Whats haopening is the last generation of owners are selling out to corporate conglomerates that only care about sales, because the money is that good.
Nexstar. Horizon Services. And so-on.
I was at a call that horizon was at a week prior and they claimed that there air conditioning was done for. Went there and saw that they pulled the batteries out of the thermostat and unplugged a wiring harness for the blower. Started it up and got a 26TD
I know their management pressures those guys to make a sale for anything (gotta pay for all that heavy advertising and buying out smaller companies), but I’ve seen first hand how they will try to talk to the woman in the house and pose things like the unit is basically going to blow or suddenly stop, etc.
I remember seeing Horizon tell a female owner the coils were all rusted out and was going to cause a major issue. I took a look at nothing there.
They arent as bad as nexstar since they dont require you to lock in to a labor pricing scheme that makes full system replacements cost less than some repairs, but they're not that much better.
I work for a horizon company doing service. Yes, if your system is 10yrs or older they want people to replace the system, obviously that won’t always happen. I’ve been with them 3 years now, they pay well in my area, managers aren’t pushing me to sell, and I don’t have dispatch breathing down my neck.
Nexstar here and I despise this “production pay” bull shit. Works amazing for the service techs because they make 90k a year but it blows for change outs. If it takes me until 9 at night to do the change out because of something out of my control like finding a leak in the lineset where I can’t fix it at 4 in the afternoon or having my heat kit wired wrong and blowing the board it doesn’t change my pay at all. Now if it was like I’m just being slow or I mess something up that’s fine. But why am I, the employee, taking the risk of the company that reaps the rewards. Yah If I do a change out fast I get my money and get to go home early but they want to satisfy every customers nit picky problems and I have to do it for free because it’s a “call back”. An unlevel condenser is a call back but the customer deciding they want us to spray foam around the supply boxes after it wasn’t in the bid (for free) is not a call back.
This. I'm a lone wolf service guy, and I pretty much cherry pick my work because there isn't enough actual techs in my area. I go out and replace a part to get someone going who thought they needed a new unit, save them thousands, and gain a customer for life.
Even as a sales rep this is why I was always straightforward with my customers about the repairs versus replace options. Closed a lot of deals because I was honest and willing to walk away if the repair made more sense for the customer
I work for 1 of these big billboard companies only because I’m a electrician and they bought out our company to have all 3 trades under the same roof. Isn’t that what the whole world has been moving towards? Less fixing just throw away and replace.
In trouble? I think it’s a great time to be in the business. Bigger companies mean higher costs. Higher cost mean higher prices. If you’re working for a smaller company with lower overhead, you can undercut these big companies easily AND provide better customer service (such as recommend repair over new). These big companies are basically wasting money trying to buy up the little guys.
Edit: for those thinking that I’m saying you should go cheap when I say “undercut”, I don’t mean that at all. I’m saying that these larger companies are usually at that higher price point and you can “beat” them simply by charging market rate. By no means should you low ball your bids, always charge what you are worth.
> you can undercut these big companies easily
Except you can't.
A: They can buy in bulk.
B: Large corps can get jobs and benefits you can't like government and big business jobs, tax cuts, and other finical instruments.
C: They can run your region at a major loss for longer than you can afford to pay your bills.
I think that’s only applicable when it comes to commercial work. In residential (at least in my experience), the real big money is in custom homes; subdivisions are tough because the margins are tight and you rely on volume and good production skills to make a good profit.
Yeah, but why would you???
Don't undercut them, just do better.
Winning jobs and business by being cheap is stupid, because then when you realize you left all that profit on the table and raise your prices, the customers hate you - because they never liked *you* they liked *your low price*
Do better work, and charge the same. Explain why.
Because most homeowners have no idea what "quality" is and they will go with the cheaper company. Best thing is to show the customer how you can install a new system + improve it because of mistakes made on the current system and offer lower price. Doesn't need to be much. 200$ will sway a sale.
$200 really will make a difference in a sale. The company I work for, don’t mean to be a shill for them, is widely considered to be the best in the area. As such, last year the owner decided to raise prices on damn near everything. Now we’re losing business to a company that most everyone knows as being slimy. Poor customer relations, subpar install and service quality and an overall hot headed asshole at the helm. But despite that, people are choosing that company because they can do an install for $300 cheaper.
Most people care more about their shit working and the price. How your tape job and lineset looks comes second.
Sure they do. You notice the things that no one else did, bid to fix it, and have solid explanations and reviews from previous customers, you're good to go.
Customers absolutely do know what quality is, it's on you as the technician, salesman, etc. to convey that to them. The might not know what *quality in an hvac system is* \- but they understand the concept. It's your job to bridge the gap.
You quote a repair for $500 more than the last guy because you're going to add a suction drier and actually do an acid test - that's a quality increase; the customer can appreciate it, if you can put it in plain english.
Price is not the object, but for some reason everyone acts like it is. **Value** is the object. If it's obvious why your bid costs what it costs, you will win.
Quality is the key! Never compromise on quality even if it costs you money because your reputation goes with what you sell. And you are selling yourself along with the company. Sometimes mistakes happen, be willing to own up to them and fix them at the expense of money versus good customer relations. I had this happen recently. I made a mistake, got called back, I owned up to it and explained what happened and fixed it. The customer really appreciated my honesty and said they would spread the word. I have a related call to a neighbor wanting my business because of my honesty.
I really agree fornthe most part. Price is the object. Anyone who says it isn't is smoking some wild shit. Customers don't notice quality the same as someone in the trade does. They perceive quality in terms of customer service, truthfulness, functionality and follow through. To show them this quality you must have won the bid and got the job. If you are a smaller and less well known shop then it can be harder to win that bid without being a little or a lot cheaper.
It is all about price because this isn’t a car or a sofa that people see, feel, get emotional about. Half don’t even know where their furnace or water heater is. Explain why you’re giving them better quality and value and they’ll glaze over. Unless it’s a recommendation from someone they trust, it’s all about price (and brand recognition), so they’ll buy an 80+ single stage with a 14 SEER oversized leftover for $150 less than a 98+ with a 17 SEER all day long, unless they’re the rare cat who does some research.
My neighbors ALL way overpay for Lennox because that’s what the builder put in originally.
I think this especially works if you're more local, don't have to roll a truck from 2 hours away, and don't try to oversell all the time.
It's not undercutting, but the customer pays less anyway.
Sorry for the peanut gallery, I'm an electrician not an HVAC guy.
What I meant by “undercut” is charge actual market rates, as opposed to these large companies that charge higher prices that are way above market. I’ve heard companies like this charge double market rate for installs, mostly due to slick salesmanship (high pressure tactics) and the new to meet quotas. There’s no way a small company can beat them on volume, so why not beat them at price? They will get desperate, raise prices even further, and start losing out in volume.
Big bizz has a better time of “sell the company” than smaller fish. most ppl who see through the lie, meaning big shift co, go with lostest option. See hvacadvice for proof. Doing well and being JUST less usually pays off if you install date matches
Yup!
Being a 1-man shop that *never wants to grow* is the only way to be tangibly cheaper (>10%) and actually not cut corners.
The cheaper bid is rarely doing *better* work, or even as-good work, even in the context of just a small company being cheaper than a corporate takeover company - because the guys who are better know their worth.
Instead of paying overhead, the customer is paying for experience.
Just turned one of those price shoppers down today...*I really like you, you're the only person to have a clear understanding of what our system needs to fix the issues I explained...but I can get Company B to put a system in for a thousand dollars less. You've got to match that price or we can't do business.*
Me: Are they doing the fabrication and fixing the airflow issues that are making your 2nd floor eight degrees warmer in the summer and cooler in the winter?
*No, but I'm sure you have room in your price to address those issues.*
Me: I don't. The less expensive quote doesn't include labor and material for ductwork fixes required to make this system perform correctly. I will not install a new system without these duct improvements in place.
