. R-32 refrigerant’s efficiency and capacity can allow for light units in certain applications, making those units easy to handle and install.

The results announcement also shows that your corporate social responsibility objectives are just as important as your financial objectives — it drives home the “why” — the bigger picture reason you’ve committed time and effort and included the whole firm. That can be a powerful message to send to everyone who works for you. The more you, as leaders, can promote the importance of corporate social responsibility, the more community needs can be met. And, there is work to be done. u

Kelly Borth is the CEO and chief strategy officer at Greencrest, a 30-year-old marketing, advertising, public relations and digital marketing agency. You can reach her at 614885-7921 or email kborth@greencrest.com. For additional information, visit greencrest.com.

T H I S I S J U S T O N E O F 3 2 G R E AT R E A S O N S TO C H O O S E R -3 2 R E F R I G E R A N T. S E E T H E M A L L AT R 3 2 R E A S O N S . C O M .

WITH MORE THAN 100 MILLION UNITS INSTALLED WORLDWIDE, R-32 IS ENDORSED BY:

HVACR BUSINESS NOVEMBER 2020

THE SECRET TO HIRING TOP SALES REPRESENTATIVES You may be impressed with a candidate’s personality, but that doesn’t necessarily indicate success in selling.

BY PATRICK VALTIN

re you trying to hire productive sales representatives who CAN close deals? Not easy ... what you see during a recruitment interview can and often is very, very different from what you observe after they have been a few months on the job. So how do you recognize the true closer from the pretending champ? How do you know you are about to hire a hungry wolf or a meek sheep? All applicants who apply for a sales position know one thing — they have to sell themselves pretty well in order to get that job! Unfortunately, a sales person who sells himself/herself very well during the interview does NOT mean they will perform, once on the job. Here is ONE tip you can use right away, next time you need to hire master closers: Stay Away from Personality! You have been impressed with the candidate’s personality: charming, open, courteous, people-oriented, amazing communication skills, etc. Does this all indicate success in selling? Sorry for the shock, but the answer is a strong NO. Does it mean that these personality attributes are un-important for success in a selling job? Again, the answer is NO. They are vital of course. So what is the trick? Simply, most recruiters get trapped into the “temporary personality” syndrome: what you see today will not necessarily show up again in the future.

Most recruiters get trapped into the “temporary personality” syndrome: what you see today will not necessarily show up again in the future. WHAT IS PERSONALITY, ANYWAY?

TEMPORARY VS. “CHRONIC” PERSONALITY:

The word originates from the Latin persona, which means mask. Specifically, in the theatre of the ancient Latinspeaking world, the mask was not used as a plot device to disguise the identity of a character, but rather was a convention employed to represent or typify that character.

Another challenge is to try to detect an applicant’s continuing or permanent personality trait, such as real communication skill, because it is vital for the specific sales job. The applicant may exhibit such soft skills during the interview.

Per the above definition, a person may adopt a different personality, depending on the situation or condition he/she is faced with. Under normal circumstances, the person will adopt one personality. In another situation, that same person may be driven to “wear another mask.” Have you ever interviewed a candidate for a sales position, had a great feeling about the person’s attitude and character, yet became very disappointed by his/ her personality change, once the “honeymoon” was over? What were you evaluating, really? You were mostly trying to analyze a “mask,” or a set of masks, that the applicant would use when going through the interview. He/she might exhibit an entirely different “mask,” once part of the team.

HVACR BUSINESS NOVEMBER 2020

Does it mean that it is a natural, constant quality? The truth is: you don’t know. The hard reality is: 1. The best way to find out is to put the applicant out of the artificial interview context and “force” him/her to react to real or simulated situations that approximate a real life or business occurrence. It is well known that people reveal themselves best when confronted by un-anticipated situations. 2. You can’t guess if a soft skill or personality characteristic exhibited during an interview is actually constant and natural or just temporary. You need to find out. 3. Here is a very easy test/drill you can use during a first interview with a candidate to a sales rep position: pick up a simple tool, accessory from your desk — anything.

It can be a stapler, a pair of scissors, a pen, etc … And ask the candidate to sell it to you! You will be amazed of what you can discover through the candidate’s reaction and actual involvement in the drill. Check for the following: • • • •

Does he/she accept to do it? Is he/she comfortable with doing it? Is he/she talking too much? Is he/she telling you lies in order to close? • Is he/she really trying to close you? • Is he/she trying to avoid the challenge? • Etc. Challenge the applicant throughout the test. Play a tough customer; argue on the price, etc. ... Make it as real as possible. And remember: the real personality comes out when you challenge the candidate, NOT when you allow them to talk about how good they are! This little, simple test will tell you more about a sales rep than any other conversation, resume or testimonial you can get. Try it a few times and you will get good at it! u

Patrick Valtin is an international public speaker and the author of No-Fail Hiring. His No-Fail Hiring System has been used by thousands of small businesses of all kinds of industries. For additional information, visit nofailhiring.com.

