3 Business Growth Constraints Experienced By HVAC Entrepreneurs
By Intrigue
Not long ago, I had the pleasure of speaking with Jack Tester, CEO of Nexstar. Nexstar has been helping independent plumbing, electrical, and heating and cooling contractors build successful businesses for more than 27 years. With over 640 members, Nexstar is leading the way when it comes to helping residential repair and replacement contractors achieve the business growth they’re seeking.
We intended the conversation to be, in part, about a book I am writing to help HVAC entrepreneurs. However, based on what’s happened since COVID-19 hit North America, I’m compelled to share this article long before the book will be finished.
The topic we spoke about was around what the primary growth constraint is for HVAC entrepreneurs.
Jack’s perspective was brilliant and might even surprise you!
I went into the conversation with the assumption that Jack was going to speak about sales and marketing, cash flow, or maybe operational efficiency.
Jack did mention those things, but his most insightful feedback on what is getting in the way of HVAC entrepreneurs growing their businesses was around three categories:
- Mindset
- Attracting skilled staff
- Growing leaders
How to grow your HVAC business
1. Mindset
“Growth starts with the entrepreneur and then works its way through the company.” — Jack Tester
Jack mentioned that there are a lot of great HVAC contractors doing excellent work. They have a keen eye for the technical aspects of the job and love leaving the job site with a project completed.
“The issue is that these contractors aren’t working ‘on’ the business because they’re too busy working in the business,” he continued.
There were four key points to note about having a mindset that promotes business growth:
- You need to decentralize. Let others do the day-to-day work and you can oversee the quality of the work they do
- Quality differs. Someone else may not do the job as well as you and you have to be okay with that because you can’t do it all
- Get excited about serving others. You need to get away from seeking praise for the great job you do onsite. This will allow you to focus on the big picture of your company, which will eventually earn you praise from the customers and communities you serve.
- Be creative. HVAC entrepreneurs need to switch to the “creating a business” mindset versus the “having a job” mindset.
2. Attracting Skilled Staff
Pre-COVID-19, companies were starving to find skilled workers. Now, there is a small window to grab some amazing people.
Just remember that the shortage of skilled staff isn’t gone, nor is it going away anytime soon.
“The best companies grow their own technicians,” said Jack.
He talked about how companies need to grow leaders and have an expense line for training on your profit and loss statement.
Sometimes, HVAC entrepreneurs have a difficult time budgeting for this type of expenditure. Here’s one strategy you can try:
Let’s say the attrition (employee turnover) rate for your HVAC company is approximately 35%.
The first thing you want to do is to get that number down to 15%. Check out the recruiting and retention page on the Nexstar website to learn more about how to do this.
If you have 60 people on staff, you’ll be hiring nine employees a year to have a break even attrition rate of 15%.
To find the best nine employees possible, you’ll want to position yourself as an Employer of Choice to help you recruit more effectively as demonstrated on this page.
A way to retain and train staff to your liking is by hiring more inexperienced, “green” technicians. This will allow you to train and grow them the way you’d like.
Jack said that this process — from an inexperienced employee to a well-integrated and well-trained employee — can take up to 18 months depending on the quality of the training program.
Based on your growth goals, you can begin to reverse engineer how many senior technicians you’ll need next year, or even in three years, and then you can begin recruiting and training.
In about 18 months, you’ll have the right talent in your organization to support your goals for the business.
To jumpstart this recruiting and training process, Nexstar has created a program called the Nextech Academy. It will allow you to get someone through the training in just 12 months!
3. Growing Leaders
Now that you’ve gotten out of the day-to-day minutiae of the business, have a competent team working in the field and office, the last constraint to growth is growing leaders in your company — this step begins with you.
Jack shared some common beliefs that get in the way of entrepreneurs at this stage. They’ll say things to themselves like:
“This is who I am.”
“I can’t.”
“I don’t want to.”
“I’m not capable.”
“Someone else is better, so…”
The key to breaking through this mindset is to be in the presence of others who have already done it.
Joining a group of successful and similar companies to your own will help you see business leaders in-action. This will help make becoming a leader more tangible.
Following industry leaders, talking to other entrepreneurs, touring other facilities and workplaces, and seeing the scale of what is possible helps to crystalize how to think and act upon your role as a leader.
Once the entrepreneur has the correct mindset and desire to become a better leader, the last piece is to set up a leadership development program like the Mid-Level Management Track at Nexstar.
You can also provide resources internally for your team. These resources can include:
- Podcasts
- Books
- Growth paths
- Structured programs
- And more…
No matter what happens, the goal is to develop a culture of self-development.
The mindset at your company needs to be, “I need to grow as a leader.”
Concluding thoughts
In closing, I wanted to thank Jack for sharing his insights on the growth constraints for HVAC entrepreneurs and that it helps people like you experience business growth.
If you need help with training, support, and leadership, or if are interested in being around other great HVAC entrepreneurs, Nexstar is there for you.
At Intrigue, our core focus is generating Qualified Leads for HVAC Companies. Click here to learn more about how we help.
Nice article! Thanks for sharing this informative post. Keep posting!