TORONTO - As trade show names go, CMX-CIPHEX isn't as easy to pronounce as Metalcon, Fabtech or the AHR Expo.But just as the name is guaranteed to fill the mouth, the HVAC and plumbing event is also sure to attract contractors from across Canada. The March 23-26 show brought more than 14,000, including attendees and exhibitors, to the Metro Toronto Convention Centre.

Ronald Coleman of Coleman Management Services Inc., gave a March 24 presentation on avoiding cash-flow problems. He says too many contractors don't know how to handle money.


Formerly known as the Canadian Mechanicals Exposition, 2006 marked the first time the Heating, Refrigeration & Air Conditioning Institute of Canada has joined with the Canadian Institute of Plumbing & Heating to produce one biennial event. Previously, each group held its own show. The combined effort resulted in nearly 500 exhibitors.

The theme this year was "Joining forces, sharing knowledge," reflecting the new combined show. In addition to the exhibits, organizers included 32 seminars on HVAC, plumbing, refrigeration, hydronics, business management and Canadian regulations as part of a "learning forum."

One such seminar was hosted by Ronald Coleman, an accountant, consultant and owner of Coleman Management Services Inc. in British Columbia. He says owners of HVAC companies - whether in the United States or Canada - have a problem: Too many of them don't know how to handle money.

"One-third of companies in this industry go broke because of cash-flow problems," he said.

Michael Glassco, operations manager for Theodor Sterling Associates Ltd. in British Columbia, gave a presentation on sick-building syndrome and other indoor air quality issues.

Cash flow

Coleman gave contractors tips on avoiding cash problems during his March 24 seminar.

He says even busy contractors in Canada's booming economy can have trouble.

"There's a lot of work out there," he said, but too many owners have no idea how much business they have to do just to break even.

Still, he said, figuring it out isn't too hard: "You don't have to make good decisions; all you have to do is stop making the bad ones."

He explained that too many contractors don't understand the difference between markup and profit margins. Your markup has to be a higher percentage than your profit target.

To increase profits, you have to increase volume, prices, or reduce overhead and costs, he said.

"The problem in our industry is it's virtually impossible to cut your overhead," he said.

Jim McIlveen of Dynair, part of sheet metal hardware maker Carlisle's Canadian operations, shows the Nexus, a four-bolt duct connector. It includes a flange, corner, cleat, nuts, bolts and gasket. According to company officials, the Nexus is leak-proof and easy to install. Dynair says the company is the only Canadian manufacturer of a four-bolt duct-connection system.

Coleman doesn't usually recommend increasing volume very much. He said it's hard to handle if you don't have enough people. However, he said hiking prices just 2 percent could increase profit margins 67 percent, if other costs stay the same. If you increase volume 2 percent, margins rise 10 percent.

That's why "Focusing on volume is not the answer," he said. "I'd much rather see you focus on price."

But if you can do it all - increase volume and prices by 2 percent and cut costs by an equal amount, profit margins can rise 141 percent, he said.

Another way to increase profits, Coleman said, is to try new markets. However, he urged caution. Coleman said he didn't want to discourage contractors from attempting new types of work, but he did want them to be realistic about them.

"If it's a new job that you've never done before, I guarantee you're going to lose money," he said. That's why he suggested attempting new projects when your company is already busy "so one bad job isn't going to kill you."

IAQ

Whether you're in Ontario or Ohio, indoor air quality is a big business and an even bigger concern. Michael Glassco, operations manager for Theodor Sterling Associates Ltd. in British Columbia, should know. Sterling Associates has been involved in IAQ work for more than 30 years.

"A lot of this whole indoor air quality (movement) started with the whole Legionnaires' thing," Glassco explained. He was referring to the 1976 incident at Philadelphia's Bellevue-Stratford Hotel where 34 people involved with the American Legion convention died from exposure to bacteria through the hotel's ventilation system.

At his March 25 presentation, Glassco gave an overview of indoor air quality, focusing on "sick-building syndrome," the condition where occupants blame coldlike symptoms on their work environment. He quoted U.S. Environmental Protection Agency statistics that said up to 30 percent of buildings have occupants who suffer from the problem.

Such building-related problems can make employee absenteeism soar, he said. And sick-building syndrome symptoms can be exacerbated by stress or other factors, Glassco said.

"If you're stressed or having a bad day, you're more likely to complain about a headache" and blame it on the building "instead of having a bad lunch," he said.

Poor IAQ can also be caused by mold, Glassco added. However, he cautioned that too many air quality experts unnecessarily scare people about the substance.

"A lot of consultants like to freak you out about mold," he said. "I like to take a more measured approach. Mold is natural. We've been living with it for thousands of years."

For reprints of this article, contact Jill DeVries at (248) 244-1726 or e-mail devriesj@bnpmedia.com.