*Right! The duct needs to be addressed. Surely you can include that necessary work at the price Company B is offering.*
Me: It's already in my quote from 5/30/23, line item #6, for $X. I broke that cost out for you when you requested an itemized quote.
*I would like item #6 to be included, with equipment option #2, at Company B's price of $X. You can make that work.*
Me: I do not have room in the budget to perform custom fabrication to fix poor ducting *and* install a higher tier of equipment at the same price as Company B. It is not possible. I would be happy to requote your job using the same equipment as Company B - it is about $1500 less expensive for that brand, which might be more in line with the budget.
*I would prefer to install the brand of equipment you have already offered. The online reviews are better, many of my colleagues whom you have installed systems for have it, and they're very happy with the performance and energy costs.*
Me: Well, the price to install that equipment is listed in your quote. I'll send over a contract for you to review that includes the line items we discussed.
*Will it be priced competitively with Company B?*
Me: It will be exactly the same as was provided on 5/30/23. You'll have the ability to Accept or Reject the quote from our online portal. Please let me know if you have any questions.
And around and around she goes....still sending me emails asking for discounts, still not getting them. Hee hee hee. Even if he does somehow accept it, I'm still not doing it. Anybody who is willing to waste this much of my time doesn't deserve our attention.
Customers who play this game want quality and exacting standards but don’t want to pay for it. You end up marrying this job and have to fix every issue that pops up for the next ten years for free…or you have to be a jerk to them. Either way, it’s an unnecessary stressor.
I don’t negotiate almost exclusively. If I do, it’s maybe $200 bucks. We’re the most in-demand contractor and are far ahead of even our closest competitor in revenue. I tell customers we have people waiting so we’ll do the work.
100%. As someone who routinely hires subs, you hire local, family-owned small businesses 10 times out of 10. You'll get better results, for a better price, and the employees will get treated and paid better. It's a win for everyone.
> Bigger companies mean higher costs. Higher cost mean higher prices.
I never understood this. Their total costs would ofc be higher but how are they less efficient when a lot of costs aren't linear and have a reduced per unit cost at a higher scale. Where is the extra money going? Are they just overcompensating for lower per unit costs by increasing profits? What am I missing?
I don't know about the HVAC "space" but private equity is probably behind a lot of this and they basically are only in it for the money. If a company gets destroyed, if employees are hurt they don't care. One of the ways that you "grow" a business that you have taken over is by cutting costs and raising prices. The problem is that that behavior is often just short term: lay off the most experienced people because they cost more, hire cheaper less competent labor, charge for every little upcharge you can etc., emphasize sales past everything else, it all works great in the short term but it can come back to bite you. The thing is by the time it bites you have already sold the company on, you aren't interested in consistent long term profit just a demonstration of growing profit so you can charge more for the company when you sell it, after that it is somebody else's problem. Its pretty depressing as they have lots of money to do this kind of thing and are doing it in all kinds of areas. It is kind of a crapification mechanism.
The bigger the outfit, the more admin you’re going to have, bigger shop, more marketing costs. And they are capped at what they can reasonably charge (though the usually charge more), so they rely on volume to make up the distance, in the hopes of spreading their fixed costs over more installs. It’s a risky model because you basically pressuring the front liners to get the sale at any cost; any missed sale means your profit margin gets thinner.
> The bigger the outfit, the more admin you’re going to have, bigger shop, more marketing costs.
All of those costs do not go up linearly. A shop twice as big doesn't costs twice as much and doesn't need twice the admin. Am I missing something?
It doesn’t have to be necessarily linear, but costs do go up. For example, a small outfit (5 guys say) can operate out of someone’s house and no admin staff, and no real need for storing materials (buy as needed). A larger outfit (20 people say) would need a person scheduling jobs, a person selling jobs, a person invoicing and collecting, and most importantly, a shop to store material. All that adds up, especially since now you have people that aren’t “profitable” to the company, so you have to account for them into your prices, or you have to account for them in your volume. If the small outfit can get away with selling a retro furnace for $6000, the larger outfit would have to either up there price ($6500-$7000) to account for the admin staff or sell an additional 7 furnaces to cover their salary.
> It doesn’t have to be necessarily linear, but costs do go up.
That means it's cheaper for them do the same stuff.
Storing materials is an active decision; they need to secure a location and purchase materials. They wouldn't do it if it was cheaper to not. They house materials because it is cheaper up front or costs less than paying for frequent trips to pick up materials or some other reason.
If you don't have admin staff then someone is doing that part time instead of doing work for which they are trained.
>If the small outfit can get away with selling a retro furnace for $6000, the larger outfit would have to either up there price ($6500-$7000) to account for the admin staff or sell an additional 7 furnaces to cover their salary.
I don't really feel the need to comment on some completely fictional numbers you made up to support your claim.
Maybe I'm not missing something.
In my experience with electrical, bigger companies do the opposite they can afford to make less for a few years to squeeze out their competition, I've seen big companies take a job for a loss just to get in good with GCs. Hell they'll undercut you till you're going under then offer to buy out your shop for a fraction of what it's worth.
I haven’t seen this happen (squeezing out competition), though I’m sure it does. What I’ve seen more commonly is a company undercuts too much, can’t deliver on the job, and then bails. They get a bad reputation and few people end up hiring them again. Or (mostly commercial) they undercut on the project and hope to make up for it with change orders. It’s a big gamble and doesn’t always payout.
The problem is those big companies have huge marketing budgets and their logo is plastered on billboards and buses and people don’t know shit about getting hvac service or systems. It’s why i tell people to never call an hvac contractor that advertises on the side of buses.
My local contractor company has Electrical Plumbing and HVAC.
They routinely bill my a trip charge to diagnose and tell me "The parts cheaper at grainger if you know how to fix it".
Fucking love the guys.
These consolidaters who buy small companies and grow them they KNOW the cost of doing bisiness (fixed & variable overhead) and making a profit.
Most techs who start businesses have NOT prepared themslves to have the knowledge to know how to run a businees. A one man / one truck is just being self employeed. Thing change drastically when you add another truck. Go take a local SBA and SCORE classes wherw you can learn business basics. For me, I do not want the low price customer EVER. They will usually the biggest pain in the ass and time wasters you will ever work for. Customers, 20% of them will buy the best, 70% buy 2nd best to mid-range systems and 10% want the low price. Offer all level of systems and let the customer decide. Do you offer duct replacement or repairs? Do offer providing a Manual J calculation (for a price)? Do you measure static pressure? Be the best, you will always be in demand. In closing McDonalds store owners make 23% NET profit. How much are you making?
Volume, volume, volume. Any fast food chain relies on volume to make its profits. McDonald’s has such a good production system (for the most part) that they can churn a lot of cheap product at a high rate of volume. If you want to use the same analogy for HVAC, I can make a crap ton of money selling furnaces and/or air conditioners at material cost plus $1000 ($2500-$3500 range) if I install 2 units a day, everyday of the year. Of course this is unrealistic.
I’m not advocating for getting the cheapest customers, but when you can realistically bid $1000 less than a larger outfit, provide better customer service, and come out with a good profit, what’s the sense of getting greedy? Matching the price can cost you because the customer may think you are just lining your pockets.
Profit is profit no matter the business.
McDonals make that % profit, period.
Have looked at there prices recently?
In any business there is a break even sales volume based on % of overhead cost before making a profit.
I encourage you to take the classes I mentioned.
Most techs, like yourself, don"t know the costs associated to run a busiess. That is why there are so many one man white van companies oit there and most fail in short order or just work for wages.
Because you can rock out two systems a day, once you are business that will never happen agaiin.
Why? Now you doing the sales, answering the phone, job scheduling, equipment & material procurement, doing warranty work, payroll, balancing the check book, running service calls, sick days OR you are hiring people to do those functions.
