⚠️ FTL Finance will be closed on Monday, May 27, in observance of Memorial Day.
Our underwriting team will be available periodically throughout the day between 9 a.m. – 7 p.m. CST.
Back to all posts
April 5, 2024

3 Habits of Highly Successful HVAC Businesses

There’s always room to improve. Find success for your HVAC business by maximizing downtime, cultivating relationships, and maintaining profit margins.

3 Habits of Highly Successful HVAC Businesses

What does a highly successful HVAC business look like?

It’s a good question. And if we were being philosophical about it, our answer might be, “That depends on how you define success.” Because residential HVAC businesses vary in size and structure, we could easily argue that success is relative to your business and its goals.

But let’s be real about it. Most folks would likely agree that a successful business is one that makes money. After all, you likely didn’t get in the HVAC business to not make money (though we’re sure it sometimes feels that way), and other goals you may have for your business likely have some profit motivation.

But how do you ensure your HVAC business is profitable? Or, if you’re already in a pretty good spot, how do you stay there?

Whether you're a seasoned professional or a budding entrepreneur, running a successful HVAC business will require more than a technical mastery of HVAC. You’ll need to master the habits that drive success. There are several, but we’ll look at three for now: maximizing downtime, cultivating relationships, and maintaining profit margins.

Habit #1: Successful Hvac Businesses Maximize Downtime

There’s not a lot of downtime in HVAC, especially during peak HVAC season. So, when you have downtime, you have to make the most of it. Not only will maximizing downtime give you and your staff something to do, but it will also set you up for success when things do pick up.

Evaluate Your Business Operations

Successful HVAC contractors understand that what worked during the busy season may not work during the slow season. So, one of the best things you can do for your company when you have downtime is evaluate your business operations — and ask staff for their feedback, too. Consider what’s going well, what’s not working at all, and what could improve for both your staff experience and your customer experience.

Then, take a look at your cash flow and your profit margins. Are you making enough money as costs continue to rise? Is your staff making enough money? Do you need to raise your prices? Answering these questions can help you understand where to focus your attention during the slow season.

Dedicate Time To Marketing

Marketing is critical to growing your business but can be time-consuming, especially starting out. There are many ways to market your HVAC business, such as social media, email marketing, and print ads. So, where do you start, and how do you prioritize each method?

  • Social Media Marketing: Building an online presence through a website and social media can be the most time-consuming part of digital marketing. To ensure you’ll have the most uninterrupted time possible, we recommend setting everything up during the off-season. You could even draft social posts for the busy season if you have extra time. Once you’re up and running, make it a priority to respond to comments and reviews or create a new post to truly maximize every minute of your downtime. If you don’t have time for this yourself, delegate it to a trusted employee.
  • Email Marketing: Email marketing, like social media, can take some time on the front end. But many email marketing platforms include templates and automation that cut down on the time you spend creating each email. Like social media, you can do this when you have 15–30 minutes of free time.
  • Print Marketing: We can’t talk about marketing without talking about print media. A recent study found that 47% of contractors use print media, such as newspapers or mailers, to advertise their business. However, the same study also found that only 22% of homeowners find a contractor through print media. So, while this marketing tool can help customers find your business, you may want to focus on other marketing strategies to maximize your downtime and budget, like the ones above. For reference, the study found that 71% of homeowners find contractors through word of mouth — including social media.

Stay Up To Date With Technology

The world is rapidly evolving and changing, and staying up to date with technological advancements is more important now than ever. Some of these advancements affect how you reach your customers, like transitioning from print marketing to social media marketing. However, other advancements can affect how your team operates.

Consider using larger chunks of downtime to provide trainings for your staff on new technology. Investing in training not only helps your staff stay up to date with their skills, but it also provides an incentive for them to stick around. The American Psychological Association found that 9 out of 10 people value learning in the workplace, and lack of learning opportunities and job growth are reasons employees leave their jobs. By offering learning opportunities, you make employees feel more valued and increase employee retention.

During shorter periods of downtime, keep up with industry news to see what’s changing. For example, manufacturers are currently developing cold-climate heat pumps. Keeping an eye on this development will help you be ahead of the competition when cold climate heat pumps are released, which means you can offer it to your customers sooner and have a competitive advantage.

