DALLAS - It didn't take Mike Moore long to roll through the audience, picking up steam as members of his group - International Service Leadership (ISL) - began to catch the emotion of his speech. ISL was in Dallas as a co-sponsor of the Comfortech meeting. Moore is ISL's vice president.

He talked about the forces that drive HVACR contractors, pointing to the following terms, which were inscribed in three circles:

  • Passion.

  • Be the best.

  • Economic engine.

    All of these circles intersect in an area that Moore describes as "BHAG." BHAG stands for "be happy and grow" or, as Moore quipped, "big, hairy, audacious growth."

    "If we want to be the best organization, we need your help," Moore told ISL contractors. "If we get your help, we can achieve the sweet spot."

    Moore recapped the "open air" technologies at the 2002 ISL meetings in Baltimore and Las Vegas and the priorities that came out of the meetings.

    "The two priorities are attaining desired profits in residential replacement and building urgencies without the weather," he stated.

    Jacki Bradbury-Guerrero uses her own experience to offer suggestions on increasing profitability.

    Breakout Sessions

    During the meeting, contractors broke out into specific groups to discuss the issues most important to each member. In one breakout session, contractors discussed the need for generating more revenue. The session was monitored by ISL members Jacki Bradbury-Guerrero of Coastal Comfort Heating & Air, Ventura, Calif., and Ron and Beth Chapman of Chapman Heating & A/C, Columbia, Mo.

    Bradbury-Guerrero told attendees that she started her own business one-and-a-half years ago with a goal of building up her business to levels comparable to a company she had previously co-owned. Her first-year sales were $1.1 million, and she was quick to give credit to two sources. "I gave all the credit for my success to ISL and my employees," she said.

    Beth Chapman talked about the importance of having good employees and detailed how they helped her and her husband get past the struggles of owning a business for the first time. "You must surround yourself with a good team," she said. "If people don't want to change with you, you have to get rid of them. Otherwise, your business foundation blocks will begin to crumble.

    "The human element has to be good, or the business won't work."

    Bradbury-Guerrero asked attendees if they thought they were generating enough revenue. Most answered "no."

    "You should be generating $100,000 to $120,000 per year per employee," she said. "This includes everyone who is working and collecting a paycheck, including the owner."

    Attendees were then asked to list the number of employees they had and divide that number into last year's total sales. Numbers ranged from $70,000 to $167,000.

    One ISL member said his average was $93,000, and Bradbury-Guerrero suggested that he now had a concrete goal to pursue - raising the number to $100,000.

    Beth Chapman asks ISL members about their biggest challenges during a breakout session.

    Helping Raise Revenues

    Some ideas were discussed to help achieve a goal of $100,000 in revenue per employee. Suggestions included:

  • Creating more revenue-generating positions. It was suggested that commissioned salespeople should be hired, and that some office staff positions that did not generate income might have to be eliminated.

  • Raising prices and selling more high-end equipment, which usually has a higher profit margin.

  • Controlling discounts. Participants urged owners to keep an eye out for salespeople who discount prices too many times just to get the sale.

  • Maintaining a higher closing rate. Attendees suggested shooting for a closing rate of at least 50 percent on sales from qualified leads.

  • Sharing the books with employees. Show employees the cost of doing business and what you need to achieve desired profits, participants suggested.

  • Giving customers replacement options rather than simply repairing the equipment.

  • Dispatching field techs from home.

  • Using flat-rate pricing.

    One member said that he keeps employees who do not generate revenue busy by having the person sell over-the-counter parts. "You've got people you like and who you don't want to lose," said Bradbury-Guerrero. "Your goal is to grow the business so you don't lose those people. Remember, you need the revenue to justify keeping these people."

    She noted that ISL members can benefit from these sessions because members like herself "have been where you are. We are all in the same place."

    Publication date: 10/27/2003