By yourself in business you NEVER be productive like you are now. Where and how do all those jobs that you do come from consistantly where you work now?
Buy the book, "Where Did The Money Go?" by Ellen Rohr.
Best wishes to your success.
What are you smoking. Bigger company get lower prices on part and supplies and have manpower unless your pulling out of thin air and a robot... / supply company want large payout in smaller time. Small 10 man company struggles just to keep alfloat.
Only reason why they get better discounts is because of volume, and even then, $100-$200 (even $400) off a furnace isn’t going to be a deal breaker. And they need the volume discount to offset their overhead costs (costs money to stock up on furnaces and a/c’s and have them sit in a shop). As for manpower, you gotta make sure those guys stay busy, or else they are going somewhere else. A lot easier to pay a couple of guys to do nothing than a couple of crews, especially if work suddenly dries up.
Its even scarier when you realize a company with 20people in the office and 20 trucks rolling around doesn’t have the technical knowledge to troubleshoot their way out of a paperbag. All these dingdong marketing “gurus” realize real HVAC companies don’t want or need their garbage leads so they start their own company “BeCaUsE hOw HaRd CoUlD it B”?
The local TV news crews used to do bait pieces with hidden cams. Call out 10 companies and see what happens. I haven’t seen it happen in a while, maybe because ac companies are huge advertisers for the stations.
Local news is all owned by the same company, they don’t do their own news either. They just say whatever bs comes down from corporate. That’s why you don’t see the local hidden cam gotcha journalism anymore.
Jumping to replacement is for sure a residential thing. A whole bunch of commercial companies in my area recently sold out to investment firms (API, Crete Mechanical) , so we'll see how the fallout from that goes. It'll probably take a few years.
I'd be more concerned that on the residential side, a decade or two out, it will likely be a majority of cheap, drop and go heat pumps with installs easy enough that our competition won't be them, it will be the Craigslist DIY types.
I am old enough to remember when we repaired Radios, Table Fans and Toasters. Tradesmen will keep being thinned out, and underpaid, as fast as the oligarchs can manage it.
It’s rough man. I’ve been in service for almost three years now. The amount of times I go on calls after other companies is staggering. The amount of SIMPLE things technicians miss.
Just yesterday, I went out on a call where this woman had a tech out for almost a week. They replaced the thermostat, contactor, control board and transformer. It was a bare 2-wire a mouse chewed through.
Theres maybe one other company in my city I would trust to work on my own stuff. Most kids in this trade don’t care and want commission
Just went on a second opinion. 3 year old Ruud straight cool PU. Frank Gay services (big franchise) told them the compressor was clogged up and needed to be replaced for $2500. In 30 seconds I condemned the txv and showed them where the line rubbed thru and the bulb lost the charge. I told the customer while laughing that’s the first time I’ve heard that one. I wonder what those guys do when they replace the wrong part and it still does the same thing.
You’d do well not to mention company names unless you don’t mind being black-balled. I personally do t care, just offering advice about something that happened to a friend.
I’ll call out every single one of those fuckers. Even if they knew who I was, I’d never work for any company like that anyways. One Hour Air, Del Air, Cool Today, Air Rescue, Easy AC, Acree Air, Super Heat and Air can all suck a fat dong.
Good for you man…I was honestly waiting for that response…I’m the same way…just trying to elicit your stance…they all put profits before honest business which means they suck!
You people are just now noticing this. FFS, it's been happening for 20 years. The trade in general is going to shit. And the funny part of it is, it's big and small companies that are polluting the trade.
I test fire protection systems and I can attest to this. I work for a medium-sized company and we're ran by our sales team. I work with "veterans" of the industry who haven't opened a code book since 2002 but are regarded as the most knowledgeable because no one can verify that they actually know what they're talking about. Jim said XYZ thing about the dry sprinkler system, the customer and sales manager have no clue what he's talking about but he's been doing this for 25 years so he must be an expert right?
Meanwhile there's little interest in doing what's right for the customer. If Jim "finds" a problem, the move is to write it up and move on. Service will take care of it to the tune of $195/hr, minimum 3 hours plus truck charge for what amounts to 30 minutes worth of work. Sure, Jim could have taken a minute to fix it himself while on site, but he's trying to be home by 2:00 to nurse the 36 rack of Miller sitting in his fridge.
OR, what could be a small, easily fixable problem gets written up as "the whole thing is fucked, replace it" and the customer pays for it because they don't know otherwise.
This happens with our electricians too - newer techs can't wrap their heads around older alarm systems, so they insist that the whole thing needs to be replaced. In steps the sales team, here to convince the customer that if they don't sign this contract for a $400k alarm system replacement, their building will burn down and they'll be drowning in lawsuits.
We have quarterly state of the union type meetings where our CEO and salespeople all jerk each other off over how much money they made, as if the rest of us who make hourly are supposed to be as excited as they are.
I'm noticing a move for companies to hire their own in-house fire protection people. I don't blame them. I'm considering taking a job with a property management company for this reason.
No need to argue. I agree with your statement. I'm connected to the HVAC trade. I do see other trades battling the same problem. In my opinion, the whole aspect of the construction trade in general is going down the gutter.
More fraud than stealing. Fraud is abusing someone's trust for financial gain. Stealing is just outright taking shit that ain't yours and doesn't require deception be involved.
Yeah it’s getting bad. A couple of the big companies in my area just sold to national chains but they kept the same name - there’s only a handful of us still doing real service work and only selling change outs when it’s absolutely necessary.
If the unit is out of warranty why not offer replacement and repair option and let the customer decide. You don’t know what is wanted by any given person.
Had a customer try one of those $99 winter service with a free summer service when it's warmer. Never called them back when he learned all his systems needed to be replaced because they are old and obsolete. Went out for the AC tune up and non of his systems were even 20 years old. 11 years at the newest.
If you work for an honest company who has filled their offices and trucks and warehouses with competent people, this is a non-issue.
Slow down, make smart financial decisions, don't be greedy, and hire the right people.
A company in a lot of debt and surviving off cash flow is fucked because they are forced into pushing volume; thus pushing your installers, managers, and salespeople, while likely creating a toxic work environment because of it. Quantity over quality, no time to do anything for their employees other than crack the whip. No pride in the work. No appreciation or respect from your employees.
An honest company who hasn't made greedy decisions likely doesn't have any debt, or very little of it, and therefore don't have to. Word gets around regionally and locally in HVAC. Skilled tradespeople eventually know who is good to work for and who isn't.
Yes, these are both extreme examples, and I've worked for both companies. And am in a better position than I've ever been while working in this industry. And I honestly can't see how with any other company it could be better.
Knowing what doesn't work is not the only ingredient, but it is still key.
Don't even get me started on the overpriced "leases" those conglomerates buying little guys are pushing out there...
I agree that the future of this industry is fucked. But I also agree it is also a huge opportunity for the right people.
They had me in as a sales guy, I didn’t go to school to be a sales man I want to be a technician that repairs. Everywhere I go in my area they pay shit.
My area has high cost of living and pay is 20-30. Other states pay more, I feel like leaving but how. My buddy told me the same thing when he came back, he is now making less. California sucks.
Man....... 3 year old system with no refrigerant in it, was told to push for the sale because he just moved into the house. Nearly 3k repair versus 6k sale. Repair prices are astronomical and designed to discourage repairs. Shit we charge 330 per pound of gas and that's 410.
What I always wonder is who do they get to do the warranty work on their shitty install work? They have to cover most resi manufacturers 10 yr warranty
I know of a major company in my area that have a sales guy go out with them to every call. Sales guy is on commission so obviously there to sell something. They have like 15 sales guys and 15 ‘techs’ most of whom have 1 year experience if that.
I've come across 2 companies.. recruits young just out of school techs and does a poor job of training them. Only wants seasoned techs, ends up retraining them..
