HVACR Business MARCH 2021 by HVACR Business

Stay Connected to the Industry Pete Grasso 4

The Right Way to Go Social Kelly Borth 9

Customer Relations is Key Eric Knaak 12

Boost Your Business Valuation Brian Cohen 14

Planning Takes Time Keven Prather 19

The Ingredients of Culture Jodie Deegan 20

HVACRBUSINESS.COM MARCH 2021 / VOL.16 / NO.3

HOW COVID-19 CHANGED BUSINESS Page 6

ALSO INSIDE » Industry News .............................................................5 Ruth King The Rules of Wealth ........................................................18 Product Focus .............................................................21 20 Questions with Kevin McNamara COO of Climate Control Group ….. ........................22

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CONTENTS

MARCH 2021 / VOL.16 / NO.3

F E AT U R E S

6 9 12 14

How COVID-19 Changed Business Many contractors have had to adapt to the restrictions of operating in a pandemic. By Pete Grasso

D E PA R T M E N T S

The Right Way to Go Social Make strategic choices about which social media platforms are best for your company. By Kelly Borth

Customer Relations is Everyone’s Job Every member of your team is responsible for creating the type of experience you want your customers to have. By Eric Knaak

Boost Your Business Valuation Implement these five add-backs to improve the profit situation of your company and make it attractive to buyers. By Brian Cohen

C O LU M N

Wealth Rule No. 19: Have an Increasing Current Ratio

How Long Does Planning for Your Business’ Future Take?

The Ingredients of Culture

5 17 21 22

Editor’s Notebook If we’ve learned anything in the past year, it’s that there is always a way to stay connected to one another. By Pete Grasso

Industry News Business Insights Product Focus 20 Questions with Kevin McNamara COO of Climate Control Group

Your company’s current ratio should be monitored monthly. By Ruth King Building necessary business value can be the longest part of implementing an exit plan. By Keven Prather Your mission and vision statements are not just wall decorations; they’re values that guide your team. By Jodie Deegan

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THE HVACR MANAGEMENT MAGAZINE

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©2021 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 ©2021 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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EDITOR’S NOTEBOOK

BY PETE GRASSO

Stay Connected to the Industry

ne year ago, I was getting ready to pack my bags and head to St. Louis for the Air Conditioning Contractors of America (ACCA) annual convention while keeping an eye on the news about the growing number of coronavirus cases in the U.S. and the world.

Later this month, the National Educator and Trainers Conference will also be completely virtual. Instead of spending just a few days in person, the conference will release new classes over the span of 12 days from March 1526. Not only that, but sessions will be available to registrants for 120 days following the conference.

As more and more states began implementing restrictions on large gatherings — and the NCAA cancelled March Madness! — I began to have doubts about my trip to St. Louis.

“While we would prefer to be meeting everyone in person, the pandemic allowed us to rethink how we could provide more content than ever before,” says Howard Weiss, executive vice president for ESCO, which manages the conference.

Sure enough, a couple of days before my flight, ACCA was forced to cancel. In the coming days and weeks, the country essentially went into lockdown.

If we’ve learned anything in the past year, it’s that there is always a way to stay connected to one another.

Other organizations were also forced to cancel in-person events last spring and as we progressed through summer while COVID-19 cases continued to rise, many events planned for the fall were also in peril.

One by one, fall events either cancelled, postponed or smartly switched to a virtual, online model. Would this become the new normal for industry events? The industry’s biggest annual event, the AHR Expo, initially planned to postpone from January to March this year, before scrapping plans for the show altogether to concentrate on the 2022 event in Las Vegas. Here we are one year later and ACCA, which had initially planned to focus on this year’s March conference in New Orleans, also made the decision to cancel yet again and prepare for an in-person convention next year. Instead, I recently had the pleasure of sitting in on a virtual ACCA Board of Directors meeting where a thorough update on the organization’s strategic plan was given and Rosenberg Indoor Comfort was awarded the ACCA Residential Contractor of the Year. It’s interesting to see how organizations have tackled the obstacle of the coronavirus pandemic, especially when it comes to events. Last September, after holding out hope for an in-person event, Service World Expo reluctantly changed course and went completely virtual. The result was, in my opinion, something to be applauded. Over the course of a few days, attendees logged on to view virtual education sessions and network with one another.

ACCA has also launched a new virtual course series, Rise to the Top, which provides members with knowledge and skills that they can put into action when out in the field, helping clients.

The Mechanical Contractors Association of America (MCAA), which normally holds its annual convention this month has also gone virtual. The Virtual Education Conference (VEC), Essential Learning for Unconventional Times, will take place March 22-25. The four-day educational experience will feature top quality education seminars, a virtual exhibit, MCAA’s annual business meeting, student chapter competition, safety awards, scholarship presentations and the annual changing of the guard. As the organization says, it’s “a different experience, yet the same quality of education.” Looking ahead to the fall, I see many in-person events planned in the industry, and a few virtual ones as well. My sincere hope is that everything goes on as planned. One thing is certain, however, and that is no matter what, you can continue to learn and stay connected to the industry. If we’ve learned anything in the past year, it’s that there is always a way. I wouldn’t be surprised to see more virtual learning opportunities implemented by various organizations, either as a permanent replacement or a supplement to in-person events. The quality of virtual programs that were put on during the past year has been incredible. Imagine what an organization can do when they have the resources and time to plan for such an event in advance! u

USE YOUR HEAD

INDUSTRY NEWS » The Code Council partners with ACCA and RESNET WASHINGTON, D.C. — The International Code Council has partnered with the Air Conditioning Contractors of America (ACCA) and the Residential Energy Services Network (RESNET) to develop the ANSI/RESNET/ACCA/ICC 310-2020 Standard for Grading the Installation of HVAC Systems. The new standard is the product of a collaborative effort of the three organizations that establishes the procedures, tolerances, and record keeping practices for evaluating and grading elements of an HVAC system’s design and installation. The standard provides a pathway to earn an improved Energy Rating Index (ERI) score when the heating and cooling system is installed in compliance with its published requirements. The Standard applies to Unitary HVAC systems and is comprised of five tasks: a design review, a total duct leakage test, a Blower Fan volumetric airflow test, a Blower Fan watt draw test, and a noninvasive evaluation of refrigerant charge. Designed to be completed in sequence, the results of each task are evaluated for compliance with specified thresholds including design tolerances and installation quality. The Code Council has held long-standing partnership with both RESNET and ACCA, which include a special certification designation and membership agreement. >> iccsafe.org

Johnson Controls Joins the Climate Pledge CORK, IRELAND — Johnson Controls (NYSE: JCI) has joined The Climate Pledge, a commitment co-founded by Amazon and Global Optimism. Signatories of the Pledge commit to reaching net-zero carbon emissions by 2040, 10 years ahead of the goal set out in the United Nations’ Paris Climate Agreement. Johnson Controls is one of 53 organizations that have now signed the Pledge, and the move comes hot on the heels of the company’s announcement of new environmental, social and governance (ESG) commitments, science-based targets, and its own net-zero carbon pledge. The pact will see Johnson Controls partner with other industry leaders to uncover new pathways to meet common environmental and sustainability goals.

