IF YOU'RE CONSIDERING adding hydronics to your business mix, here's a chance to learn from my experiences. In 1976, my wife and I started a residential forced-air company that also did plumbing work. By 1990, we had grown to 13 employees and were doing $1.2 million in sales.
The seasonal, weather-related ups and downs that are all too familiar to HVAC contractors, however, took a toll on us. There were times when we literally ran out of work.
In 1990, we made a decision: We were going to move totally out of the forced-air business and focus strictly on boiler work. After selling my old company to another area contractor, we started all over again as Hydronic Heating Specialists.
Since then, our focus has been strictly on the hydronics side of the market. The business has grown back to 14 employees, including my three sons and daughter, and we are on target to do $1.8 million in sales in 2006.
We started out doing strictly steam and hot water boiler service and replacement. Our service area, which includes Cleveland and its suburbs, has a large number of homes built in the 1920s and 1930s with steam and hot water radiator systems.
As time went on, we moved into the radiant side of the market and began to seek out and tackle high-end radiant projects. Today, my company has gained a reputation as one of the finest hydronics contractors in northeastern Ohio. That's certainly not something that I expected when I started my forced-air business in 1976.
I've learned four simple, yet important, lessons from the changes my business has gone through over the years. I'm sure they would apply to any contractor who's considering a move into hydronics — even if you're not considering a dramatic move like the one I made.
Lesson 1: Learn the technical side of the hydronics business. While your manufacturer and distributor partners will be valuable resources in your business venture, you don't want to rely on them for the design of your systems.
You need to have enough confidence in your technical skills to sit across the table from a customer and say: "We will take care of everything regarding your system. You have only one number to call — ours."
Lesson 2: Learn the business side of your own business. If there's one thing I would do differently, I would have gotten a better education as a businessman. I look back now and realize that I didn't have the proper skills to run a business. I learned a lot about running my business through the proverbial school of hard knocks, and it all could have gone a lot easier had I been better skilled in business. Don't expect a move into the hydronics market to save you if your business skills are shaky in the first place.
Lesson 3: Be prepared to train. We've always been big proponents of inhouse training. Our training center includes a forced-air furnace, a heat pump, ductwork and dampers, a high-velocity system with a hot water coil, two hot water boilers, three different types of radiant floor systems, and steam boilers hooked up to one-pipe systems and two-pipe systems. What this training center enables us to do is hire for attitude and train for skill.
We also worked with our business consultants to create manuals that standardize how we install and service equipment.
Our goal is to train our people well and pay them well, so they won't leave us. But if they do leave, they'll be good competition. They're going to know how to price, as well as what it takes to run a business. We'd rather go up against 10 good, knowledgeable competitors than one low-priced "Bubba" who throws the entire local market out of kilter on his way out of business.
There's a marketing bonus to our training: None of our competition has what we have. Once we get customers in the front door, we start to win them over in our showroom. If that impresses them, we seal the deal when we show them our training center.
Lesson 4: Keep it simple. We've recently dropped the name Hydronic Heating Specialists, and returned to the name Stack Heating & Cooling. The average homeowner doesn't know what "hydronic" heating is. So we simplified it, which is part of a strategy of not being technical with customers. We don't weigh them down with too much information, we keep the focus on features and benefits.
What could exploring hydronics mean to your business? For me, it has made all the difference in the world. Consider the lessons I've learned over 30 years and decide for yourself if it's time to get your feet wet.
Andy Stack is CEO of Andy Stack Heating & Cooling, Avon, Ohio. He can be reached at 888/ 850- 9994 or e-mail [email protected]