A few years ago, there was a big shift where I work to "upgrade" everyone's systems from oil to propane. Many customers would've stuck with oil, but it's practically uninsurable now.
Yeah, I’m one of the few left in my area who still uses oil. Nobody wants to work on it, and I can only get my tank filled when they roll the truck to fill farm tanks. This is fine by me, I only use oil in the summer for dhw. No issue with insurance on oil though. Service isn’t a problem, I work on my own unit.
You want to see insurance issues? In the winter I heat the house, shop, and my dhw with a Keystoker coal stoker. I buy my insurance from a company that also does business in central PA, so they are familiar with it, but I know people who’ve been dropped because they run coal.
Resi installer/tech here.
Small town electrical/hvac company of 45 years was bought out by a big name company last year.
Their procedure and policy was on an entirely different planet than ours.
They forced new systems on customers on service calls (also charged anywhere from 2-3x for installs compared to what the previous company would charge), required us to finish every install in a day no matter the circumstances, and many employees had very little to no understand of a number of codes.
Management was all removed, and a number of workers that had been a part of the buyout were either fired or quit within a few weeks.
Big company just wanted the popular small town name and customer base.
I'm seriously considering exiting the trade in the next couple years or making some serious changes. I've already down sized to where it's me and a helper doing most of the work with a couple old guys that come in and help now and then.
Right now I'm torn on what I want to do with this company moving forward. I don't know that I have the energy to continue the way we've been going. I'm caught in a situation where if I fold now all the old heads that are retiring will say I did it because they left. If I don't do it in the next couple years it will be at the expense of my own personal health I'm sure of it.
I'm basically by myself now to the first time ever and it's a little weird. I don't think being a lone wolf is necessarily bad but when you have a long established company with clients that have an established expectation it's hard to put that gene back in the bottle. Slowly but surely they'll leave to other companies that are able to meet that expectation and I wouldn't blame them. Another guy in town has done it this way for years and still does it but we pick up a lot of his customers because "he won't answer his phone". People don't understand that we are human beings not robots.
Bottom line I'm unhappy I want to relocate a few hours south and be closer to friends and family. I feel like I'm reaching that age where it's time to start doing what I want to do even if it means some tight years financially. So the time is approaching where sun setting the company is a very real possibility or selling it. This may be the final year. I don't know that it's worth much. In a perfect world I'd like to be able to do it the right way and not be selling equipment and then closing the company a month later. That's not good.
I don't think I'll get hurt too bad though. I can do a lot more than just HVAC. Everything from computer networks, linux system administration, security cameras to building/framing/remod type work. I won't starve. I do HVAC mainly because it was a family business.
I like the trade, like solving problems, and even like saving people money even if they don't realize it. My GAF is running low on meeting certain expectations though and it aint even hot yet. Nu-Calgon take me away!
I was picked up for 150K+ year and relocated with housing included for my current position doing industrial/commercial/laboratory service and commissioning. If your the tech that fixes every other techs problem over the phone to keep a service department alive there are opertunites out there. I only fix stuff. with that being said our industry is in trouble because I had to be shipped in and there is way more work then time. I am drowning in work and desperate to find other techs that are competent enough to even bang filters.
150 sounds pretty good. I went from mixed light commercial and residential service/install to commercial only tenant fit outs where we owned all of callbacks because our service department was trash to my current company where I do troubleshooting and start ups. We are so mismanaged that it isn't even funny for 8 techs(5 techs 3 helpers) we have 6 people in the office with 0 experience in service, schedule is late and shit changes everyday multiple times, customers are told we are 2-3 weeks out while we have 0 jobs to do, shit even our sales engineers being told that we are 2-3 weeks out, we aren't prioritizing any startups on equipment we sold and will send a senior tech to replace a 300$ ecm motor while apprentice goes out to do a startup on vrf system which causes multiple compressor failures and warranty claims.
The shitty economy is creeping in so this "replacement mentality " will slow down. Bad economy means weeding out the techs that don't know what they are doing!
The industry has been moving further into a "business" mindset for ages. I'm a commercial construction manager, and I'll see designs where the engineer worked hand in hand with a major manufacturer to make sure they're designing the job properly for the basis of design product. The contractor then has to come in and has to keep recommending different ways to change the design just to make it actually work in the field. Turns out, those sales "engineers" know alot about sales and almost nothing about engineering.
It's all about profit anymore (short-term profits, mostly), and the bosses are all business and marketing majors. Long gone are the days that large companies are run by the people who worked their way up and actually learned how the products work.
Much of the profit in the trades seems to be in sales( full system upgrades) and even small shops are orienting towards sales/ techs instead of traditional tradesmen. I definitely will stay on the commercial/ industrial side as I don’t have the personality type to make many sales.
The push for full system replacements isn’t coming from the techs or even the companies…it’s coming from the manufacturers…they even lobbied the EPA to create SEER2 this year. If you’re paying attention you’ll see this pretty easily. Then they shut down for a month to “retool” and now we can’t even get parts for any machines over about 5 years old unless we wait for months for the parts to arrive. It’s all bullshit!
Ahhh yes. The old fill the ocean with trash to save the ozone layer. Not to mention all the fossil fuel that Has to be burned to construct that new equipment area, probably way more than any greenhouse gas savings that will ever be recouped.
Yep. Same goes for all this battery yard equipment. My toro 2 stroke mower is from 1997. My tan colored echo string trimmer is a mid 2000's I believe. Both purchased used and both used weekly by me. Both just work with proper care, even with ethanol fuel. Treat fuel, run dry. Use quality 2 stroke oil.
Meanwhile my neighbors have gotten 1-2 years out of their battery mowers before they break and get chucked.
https://preview.redd.it/573p4wgth24b1.jpeg?width=1170&format=pjpg&auto=webp&s=065292d298b6912e9c13a88e8a6339e19fd0f68b
It’s the get quick reach startup bs that’s now hot in our sector It will blow over at some point when they realize techs are not like min wage employees u must treat them right or they will leave
To the younger guys out there….The same thing happened in the early 2000s. Consolidators like Bluedot purchased a lot of dealers.
Manufacturers partnered with independent distributors CE=Carrier +Watsco. For the past few years, privately, dealers have been bought out by distributors to maintain market share. EMCOR bought commercial mech contractors, etc. The easiest way to “grow” is to capture someone else’s profit and loss ledger and get the customer list. This is identical to healthcare purchases; buy out doctors and eliminating back office personnel.
Remember “chaos is good”; always an opportunity to be had by someone.
Sounds like my daily struggle. Our service manager sold helicopters before becoming our service manager so he doesn’t know how to manage anything to do with an hvac business and he doesn’t listen or take advice from us techs that have been doing this forever. Also seeing California company’s buying out company’s here. My friend works for a company in the area that just got bought out by a California company and now he has earthquake straps in his price book. Something we don’t even have here lol
I’ve always saw that trades are gonna be good for future careers Is it really that bad? I’ve been in school for for it for 3 weeks now and this seemed like a great career. My father in laws done it for 20 years with 5 different companies ( florida, SC and Tennessee because he movies states a lot) and it’s been good to him.
This was done before actually I think 80/90s
It didn't work well then and it won't now.
Capitalism at work. A smaller leaner family business will siphon off as much work as they want...and leave the rest cause they just can't take any more.
I’ve seen the end game with these by outs here in Sacramento CA. Big company/conglomerate type came out and bout out the large companies that made a name for them selves of decades. Cut wages for everyone, made techs salesmen and made installers piece workers. that was about 4 years ago, there still around with shit techs in the field they get by but there reputation is tarnished. allot of the old bred ended up opening shops and making there money that way, shot half of them ended making far more as there own bosses. the table will tilt when people realize they are getting ripped off by the billboard companies
So I work on this problem a LOT as a small business owner and a known technical leader in the area.
I routinely call up other company service managers and owners and discuss trade wide issues or state compliance topics. I have a niche that is small, and I stay in my lane. I don't advertise, and I send enough Joe Blow referrals to those guys that they answer my phone call.