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HVACR BUSINESS MARCH 2021

HOW COVID-19 CHANGED BUSINESS

The pandemic has affected the way many people do business, contractors included. Some have had to make significant changes to operating procedures to survive. BY PETE GRASSO

oward the end of 2020, I interviewed Dan Foley, owner and president of Foley Mechanical in Lorton, Va. for our 20 Questions column. During the course of the interview, the conversation inevitably steered toward the coronavirus pandemic and I asked him how it had affected his business.

Foley revealed to me that his business was put in further jeopardy when he began to exhibit symptoms of COVID-19.

“We were going pretty strong, and then the brakes hit in March as clients just didn’t want us in the houses,” Foley recalled. “No one did. It was uncertainty.”

“The first week of April, I started feeling funny and I just couldn’t get out of bed,” he said. “I went and got tested and I was positive (for COVID-19).”

It was a sentiment that was echoed by many contractors with whom I spoke with last year. Uncertainty was a common theme. But then, as we continued to talk,

Hospitalized for a week and unable to muster any energy for a few more after that, Foley realized an even bigger setback with his business — as the linchpin of the

Sometimes, you tend to take things for granted when things are flowing. What this pandemic did was got everyone to hit pause and assess this new environment.

HVACR BUSINESS MARCH 2021

company, Foley’s business came to a halt without him there to lead his team. “I’ve got talented technicians but I’m the one that brings the work in,” Foley said. “That was not a good place to be in because none of my guys were trained to close jobs or sell jobs or bring in work. So, we had no income basically.” Throughout the summer, as Foley recovered and business started to pick up, he implemented changes within the

company to ensure his absence didn’t stunt the company’s growth ever again. His story is a cautionary tale that is all too familiar to contractors: Be sure your company can survive without you. That said, I wondered how the pandemic affected others in the industry, so I reached out to a handful of contractors to find out what their experience has been in the past year and what changes they implemented to survive and thrive in the current global climate. The panel included Mike Graessle, general manager of Hetter Heating & Cooling in Columbus, Ohio; Benson Green, president of Benson’s Heating and Air Conditioning in Tallahassee,

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Fla.; Eddie McDonald, owner of Zen Air Heating & Cooling in Suwanee, Ga.; Rob Minnick, president and CEO of Minnick’s in Laurel, Md.; and Brian Stack, president of Stack Heating, Cooling & Electric in Avon, Ohio. Here’s what they had to say.

How has business been in the past 12 months? Graessle: The overall mindset has changed in the past 12 Months. We are truly appreciative of our health, our clients and each other. Sometimes, you tend to take things for granted when things are flowing. What this pandemic did was got everyone to hit pause and assess this new environment.

We started by putting together a new safety plan to ensure we were protecting our employees and customers the best we could. Our CSRs had to adjust and change scripts to make sure the customer knew we were taking this seriously. I can see some of these new procedures sticking with us for a while.

BENSON GREEN

Immediately we sat down as a management team once the stay at home order hit. We calculated “worst case scenarios” if we shut down but kept payroll flowing. We assessed 90-day and six-month projections. We communicated stay at home and dispatching procedures for all field technicians. We implemented schedules for office personnel to work from home and confirmed that systems were operable remotely. We stockpiled Paycheck Protection Program (PPP) materials and distributed them to all employees. We changed advertising messages to ensure customers that we were adhering to the CDC guidelines. We took it one day, one call at a time. Green: We were behind on budget and a little behind on 2019 numbers. No one thing just all the little things added up for the low sales. McDonald: Last year was worse than expected. We were down about 35 percent from the previous year. Minnick: It has been less than in the past, though I would not say horrible. Stack: We were worried how the year was going to end up with the pandemic. The beginning of the year was rough. Things picked up through the summer, however, and we kept everyone working through the year. In the end, the year was better than I expected.

How did the pandemic affect your business last March/ April? Graessle: The customers were hesitant at first. They were trying to digest

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MIKE GRAESSLE General manager of Hetter Heating & Cooling in Columbus, Ohio

President of Benson’s Heating and Air Conditioning in Tallahassee, Fla

EDDIE MCDONALD Owner of Zen Air Heating & Cooling in Suwanee, Ga. all of the media reports. March gradually slowed down and April was a challenge. For 60 days, service fell 35 percent and installations dropped 20 percent. Green: We were a little slow just because we serve a lot of older citizens that did not want us in their homes for maintenance. But it didn’t last long once they saw all of our safety protocols in place. McDonald: tremendously.

Business

slowed

Minnick: We had a horrible March, April and May in 2020. Stack: Being mostly a residential service/replacement company, the pandemic really affected us in March/April. Most of our customers called and put everything on hold until we knew what was happening with COVID-19. This led to us laying off more than half of the company until we were able to secure the PPP Loan.

What changes did you have to make to your operating procedures, short term, to deal with the pandemic last spring? Green: We followed all CDC guidelines then and now throughout our business and continued with a strong service presence in our area with some outstanding reviews about our safety and service that keep work coming in. I believe, all in all, it was a very positive year considering everything that was going on in 2020.

ROB MINNICK, President and CEO of Minnick’s in Laurel, Md.

McDonald: We implemented a mask protocol, using sanitizer and wiping down everything we touched. We have a total contactless experience for customers now. Minnick: We didn’t have to make a lot of changes, as we already had all the PPE … we just need to get more. Stack: We started by putting together a new safety plan to ensure we were protecting our employees and customers continued on page 8

BRIAN STACK President of Stack Heating, Cooling & Electric in Avon, Ohio

HVACR BUSINESS MARCH 2021

continued from page 7

the best we could. Our CSRs had to adjust and change scripts to make sure the customer knew we were taking this seriously. I can see some of these new procedures sticking with us for a while.

comfortable! We ended with our best year on record.

service and replacement sales along with more indoor air quality (IAQ) sales.

McDonald: We rebounded somewhat, but summer was not that hot in Georgia, so we still ended up lower than the previous year.

What changes did you institute, long term, as a result of last spring/summer?

How did you rebound, if at all, during the summer?

Minnick: Summer was fantastic for us and the PPP loan helped us make it through the year.

Graessle: Once warmer temperatures arrived, with thousands of people working from home, business picked up quickly. If they were home, they wanted to be

Stack: The warm weather did help with business. With more people working from home, their indoor comfort became more important. We saw an increase in

Graessle: Our overall communication, both internally and externally with customers, has improved. Our digital advertising has grown as well. We appreciate each other. We appreciate our customers allowing us to continue to serve them. I believe our distributors appreciate us more. The challenges we face now and moving forward are inventory related based on “production lags” over the past 12 months.

communication and overall efficiency has improved over the past 12 months. We are thankful that we were deemed “essential” a year ago and we ALL realized quickly that we provide an important service to others. We are blessed. Green: We are moving our marketing around and devoting more money to acquire more customers. We have gone through extensive sales training for service and maintenance technicians. Our comfort consultants are in sales training now so after we capture more leads we will be able to close at a higher percentage. With our customer base still working from home, they have more time to shop for multiple quotes on service and change

At the beginning of 2020, our plan was to automate 80 percent of our processes and procedures. The pandemic gave us the time to do that and we have made the changes which have helped us be more efficient. We will take it one job at a time. It has been a team effort and relationships have improved. Green: Our customers in our area will expect these new safety procedures from here on out and unless they tell us we do not need to do something in our procedures, we will always perform like this.

outs and we are learning how to combat these issues. McDonald: We survived! So, now we’re putting a team in place to be successful when the busy season hits.

