Management Training is the Key to Increasing Profitability in HVAC
December 10, 2013
“There is only one boss – the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” —Sam Walton, Founder of Wal-Mart
In today’s marketplace the oil heat and propane consumer has more leverage than ever. Increased competition and availability of dealers will do this every time. Prior to 2007, that was not the case. The price of fuel oil was reasonable and the competitive landscape was static and comparatively unthreatening. Customer loyalty was not the issue it is today. Times have changed and this means change for our industry.
Given the current market, ask yourself this question: “If I did not sell oil and/or propane five months a year, would the revenue from my HVAC department keep me in business?” If your answer is no, then you need to take a page out of the HVAC-only playbook. There are plenty of HVAC only companies out there and many are highly successful – without the benefit of selling fuel. To gain a solid competitive advantage, this is the vision you should adopt for the service side of your full service business.
One major difference in the “playbook” is the experience at the line management level. HVAC-only companies never had the luxury of cash flow from fuel sales. Therefore, they had to have the core technical expertise as well as service managers with management experience. Ready or not, market forces have made service management one of the most important positions in the oil heat and propane industries. It is certainly not new news that gallons are down and margins are under pressure. This makes the HVAC business more important than ever to every full service supplier. The management of the service side of the business will therefore require a more diversified skill set.
For most companies, the best technician ultimately gets a shot at management. In almost all cases, the technical experience is in place; however, rarely does somebody begin the service management role in the oil heat industry with the skills or experience necessary in human resources, financial analysis, or basic management acumen.
The market forces demanding a focus on profitability in HVAC will also shine a bright light on service management. The top line issue for virtually all companies is year-round technician utilization, business process improvement, and general management. This means change, and change is always a management challenge – even for the experienced.
This challenge will be important to take head-on for all levels of management. For owners and top managers, embracing and facilitating change is the first step. The next step is looking at line management and asking a simple question: “Can my service manager benefit from training focused on basic financial understanding in HVAC, human resources, and general management?” The reality is that future opportunities will be realized on the service side of the business. Home comfort is a growing segment nationwide and has been for the past decade.
Preparing for the opportunities ahead means preparing your service management for a future that will continue to be demanding and competitive. The best way to do that is to embrace new ideas and best management practices at the service management level.