Running a Mid-Size HVAC Company: How to Make Your Challenges Small and Your Profits Large

Let’s face it: running a successful mechanical contracting firm is a tough job. This applies to contracting firms of any size — any size company has its own set of challenges. Having said that, in my experience of 25+ years, there are certain challenges that are unique to mid-sized firms. There are also unique opportunities, if you can capitalize on them.

Adrian Mechanical Services has been in business since 1980. Our company performs commercial and industrial heating and air conditioning, plumbing, piping, certified welding, and offers 24-hour service and repair work. I joined the company in 1986, became a partner in 1994, and completed my purchase of the company in 2007.

There have (of course) been some lessons learned along the way, and I’d like to share four of the biggest.

As the owner of a mid-sized company, you should be out there selling for your company. No one can sell your company like you can.

As the owner of Adrian Mechanical I‘ve done everything from estimating jobs to driving the supply truck. But I’ve found that the best contribution I can make is to go out and sell the company. I‘ve done it for the past five years and it has made a huge difference.

For many years we didn’t engage in proactive sales. We sat back and answered the telephone, and life was good: we were busy and growing. But as the recession arrived and lingered, we saw things beginning to dry up. We decided to become proactive, not reactive, and hired a salesperson.

The salesperson could sell but didn’t know the industry, so he asked if I was available to accompany him on calls. I had never done that before. I’m an engineer, not a salesperson — but he has turned me into one. And that’s a good thing.

Going out on calls with your salesperson, even one day a week, does two things: it allows you to observe and review your salesperson’s performance, but even more importantly it allows you to go out and thank your customers for doing business with you. Which brings us to the second lesson:

Show your customers appreciation for their business.

When someone spends a lot of money with you in these economic times, it’s important to show appreciation — and thanking customers doesn’t cost you anything.

Again, this holds true at any size company, but it’s perhaps uniquely do-able at a mid-size company. In a small company the owner wears many hats and is constantly “putting out fires.” He or she may not be able to go out and proactively sell, or have any spare time for a personal “thank-you” visit. In larger companies, the owner has his or her hands full with administrative duties, and the personal connection between the owner and the customer is often lost.

In either of these scenarios, customers can get the impression that the owner is “too good” to come out and see them. That’s not usually the case, but that’s the impression they may get. In a mid-size company, especially when you’re proactively selling, you may find that you’re uniquely situated to truly show your interest in your customers’ business, and your appreciation for it. Many times when I go out and talk to potential customers, they say, “You know, we’ve been using our current HVAC company for 20 years, and we’ve never once seen the owner in here to thank us.” Do you think your visit makes a positive impression on customers? You bet it does, yet there are many companies that just don’t do it.

In addition, getting in front of current customers to thank them for their business presents the opportunity to hear my four favorite words from a customer: “Hey, while you’re here . . .” You’d be surprised by how often you hear that. They wouldn’t necessarily have called, but while you’re there (and they’ve found out you’re a real person) they want you to look at something. That leads to more opportunities.

Get the right people into the right roles.

Getting the right people in the right roles can be a struggle, but I think we have more flexibility to do so in mid-sized copanies than our larger or smaller brethren do. I’ll give you an example of how this worked recently for us.

I hired an engineer to be a project manager, but he had never worked in construction before. He didn’t like confrontation, but that can be an unfortunate part of commercial construction: You don’t pick fights, but you have to be able to stand your ground. Although he wasn’t comfortable with that, he had all the other characteristics that we look for in an employee. So we moved him to a different position and it has worked out well for him and for the company.

If someone isn’t a good fit for a specific role in a smaller or larger company, the owner may not have any other option other than to let that person go — even if he or she has qualities that are valuable for the company. Finding good people and the roles to which they are best suited is a challenge, but it’s certainly worth it.

Don’t be in a rush to grow for growth’s sake.

Finally, remember that bigger is not necessarily better. Being the most profitable is what’s better. Don’t be envious of your larger competitors, just look for ways to do what you do better. Be the best at what you do, and don’t be afraid to charge for it. That’s what will bring your profit margin up.

We do service work as well as construction, so when we work on a new construction project we’re always looking to do the service work for that customer as well. New construction gives you opportunities to sell a new customer. We want a customer for life. That’s our mission.

Get to know your customers on a face-to-face basis. Join community groups and attend community functions. Get to know others in the business community and let them know you want to run your business by building customers for life. There’s a huge benefit to that, because the people they know will see you talking to them, and introductions — and more opportunities — will follow.

Running any size successful contracting firm is a tough job. If you’re doing so, take a moment to reflect and feel good about it.