Summertime: bigger profits or more expenses?
May 5, 2006
By now, in much of the country, temperatures are starting to heat up good news for those of us who live in the often-cold upper Midwest.
It's also good news for HVAC contractors, especially those in residential service. As the thermometer starts to flirt with 80ºF, more homeowners and building managers will call for service if their existing systems aren't able to keep up.
The rising temps may give contractors another chance to explain the advantages of the now-federally mandated air conditioners with a 13 seasonal energy-efficiency rating. Hopefully, it will result in a few sales.
That should mean that contractors will stay busy and if they manage their businesses well, keep their bank accounts full. However, recent reports are predicting that energy costs specifically, gasoline could rise to record levels and make summer a more challenging business season.
According to several published reports, $3-a-gallon gas is possible in the next few months as the summer driving season peaks. As of mid-April when this column was written, a gallon of regular gas already averaged around $2.70 nationwide, according to the American Automobile Association.
Last year, when Snips ran a cover story on the high price of gas, the nationwide average was $2.12, a price that would now see many motorists lining up for the bargain.
In that July 2005 story, many contractors said they were already looking for ways to cut down on fuel consumption or passing along the extra costs to customers. Some were insisting employees drive a more fuel-efficient vehicle whenever possible, instead of the big pickup trucks many favor.
I wonder how contractors are dealing with fuel prices now. It seems as if gas for $1 a gallon is gone forever, and maybe $2 gas is a memory, too. I hope I'm wrong.
How are you dealing with fuel prices? Are they cutting into your profits? Let me know. Write me at Snips magazine, BNP Media, 2401 W. Big Beaver Road, Suite 700, Troy, MI 48084. You can also send an e-mail to email@example.com. Please include your title and contact info. We may contact some of you for a story or run some of the letters on this editorial page.
LettersContractor finds it hard to succeed in industry
I just read Jim Olsztynski's "Times are a-changin" column in the March issue of Snips.
As a very small residential HVAC contractor, what you say really rings true. I have tried three times to team up with another contractor in the Denver area with the goal to get bigger; however, each time I have struck out. The other contractors either are poor businesspeople or don't want to get really big or are really big and do marginally OK work.
As a technician in my 10th career, I don't want to be a lone ranger. However, I can't afford to hire "bubbas" who can't do the technical stuff, cost too much and who make even more work for me. Currently I spend about 50 percent of my time fixing the lousy workmanship of other contractors. I really do want to be a businessman managing my business.
There is an unspoken tragedy in this country: Home designers, builders and HVAC contractors know that when people buy houses, they don't find out how good or bad the heating and cooling system is until after they move in.
Today, too much mechanical equipment is located in places where the service or repair time is doubled because of the poor or too-small equipment location. Although many homeowners would like to add air-quality-improving devices to their heating and cooling systems, there physically is no space for them.
Although I am currently only an "airhead" contractor, I see the need to become a "wet-head" contractor as well. To stay up with and/or ahead of the times in the Denver area, I need to be able to work on both air and hydronic systems, even if my service and installation trucks become 45-foot-long semitrailer rigs.
Alex Walter About Home Comfort Inc. Aurora, Colo.