McDonald: We will continue to implement the mask protocol.

Minnick: At the beginning of 2020, our plan was to automate 80 percent of our processes and procedures. The pandemic gave us the time to do that and we have made the changes which have helped us be more efficient.

Minnick: We’ve created virtual service calls, virtual sales calls and virtual energy audits, which has really helped.

We have also put more time into our marketing strategy. Both of these will help us grow as we are already seeing movement.

Stack: One of our biggest changes was adding a second line of equipment to the mix. We have always carried only one line. Equipment shortages caused us to start looking for a second line to ensure we could take care of our customers.

Stack: We are planning for growth this year, but I don’t think I would attribute that to any changes we have made because of the pandemic. u

One year later, how are you poised to grow your business as a result of changes you’ve had to make because of the pandemic?

Pete Grasso is editor of HVACR Business magazine. You can reach him via email at pgrasso@hvacrbusiness.com.

Graessle: We were able to maintain our staff — actually add to our staff — and we are positioned to grow. Our scheduling,

HVACR BUSINESS MARCH 2021

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THE RIGHT WAY TO GO SOCIAL

Make strategic choices about which social media platforms are best for your company. BY KELLY BORTH

ocial media can be a great tool to help drive traffic to your company website, engage and develop relationships with new customers, existing customers and strategic partners such as vendors and media. Your content and conversations on social media can be powerful ways to communicate your brand. But, do you need to be on every social media network? Do you need to be on any of them at all? The answer is usually somewhere in between and it’s worth researching to find out where to focus your social media efforts, how social media can benefit your business and how, exactly, to accomplish that. Social media can require a significant time investment, so it’s important to understand what kind of returns you can expect before you dive in.

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Social media can require a significant time investment, so it’s important to understand what kind of returns you can expect before you dive in. Typically, businesses narrow their priorities to maintaining two to five social networks. The tricky part, however, is knowing which social networks are most beneficial for your business.

For example, if you have an e-commerce website and you want to promote your products and drive sales, you might want to develop a channel on as many social media networks as possible to get exposure with the widest possible audience.

YOUR SOCIAL MEDIA GOAL

But if your business is something more specific and niche-oriented — for example, custom control panel software for commercial installations or indoor air quality (IAQ) monitoring systems — then you’ll want to consider what you really want to accomplish.

The first step in your social media plan is to define your objective. What is it, exactly, that you want to achieve? How can social media benefit your company? Why is social media a better (or, at least, equivalent) channel for that goal than SEO or email marketing?

Are you trying to drive sales? Or is your

goal to increase general brand awareness and educate your audience? Getting clear on that first is critical, because all your subsequent decisions need to feed that overall objective.

AUDIENCE Once you know what your goals are, you’ll need to figure out who you want to talk to on social media and which networks they are on. Want to connect with media? Twitter and LinkedIn might be the best routes. Want to showcase your company’s philanthropic efforts? Add Facebook and possibly YouTube to Twitter and LinkedIn. Are you a rooftop systems company continued on page 10

HVACR BUSINESS MARCH 2021

continued from page 9

with great photos of videos from high atop homes and office buildings? Instagram

and YouTube (and maybe Pinterest too), will be your best bets. In general, Facebook is typically great for engaging with your own employees,

some vendors and the general consumer public. LinkedIn can also be ideal for vendors, prospective employees and potential customers.

Many reporters and journalists are on Twitter, so it is a perfect channel to build rapport with the media. If you are targeting customers and potential customers, some businesses have had success with Pinterest, Instagram, Twitter and YouTube. Claiming and regularly updating your Google My Business and Bing Places for Business listings is almost always necessary for search engine optimization (SEO). Make a list of the types of people you want to connect with and the kind of stories you want to tell them. This will help put some strategy behind your social media choices.

Look at other companies in your field, including your competitors and see what kinds of content they are posting and what is getting the most clicks, comments and shares. POSTING If you sell a product or service that is very visual, focus on a social media network that is also very visual such as Instagram, Pinterest and Facebook. If your company is more business-tobusiness, LinkedIn is typically the most strategic, as many decision makers are active on LinkedIn. LinkedIn is also a great tool for sales people to use for networking and HR to use for employee recruitment. HVACR installations and equipment can be slightly complicated, so consider hosting a YouTube channel with videos that show how it works. Share the videos on other social networks and on your website. Look at other companies in your field, including your competitors and see what kinds of content they are posting and what is getting the most clicks, comments and shares. Note what gets very low engagement too. Look at the accounts your customers already follow. Look at what kinds of

HVACR BUSINESS MARCH 2021

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things are posted by others in your target audience and what kinds of reactions they are getting. Look for patterns in all this. You might see that short, explanatory videos get a lot of views, likes and shares. You might see that links to blog articles fall flat. You might see that when the CEO posts personal messages, likes and comments spike high. All this information will help you make informed decisions about what to post.

TYPES OF CONTENT Has your company already developed case studies or white papers? Share them on LinkedIn. Do you have a number of photos that capture your employees working or having fun? Create a gallery on your website and share it. Behind-thescenes photos perform well on LinkedIn and Facebook. Do you have captivating images of your work or products? Share them on Instagram, Pinterest and Facebook. Be sure to also include an engaging caption and use a couple of relevant hashtags. Provide a link back to your website where the products can be ordered online or where prospective customers can request a quote. Articles perform well on LinkedIn and Twitter. If you have a blog or a newsroom on your website, it’s a best practice to share your blog articles on all of your social networks to help increase blog traffic.

write a captivating headline that will catch people’s attention and drive them to click your link. If you mention colleagues or partners in your blog or press release, consider tagging them. That ensures their networks see your post, too and they may re-share it, driving additional views, likes and clicks for you.

NICHE SOCIAL PLATFORMS Many industries have their own dedicated social media channels — such as Sermo for doctors or ResearchGate for scientists. There are hundreds of industryspecific networks, some industries even have more than one.

Kelly Borth is the CEO and chief strategy officer at GREENCREST, a 30-year-old marketing, advertising, public relations and digital marketing agency. Kelly is one of 35 certified brand strategists in North America. Reach her at 614-885-7921 or kborth@greencrest.com or for additional information, visit greencrest.com.