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FINANCE

BY RUTH KING

Wealth Rule No. 6: Save Cash

uilding your cash balance is the first step in building wealth. How much cash do you need?

The answer depends on your tolerance for risk. Some owners choose to have three months of overhead expenses in the bank at all times. Others want six weeks of payroll. Others want a year’s worth of operating expenses. Others have less than a month’s operating expenses saved.

Save one percent of all cash that comes in the door in a separate savings account and as much of the residential maintenance money that is paid up front or monthly.

The contractor had a very profitable HVACR business with a line of credit exceeding $1 million. In the first quarter of each year they would use the line of credit. Then, when they were in their busy season, they would pay off the line of credit. This pattern went on for more than five years. The line of credit was current and the company abided by the rules for using the line of credit (being zero for at least 30 days out of each year). One day, during the start-up of their busy season, the owner got a call from his banker. The banker said they were calling the line of credit and he had 30 days to come up with more than $1 million. The owner was in shock. After all, the line was current and they had this line for many years. The banker said the bank was under new management and they were changing all credit policies. His company’s line of credit was deemed too risky and was no longer wanted by the new owners of the bank. It was early spring and the company

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Here’s what could happen when you save the money: I was presenting at an ACCA conference. A person in the audience raised his hand when I started talking about saving one percent of revenues. He asked whether he could tell a story. I said yes. The contractor said that he was in another one of my presentations in the mid 1990s where I talked about saving one percent of revenues. He started doing it and built up a large sum of money. When the recession hit in the mid to late 2000s, the building next to his came on the market at a cheap price because the owner of that building needed money.

Some contractors live off their lines of credit and don’t have much cash saved. But, what happens when the bank changes hands or the management philosophy changes and they call your line of credit — even if it is current? Here’s a sad story about how a bank almost put an HVACR contractor out of business.

invest in some non-liquid wealth building assets.

didn’t have $1 million in cash. The owner scrambled to find another bank and, luckily, he did. He vowed to save the cash so that he would never be in this situation again. The company would be its own line of credit.

HOW DO YOU SAVE CASH? Save one percent of all cash that comes in the door in a separate savings account and as much of the residential maintenance money that is paid up front or monthly. As this account grows you can decide what to do with the cash in savings. That means invest it, not spend it on personal things. Don’t do what one of my clients did: They paid attention and did what I asked — they put the majority of their residential maintenance money that customers paid in advance in a separate savings account. The dollars in that account grew large (more than six figures) and the owner decided to take some of the cash to fund an expensive personal toy. When I found out that he had taken the

money out of the account, asked, “Why did you touch the money? That was for your retirement. Do you know how much you have to generate to put that back?” I was nice about it, but firm. He realized what he had done and the company worked extremely hard to put the money back in the savings account. The next year around the same time I called him and asked whether he was taking money out this year. His comment, “No. I gave my stupid gene to my competitor!” He learned a hard lesson. The initial savings account should probably be in the bank where you have your operating account. This way you can transfer one percent of the deposit each week when your bookkeeper prepares the weekly cash flow report or each time you make a deposit. As the amount in that account grows, and it grows over the maximum Federally insured amount, consider moving some of it to an account that provides interest and is not in the same bank. This will decrease your temptation to take it out on the spur of the moment. You may also want to

Jack had the money in the savings account so he wrote a check for the building next to his building. He rented the space and had positive cash flow on that building. He told the audience and me that he had recently sold the building for a lot of money. And, Jack gave his thanks for me giving him the idea to save one percent of revenues. The key to saving is to be consistent. Every bank deposit should have one percent of the deposit amount transferred to a savings account. Or, when your bookkeeper calculates your weekly cash flow report described in the Wealth Rule No. 5 (Oct. 2020, pg. 18), the transfer can be made once a week. Just do it on a regular basis. 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 or call 770-729-0258.

HVACR BUSINESS NOVEMBER 2020

ESTATE TAXES

PROVIDED BY KEVEN PRATHER, CFBS

When the Worst Happens, Are You Really Protected?

illiam, an entrepreneur making around $300,000 a year, suffered a debilitating injury that left him unable to stand—let alone work. For the next ten months, he was unable to do much of anything. Lacking disability insurance, he was forced to take money from his company’s coffers to pay his bills and take care of his family’s financial needs. He also needed to come up with funds to pay for someone to come in and run his firm while he was flat on his back. In the end, he burned through his cash and very nearly went bankrupt. If you don’t think this could be you someday, think again. Do you realize that you may be three times more likely to become disabled for an extended period than you are to die before age 65?

