How to Grow Your HVAC Distribution Business and Meet your Goals in 2023
HVAC distribution businesses are crucial to thriving communities. HVAC technicians everywhere help people stay comfortable in their homes and workspaces and rely on their distributors to do so. Today growing & operating a successful HVAC business is not without challenges, contractors and distributors alike are facing:
- Supply chain issues
- High turnover rates
- An aging workforce
For those looking to expand their companies and meet all of their goals in this current day and age, with proper planning and execution, there are steps you can take to set your organization up for success.
If you don’t have time to read the full guide, depending on your needs and budget, Prokeep may be a quick solution to optimize your HVAC distribution business.
Get a demo with Prokeep's Communication Software built for HVAC.
Success-driven tactics for growing your HVAC distribution business
All distribution businesses benefit from a close look at their foundations and internal processes. Whether you are in the early stages of your business or have been established for years, here are some advantageous strategies:
Writing an HVAC business planOutline your goals and 5-year plans
- Effectively assess where you are in terms of staff, ARR, and any other trackable metrics.
- Detail where you’d like to be in 5 years and the steps you will take to get there.
- If you are a new business owner, register your distribution business
Effectively financing your HVAC business
Evaluate your service prices and if needed adjust for inflation. When setting prices consider different types of costs:
These costs vary between individual projects, your labor is charged by the hour and the cost of materials.
Your pricing should take into consideration your staff’s personal skills, experience, the quality of materials you distribute, and the location of your target market
Newer business owners must determine how they will secure funding: your local government might also have financing programs to help new businesses. If your organization is eligible this can be a great way to access financing.
Invest in opportunities to differentiate your business
There are countless distribution businesses tailored to HVAC, so ensuring that yours stands out is key. Some good practices include:
- Finding a mentor within your industry and learning good practices from them
- Read books written by leading industry experts on HVAC and distribution trends.
- Listen to HVAC podcasts and network with top HVAC organizations
- Learn your industry; read and connect with contractors and manufacturers to better understand their perspectives.
Consider targeting a different audience than your competition through specialization rather than focusing your efforts on outdoing your competitors.
How $1 million HVAC businesses structure their companies
Having a strong core foundation is crucial to managing growth. As your business continues to get larger it will be even more necessary to ensure that all facets are accounted for. Key components within your HVAC distribution business include:
- Key business tasks
- Value Propositions
- Cost Structure
- Customer base
- Market Segmentation
- Marketing, sales, and growth channels
- Revenue streams
You should consider using software like Customer Resource Management (CRM) tools to track employee and customer data as well as daily business tasks. Communication tools like Prokeep enable you to make sales faster, as well as boost transparency within your organization as records of conversations are kept.
A Strong HVAC distribution business invests time and money into training and developing its workforce.
With the high turnover rate of today, retaining a qualified workforce that feels valued and satisfied is incredibly important to your business’s long-term success. Some helpful strategies for creating a strong work environment include:
- Keep a fully developed organizational chart
- Provide extensive training for every employee and offer opportunities for continuing HVAC education.
- Offer performance pays as an incentive to grow.
- Always be recruiting and develop a strong, thorough interviewing process.
Invest in SEO site optimization tactics
In order to be found online, your site needs to be optimized for local searches by using a search engine optimization (SEO) strategy.
“Local SEO is essential for HVAC marketing. You need to be found in your city listings. It helps drive organic search traffic to your website. Organic traffic is free traffic.”
- SEO expert Bradley Shaw
Popular tools for optimizing your website include:
Developing your specialized HVAC distribution business plan
Each organization is unique and your own business plan needs to be tailored to your distribution business. Your plan should outline your short and long-term goals with attainable metrics listed to aid in tracking progress. You can use this to plan your strategy & assess your progress as you continue building your business.
What your specialized plan should include:
- The problems your business is solving for your customers
- The legal structure of your business (sole proprietorship partnership, corporation, etc.)
- The structure of your organization and all its employees
- Your legal and trade name
- Where your business operates
- Assets necessary for your organization to run
- Ongoing costs of running your company
- Revenue goals for 1 year, 3 years, and 5 years
- Current revenue and customer base
Continue investing in a strong company culture.
Your organization's number 1 asset is its employees. As you plan for growth, look for opportunities for career development for your staff. Always be sure to invest as much time in recruiting and training as you do in sales, and regularly share your team’s success stories to motivate and inspire everyone.