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HVACR has many online community boards devoted to it, you should seriously consider becoming active on it. All the same rules apply — spend time watching how others are posting and interacting first, decide how the network can benefit your business or professional network, see what seems to drive engagement and what falls flat and then define what kinds of things you want to share that feel comfortable and authentic. There are hundreds of social media networks out there that can help a business’s online marketing efforts. When choosing which one to use, keep your goal, audience, content and industry in mind. Strategic choices reap the most rewards. u

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Company press releases also perform well on these channels. Make sure you

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HVACR BUSINESS MARCH 2021

CUSTOMER RELATIONS IS EVERYONE’S JOB Every member of your team is responsible for creating the type of experience you want your customers to have. BY ERIC KNAAK

ustomer relations at a company is very much associated with sales and when we talk about sales, it’s everyone’s job. Therefore, customer relations is the responsibility of every member of the team. Sure, there are salespeople, project managers, estimators and front-line customer service representatives who have daily contact with your customers, but everyone is responsible for creating the type of experience that you want your customers to have. So much of what we accomplish in our profession is based on the relationships we have with our customers, vendors,

Spending time with project managers to be sure they’re using the tools they’ve been taught helps to ensure that your customers are receiving consistent and professional advice.

makes sense for the non-technical person and allows them to make an educated decision. Either having the resources necessary to accomplish what they need or having access to those resources so that projects move along smoothly and with minimal interruptions.

suppliers and manufacturers, so maintain-

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Being available when they need you, not only for the everyday needs, but when they have a serious concern, a question that needs a researched answer or they need guidance on what direction they should be going with a decision.

EDUCATION

Providing them with information that is useful and easily understood, so that it

Spending time with project managers to be sure that they are using the tools they

dends for many years to come. When we focus on the customer relationship we often think about communications and meeting their needs and while those are essential elements, it comes down to much more than that.

HVACR BUSINESS MARCH 2021

Education and training of your team are critical components when it comes to maintaining your customer relationships and fostering the organic growth that they can provide.

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have been taught helps to ensure that your customers are receiving consistent and professional advice on every lead that is run and every project installed. Listening to your service representatives and coaching them on their phone skills is another key element of creating that connection that most customers wish to have with a trusted advisor.

Giving back to the community is extremely important to some customers and many relationships are built based on community involvement.

PROCESS

What types of services are they asking for and what kind of technology are they demanding? You need to understand these things if you want to understand your customer’s needs. How much does your company spend to acquire a new customer and better yet, what is the lifetime value of that customer. If you do not know the answer to those questions, you should.

How about your marketing efforts, what is the messaging that you are sending out over the internet, on social media and with your direct mailings? Marketing is about making a connection with your current and potential customers and creating that bond that places you in the position as the trusted expert/ advisor. The more they feel they can trust you, the more they will listen to what you have to say and the more frequently they will purchase from you instead of your competitors. Many customers will make their purchasing decisions based on the image of a company, you need to be sure that the

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What a world we live in where a genuine apology, a gentle “please” or a thoughtful “thank you” can go a long way towards customer relations. Often, we want to jump in and solve the issue and in doing so we neglect to say, “I’m sorry.”

It is easy to take a customer for granted when we are busy, heck they should feel lucky that we picked up the phone. Please never think of your customers that way, each call is a gift and whenever a customer decides to choose your company over everyone else, we should be thanking them.

VALUE

CONNECTION

SORRY, PLEASE AND THANK YOU

But when we do, and the customer feels truly heard, the barriers begin to come down. When we need something from the customer and we start with please, they immediately feel respected. And at the end of a service call, installation, sales call or phone call, how many people on your team will thank the customer for calling and for choosing your company?

Continually evaluate your processes and procedures to make sure they are customer friendly, what worked 10 years ago may not work so well today. Think about how your customers like to interact with your team, how they like to schedule appointments, what times they like to schedule for.

We do for our company and you can be assured that our marketing, service and installation groups do as well. We spend a large amount of money each year to acquire new customers and to help maintain the relationships with current customers, so whenever there is an opportunity to enhance that relationship, we need to be sure that we are.

treatment and they can hear it over the phone.

Customer relations is often very simple to maintain and improve upon, especially if we give them the time and attention they deserve. We should never take a customer for granted and assume they are satisfied — we need to ask and we need to listen to what they have to tell us. message you are sending is the correct one and that it properly represents who you are as a company. Community Involvement, that is an area where some organizations excel, and others fall short of what they could be doing. While we do not currently measure or know how much of our business comes from customers based on our involvement in the community, I can tell you that it is a comment that comes up regularly … “I saw you supporting this organization,” “We saw one of your people at the xxx event” or “We met John when we were at the gala.” Giving back to the community is extremely important to some customers and many relationships were built based on our community involvement, do not sit back and observe when you have the option to get involved. As much as the thoughts shared above

have a great deal of impact on customer relations, nothing compares to the basics. Many years, almost too many to mention of customer experience have taught me that nothing compares to meeting the basic needs of a customer. Answering the phone with a live person and not a recording or answering service is always the best first step, they want to speak to someone from the company, not a machine or an imposter. Customers want to be heard and that means listening, listening intently to everything they have to say. You might not feel it is important, but they do, and they need to feel that you do too. Included with answering the phones is to not treat each call as just another call.

Each of us has the opportunity to improve our customer relations with the very next interaction, the question is if you are ready for the challenge or not? If you are not, I bet the other company across town is. u

Eric Knaak is vice president of operations for Isaac Heating & Air Conditioning in Rochester, N.Y. and past-chairman of the Air Conditioning Contractors of America (ACCA). For additional information, visit isaacheating.com.

It may be to you, but it is not to your customer and they want to be treated as if they had just told you they were giving you one million dollars, they deserve special

HVACR BUSINESS MARCH 2021

BOOST YOUR BUSINESS VALUATION

Implement these five add-backs to improve the profit situation of your company and make it attractive to buyers. BY BRIAN COHEN

o, you’ve decided to sell your business. After years of blood, sweat and tears doing whatever was necessary to build it into the success it has become, you want to make sure you get absolute top dollar for it. That’s when the bean counters come in and start to calculate a valuation for your business. Of course, the buyer’s financial team is going to try to get them the best deal and keep the valuation low. So, chances are they aren’t going to include any potential add-backs in their numbers.

WHAT ARE ADD-BACKS? An add-back is an expense that is added back to the profits of the business — most often earnings before interest, taxes, depreciation and amortization

For something to be added back it must have been subtracted or have impacted the P/L thru an expense category. You can’t get credit for an add-back if it never came out of the business. (EBITDA), for the express purpose of improving the profit situation of the company. Transactions are typically based on EBITDA times a multiplier. Therefore, as a seller, you should be mindful to create the highest possible EBITDA number, but also be realistic in your approach. For something to be added back it must have been subtracted or have impacted the P/L thru an expense category. You can’t get

HVACR BUSINESS MARCH 2021

credit for an add-back if it never came out of the business. For example, distributions and dividends that typically run through the equity section of a company are not an add-back since they were never taken out. The idea behind these add-backs is that these expenses are purported to be extraneous, one-time, and/or “owner’s” expenses. In plain English, these add-back expenses will either go away once the company is in the hands of the new owner or won’t be incurred again.

Here are five common, legitimate addbacks you should know.

ADJUSTMENTS TO OWNER’S COMPENSATION Many owners of closely held companies, especially successful and highly profitable ones, give themselves oversized salaries and bonuses. Nothing is wrong with that, of course, but an acquirer is unlikely to pay that kind of compensation to the new president (and other execs). Therefore, the salary difference between the expected amount going forward, which should be based on reasonable compensation for such position at an arm’s length (i.e., no ownership), versus what was paid, is the add-back. For example, let’s say John Doe,

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GM for XYZ Company, overpaid paid himself with a salary of $500,000. If the baseline for such a position is $200,000, then $300,000 would be the add-back. Conversely, if that same GM was paid just $100,000 instead of the baseline $200,000, then XYZ would have a negative add-back of $100,000. Yes add-backs can be both negative and positive depending on the add-back.

