With fuel prices surging up, now is the time to tell customers about high-efficiency products.

The HVAC industry has been given a gift: fuel prices are skyrocketing.

This is an opportunity. Take advantage of it. Change your marketing activities to include "awareness and fear" messages.

Before you have a fit over including fear as a sales tactic, it is one of the primary sales motivators (greed and sex are the other two). So whether we like it or not, human beings respond to fear.

Focus on what your customers and potential customers are thinking about - high gas prices and how they're going to pay for them. You have a solution: higher-efficiency equipment.

Unfortunately, things like the benefits of longer equipment life, peace of mind, and more comfort in the home are less likely to win the sale. They're still important, but customers are less likely to care about them right now.

All of the direct-mail pieces that you send to your customers should focus on saving money. During these times, postcards work well. No one has to open an envelope. If you print them on bright paper, people will notice them and read your message.

Make the message short. Focus it on the cost-cutting benefits that customers will get by sealing ducts, installing a new system or cleaning their old one.

If you send newsletters to customers, include ideas on things they can do to save money on their utility bills in their homes or offices. Write an article about how high-efficiency systems can save them money.

The best benefit that you can give customers is that they will save money on utility bills. With the size of the checks that many of us have written in the past few months, this headline will definitely get your potential customers' attention.

‘Profits' and ‘cash'

On a different subject, one of my first clients was a florist. She got her financial statements at the end of each month, looked at the bottom line and saw that she had a profit. She then put the statements in the drawer and forgot about them. She became puzzled when she could not pay her bills even though her statements said she was profitable.

The florist was making a mistake that many business owners do - equating profits with cash.

For operational purposes, contracting companies are set up on an accrual basis, which means that you record a sale when you make it; not when the cash is collected. Likewise, you record an expense when the bill arrives, whether or not you've paid it.

For companies on an accrual basis, when you look at the bottom of your financial statements and see a positive number, it only means that you earned a profit. The number does not represent cash. It is simply the amount of profits you earned for that period. You must convert that profit into cash. This means that you have to collect the money for your work, pay your expenses against the job, and then have cash left over.

Many contracting companies have more than one job per month. So your accounting program should add all of the revenue from all jobs and subtract all of the expenses from all jobs (you can also get an individual job-cost report). On your balance sheet, it should show you the cash you have and the receivables you have because of the jobs. You must be aware of and timely collect the receivables so you can pay your employees and other bills.

Don't feel too secure when you see a profit on your income statement. Look closely to ensure that you collected for the profitable work that you did.

(Copyright 2004, Ruth King. All rights reserved. Write to Ruth King, 1650 Oakbrook Drive, Suite 405, Norcross, GA 30093. Call (800) 511-6844; e-mail ruthking@hvac channel.tv.)