• •

Do I have the protections in place that I need in order to ensure my personal and professional financial security if I become disabled?

business owners actually have disability insurance protection in place.

• Asking eight key questions will help shed some light on the right type of disability insurance yourbusiness needs,owners’ goalsexpense and situation. entrepreneurs have bothered for to buy disability

Even fewer insurance—which covers business expenses if owners are disabled (see Exhibit 3). These expenses can include rent and property taxes, utilities, leasing costs, accounting costs, business insurance premiums, employees’ salaries and benefits, and other key expenses that help keep the lights on.

6.8%

14.3%

EXHIBIT 3

EXHIBIT 2

Business Owners with Disability Overhead Policies

Business Owners with Individual Disability Policies

Yes No

It’s time to ask yourself a few questions: • What would happen to me, my family and my company if I were to become unable to work? • Do I have the protections in place that I need in order to ensure my personal and professional financial security if I become disabled?

A SHOCKING LACK OF PROTECTION Despite the sizable threats that becoming disabled can present to financial security, few business owners actually have disability insurance protection in place.

work?

• The vast majority of business owners don’t any type of disability insurance in place A shocking lack ofhave protection to protect themselves, their families and their Despite the sizable threats thatcompanies. becoming disabled can present to financial security, few

While death and taxes are life’s only two certainties, it seems disability may be close behind. Here’s why that’s such a big deal. We’ve discovered that far too many business owners have not taken steps to protect themselves—and their incomes—from the financial carnage that can occur in the wake of suffering a disability.

• You may be three times more likely to become disabled for an extended period than you are to die before age 65. What would happen to me, my family and my company if I were to become unable to

It’s time to ask yourself a few questions:

HVACR BUSINESS NOVEMBER 2020

85.7%

93.2%

Example: Less than one-fifth of entrepreneurs we studied have individual disability insurance—policies purchased by the business owners themselves that can offset the loss of income that would occur from their being unable to work (see Exhibit 2). Even fewer entrepreneurs have bothered to buy business owners’ expense disability insurance—which covers business expenses if owners are disabled (see Exhibit 3). These expenses can include rent and property taxes, utilities, leasing costs, accounting costs, business insurance premiums, employees’ salaries and benefits, and other key expenses that help keep the lights on. Finally, a minuscule percentage of business owners have buy-sell disability insurance, which is designed to allow a partner to buy out another partner who has become disabled and is unlikely to continue in his or her role (see Exhibit 4).

EIGHT QUESTIONS TO ASK BEFORE YOU BUY DISABILITY INSURANCE

Not surprisingly, disability insurance— Yes ance policy. When you buy disability Finally, a minuscule percentage of business No like many other types of policies—can be income insurance coverage, you owners have buy-sell disability insurance, a jumbled mess of terms that create more are essentially buying the insurance which is designed to allow a partner to company’s definition of confusion disability. than clarity. To break through buy out another partner who has become disabled and is unlikely to continue in his or N=513 business owners. Source: AES Nation, LLC N=513 business owners. Source: AES Nation, LLC the noise, start by considering these eight There are three basic definitions: “own her role (see Exhibit 4). occupation,” “any occupation,” questionsandwhen evaluating disability “partial” or “residual” disability. insurance. 2.4% • Own occupation. This 2 refers to the 1. What’s occupation you were working in just the policy’s definition of disability? This is one of the most prior to your disability. If your “own occupation” is protected, important the policy features, if not the most will not require you to work in another EXHIBIT 4 important feature, of a disability insurBusiness Owners occupation. This is also sometimes with Disability ance policy. When you buy disability referred to as “regular occupation” or Buyout Policies “your occupation.” income insurance coverage, you are esYes No

97.6%

N=424 business owners. Source: AES Nation, LLC

Eight questions to ask before you buy disability insurance Not surprisingly, disability insurance—like

•

sentially Any occupation. Some policies will buying the insurance companot pay benefits if you can perform ny’s definition of disability. “any” occupation you are suited to, There are three basic definitions: “own based on your education, training and experience. occupation,” “any occupation,” and Partial/residual. Residual “partial” disability or “residual” disability. insurance pays benefits even if you are not completely disabled (and can work part time). Benefits are based on the income you earn www.hvacrbusiness.com working part time, relative to your previous full-time earnings. Partial disability coverage is similar, but loss

•

Own occupation. This refers to the occupation you were working in just prior to your disability. If your “own occupation” is protected, the policy will not require you to work in another occupation. This is also sometimes referred to as “regular occupation” or “your occupation.”