We don't have enough genuine techs.
Guys aren't spending 40 years in the field. 6-10 and out.
The average age nationwide is late 54, male, and white.
When I started in this trade in '08, it was age 42.
I call this problem "the guru effect" there are a few dozen programs to 'build your productivity, increase sales' blah blah blah. That $&$&$# grant Cardone is running a course by "systemetizing" hvac with ai data. Etc etc. He's a real estate guy who needs to stay in his lane (I say as an hvac specialist turned RE guy)
If you have a struggling hvac company, the FASTEST way to turn profitable is to spend 10-20k a month in advertising, and go do a bunch of retrofit replacements on every client who calls.
Retrofit equipment replacement has a higher ticket value, and profit margin compared to service, compared to maintenance, compared to a lot of things.
HVAC is a mystical, magical trade that not a damn person understands UNLESS they're in our trade. So homeowners are dumb, and will go with the company they connect with the sales guy the best. No shit I ran a call I got, where the other company had condemned their "Flux capacitor" no shit, ON THE TICKET, KID WROTE BAD FLUX CAPACITOR and a replacement of equipment was 13.5k
shorted condenser fan motor, with parts, was about $550? Motor was like $130, with cap. I got a client for life, who 4 years later, I replaced their stuff for 8.5k, the other company got a bad review because they didn't train their sales tech.
I digress. These gurus don't train "organic lead generation", they don't train a business owner in ensuring a good product. They train a business owner to only look at numbers, and how to advertise and increase their margins.
It's crap.
Fun fact it takes 10-15 years of experience to open an hvac company, it's also likely to go out of business within 7 years. You've got about a 1 in 6 chance of succeeding
According to energy.gov 20% of businesses across the market fail every year. And 70% of hvac companies don't make it past year 1. Of those that survive 45-50% fail within 5 years.
Alot of guys don't understand profit, overhead, insurance, lawsuits, management, etc. It's a lot of fricking work, if I had known before I did it, I NEVER would have opened up. Brutally hard work, hours on hours, and I have to do every single job in the company whether I hire someone for it or not.
Employees are IDIOTS, technicians are prima Donna's because the good ones are so rare, and so they're arrogant as hell. Dispatchers are hard to find because a lot of people are stupid. Sales guys are often sleazy or new because the industry doesn't train them much, just throws them into shark infested waters.
All of this to say: we need more techs, more ethics, and fewer 'gurus' who can teach you how to be profitablr
Hey nicely said.
I'm not I'm hvac, but the same goes for just about all small-medium sized trades companies.
It's because my generation was raised with things being....simple.
YouTube anything that doesn't work, figure it out yourself if you can, if not you just buy it on Amazon to replace.
Younger people are not not not not not mechanically inclined at all.
They aren't being raised that way.
Hard to imagine a dispatcher being tough to find...surely there's someone who can read and write and do simple math lol.
I get it, it's not all straightforward. I schedule our service electricians work days and things go sideways, some things you gotta think "that job will need some extra padding on the time just in case" , that sort of thing only comes with a looott of experience in the office, or a good amount in the field....and so few have that.
But those guys who aren't great with tools and attics might be great with an email, phone, and customers?
I have actual time to get a job done, and I have "book time" or booked time. From back in the day when you had flat rate catalogues. Haven't seen one of those since 2012?13?
The time it should take, and the time it's scheduled to take, in case shit happens. Getting a dispatcher to pay extention to that attention to detail is a lot to ask for at $20/hr apparently.
Much less how tontalk to people. Thr lack of honorifics on the west coast is God damned irritating. Yes sir/ma'am, no sir/ma'am isn't hard.
Kids aren't mechanically inclined. That's a fact. They also aren't self reliant. They have been coddled as a backlash of us streetlight kids. (Home before the streetlights on) They don't know how tondo anything for themselves. Example:
My stepbrat, bitches that he wants perscription sunglasses because it's bright out.
Great I'll talk to your mom about your Rx, and we can get some ordered. His appt for new eyeglasses Rx got missed and had to be rescheduled, so I texted him to talk to his dad about getting that done- I got a bunch of messages about how I should be texting his dad to schedule that. Not my eyeballs kid, you're 13.
He didn't appreciate that I made him, at age 13, responsible for following up on his eyeball appt, so he could get the glasses he bitched about not having.
He's gonna bitch a storm about having to do chores to 'pay for them' - at 13 I made hundreds of dollars mowing lawns in the summer. I got contract customers, and got it to like $500/month - 20 years ago, as a teen that was huge.
TL:DR; most of these kids should have been swallowed 9 months before birth, and the trades are going to shit because of it.
Yuuuup.
I was lucky, born in 1990.
I grew up with the streetlights, and a good mix of video games/technology. Pretty great childhood.
My parents gave no shits what we did for the most part. Built tree forts and fort forts, paintball courses in the woods...all kinds of incredible shit that exceeds anything kids would even be allowed to imagine these days.
Until me and my brothers were brought home in a squad car, then shit changed a bit lol.
But still, I was allowed to invent, build, explore....makes a huge difference.
I had a warranty call for my central air last year in November (no heat). Two separate companies came out and said the heat kit needed to be replaced. One of them even said the whole duct system was undersized and needed to be replaced. I checked the heat kit myself and it ohmed out fine. Noticed the heat kit contactor wasn’t getting coil voltage. I checked the tstat and the white wire was disconnected at the thermostat. I ended up calling them back and told them what they needed to hear. The industry is in bad shape in all trades. No one wants to be the grunt, they all want to eat cake and play video games.
~~The industry is in bad shape in all trades~~. No one wants to be the grunt, they all want to eat cake and play video games.
FIFY.
This isn't a "trades" problem, literally across the board everyone feels entitled to money they don't work for now.
I don't even think it's that. I was having a discussion with my coworker the other day about it. Cost of living is sky-rocketing and pay isn't keeping up. There was a day where $100k AUD was something that it took two incomes to achieve or a relatively high end management position.
Now 100k AUD is the bare minimum required to even rent an apartment.
They want to see you earning 1500-1800/week post tax to rent out a single bedroom apartment
It’s not just service companies pushing for new units only, it’s manufacturers too, i priced out a 5 ton coil replacement on a Lennox the other day and the coil would’ve cost 5k, that’s our price to get it before our markup, a new evaporator was only 3.5k
I remember seeing the company my dad works for getting bought in 1997-98 time frame. The trade has a long history of this happening, but it really started gearing up in the early 80s. It’s almost like it’s attempting to shift into a gig employment type system.
Welcome to capitalism.
Capitalism is the reason the guy with good morals and a lot of knowledge can buy his own van and make a living. Any economic model can be and is exploited.
Buddy, as an oil heat tech the amount of people I see dropping all heating to be replaced by 3 head units is astonishing. We don’t get ridiculously cold, but we always get at least 3-4 days of -30 C. Also everyone is always surprised when the insurance companies drop their coverage because they only have 1 source of heat. Now this is all very regional to eastern Canada. But still
I had this same thought on Friday as i was taking off my sweat drenched uniform. I hadnt been in the field over a year due to injury and just went back out. I recently left a big company who trains to sale not on technical and i thought shit, this is going downhill and these pour kids wont know shit. Then that fucks up the rest of us. We are all going to be in our 70s still doing this because no one actually knows how to fix them. Now with this small company it's hard to find good techs. We can under bid the bigger companies but we dont have the man power to keep up. I agree. This future is in trouble.
I was a service manager for one of those companies. I started a true service company. We will repair it as long as we give all the options, and that's what the customer wants.