Habit #2: Successful HVAC Businesses Cultivate Relationships

It’s easy to view HVAC as a technical business. All day, every day, you deal with technology. But at the core of the HVAC business is people. Just like you deal with technology daily, you also deal with people daily. Every part of your business deals with people — from your staff to your customers to your vendors — and cultivating these relationships is key to running a successful HVAC business.

Relationships With Staff

Your staff represents your business, and they ultimately represent you. And what they represent is often a reflection of their relationship with their workplace. If you want your staff to view their job as more than just a paycheck, cultivating relationships with them is critical.

We mentioned before that learning opportunities and job growth are critical to retaining staff, but there are other factors, as well. Showing your employees recognition and appreciation is key to relationship building. Everyone wants to feel like they matter. But this past year, 43% of HVAC businesses reported giving their employees a 0–1% pay increase. While pay isn’t the only way to show employees they’re valued, it is significant, especially during a labor shortage. Why would someone stay where they are if another company offered to pay more?

Creating a positive company culture employees want to be part of and boosting team morale also help with employee retention. One way you can do this is by including them in decision-making, such as when evaluating your business operations. Your staff is the best source of feedback for their job, so why not ask for it? It not only helps you evaluate operations more effectively, but it also helps your employees feel valued.

Relationships With Customers

Customer experience is the foundation of your business. It keeps people coming back to you and sets you apart from the guy down the street. Ensuring your customers have a great experience ensures they return to you and, hopefully, become lifelong customers.

Providing a personalized experience for each customer is key to customer satisfaction. Each customer has different wants and needs, which you can discover by asking questions and taking notes throughout your business relationship. Even referencing the previous visit can make a big difference in customer experience.

Taking the needs of different generations into account when upselling can also help shape the customer experience. For example, Gen Z and millennials are more likely to be interested in green HVAC solutions than older generations. But Silent Generation homeowners most likely prioritize keeping their HVAC alive as long as they are, so a service contract is a better recommendation for this customer.

Customer education can also help improve customer experience and prevent customer dissatisfaction. How many times have you gotten a call from someone complaining that their HVAC system is “doing the same thing again,” but it wasn’t? Taking the time to explain solutions and expected results to customers can help keep their expectations realistic. Plus, it lets you offer multiple solutions, giving the customer the power of choice.

Relationships With Vendors

It’s easy to understand why cultivating relationships with staff and customers is necessary — you’re working towards retention and business growth. However, successful HVAC businesses don’t stop there; they also cultivate relationships with their vendors, from distributors to print shops to lenders.

Vendors are likely to negotiate competitive pricing for businesses they have relationships with and prioritize them during supply chain shortages and when new products and trainings are available. You can cultivate these relationships and become a stronger partner for your vendors by communicating frequently and attending industry events.

An easy place to start here is with your distributor. Sure, you could only talk to them when you need to place an order. But your distributor can likely provide additional value through open houses, dealer meetings, and training workshops. For instance, we partner with several HVAC distributors to provide customer financing training to their contractors.

Other industry associations may offer additional resources like educational courses, workshops, and opportunities to connect with and learn from peers in your industry. By building your relationships with vendors, you strengthen your professional network and gain more access to the resources you need to run a successful HVAC business.

Habit #3: Successful HVAC Businesses Maintain Their Profit Margins

We can’t talk about successful HVAC businesses without discussing profit margins. That is, after all, how most people define a successful business. So how do these businesses do it, especially during times of economic uncertainty?

Many factors affect profit margins, and some of those factors include maximizing downtime and cultivating relationships. Outside of what we’ve already discussed, financing options set successful HVAC businesses apart and keep their profit margins high.

Offering financing options can help prevent cash flow problems, like losing money on each job. Financing makes larger expenses more affordable with monthly payments. So, you can charge what you need for your services without becoming unaffordable, and you don’t have to worry about late or non-payments because you’re not handling the financing yourself. Plus, installment loans give customers more money to play with; they’re not limited by their cash reserves or credit limit. Your customer gets better equipment, and you bring in more revenue.

Highly successful HVAC businesses don’t appear overnight. They take years to build their business by maximizing downtime, cultivating relationships, and maintaining profit margins. By incorporating these three habits, your HVAC business can see more success, too.

If you need a financing partner to help improve your profit margins, contact us today to learn more. Or, if you’re already incorporating these three habits, learn how to boost your HVAC business's profit margins.

Read more articles like this:
Copyright © 2024 - FTL Capital Partners LLC dba FTL FinanceAll Rights Reserved | NMLS ID 2133635