• Any occupation. Some policies will not pay benefits if you can perform “any” occupation you are suited to, based on your education, training and experience. • Partial/residual. Residual disability insurance pays benefits even if you are not completely disabled (and can work part time). Benefits are based on the income you earn working part time, relative to your previous full-time earnings. Partial disability coverage is similar, but loss of income is not considered. Instead, the policy pays 50 percent (or less) of the benefit that you would get if you were totally disabled. Advice: Look for a disability income insurance policy that considers you disabled if you cannot perform the substantial and material duties of your own regular occupation. Note, however, that this option is not always available. Based on your occupation, you may be eligible for a less comprehensive definition of disability. Don’t dismiss that coverage. Having some sort of protection is better than having none. You can further enhance your policy with coverage that provides benefits in the event of a partial disability.

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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2. What is the amount of coverage? Most plans set a limit on the percentage of your income you can insure— usually 50 to 70 percent of your total gross earnings. We tend to suggest that business owners aim for policies on the high end of the spectrum, assuming such policies are financially feasible, so they can meet their responsibilities and take care of unexpected financial needs without eroding their lifestyles greatly.

5. Is the policy noncancelable and guaranteed renewable? If you’ve got a noncancelable and guaranteed renewable disability insurance policy, the insurance company can’t raise your premiums or cancel the policy as long as you pay the premiums—giving you considerable security. A policy that is only “guaranteed renewable” can increase premiums under certain circumstances.

IS IT TIME TO RE-EVALUATE YOUR INCOME PROTECTION?

3. How long is the waiting period? The waiting period (also known as the elimination period) is the length of time you must wait before disability income benefits begin to be paid if you are too sick or too hurt to work. The period can be as short as 14 days (short-term disability policy only) or as long as a year. As a rule, the shorter the waiting period, the more expensive a policy will be. Most people choose either a 90-day or 180-day waiting period. Note: Benefits are typically not paid until the end of the month following the waiting period. If you have a 180-day waiting period, you’d receive your first benefit check after at least 210 days.

6. Does the policy cover accidents and illness? About 90 percent of disabilities are the result of illnesses, according to the Council for Disability Awareness. However, accidents—such as a bad car wreck or a serious fall from a high ladder—also put you at risk. Be sure your policy addresses both sources of disabilities.

Or you may be part of that select group of business owners who have insurance policies to protect their business and income in the event of a serious disability.

4. How long will benefits last? The benefit period is the length of time benefits are paid. The shortest benefit period is usually two years. A five-year benefit period is fairly common. Most people purchase coverage that lasts until age 65, or longer if available. Pro tip: Buy the longest benefit period you can afford. If you remain in good health, most insurance companies will allow you to upgrade your coverage down the road.

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

7. Does the policy come with a costof-living increase in benefits? A long-term disability deprives you of income. Unless you are careful, some policies can also put you at the mercy of inflation. To avoid the risk of inflation eroding the value of the disability payments, you can purchase a policy that automatically adjusts your payments to reflect an increased cost of living. 8. Are the benefits taxed? Benefits may be tax-free if you pay the premiums using after-tax dollars. That said, the key is to evaluate the tax implications of using pretax or after-tax dollars so you understand what you’re getting and so you can customize your policy to your needs if necessary.

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.

By now, you may have realized that you’re among the vast majority of entrepreneurs who lack one or more types of disability insurance, and that you are putting your financial well-being at risk. If so, what are you waiting for? The time has come to safeguard yourself, your family and your company from potential catastrophe.

If so, it’s time to reassess your current level of coverage and the type of new options available to you. We find business owners often discover that the disability coverage they bought years ago and forgot about doesn’t meet their current needs in one or more of the eight categories outlined above. That’s especially true if your income has risen substantially. The upshot: As your needs, level of success and health status change over time, your disability protection has to keep up—or else you needlessly put yourself at risk. Contact a legal or financial professional who can evaluate your unique situation to determine your disability insurance needs, what types of policies could meet those needs and whether any existing policies you have are up to snuff. 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.

HVACR BUSINESS NOVEMBER 2020

STRATEGY

BY JENN SAID

Build Strong Relationships with General Contractors

s a specialty contractor, maintaining collaborative and fruitful working relationships with general or lead contractors is critical for success. Strong partnerships build trust, help ensure work is done more efficiently and lead to winning more bids in the future. Establishing these relationships can be difficult, however, when you’re tasked with projects that are larger, complex and more data-driven than ever before. If you’re managing your own subcontractors, it’s probably easy to understand a general contractor’s point of view. Like you, general contractors face a balancing