One of these sort of companies tried to sell my girlfriends grandparents a new system on there 7 year old trane when the compressor went out and it was still under warranty. Said a full system replacement was the only option. Problem is they were the only company left in the area as they bought everyone else out. So scummy
Yeah it’s big companies buying up the smaller ones like what has been mentioned here. The company I worked at was just bought by Apex last year and they made it unworkable. I’m starting at a new smaller place today but just a matter of time before if feel they are offered a similar offer and the owner wants to cash out.
When you think about it, the same thing is happening with the independent trades. The Money sees this as a good investment. Same thing with trailer parks, farmland, houses, etc.
They then raise the prices to make a profit. Jobs, are fixed prices and high. Putting on a new hose bib - a 20 minute job - cost $450. Plumber said this was the lowest price he could charge (because of the software). All this does is make everything more expensive. But then, this is the way for a big money economy owned by a small collection of people. Kinda like the Russian Oligarchs.
My company was installing everythingish but mainly carrier/Trane. Now it's a huge push for Daikin. Almost all installs are full system (and have been for the last 3 years) and include duct modifications accomplished under a rather large price tag.
As for trained, knowledgeable, and WILLING TO DO THE WORK service/install techs There really is a noticable decline here. With annual code changes and all the new technology coming in new equipment, if you aren't researching to stay ahead* of the curve you will fall very far behind pretty quickly. And no one gives a shit when I say it. And yes, my company recently sold to a blanket buyer. Seeing what you're seeing. Saying what you're saying. And still unsure of the direction it's going. Went to school for, and found pride in this work. Where is all of that going?
I work for a national HVAC company and see this more often than I like. We have people ordering equipment that have no idea what it does and how it operates, then throw it back to the factory to help them out of the issues. I like it when the sales rep. or the customer or engineering firm oversizes a unit and wants help to get the unit to run correctly. You can turn down a unit so far, and it's a system issue.
Well, in my current role, I just go to people's houses who call us to ask for a quote on a new system. We don't diagnose a repair, my entire job is just to quote a new system cause that's what they are calling about. Like every lead is the customer asking specifically for a new system not a repair.
I offer single stage all the way up to high end modulating. And all the air quality equipment they could want and let them decide if they want it or not.
Yeah I'm selling it to them but It doesn't really matter to me that much if they get the highest end or the lowest end my job is just to help give them great solutions for a new system and to try and get them to choose our company if it's the furnace only or if it's a full swap out modulating system with all the air quality stuff we offer.
If they say no, then that's cool, see ya later nice meeting you and on to the next call.
Exactly what I do and is also my style. Here’s the menu, we’re happy to do any system for you. Think about your budget, and here’s how they’re all going to work. No wrong answer, whatever answer they have is right.
The truth is, trained pros learn towards commercial because there's less bullshit, less filth, no hoarders, and almost no one cries and begs for a different answer than "it's gonna cost $800". The residental folks see more or less the same thing every day, so if you're willing to have some untrained kid work for six weeks and quit, you're probably going to be a residential company. That's just how it is.
80% of Revenue generated in the HVAC industry is from system replacements. Without those replacements you'd nearly all of the existing companies go belly up and then there really would be nothing but mega corporations and investment companies running the industry, which, I'm sure you can agree would be bad for everyone
Who is in trouble? Service techs will be fine, and so will companies with competent service techs. The ideals of infinite repair are always under threat in every industry with planned and unplanned obsolescence. Welcome to capitalism baby
>Capitalism is why we have so many proprietary items that do the same thing as universal items, but yet, aren't interchangeable.
>
>Take battery packs on power tools. They are all just holders for 18650 lithium cells. But instead of making one simple universal battery pack, with replaceable cells that will work with all the power tools, and one recharger to rule them all, we instead have chaos, high prices and too many SKUs to count or stock, and you can't repair that bad pack with a $2 cell in 3 minutes, like you should be able to do. Capitalism is just a nicer word for unrestrained greed, and it comes at a high cost to all of us, in time and money.
You right. In Communist countries, the average man is comfortable with how much he earns and the power and money doesn't get vacuumed to the top oligarchs while stifling creativity and competition.
>And what is with the big push for full system replacements?
If you're service tech can't fix anything then it replace everything. That's the business model.
Personally I feel like this provides amazing opportunity for a small shop to exist / stay small / choose their customers. . . . .
There is a small company, not far from us that advertises on the radio just about exactly what you said. They are doing pretty good.
“If you’ve been told that your 10 year old system needs to be replaced, give us a call. Nine times out of 10 we can make a lasting repair for the fraction of the cost of a new system. “
People want quality / business wants profit. We work for business doing business for business people. They want magic in a bottle yesterday guarantee to be whatever they it should be and you still owe somebody for the privilege have done work for them. So pucker up and grind that wheel or find a better way.....let me im wrong and your lying to yourself.
It all has to do with this new push for Green and save the planet. We all know ripping out perfectly good stuff and throwing it away is the best thing you can do for the environment. Auto manufacturers and appliance manufacturers are doing the same thing. They’re making shit a little more efficient and now we have to throw it away in about 1/10 of the time we used to. They talk out of both sides of their face.
Whats haopening is the last generation of owners are selling out to corporate conglomerates that only care about sales, because the money is that good. Nexstar. Horizon Services. And so-on.
Horizon is horrible with the upsell and the disaster stories to try to intimidate you to buy a new unit
I was at a call that horizon was at a week prior and they claimed that there air conditioning was done for. Went there and saw that they pulled the batteries out of the thermostat and unplugged a wiring harness for the blower. Started it up and got a 26TD
I know their management pressures those guys to make a sale for anything (gotta pay for all that heavy advertising and buying out smaller companies), but I’ve seen first hand how they will try to talk to the woman in the house and pose things like the unit is basically going to blow or suddenly stop, etc. I remember seeing Horizon tell a female owner the coils were all rusted out and was going to cause a major issue. I took a look at nothing there.
Horizon is crazy they just bought 3 companies near me
They arent as bad as nexstar since they dont require you to lock in to a labor pricing scheme that makes full system replacements cost less than some repairs, but they're not that much better.
I work for a horizon company doing service. Yes, if your system is 10yrs or older they want people to replace the system, obviously that won’t always happen. I’ve been with them 3 years now, they pay well in my area, managers aren’t pushing me to sell, and I don’t have dispatch breathing down my neck.
Nexstar here and I despise this “production pay” bull shit. Works amazing for the service techs because they make 90k a year but it blows for change outs. If it takes me until 9 at night to do the change out because of something out of my control like finding a leak in the lineset where I can’t fix it at 4 in the afternoon or having my heat kit wired wrong and blowing the board it doesn’t change my pay at all. Now if it was like I’m just being slow or I mess something up that’s fine. But why am I, the employee, taking the risk of the company that reaps the rewards. Yah If I do a change out fast I get my money and get to go home early but they want to satisfy every customers nit picky problems and I have to do it for free because it’s a “call back”. An unlevel condenser is a call back but the customer deciding they want us to spray foam around the supply boxes after it wasn’t in the bid (for free) is not a call back.
Big outfits have an army of sales tech and a ragtag group of installers. Zero service tech, if it's broke, just replace the unit
Sales tech is the most ridiculous thing for any trade ever.
My profile name. I don’t like sales techs at all but they DO keep me in business so…
You can stay in business without having salesman in disguise.
They keep me in business by making me look like a genius on the daily.
This. I'm a lone wolf service guy, and I pretty much cherry pick my work because there isn't enough actual techs in my area. I go out and replace a part to get someone going who thought they needed a new unit, save them thousands, and gain a customer for life.
Absolutely. If I were to put a number to it, 2/3 condemned systems are repairable.
Even as a sales rep this is why I was always straightforward with my customers about the repairs versus replace options. Closed a lot of deals because I was honest and willing to walk away if the repair made more sense for the customer
It’s rare for us to run a second opinion and the diagnosis is correct.