Best practices for developing your strong company culture include:
- Create a well-defined operating system including a detailed organizational chart and operating manuals
- Offer continuing career development opportunities
- Invest in communication software like Prokeep to nurture your company culture.
How Prokeep helps your distribution business create a strong company culture.
Prokeep is a communication software that text-enables your main phone line so you can send messages internally or externally from one unified work channel. Prokeep enables your employees to work more efficiently and prevents burnout as they can chat with each other effectively from their phones or counter computers.
Prokeep connects your entire workforce in one channel, allowing for internal messaging without needing personal cellphones. This breaks down siloes and boosts transparency amongst your team, allowing them to better support each other as they serve customers faster.
Common HVAC business expenses and how to manage them
Every business comes with start-up and ongoing costs, without effective planning they can become rather steep and you can fall into debt.
Ongoing costs you will need to cover:Inventory
- Basic hand tools
- Safety tools and PPE like gloves, masks, goggles, and earplugs
- Advanced HVAC tools that differ depending on the services you provide; like core removal tools, thermal image cameras, leak detectors, megohmmeters, phase testers, and refrigerant scales.
- Replacement parts or parts needed to complete jobs by contractors.
- New HVAC contractors typically spend $200–300 on basic HVAC tools and safety equipment. It is a good idea to be well-versed in the contractor's side of the business so you can tailor your inventory to best meet their needs.
- Assess current staffing: how much it costs to employ them and if there is a need for more staff.
- Decide whether you want to hire employees or subcontractors
- Write an HVAC distribution sales associate description and share it on job search websites
- Prepare questions to ask a new employee before you hire them
- Check references and ask for police background checks
- Prepare to train your employees once they’re hired and to continue to do so
- Pay your team competitive wages and offer a great work environment
The brick & mortar business
Be sure to always have a safety net of savings as you continue on your business endeavors, even with all the right planning there can still be costly emergencies.
The importance of HVAC distribution business cards
Distributors should aim to take advantage of every tactic through which they can grow their businesses, and business cards are still widely relied on today. The business card represents your company’s brand. it conveys important personal contact information such as name, title, email, website, address, and phone number, and often is also the first exposure to the overall image of the business.
Having a business card conveys professionalism and is an efficient way to quickly pass essential details including:
- Company name
- Brand logo
- Your business’s number
- Your office address
- Your first and last name
- Your official title
- Your business email address
- The company website
- Any social media handles.
Some ideas to consider include:
- Use simple graphics to catch the eye
- Use a minimalistic design
- Include a CTA like “schedule a free consultation today,”
HVAC distribution business software
Incorporating technology into your business will allow you to stay organized and efficient as your company grows. As your business grows you will have more staff, more inventory, and more customers to account for, without technology it will be easy to lose track of things.
Many tools exist to streamline business functions and adequately store data:
- Customer relationship management is a process in which a business or other organization administers its interactions with customers, typically using data analysis to study large amounts of information.
- Salesforce, Nethunt, Hubspot, Microsoft Dynamics
- Enterprise resource planning (ERP) is a type of software system that helps organizations automate and manage core business processes for optimal performance
- Netsuite, Eclipse, Innovo, Prophet 21
Communication Software - Prokeep
- Prokeep is a communication software built for distributors that allow business communications to all occur in one unified workspace. It allows for:
- Customers can text the branch to place orders or ask questions. This way they can get service instantly without interrupting their work, and your employees can answer in a fraction of the time.
- With Prokeep your employees can text, email, or fax (we can say email & fax right?) on one screen, with one work account, making doing business seamless.
The best HVAC software for distribution businesses of all sizes
Several programs exist to boost productivity and better streamline your workflow. it is key to use appropriate service software that boosts efficiency but doesn't overcomplicate things, creating a more difficult process for you. Tools like Eclipse, dynamics 365, or Prophet 21 are all well-received and beneficial for HVAC professionals of all sizes.
In our opinion, if you want to do business faster while providing the best experience for your customers, the best HVAC software is Prokeep. Prokeep is easy-to-use, easy to implement, and will not complicate your work, which is crucial to distributors. Offering texting as a medium of communication will offer customers a channel to better connect with you at their convenience.
Are you looking to grow your HVAC business by optimizing communication? Let’s get in touch.