Being open, honest and transparent will build trust and respect and increase the odds of repeat work. act in effectively tracking a subcontractor’s work while at the same time, respecting their expertise. This can be difficult when manual processes or outdated technology stifle communication and lead to issues with change orders, paperwork, materials and permits. Whether you’re managing a subcontractor or working with a general contractor, the right mix of technology and best practices will help you avoid common problems that can diminish trust and negatively

impact the partnership. To build long-lasting relationships with general contractors, consider these tips that are designed to improve and streamline your operations and help your business grow. Ditch the paper and move beyond manual processes. Most general contractors are looking for specialty contractors that use modern technologies and up-to-date software rather than relying

RLS

The Original, Proven HVAC/R Press Fittings Compared to Modified Plumbing Fittings. RLS HVAC/R Press Fitting

ZoomLock Max/ Conex MaxiPro

Flare on end (HVaC/r style)

No Flare on end (plumbing style)

Two complete 360° circular metal-to-metal connections.

Hexagonal press leaves 6 points with no jaw contact.

• Proven since 2015

• Introduced after June of 2019*

• Sizes up to 1-3/8" (1-5/8" & 2-1/8" soon)

• No sizes over 1-1/8"

• Long radius elbows

• Short radius elbows

• Made in USA

• Imported

on manual processes. Many of their clients demand real-time data that some subcontractors can’t easily provide. Jeremy Larsen, vice president of products at Viewpoint, explains the added benefits of moving away from paper and manual processes. “By moving to an integrated, cloud-based construction management solution that nets you realtime data and decision-making abilities, your business will run more efficiently,” he says. “You’ll also unlock a competitive advantage that will go a long way toward building stronger business relationships and winning more bids.” Set guidelines and expectations

RLS fittings look different... because they ARE different! The original, patented, proven RLS press fittings (previously sold under the ZoomLock brand) were specifically designed for HVAC/R and have been used around the world for nearly 6 years. So why choose modified plumbing fittings? Choose a proven track record. Choose American-made. Choose RLS!

Look for the flare!

That’s how you know it’s for HVAC/R.

*From RLS’s June 2019 press release regarding its patent lawsuits against Conex: “As part of the settlement, Conex has agreed, without admitting liability or infringement, that as of June 30, 2019, it will stop selling the design of its B MaxiPro fitting that RLS accused of infringement in the lawsuits. Conex has changed its design.” ZoomLock® is a registered trademark of Parker Intangibles LLC, which is a subsidiary of Parker-Hannifin Corporation. RLS’s use of the trademark herein does not imply any affiliation with or endorsement by Parker-Hannifin Corporation.

HVACR BUSINESS NOVEMBER 2020

A M E R I C A N

M A D E

rapidlockingsystem.com www.hvacrbusiness.com

from the start. Ensure your roles and responsibilities are written into the contract. Terms and conditions should be clearly defined, including project specifications, expectations, timelines and all aspects of remuneration and payment methods. This is also a good time to shine if you have the proper documentation in place, from licensing and bonding to special certifications and union payroll ability/documentation (if needed). “The general contractor should walk you through all aspects of the project, the technologies and platforms used, communication practices and procedures, to name a few,” Larsen says. “This should also include a rigid overview of safety procedures and practices. Setting these clear expectations can save time, money and help avoid costly problems or delays.” Communicate often. Collaboration is the glue for any successful construction project. “Communicating project changes consistently, working with real-time data and systems and delivering information ahead of schedule will go a long way toward ensuring that everyone is on the same page,” Larsen says. “With an integrated, cloudbased construction management solution in place, you’ll be able to capture, view and share real-time project information and automate workflows for processes like time entry, invoices and change orders to deliver more productive, higher-quality work.” In addition to delivering project information on a timely basis, strive to ensure the lines of communication are always open and that you can quickly address questions. Initiate frequent check-ins to match performance with outlined expectations to continually improve the relationship. Being open, honest and transparent will build trust and respect and increase the odds of repeat work. Document digitally. A key element of ensuring compliance and project quality is documentation, so it’s important to have a fluid system of record-keeping in place. This means easy-to-access, correctly-versioned documents in a central location, with an effective means of distribution and backup copies in place. “Unfortunately, many specialty contractors still rely on physical paper, file cabinets and other manual means of document and data collection,” Larsen says. “These methods are not ideal as

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documents can take longer to find, are easily lost and might not be recoverable in the case of a disaster, such as a fire or flood.”

REASON

Modern cloud-based construction management solutions feature powerful document management functionalities that allow you to go paperless with guaranteed digital audit trails that are consistently backed up.

Whether a single-page document or hundreds of pages of detailed plans, drawings and specs, these documents can be quickly accessed, updated and shared when needed. Intuitive versioning controls and alerts when expirations or new information is needed ensure that teams are always working with the latest information in hand. Evaluate your performance. At the end of the project, take time to analyze the relationship. Sit down with the general contractor and review project milestones, such as your ability to meet cost estimates and deliver the work on-time and in compliance with all aspects of the contract and regulations.