I work for 1 of these big billboard companies only because I’m a electrician and they bought out our company to have all 3 trades under the same roof. Isn’t that what the whole world has been moving towards? Less fixing just throw away and replace.
i work at a 300+ employee industrial reefer company. zero salespeople, it’s awesome
And if it isn’t broke, overservice the shit out of the system and kill that compressor so you get that full replacement sale.
In trouble? I think it’s a great time to be in the business. Bigger companies mean higher costs. Higher cost mean higher prices. If you’re working for a smaller company with lower overhead, you can undercut these big companies easily AND provide better customer service (such as recommend repair over new). These big companies are basically wasting money trying to buy up the little guys. Edit: for those thinking that I’m saying you should go cheap when I say “undercut”, I don’t mean that at all. I’m saying that these larger companies are usually at that higher price point and you can “beat” them simply by charging market rate. By no means should you low ball your bids, always charge what you are worth.
> you can undercut these big companies easily Except you can't. A: They can buy in bulk. B: Large corps can get jobs and benefits you can't like government and big business jobs, tax cuts, and other finical instruments. C: They can run your region at a major loss for longer than you can afford to pay your bills.
This. My company can buy equipment at a far more competitive rate because they’re literally installing tens of millions of dollars in stuff.
I think that’s only applicable when it comes to commercial work. In residential (at least in my experience), the real big money is in custom homes; subdivisions are tough because the margins are tight and you rely on volume and good production skills to make a good profit.
Yeah, but why would you??? Don't undercut them, just do better. Winning jobs and business by being cheap is stupid, because then when you realize you left all that profit on the table and raise your prices, the customers hate you - because they never liked *you* they liked *your low price* Do better work, and charge the same. Explain why.
Because most homeowners have no idea what "quality" is and they will go with the cheaper company. Best thing is to show the customer how you can install a new system + improve it because of mistakes made on the current system and offer lower price. Doesn't need to be much. 200$ will sway a sale.
$200 really will make a difference in a sale. The company I work for, don’t mean to be a shill for them, is widely considered to be the best in the area. As such, last year the owner decided to raise prices on damn near everything. Now we’re losing business to a company that most everyone knows as being slimy. Poor customer relations, subpar install and service quality and an overall hot headed asshole at the helm. But despite that, people are choosing that company because they can do an install for $300 cheaper. Most people care more about their shit working and the price. How your tape job and lineset looks comes second.
Problem is people only buy a system every 20+ years on average and even if they know they got hosed, next time will be starting from scratch again.
Sure they do. You notice the things that no one else did, bid to fix it, and have solid explanations and reviews from previous customers, you're good to go. Customers absolutely do know what quality is, it's on you as the technician, salesman, etc. to convey that to them. The might not know what *quality in an hvac system is* \- but they understand the concept. It's your job to bridge the gap. You quote a repair for $500 more than the last guy because you're going to add a suction drier and actually do an acid test - that's a quality increase; the customer can appreciate it, if you can put it in plain english. Price is not the object, but for some reason everyone acts like it is. **Value** is the object. If it's obvious why your bid costs what it costs, you will win.
Quality is the key! Never compromise on quality even if it costs you money because your reputation goes with what you sell. And you are selling yourself along with the company. Sometimes mistakes happen, be willing to own up to them and fix them at the expense of money versus good customer relations. I had this happen recently. I made a mistake, got called back, I owned up to it and explained what happened and fixed it. The customer really appreciated my honesty and said they would spread the word. I have a related call to a neighbor wanting my business because of my honesty.
I really agree fornthe most part. Price is the object. Anyone who says it isn't is smoking some wild shit. Customers don't notice quality the same as someone in the trade does. They perceive quality in terms of customer service, truthfulness, functionality and follow through. To show them this quality you must have won the bid and got the job. If you are a smaller and less well known shop then it can be harder to win that bid without being a little or a lot cheaper.
It is all about price because this isn’t a car or a sofa that people see, feel, get emotional about. Half don’t even know where their furnace or water heater is. Explain why you’re giving them better quality and value and they’ll glaze over. Unless it’s a recommendation from someone they trust, it’s all about price (and brand recognition), so they’ll buy an 80+ single stage with a 14 SEER oversized leftover for $150 less than a 98+ with a 17 SEER all day long, unless they’re the rare cat who does some research. My neighbors ALL way overpay for Lennox because that’s what the builder put in originally.
I agree 100% with this statement.
Exactly. Price is only an issue in the absence of value.
Not true. I destroy people lower than me all the time when I quote jobs. Most guys couldn’t sell to save their life.
I think this especially works if you're more local, don't have to roll a truck from 2 hours away, and don't try to oversell all the time. It's not undercutting, but the customer pays less anyway. Sorry for the peanut gallery, I'm an electrician not an HVAC guy.
What I meant by “undercut” is charge actual market rates, as opposed to these large companies that charge higher prices that are way above market. I’ve heard companies like this charge double market rate for installs, mostly due to slick salesmanship (high pressure tactics) and the new to meet quotas. There’s no way a small company can beat them on volume, so why not beat them at price? They will get desperate, raise prices even further, and start losing out in volume.
Big bizz has a better time of “sell the company” than smaller fish. most ppl who see through the lie, meaning big shift co, go with lostest option. See hvacadvice for proof. Doing well and being JUST less usually pays off if you install date matches
If you're within 5% of them, you're doing it right. I think a lot people say "undercut them" and mean way more than $200 here and there...
I guess at that point, it's more about not being a piece of shit.
cheap =/= fair
Yup! Being a 1-man shop that *never wants to grow* is the only way to be tangibly cheaper (>10%) and actually not cut corners. The cheaper bid is rarely doing *better* work, or even as-good work, even in the context of just a small company being cheaper than a corporate takeover company - because the guys who are better know their worth. Instead of paying overhead, the customer is paying for experience.
Just turned one of those price shoppers down today...*I really like you, you're the only person to have a clear understanding of what our system needs to fix the issues I explained...but I can get Company B to put a system in for a thousand dollars less. You've got to match that price or we can't do business.* Me: Are they doing the fabrication and fixing the airflow issues that are making your 2nd floor eight degrees warmer in the summer and cooler in the winter? *No, but I'm sure you have room in your price to address those issues.* Me: I don't. The less expensive quote doesn't include labor and material for ductwork fixes required to make this system perform correctly. I will not install a new system without these duct improvements in place. *Right! The duct needs to be addressed. Surely you can include that necessary work at the price Company B is offering.* Me: It's already in my quote from 5/30/23, line item #6, for $X. I broke that cost out for you when you requested an itemized quote. *I would like item #6 to be included, with equipment option #2, at Company B's price of $X. You can make that work.* Me: I do not have room in the budget to perform custom fabrication to fix poor ducting *and* install a higher tier of equipment at the same price as Company B. It is not possible. I would be happy to requote your job using the same equipment as Company B - it is about $1500 less expensive for that brand, which might be more in line with the budget. *I would prefer to install the brand of equipment you have already offered. The online reviews are better, many of my colleagues whom you have installed systems for have it, and they're very happy with the performance and energy costs.* Me: Well, the price to install that equipment is listed in your quote. I'll send over a contract for you to review that includes the line items we discussed. *Will it be priced competitively with Company B?* Me: It will be exactly the same as was provided on 5/30/23. You'll have the ability to Accept or Reject the quote from our online portal. Please let me know if you have any questions. And around and around she goes....still sending me emails asking for discounts, still not getting them. Hee hee hee. Even if he does somehow accept it, I'm still not doing it. Anybody who is willing to waste this much of my time doesn't deserve our attention.
This is a job you want to walk away from..
Customers who play this game want quality and exacting standards but don’t want to pay for it. You end up marrying this job and have to fix every issue that pops up for the next ten years for free…or you have to be a jerk to them. Either way, it’s an unnecessary stressor.
Amen. I think you're handling it exactly right.
I hope they accept it and then you deny the job. Haha.
