SAN ANTONIO — Forget the recession. Don’t worry about the recent midterm elections. Forget about the ongoing war in Syria or the terrorist group called ISIS — at least when it comes to the U.S. economy. None of it matters to your wholesale HVAC market business.

That was the message Alan Beaulieu of ITR Economics told members of the Heating, Air-Conditioning and Refrigeration Distributors International during his Dec. 7 appearance at the group’s 2014 conference in San Antonio.

“From an economic point of view, unless you’re a bomb maker… it doesn’t matter to you,” he said.

Beaulieu, HARDI’s chief economist, was the opening keynote speaker for the HVAC construction distribution group’s Dec. 6-9 event at the JW Marriott San Antonio Hill Country. With business on the upswing for many members and economic indicators predicting the economy will continue to grow, Beaulieu said it was time to spend.

“You’re going to have to invest in yourself,” he said. “It’s going to be fun. You’re going to make some money.”

Easy money

Unlike a few years ago, banks have eased credit standards and financing with low interest rates is easier to secure, Beaulieu said.

“There’s plenty of money in the system,” he said. “Banks want to lend and I encourage you to borrow some of it.”

That doesn’t mean HARDI members won’t face some cost pressures. Margins will likely be squeezed and you’ll probably need to pay good employees more money to keep them — and keep them happy, he said.

While the immigration issue will continue to be political fodder, Beaulieu said it won’t negatively impact the economy: Few immigrants are taking jobs Americans want.

Steel prices — a concern for many HARDI members — should stay stable. There is not enough demand to cause price spikes.

One area for concern, however, remains health care. The Affordable Care Act did not do much to drive down insurance premiums, and heath care remains expensive when compared with other nations, Beaulieu said.

That scenario is unlikely to change.

“There is no Washington cure coming for this,” he said.

The next major recession is not due until 2019, so take advantage of opportunities now, Beaulieu said. He foresees a Great Depression-level downturn in the 2030s, so he encouraged HARDI members to position their companies now to better handle its impact.

To your health

In addition to Beaulieu, HARDI booked a number of experts in fields such as health care, distribution and politics to give their expertise and advice to members. Attendees heard from Robert Stephens, founder of the computer repair company Geek Squad, who told how he turned a part-time college business into one of the largest brands in the world. Stephens also spoke about how technology is changing every industry, including HVAC market wholesaling.

Lacey Robinson, HARDI’s health care benefits consultant and a vice president of employee benefits at Indiana agency Gregory & Appel Insurance, gave members an update Dec. 7 on the law popularly known as Obamacare.

The law expanded coverage to millions of uninsured Americans, Lacey said. But because it also mandated coverage for pre-existing conditions and other services previously considered optional, it didn’t lower expenses for most employers.

“It was definitely felt in the premiums,” she said.

In addition to the general sessions, the association held a number of forums on industry topics such as the supply chain, manufacturer relationships and emerging leaders. One session that organizers say has been growing in popularity is the Sheet Metal Market Forum, which was held Dec. 7.

Members discussed topics such as code requirements for sheet metal products thickness in ductwork fabrication and the need for duct sealing when 35 percent of a home’s energy waste comes from the HVAC system.

Steel

David Boggs of Lyon, Conklin & Co. Inc., committee chairman, told attendees that the steel industry is seeing another round of consolidation.

“We’re getting fewer players all the time,” Boggs said.

Tim Quinn of Majestic Steel USA said his company — and the U.S. steelmaking industry in general — is being impacted by overseas competition.

“There is a lot of import pressure,” he said. “China produces 50 percent of the world’s steel right now.”

That kind of environment has made service more important when choosing a steel supplier, he added.

“The lowest common denominator has had a hard time surviving,” Quinn said.

When it comes to sales, it takes a lot more than just surviving to succeed. That was among the messages from Joe Ellers, a sales expert who spoke to association members in a Dec. 9 talk aimed at sales managers.

Salespeople need to communicate effectively with potential customers — and much of the time, that means in-person visits, he said.

“One of the things that is really imperative is to get our salespeople to make calls,” he said. “Sales management is driving the behaviors that produce the results you want.”

Too many choose to only visit customers they’re already comfortable with and talk about familiar subjects, he said. And it’s hard to get existing customers to buy more products and services.

Relationships

Existing relationships seldom help you grow your business.

“When someone has been buying the same thing from you year over year” it’s hard to grow margins, he said.

Most salespeople have no problem selling the same items to customers who always buy them. But only 30 percent of existing customers buy new products or services, Ellers added.

You need to know and be clear on these goals — and communicate them to your sales staff:

  • What do we want to sell?
  • To whom do we want to sell it?
  • How many sales calls should be made?

“Is there a clear definition of the new customers we want to go after?” he asked the audience. “A lot of times, the last people we call on are the people who aren’t doing business with us today.”

Managers need to carefully examine their staffs’ calendars at least two weeks in advance to track where they’ll be and whom they’ll be visiting.

The final keynote speaker was TV commentator Tucker Carlson, whose career has encompassed newspapers, MSNBC, CNN and a stint on “Dancing With the Stars.”

In his Dec. 9 speech, Carlson said this is an exciting time to follow politics.

“We are at one of those moments in history where an awful lot is happening at once,” he said.

The world is changing so rapidly, even people from the same generations can have wildly different experiences, Carlson said.

“I am completely convinced that high school seniors who graduated in 2008 will have very little in common, in their assumptions, with high school seniors who graduated in 2009,” he said. “So much has changed about the way young people see the country. Their core assumptions about democracy, capitalism, science and everything, are all very, very different and all very unclear at this point. The bottom line is that… there is a ton of turmoil just beneath the surface.”

 For reprints of this article, contact Renee Schuett at (248) 786-1661 or email schuettr@bnpmedia.com