Conversely, ask the general contractor if there are areas in which you could improve. You might find that many contractors appreciate this extra effort, and it will likely not go unnoticed when the next project’s bid packages are sent out. Plus, this review could help your company identify areas where it can improve.

10% more thermal capacity. R-32 refrigerant has excellent thermodynamic performance, with about 10% more thermal capacity than R-410A.

Capture important details. Leverage technology to increase the level of detail captured on projects. Take photos or record evidence of why work cannot be completed to clearly define liability responsibilities. Report delays caused by weather conditions. Log incomplete tasks and defects ahead of walk-throughs. Being data-driven and transparent goes a long way toward building solid working relationships. Why take a chance by playing the data guessing game with manual processes and outdated technologies? Consider making the transition to a modern, integrated construction management platform to meet today’s modern project demands. Doing so will improve quality and productivity, streamline workflows, reduce overhead costs and boost bottom-line profits. u

T H I S I S J U S T O N E O F 3 2 G R E AT R E A S O N S TO C H O O S E R -3 2 R E F R I G E R A N T. S E E T H E M A L L AT R 3 2 R E A S O N S . C O M .

WITH MORE THAN 100 MILLION UNITS INSTALLED WORLDWIDE, R-32 IS ENDORSED BY:

Jenn Said is a freelance writer who has written about the construction industry for more than 15 years.

HVACR BUSINESS NOVEMBER 2020

FINANCE

BY SHANE RAU

When You Love Your Business, But Hate Numbers

ften, when I talk with an owner or key operator of a business, they tell me that they don’t really like the numbers side of the business, or that they’re more comfortable in the field. This is completely understandable. Many business owners started out as technicians prior to taking over a family company or starting their own business.

To be successful as a business leader, you have to have a grasp of the basics.

But working with the numbers is a crucial part of running a company. To be successful as a business leader, you have to have a grasp of the basics.

Let’s start by getting rid of the idea that to care about the numbers in your business, you need to be the accountant/ bookkeeper. That’s not your role.

Once they’ve done this, you need to review the information for accuracy, ask questions, and use the numbers to make needed adjustments. You, as an owner or leader, don’t have to be responsible for the data entry and number crunching– you’re responsible for checking the numbers and using the data. Once you have your business’s financial information and have verified its accuracy, what do you do next? Pay attention to the Big 5 — the five most important expense categories you should focus on to keep your business financials on track: • Direct Materials — broken out by department

The final must-see ratio on your balance sheet is your debt-to-equity ratio (D/E), which shows how much debt you have compared to how much equity — or “true” ownership — you have in the company. The D/E ratio is your total liabilities divided by your equity. A high debt-toequity ratio means that your company is leveraged and potentially at risk of default. If any of these ratios are not where you want them, you’ve now identified them and can start taking steps to improve them. Improving your company’s balance sheets tends to take quite a bit longer than improving issues on your income statement. With dedication, however, both sheets — and your company’s finances — can be improved.

WHAT DO YOU DO WHEN YOU HATE NUMBERS?

We also need to throw out the thought that if you have an accountant or bookkeeper, you don’t need to worry about numbers. Accountants and bookkeepers break out your expenses into a useable format. They enter your business’s data to make understanding the information easier. Period.

be at least 1:1, or your business could be in financial trouble.

• Direct Labor — broken out by department • Office Wages — for the whole company • Advertising — for the whole company • Vehicle Expense — for the whole company Use the numbers from your income statement to identify areas you want to investigate further and/or correct. For example, a high labor amount could be the result of low conversion rates, which may be due to overbooking technicians. By identifying the high labor amount using your income statement, you can investigate the issue and understand what the cause is. Once you’ve identified an issue, you can work on possible causes and fixes. For instance, you could decide to have your company focus on maximizing each call to increase conversion rates and sales, which would drive down that labor figure.

HVACR BUSINESS NOVEMBER 2020

Another primary financial statement you need to review is your balance sheet. On your balance sheet, a key item to always look at is your cash. It’s vital to make sure you have enough cash on hand to cover expenses. What else should you be looking at on your balance sheet? You’ll want to review your current ratio, which is a number that tells you if you have enough assets on hand to quickly cover your short-term obligations. The current ratio is calculated by dividing your current assets by your current liabilities. The next is your quick ratio, which is an extension of your current ratio. It removes prepaid expenses and inventory from your current ratio figure, because you’re unlikely to be able to convert those to cash quickly.