TAXES AND BENEFITS If you’re making add-backs for adjustments to an owner’s compensation, make sure to add back the corresponding taxes as well. If an owner and/or other employees are leaving the company postacquisition, the benefits these people were paid may be appropriate add-backs, too.

SEVERANCE AND LAWSUIT SETTLEMENTS Severance payments and lawsuit settlements may be cause for further due diligence on behalf of the Buyer, but these payments can be another example of a legitimate add-back—assuming these sorts

Running personal expenses through the company is a common occurrence in closely held companies. of payments are truly rare and unusual for the company.

• Any country club, or other club, dues and/or fees

They certainly should not recur in the future to be considered an add-back.

• Owner’s car expenses (monthly payment, insurance, gas, and so on)

OTHER UNIQUE AND NON-RECURRING BUSINESS EXPENSES

• Family members on the payroll that are non-working in the business • Travel, meals, entertainment for personal use, not business purposes

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These are handled individually. Some examples are discontinued operations, a failed initiative that did not produce desired results, bad hires, a one-time headhunter expense, peer group costs, and professional fees related to a future transaction (legal and accounting).

PERSONAL EXPENSES Running personal expenses through the company is a common occurrence in closely held companies. Personal expenses may include the following:

• Any other expense that is personal in nature and not a business-related expense, such as home repairs or building repairs, etc.

recurring, and therefore not a legitimate add-back expense. Part 2: If the company will incur addback expenses post-acquisition, they aren’t legitimate add-backs. Sellers shouldn’t try to add back expenses that will not go away post-closing. And finally, knowing about add-backs doesn’t just benefit Sellers. Buyers should always pay close attention to a Seller’s addbacks. Don’t be afraid to challenge the Seller as to the legitimacy of the add-back. u

So, what add-backs aren’t legit? This group is a little more difficult to quantify, because types of expenses are virtually limitless. Instead, you can apply a simple two-part rule of thumb:

Brian Cohen is a business strategist for

Part 1: If one-time-only expenses show up on a company’s income statement year after year, they aren’t one time. They’re

visit sfpadvisors.com.

SF&P Advisors. Prior to joining SF&P, Brian ran a small home improvement organization with more than 100 employees and four locations. For additional information,

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HVACR BUSINESS MARCH 2021

BUSINESS INSIGHTS »

FITTINGS

ZoomLock® PUSH Refrigerant Fittings

Connect copper in seconds—improves profitability for today’s HVACR companies

VACR contractors and technicians have had to rely on brazing as the way to join copper tube and fittings for refrigerant lines. But brazing requires highly trained, highly paid technicians; fire permits; fire spotters; brazing tools and gases; nitrogen purging; and more. That is until Parker launched the perfect solution— and then improved on it—solutions that increase both productivity and safety. First, Parker Sporlan introduced the ZoomLock braze-free connecting process based on crimping technology. A technician only needed two hands and a few simple tools. With no need for brazing or technical expertise, joining refrigerant lines takes practically no time at all—and one technician can do the connecting job alone. Now we’re introducing ZoomLock PUSH refrigerant fittings. No crimping necessary, says Joe Freese, ZoomLock PUSH Product Manager. We’ve designed a fitting that service technicians push onto the end of the copper tube to secure the connection; no torch, no crimping tool necessary. Preparing the end of the tube is still important, just like in brazing, but the speed of securing a ZoomLock PUSH joint after prep is unbeatable. Push-to-connect fittings were designed more than 16 years ago for the plumbing industry. They quickly adopted this technology due to the significant time savings, repeatability, and simplicity of installation. ZoomLock PUSH provides the same benefits for refrigerant lines while providing a clean, leak-proof connection. By eliminating concerns with oxygen-acetylene torches and flames, ZoomLock PUSH gives the technician more flexibility in where and when they can work. Plus, there’s no need to nitrogen-purge the lines. ZoomLock PUSH, made of a robust, durable brass body with unique double O-rings, comes in two versions, R410A Optimized and Removable. ZoomLock PUSH R410A Optimized is an excellent option for the air conditioning contractor to make connections in seconds.

HVACR BUSINESS MARCH 2021

MIKE CAPPUCCIO Owner/President N.E.T.R Inc. 781.933.6387 netrinc.com

FOLLOW UP: Changing out equipment got more accessible and more efficient with ZoomLock PUSH push-to-connect refrigerant fittings. Visit zoomlockPUSH.com.

BUSINESS INSIGHTS: ZoomLock PUSH refrigerant fittings brought to you by Parker Hannifin – Sporlan Division

ZoomLock PUSH Removable is single-use with a quick-release feature, also an excellent choice for the HVACR contractor. The engineering team extensively tested the ZoomLock PUSH fittings for the quality assurance contractors expect from Parker Sporlan. We used the ZoomLock crimping system, says Mike Cappuccio, Owner/President N.E.T.R. Inc. Heating and Cooling Systems, Boston, MA. And Dana George, my ZoomLock rep, introduced me to ZoomLock PUSH. We do over $7 million in ductless mini-split installations a year. One of the biggest issues we had was refrigerant leaks. We did a lot of in house training to eliminate leaks out in the field. We bought the best tools, and we tried making the flare fitting’s on a machine to take the human error out of it. But we still had problems. Since we started using ZoomLock PUSH, we haven’t had any leaks or callbacks. And they offer two fittings, a one-time fitting and a removable fitting. The removable fitting is great in applications when sizing something, and you have to take it off to size it just right, like installing an elbow. The ZoomLock PUSH system has eliminated a huge amount of cost from our operation. We were making flares; we weren’t good at it. Ninety percent of the leaks

were from where we had made the flare for these minisplit installations. Additionally, when we used to braze, we were involved with a lot of paperwork. We had to pull permits, schedule a fire watch with the fire department—this is a big deal in our area because the cost is $76 an hour with a minimum of four hours. That starts to get expensive when you’ve got a piping job that’s going to take a week. We have 14 techs and 25 installers, so you see where costs start to really add up. And, our guys love the ZoomLock PUSH fittings. Imagine coming out the side of a home with a seveneighths line set, and you’re bringing it down the side of a house, out of an attic. You’ve got to put a 90-degree bend on that. So you’ve got to braze that fitting up in the attic or on a ladder. Or get a pipe and bender and try to bend it while you’re up there. And, brazing in an attic always made me nervous in these older homes. ZoomLock PUSH is simple, stick the pipe out, clean it, push the push fitting on. We’ve also found we’ve saved thousands on scrap. ZoomLock PUSH really limits the amount of waste. We were scrapping large sections of copper and, now we’re using that scrap because it’s so simple to put it back together again. No problems, no leaks, nothing. u

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FINANCE

BY RUTH KING

Wealth Rule No. 10: Have an Increasing Current Ratio

his is the rule that tells you whether your company is becoming more profitable (most of the time).