When it comes to your business’s finances, there are many more items to review and ratios to analyze, but this is a great starting point. Once you’ve begun reviewing these first few figures and feel you have a good handle on them, you might find that you like dealing with numbers more. It’s my hope that one day, you won’t just tolerate the numbers of your business — you’ll love them. u

Shane Rau is a Finance Coach at Nexstar Network.To learn more, visit nexstarnetwork. com, call 888-240-7827, or email membership@nexstarnetwork.com.

The quick ratio is your current assets, minus inventory and prepaid expenses, divided by your current liabilities. The quick ratio also measures your ability to pay short-term obligations. Both your quick ratio and your current ratio should

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PRODUCT FOCUS »

DAIKIN APPLIED

JOHNSON CONTROLS

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Daikin has expanded its SmartSource Compact water source heat pump (WSHP) product line, adding a horizontal configuration to make the technology a fit for a broader range of applications.

With a range of efficiency ratings from MERV 11 to MERV 16, KOCH DuraMAX filters are a smart and safe upgrade from bag filters and other boxstyle rigid filters and effectively help lower the spread of COVID-19 indoors.

The RIDGID SeeSnake CSx Via provides a convenient means to stream, capture and share inspection images using an iOS, Android or Windows device, giving end users another great inspection option in addition to the RIDGID full line-up of monitors.

Taco Comfort Solutions has expanded its family of easy-to-use, ECM highefficiency circulators with the addition of the 0034e and 0034ePlus models. With a maximum of 34 feet of head and 50 gpm, the new circulators offer up to 85 percent energy savings over a conventional circulator.

SmartSource Compact heat pumps are designed to provide commercial contractors and facility managers with a low-cost alternative to more expensive and larger WSHPs. Now with vertical and horizontal configurations, the compact WSHPs are ideal for new construction and retrofits where space and budgets are limited. They can be configured for boiler tower or geothermal applications that are often found in schools, offices, lodging, condominiums and retail facilities.

Tested in accordance with ASHRAE Test Standard 52.2-2017, DuraMAX is an ideal choice in filtration systems with high velocities or variable air volumes. The high-capacity mini-pleat design allows a nominal 24x24x12 filter to incorporate 194 square feet of filter space, which creates an extremely high dust-holding capacity to significantly prolong the service life of the filter. >> kochfilter.com

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CSx Via enables reels with an interconnect port to be Wi-Fi enabled and uses the free RIDGID HQx Live app to remotely control the camera functions and features. Simply dock in the CSx Via Wi-Fi control device to unlock a world of flexibility, convenience and camera operations with just your mobile screen.

These circulators are available with cast iron or NSF/ANSI 61 & 372 certified stainless steel volutes, so they are ideal for closed-loop heating systems as well as domestic hot water recirculation systems. Both circulators also offer a convenient, rotatable control box cover for a professional look, no matter the orientation of the installed circulator.

Remotely control all functions and features of your camera reel, including TruSense, distance counter, sonde and more.

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HVACR BUSINESS NOVEMBER 2020

20QUESTIONS >>

with NATHAN WALKER

We sat down with Nathan Walker, vice president of Goodman Manufacturing in Waller, Texas, to discuss industry refrigerant changes, specifically AL2s and R-32, and how these changes will impact the North American market. We also discussed COVID-19 and opportunities for contractors focused on indoor air quality (IAQ). 1. When you’re at work, what always puts a smile on your face?

The extraordinary and outstanding efforts our employees provide to ensure we can continue to deliver the best support possible to our customers.

2. Please finish this sentence; I was raised to believe ...

... that you work hard on behalf of yourself and your family and that you lend a helping hand to others when they need it.

3. What’s your most recent good idea? Recently, I’ve had a few but they are work related and proprietary. So, I can’t share them right now.

4. You studied engineering in college ... how did you transition into marketing?

I owe that fortunate shift in my career to good leadership at Goodman. After helping Goodman prepare for the 13 SEER transition, I was approached about a product management job that leveraged my technical experience in a way I had not considered at the time.

5. You’ve been with Goodman for 18 years ... what’s kept you at the company for so long?

Thank you for the subtle reminder of my age! Honestly, I came to Texas expecting to stay a short time and return to my native Tenn. However, I joined a fast-paced organization that was fiercely dedicated to serving its customers. I thoroughly enjoyed it from day one.

6. What do you see as the next significant change coming to the industry?

A refrigerant change is likely coming to the HVACR industry. Specifically, a low global warming potential (GWP) replacement for R-410A — it represents a significant change to everyone affiliated with the industry.

7. What benefits do A2L class refrigerants offer?

Many A2Ls offer lower GWP, single component versus blend, better capacity, efficiency and improved thermophysical properties.

8. Do you think there will be more than one refrigerant option available? Yes, I am aware of two North American manufacturers that have announced their choice for an R-410A replacement, and they are not the same A2L class refrigerant.