Your company’s current ratio should be monitored monthly.

Generally, an increasing current ratio generally means increasing profitability. A decreasing current ratio generally means decreasing profitability. The only times this generally is not a measure of profitability is when your company has large cash withdrawals for tax payments or large deposits from loans (i.e. PPP loans) or asset purchases such as vehicles. For tax payments cash, a current asset is decreasing without any decrease in current liabilities. Therefore, the current ratio decreases. The opposite is true for large loans (i.e. PPP loans that were received by many contractors). In this case, cash was received and the loan is a long term liability. Nothing happened to current liabilities so the current ratio increased. For vehicle purchases, the company is “trading” short term assets (i.e. cash) for long term assets (i.e. a vehicle). Current liabilities remain constant so the current ratio decreases. This decrease is not due to less profitability. It happened because of an asset purchase. Current ratio is calculated: Current assets Current liabilities Figure 1 shows the graph of the data. The trailing graph shows the seasonality of the company — profit increase in busy times and decrease in slower times. The overall trend, however, is upward (i.e. more profitable). On a monthly review of the financial statements, you can’t tell that the company is losing profitability. Only when you look at the current ratios on a long-term trend can you see that the company must become more profitable each month to survive for the long term.

LAWS OF PROFIT 1. Live, Eat, and Breathe Net Profit Per Hour 2. Discover True Cost 3. Price for Profit 4. Consistent Gross Margins 5. Continuous Profits are Critical 6. Build Recurring Revenue — from a P&L perspective 7. Profit and Cash are not the same 8. Review timely, accurate financial statements each month 9. Inventory is a bet 10. You can’t take a percentage to the bank

LAWS OF WEALTH 1. Pay attention to your balance sheet — Balance sheets build wealth

Figure 1

Current Ratio

Dec 18

Jan 19

Feb 19

Mar 19

Apr 19

1.05

0.98

0.87

0.85

0.8

Here is the story of one contractor: This husband and wife team grew their business to more than $3 million in revenues by only looking at sales numbers and cash. When it got to the point they could no longer manage the business without managers and financials, they begrudgingly got managers and I helped them straighten out the financial side of their company. But, they never paid attention to them. There were always more pressing needs. After begging for financial statements for five months I finally receive them at the end of May. Table 1 is the current ratios for the five months that I got all at one time. The current ratio was less than one, and going down significantly each month. They were in financial trouble and didn’t know it until it was too late to do much about it. Had the current ratio been monitored in January and at the latest, in February,

HVACR BUSINESS MARCH 2021

actions could have been taken to reverse the downward trend. Now a cash crisis existed when it could have been prevented. Get your financial statements every month and calculate your current ratio every month. Your company’s current ratio should be monitored monthly. It should always be greater than one. It should be constant or trending upward. The only times downward current ratios are acceptable is if the company paid a huge tax bill or purchased assets using cash rather than a loan. In these cases cash decreases and current liabilities remain the same causing the current ratio to decrease. Increasing current ratio means increasing wealth. This column concludes the Laws of Profit and Wealth. As a recap, here they are. You can find the details in the previous columns or in my new book, “Profit or Wealth? Simple Rules for Sustainable Business Growth.”

2. Separate business from personal — don’t use your business checkbook as a personal checkbook — pay for vacations out of personal cash; pay for personal things personally 3. Build Recurring revenue — from a wealth perspective 4. Build a great culture and a business not dependent on you 5. Monitor your cash 6. Save Cash 7. A Sound collection policy — receivable days 8. A Sound inventory policy — inventory days and acid test 9. A Sound debt policy — Long term debt to equity no greater than one 10. Increasing current ratio

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 at 770-729-0258.

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PROVIDED BY KEVEN PRATHER, CFBS

EXIT PLANNING

How Long Does Planning for Your Business’ Future Take?

ne of the first questions business owners ask about exiting their businesses is, “Just how long is all of this supposed to take?” The true answer is, it depends. There are many things to consider as you shape your exit plan. You might have a business that’s worth $10 million but is overly reliant on you for success. You might have a strong management team to take over but only one or two huge customers. Different obstacles provide different answers to “How long does this all take?” Fortunately, there are some general guidelines for how long planning can take. Exit planning timeline guidelines, however, are primarily dependent on you. If you and your business are ready for an exit, advisors can shape and implement an exit plan for you. If neither you nor the business is prepared, planning will need to include a phase for getting both you and the business ready, as well as a phase devoted to designing and implementing the actual exit.

Building necessary business value can be the longest part of implementing an exit plan. need for financial independence; and know which exit path you want to take and why. Though you may have ideas for what your ideal exit looks like, your ideas are likely loaded with questions you never considered. For instance, you may say that you want to transfer your business to your children. This raises questions such as “What if my kids don’t want it or can’t run it?” and “What if they can’t pay me for total ownership for 10 years or more?” Unless you uncover and address these questions, planning could take years (or never get done at all). Often, delays in planning result from an owner’s uncertainty. Whether that uncertainty is about how much money they want, to whom they want to transfer or whether they can see themselves not running a business, the owner’s uncertainty often causes delays.

EXIT PLANNING TIMELINE

FULLY IMPLEMENT AND EXECUTE

Shaping the actual plan can take as little as a few months. To quickly shape exit plans, you must have all the appropriate data; know what you have and what you

Once you’ve shaped your plan for your business’ future, it’s time to implement and execute it. If you are ready to act, implementation and execution can begin

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immediately. Here are a few things to consider. It Takes Time to Build Necessary Business Value. Building necessary business value can be the longest part of implementing an exit plan. Many business owners have a sizeable gap between the resources they have and the resources they need to achieve their goals. This can mean that owners must increase the value of their businesses beyond what they’re worth today. Compounding this challenge is the fact that you and your existing management may not have the know-how to grow the business further and achieve your exit goals. To build necessary value, you’ll likely need a growth plan. A strong growth plan positions you and your management to implement strong value drivers in the business. Different Exit Paths Have Different Timelines. Recall that you have two overarching options when you sell or transfer ownership. You can sell to a third party, like a strategic buyer or transfer to an insider, such as a child or your employees. If you and your business are prepared for an exit and you commit to pursuing

a third-party sale, it’s possible for you to sell your business and be completely out within a year or so. Typically, transfers to insiders take longer, even if you and your business are ready for your exit. The additional time is due primarily to incoming ownership’s financing capabilities. But the time it takes to sell a business to a third party or transfer to insiders is not primarily dependent on the nature of the exit path. It’s dependent on whether you are ready to exit and whether your business can support your exit.

CONCLUSION In exit planning, time binds all decisions. As you look toward your future, whether your timeline is one year or 20 years, consider asking yourself, “Do I want to wait until I’m ready to move on to do all these things?” Experience shows that the answer is “No.” u Keven P. Prather is a registered representative of and offers securities and investment advisory services through MML Investors Services, LLC. Member SIPC. Call 216)-592-7314, send an email to kprather@financialguide.com or visit transitionextadvisors.com for additional information.

HVACR BUSINESS MARCH 2021

COMPANY CULTURE

BY JODIE DEEGAN

The Ingredients of Culture

e hear a lot of words today that weren’t commonly used 25 years ago. They existed in our lexicon but weren’t household terms. Examples include “empower,” “synergy” and “collusion.” Another popular word commonly heard in the business world today is “culture.” Everybody’s talking about how important culture is to your business. But what is it? What elements comprise a great business culture? There are a lot of answers and common themes, but I believe it boils down to the following factors.

LEADERSHIP It starts with an organization’s leadership. The person at the top must inspire and guide the organization in the right direction. Leadership is always the deciding factor in a successful business. The leader always owns the result. A business owner who looks for excuses or justification for why they failed isn’t a leader. People want to be on a winning team and will follow the person who expects to win.

VISION AND MISSION Your team should know your mission and vision for the business. These are the principles that guide each team member when there’s doubt about what course of action is correct.

Your mission and vision statements are not just wall decorations; they’re values that guide your team. If we say we value honesty and integrity, then our actions must align. We can’t turn a blind eye if a technician overcharges a customer. If we overcharged, then a refund and an apology are due. If we say we care about our employees but fail to deliver on promises of allowing an employee to leave at his scheduled time so he can attend his son’s sporting event after-hours, we aren’t really showing employees we care about them. We must do what we say were going to do. Our employees respect that and it’s a key ingredient of a positive culture.

PEOPLE Do we have the right team or are we settling? Successful businesses know that having the right team is critical. Always look for and attract the best. In Patrick Lencioni’s best-selling book, “The Five Dysfunctions of a Team,” he explains how just one bad apple can ruin the team. If there are people on your team who have poor attitudes or are not willing to perform, they can derail your talented people.

I’ve visited a lot of great businesses; among the best are those whose employees can readily respond when asked what their vision and mission are. They represent a company that’s aligned with its leader’s vision. Your mission and vision statements are not just wall decorations; they’re values that guide your team.

Sometimes, we feel like we can’t do without the former. But, once they’re gone, we realize how devastating they were to the entire company dynamic. Sometimes the damage is so gradual that we don’t notice it until it’s taken its toll. Great people are out there; they just haven’t found you yet. Be a magnet that attracts, trains and rewards top talent.

PRACTICES

COMMUNICATION

Mission and vision are executed through practices. Are we practicing what we preach? If not, our values aren’t in alignment with our mission.

One of the biggest frustrations within organizations with low culture indexes is communication, which travels through several conduits: meetings, consistent

HVACR BUSINESS MARCH 2021

coaching, all-staff meetings and leadership team meetings. Communication skills show in the way dispatchers communicate with service professionals. They show in how a customer experience representative speaks with customers. The words we choose and how often we use them have a powerful effect on how people feel. If we aren’t telling our team how great they are and how great our customers think we are, they may assume they’re not that great. It’s easy to only see when they get it wrong. Teams need to be constantly reminded that they mostly get it right.

SUPPORT Support comes in many forms, from training to the tools, trucks and resources employees need to excel at their jobs. As leaders, we also support employees with our knowledge, experience and availability. Our teams are better supported when there is a network of resources and lifelines that help them when they need assistance.

ENVIRONMENT Create an environment that empowers you and your team. Your work environment should align with your values. It is incongruent to expect your service professionals to wear a clean uniform, be neatly groomed and drive a clean truck, but then report to a messy office or dingy training room. Lead by example. I often witnessed the power of this in my Naval career. When a new hard-nosed chief petty officer arrived and raised the bar on cleanliness and grooming standards, his team hated it at first. Without fail, however, that feeling was

followed by a higher degree of pride and self-respect. The team always performed at a higher level when they had more pride. Fun is also a big part of a positive environment. We spend more time at work than anywhere else, so why not enjoy it along the way? Fun comes in the form of team-building events, parties and unexpected enjoyable activities. If you struggle to create fun in your work environment, then identify someone who’s great at it and give them support to create the fun.

ACCOUNTABILITY All this culture stuff doesn’t mean businesses shouldn’t keep score. Winners want to know if they’re winning and that needs to be defined. Playing ball without keeping score may be fun for a minute, but we all acknowledge, even it’s just to ourselves, that we play the game for the thrill of winning. We play because we are competitive animals. Every member of your team should know what their definition of winning the day looks like. We won’t win every day, but scorecards make the game worth playing. Recognition is also a big part of accountability. It can come in the form of formal awards or just saying, “Great job.” We all want to be appreciated on some level. We talk about culture more now than we did 25 years ago; it’s a permanent part of our business vocabulary. As you can see, it’s formed by more than just one element and by sharing our best practices and experiences with one another, we can all learn how to institute a winning place to work. u

Jodie Deegan has worked in the trades for more than 30 years, beginning as an HVAC technician and eventually becoming the president of several large industry service companies. Email jodied@nexstarnetwork.com or visit nexstarnetwork.com.

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PRODUCT FOCUS »

CARRIER

FRESH-AIRE UV

GOODMAN

LENNOX

Carrier has expanded its AquaEdge 9DV water-cooled centrifugal chiller capacity range in North America by an additional 150 tons. With the capacity range now starting at 350 tons — previously 500 tons — the 19DV can accommodate customer requirements of smaller applications.

Fresh-Aire UV introduces the Purity Low Profile LED (PLP-LED), a oneinch-thick (24-mm) replaceable filter that combines biological contaminant disinfection, VOC removal and particulate capture.

Google and Goodman Manufacturing Company have collaborated to launch the Nest Thermostat E + Goodman program designed for Goodman’s extensive independent dealer network across the United States.

The PLP-LED offers high efficiency filtration, using mini LED light arrays, with minimal static pressure loss and is designed to fit the most common oneinch filtration rack sizes in residential and commercial air handlers.

The Nest Thermostat E + Goodman is enabled with Google Assistant so that homeowners can easily adjust their indoor comfort by using the ‘Hey, Google’ prompt with devices like a Nest Hub display or Nest smart speakers or even a mobile phone with the Google Assistant app.

Lennox Industries has unveiled a 99 percent efficient gas furnace with enhanced diagnostics. Following years of research, development and technological innovation, Lennox engineered the Dave Lennox Signature Collection model SLP99V gas furnace, which functions at 99 percent Annual Fuel Utilization Efficiency (AFUE).

The AquaEdge 19DV was designed to minimize environmental impact. The 19DV’s unique EquiDriveTM two-stage back-to-back compression allows for effective heat recovery, which enables its excellent cooling efficiency at standard conditions to flex up to 120F for energysaving hot water production.

>> freshaireuv.com

>> goodmanmfg.com/goodmangooglenest

The SLP99V gas furnace is compatible with Lennox’ full line of iComfort smart home thermostats, which enables homeowners and contractors, through secure homeowner access permissions, to conveniently control comfort levels, save energy and properly maintain the system. >> lennox.com

>> carrier.com/commercial/en/us/

METUS

NAVIEN

STANLEY

TESTO

Mitsubishi Electric Trane HVAC US (METUS) has made advancements to the Mitsubishi Electric MEView mobile app. The newest version of the Mitsubishi Electric MEView app allows contractors and homeowners to select the most appropriate model and location for an indoor unit using augmented reality technology to visualize the installation.