HVACR BUSINESS NOVEMBER 2020

9. Why has your company endorsed R-32? R-32 is a proven commodity, deployed in more than 100 million units around the world. R-32 is abundant and widely available from multiple suppliers. As a pure, single-component refrigerant, R-32 can be topped off and recharged in the field, in both liquid and gas phases, without changes in composition. Further, R-410A is a blended refrigerant of 50 percent R-32.

10. What defines ‘mildly flammable?’

All A2L class refrigerants carry that distinction. But, R-32 refrigerant is roughly 100 times more difficult to ignite than propane.

11. Refrigerants are heavily regulated ... why is it so confusing for contractors?

When the industry goes through a refrigerant transition, I think inaccurate and misleading information confuses contractors. Often, rumors spread quickly, then eventually are proven wrong. In the meantime, contactors may make decisions that could be detrimental to their business.

12. How does the pending refrigerant change affect the North American market?

Quite often, a refrigerant transition creates the opportunity for manufacturers, and others to create new technologies that will help the industry deliver even more efficient and effective heating and cooling systems. From my perspective, the refrigerant transition is only one part of a continually evolving industry.

13. Do you think this will be the last refrigerant transition?

15. What are the biggest challenges for contractors when new refrigerant regulations are introduced?

Contractors are a resilient group. Typically, they adapt to any change that affects the industry, whether it involves new technology, refrigerants or energy efficiency standards. That’s what makes contractors unique.

16. Where can contractors get the most accurate information regarding refrigerant changes?

It depends on the change. For the pending refrigerant transition, equipment and refrigerant suppliers are the best source for accurate information. Industry associations such as Air Conditioning Contractors of America (ACCA), Institute of Heating and Air Conditioning (IHACI), Sheet Metal Air Conditioning National Association (SMACNA), Air-conditioning, Heating & Refrigeration Institute (AHRI) and Plumbing-HeatingCooling Contractors — National Association (PHCC) are dependable sources for information too.

17: Where can contractors learn more about R-32 right now?

That’s easy. We developed a tool that answers 32 of the most commonly asked questions about R-32. Anyone can visit r32reasons.com. Its an informative and educational site devoted to R-32 refrigerant. For example, R32 can be up to 12 percent more efficient, it’s non-proprietary and it’s GWP is 68 percent lower than R-410A.

18. Beyond refrigerants, what trends do you see in the market over the next three years?

Likely not. We should remember this is the fourth major transition since the beginning of air conditioning. There may be changes in the future as new refrigerants are developed and guidelines change.

Control technology and connectivity seem to be a trend with HVACR equipment that will continue. The continued growth of ductless systems and inverter units is a trend that we’ll continue to see in the coming years.

14. How can contractors benefit from changes that occur due to regulations?

19. It’s been a challenging year for contractors ... have you noticed positive trends that have helped them?

Successful contractors understand they are in the service business, and equipment is just one component of the services they provide. A refrigerant transition offers enhanced energy savings and performance.

Many who are working from home are spending more time with their HVACR system and have discovered their current system is not providing the indoor comfort expected. Many contractors are getting calls to troubleshoot or replace systems that have received additional scrutiny due to owners spending more time at home.

20. Due to the COVID-19, has interest in indoor air quality (IAQ) increased?

The pandemic has reshaped attitudes of homeowners and business regarding IAQ. Beyond needing hot or cold air, a growing emphasis on the quality of the indoor environment is occurring.

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Grow recurring maintenance revenue with ® HVACScan , the robust asset management solution for preventative maintenance. HVACScan is the mobile service application and web-based reporting solution that provides the advanced business intelligence and valuable insights your existing technology stack can’t. You likely already employ software and technology for field service management, inventory management, project management, job costing, and much more. While these solutions help you provide efficient and reliable service delivery, they lack direct, tangible value to customers mired in paper reporting who lack visibility into their HVAC-R system status. HVACScan delivers that value and visibility to your technicians and customers by: • Eliminating time consuming and manual paper reporting year-round • Providing customers with a complete digital asset management solution, including recall and warranty tracking and detailed service history • Generating interactive facility maps with system and device locations via the digital Floor Plans feature • Documenting and reporting compliancerelated deficiencies and events, including EPA Section 608 refrigerant tracking • And much more

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HVACR BUSINESS NOVEMBER 2020

Articles inside

20 Questions with Nathan Walker

Special Report: R-32 Myths Busted

When You Love Your Business, But Hate Numbers

Wealth Rule No. 6: Save Cash

Product Focus

When the Worst Happens, Are You Really Protected?

Editor’s Notebook

Establish Culture of Social Responsibility

The Secret to Hiring Top Sales Representatives