Navien announced three new products: the NCB-H condensing combi-boiler, NFC-H condensing fire tube combiboiler and NFB-H condensing fire tube boiler.

STANLEY announced three new additions to the brand’s portfolio of innovative cutting solutions. The latest collection features a versatile Utility Knife with 10-Blade Storage (STHT10479) and a Control-Grip Utility Knife (STHT10432).

Further improving on its digital manifolds for the servicing and commissioning of air conditioning and refrigeration systems, Testo has introduced the nextgeneration of Smart Digital Manifolds.

Other enhancements include the availability of the full suite of METUS products, including floor and ceiling units, simplified room image sharing and inclusion of products from additional METUS brands.

Navien’s new NCB-H condensing combi-boiler series includes five models ranging from 160,000 BTU/H for DHW and 60,000 BTU/H for heating, to an industry first 210,000 BTU/H DHW and 150,000 BTU/H heating. The NCB-H uses durable dual stainless steel heat exchangers for heating and a separate flat plate stainless steel heat exchanger for DHW.

>> mitsubishicomfort.com

>> navieninc.com

The new line of utility knives is the latest innovation to join the brand’s rich legacy of dependable tools, suitable for professional users across all trades. The latest offering by STANLEY provides razor-sharp performance, jobsite durability, comfortable use and easy blade change. >> stanleytools.com

The testo 550s and testo 557s Smart Digital Manifolds feature many new improvements including a larger screen for increased visibility, improved guided measurement menus which allow automatic determination of important parameters, and increased Bluetooth connectivity to the new testo Smart App allowing for a variety of temperature, pressure, and humidity measurements using testo Smart Probes. >> testo.com

www.hvacrbusiness.com

HVACR BUSINESS MARCH 2021

20QUESTIONS >>

with KEVIN MCNAMARA

We sat down with Kevin McNamara, chief operating officer of Climate Control Group, a diverse collection of HVAC products and solutions that includes ClimateMaster, International Environmental (IEC), ClimateCraft and ClimaCool. McNamara discussed a short-lived retirement, employee retention and being a leader. 1. Where do you spend your weekends? Golfing for sure. When I was retired, it was pretty much every day except Monday, and that was because the club was closed. It was a great time to relax, get healthy and take a step back from everything and assess things.

2. How long did retirement last?

Not very long. I retired from LG in July, after turning 60 last February, and was enjoying my time on the golf course. But this is a small industry and everybody knows everybody. Pretty soon, I was in discussions with NIBE about coming on board at Climate Control Group.

3. Where are you from?

I’m originally from New York and I went to school at Niagara University in upstate New York.

4. Where did you get your start?

I started back in the 1980s working for Honeywell in New York. And then over the course of my career, I worked at York in Atlanta. Then, I was a regional manager in Houston, traveling all over the Western United States for York, all on the service side. It was a lot of fun, quite frankly. We had a really great team during interesting times.

5. Where did you go from there?

Subsequently from York, I worked at Trane and then Carrier for a number of years before going on to LG. I’ve just been very lucky. I’ve had a chance to work in different companies in different roles and have different exposures to businesses and to different markets, especially markets at different times.

6. How do you explain your longevity?

As the business cycles go around, you have to be able to adopt new ideas and adapt to the changes, being agile and flexible and seeing the future before it happens.

7. What made you come out of retirement?

Well, it’s a combination of things. The first is that the technologies under the umbrella of the Climate Control Group, are really exciting and address many of the issues that face us today and will face us into the future. When you look at decarbonization, when you look at filtration and ventilation and in buildings and in spaces, and then also the renewed and deeper focus on healthy buildings, all fit into this portfolio of products and the channel that represents us across the United States.

8. What’s new with Climate Control Group?

9. What’s your greatest responsibility? To provide the best possible work environment for all of our employees, that we are the preferred employer of choice — the place people want to come to work and establishing that in the community and in the industry.

10. What do you hope to accomplish?

The biggest thing is leveraging the power of these four companies in the marketplace becomes really critical over the longer term, so that we’re able to provide more options for buildings and for architects and for engineers to look at that we have in our portfolio.

11. What aspect of business do you enjoy most?

When you put together a great team. When you work with a great team and have great people, and those people in turn develop and recruit great people that work for them and you just have this really dynamic organization, that’s extremely gratifying to me and that’s a lot of fun.

12. Why is that important?

If you don’t embrace people and they don’t embrace the challenges that you have, it’s going to be very difficult to be successful.

15. What’s the biggest challenge in the industry?

The single biggest challenge in the industry is finding great talent or qualified talent to go to work for you. It’s important that when contractors are recruiting, that they not only think about hiring, but how they are going to retain the people they hire. We’re going to have to go to different places to try and find talent.

16. What attracts people to some companies and not others?

Companies that have good culture will attract better people. A company with a good culture, with the right people will attract better candidates and will also retain better people. When you don’t have a good culture, obviously, it makes it much more difficult to retain people and it makes it very hard to attract people.

17. What would you tell contractors?

Put a big hug on the people who are really doing a great job for you, and don’t let anybody take them away from you. Train and invest in them every day.

18. Who is the last person who impressed you?

13. What is the key to winning in business?

To say there’s one thing is very hard. First of all, you have to be honest. You have to be trustworthy and you have to be an organization that backs up and does what it says it’s going to do — integrity, honesty, truthfulness and trustworthiness are all important keys.

Gerteric Lindquist, the CEO and managing director of NIBE Industrier AB. When I was meeting with NIBE, his enthusiasm, passion, business acumen, concern for people and the environment was like nothing I had ever heard from a leader at his level before — he was genuine, authentic — which is rare in the world today and in this industry. He truly has a global view and is a man of action not words.

14. How do you like to communicate?

19. What is your leadership philosophy?

Talking. I’ve never been a big fan of email, PowerPoint or things like that … I like to be accessible on the telephone. The ability to using text messaging has been helpful at times when you can’t get somebody on the phone, at least to be able to work with them. But sitting around a table or on a call or being able to talk with people is important because then you really can fully understand the message.

A good leader — I won’t say a great leader — but a good leader recognizes he or she doesn’t have all the answers. A good leader is willing to be humble and accept input from other people around him or her and to use all of the information they can, always be in a learning mode and not think they have all the answers. A good leader will ask a lot more questions, if you will, than give answers.

20. What’s the best business advice you’ve ever received?

From my uncle: You are never as good as you think you are, so stay humble and honest. Success is fleeting. People are what matter; they are the ones who share in any success you have so be thankful for them and share your accomplishments and achievements with them.

In each one of the businesses, you’re going to see significant innovations roll out over the next six, 12, 18, 24 months in the entire product portfolio. More importantly, there’ll be more innovations and more things that we’ll be able to provide as far as efficiency is concerned and modularity, as far as products are concerned. And then also the applications that we’ll be able to do.

HVACR BUSINESS MARCH 2021

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HVACR Business MARCH 2021

Articles inside

Editor’s Notebook

The Ingredients of Culture

Business Insights

Wealth Rule No. 19: Have an Increasing Current Ratio

The Right Way to Go Social

How Long Does Planning for Your Business’ Future Take?

Customer Relations is Everyone’s Job

How COVID-19 Changed Business