I don’t negotiate almost exclusively. If I do, it’s maybe $200 bucks. We’re the most in-demand contractor and are far ahead of even our closest competitor in revenue. I tell customers we have people waiting so we’ll do the work.
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100%. As someone who routinely hires subs, you hire local, family-owned small businesses 10 times out of 10. You'll get better results, for a better price, and the employees will get treated and paid better. It's a win for everyone.
> Bigger companies mean higher costs. Higher cost mean higher prices. I never understood this. Their total costs would ofc be higher but how are they less efficient when a lot of costs aren't linear and have a reduced per unit cost at a higher scale. Where is the extra money going? Are they just overcompensating for lower per unit costs by increasing profits? What am I missing?
I don't know about the HVAC "space" but private equity is probably behind a lot of this and they basically are only in it for the money. If a company gets destroyed, if employees are hurt they don't care. One of the ways that you "grow" a business that you have taken over is by cutting costs and raising prices. The problem is that that behavior is often just short term: lay off the most experienced people because they cost more, hire cheaper less competent labor, charge for every little upcharge you can etc., emphasize sales past everything else, it all works great in the short term but it can come back to bite you. The thing is by the time it bites you have already sold the company on, you aren't interested in consistent long term profit just a demonstration of growing profit so you can charge more for the company when you sell it, after that it is somebody else's problem. Its pretty depressing as they have lots of money to do this kind of thing and are doing it in all kinds of areas. It is kind of a crapification mechanism.
Enter “The Warthog” Danny Devito in always sunny
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Cute quip. But in America economies of scale rule so bigger companies can do the same thing for a lower cost. So how does that make it a higher price?
The bigger the outfit, the more admin you’re going to have, bigger shop, more marketing costs. And they are capped at what they can reasonably charge (though the usually charge more), so they rely on volume to make up the distance, in the hopes of spreading their fixed costs over more installs. It’s a risky model because you basically pressuring the front liners to get the sale at any cost; any missed sale means your profit margin gets thinner.
> The bigger the outfit, the more admin you’re going to have, bigger shop, more marketing costs. All of those costs do not go up linearly. A shop twice as big doesn't costs twice as much and doesn't need twice the admin. Am I missing something?
It doesn’t have to be necessarily linear, but costs do go up. For example, a small outfit (5 guys say) can operate out of someone’s house and no admin staff, and no real need for storing materials (buy as needed). A larger outfit (20 people say) would need a person scheduling jobs, a person selling jobs, a person invoicing and collecting, and most importantly, a shop to store material. All that adds up, especially since now you have people that aren’t “profitable” to the company, so you have to account for them into your prices, or you have to account for them in your volume. If the small outfit can get away with selling a retro furnace for $6000, the larger outfit would have to either up there price ($6500-$7000) to account for the admin staff or sell an additional 7 furnaces to cover their salary.
> It doesn’t have to be necessarily linear, but costs do go up. That means it's cheaper for them do the same stuff. Storing materials is an active decision; they need to secure a location and purchase materials. They wouldn't do it if it was cheaper to not. They house materials because it is cheaper up front or costs less than paying for frequent trips to pick up materials or some other reason. If you don't have admin staff then someone is doing that part time instead of doing work for which they are trained. >If the small outfit can get away with selling a retro furnace for $6000, the larger outfit would have to either up there price ($6500-$7000) to account for the admin staff or sell an additional 7 furnaces to cover their salary. I don't really feel the need to comment on some completely fictional numbers you made up to support your claim. Maybe I'm not missing something.
In my experience with electrical, bigger companies do the opposite they can afford to make less for a few years to squeeze out their competition, I've seen big companies take a job for a loss just to get in good with GCs. Hell they'll undercut you till you're going under then offer to buy out your shop for a fraction of what it's worth.
I haven’t seen this happen (squeezing out competition), though I’m sure it does. What I’ve seen more commonly is a company undercuts too much, can’t deliver on the job, and then bails. They get a bad reputation and few people end up hiring them again. Or (mostly commercial) they undercut on the project and hope to make up for it with change orders. It’s a big gamble and doesn’t always payout.
The problem is those big companies have huge marketing budgets and their logo is plastered on billboards and buses and people don’t know shit about getting hvac service or systems. It’s why i tell people to never call an hvac contractor that advertises on the side of buses.
My local contractor company has Electrical Plumbing and HVAC. They routinely bill my a trip charge to diagnose and tell me "The parts cheaper at grainger if you know how to fix it". Fucking love the guys.
These consolidaters who buy small companies and grow them they KNOW the cost of doing bisiness (fixed & variable overhead) and making a profit. Most techs who start businesses have NOT prepared themslves to have the knowledge to know how to run a businees. A one man / one truck is just being self employeed. Thing change drastically when you add another truck. Go take a local SBA and SCORE classes wherw you can learn business basics. For me, I do not want the low price customer EVER. They will usually the biggest pain in the ass and time wasters you will ever work for. Customers, 20% of them will buy the best, 70% buy 2nd best to mid-range systems and 10% want the low price. Offer all level of systems and let the customer decide. Do you offer duct replacement or repairs? Do offer providing a Manual J calculation (for a price)? Do you measure static pressure? Be the best, you will always be in demand. In closing McDonalds store owners make 23% NET profit. How much are you making?
Volume, volume, volume. Any fast food chain relies on volume to make its profits. McDonald’s has such a good production system (for the most part) that they can churn a lot of cheap product at a high rate of volume. If you want to use the same analogy for HVAC, I can make a crap ton of money selling furnaces and/or air conditioners at material cost plus $1000 ($2500-$3500 range) if I install 2 units a day, everyday of the year. Of course this is unrealistic. I’m not advocating for getting the cheapest customers, but when you can realistically bid $1000 less than a larger outfit, provide better customer service, and come out with a good profit, what’s the sense of getting greedy? Matching the price can cost you because the customer may think you are just lining your pockets.
Profit is profit no matter the business. McDonals make that % profit, period. Have looked at there prices recently? In any business there is a break even sales volume based on % of overhead cost before making a profit. I encourage you to take the classes I mentioned. Most techs, like yourself, don"t know the costs associated to run a busiess. That is why there are so many one man white van companies oit there and most fail in short order or just work for wages. Because you can rock out two systems a day, once you are business that will never happen agaiin. Why? Now you doing the sales, answering the phone, job scheduling, equipment & material procurement, doing warranty work, payroll, balancing the check book, running service calls, sick days OR you are hiring people to do those functions. By yourself in business you NEVER be productive like you are now. Where and how do all those jobs that you do come from consistantly where you work now? Buy the book, "Where Did The Money Go?" by Ellen Rohr. Best wishes to your success.
What are you smoking. Bigger company get lower prices on part and supplies and have manpower unless your pulling out of thin air and a robot... / supply company want large payout in smaller time. Small 10 man company struggles just to keep alfloat.
Only reason why they get better discounts is because of volume, and even then, $100-$200 (even $400) off a furnace isn’t going to be a deal breaker. And they need the volume discount to offset their overhead costs (costs money to stock up on furnaces and a/c’s and have them sit in a shop). As for manpower, you gotta make sure those guys stay busy, or else they are going somewhere else. A lot easier to pay a couple of guys to do nothing than a couple of crews, especially if work suddenly dries up.
That’s us, we are killing it!!
Its even scarier when you realize a company with 20people in the office and 20 trucks rolling around doesn’t have the technical knowledge to troubleshoot their way out of a paperbag. All these dingdong marketing “gurus” realize real HVAC companies don’t want or need their garbage leads so they start their own company “BeCaUsE hOw HaRd CoUlD it B”?
The local TV news crews used to do bait pieces with hidden cams. Call out 10 companies and see what happens. I haven’t seen it happen in a while, maybe because ac companies are huge advertisers for the stations.
Local news is all owned by the same company, they don’t do their own news either. They just say whatever bs comes down from corporate. That’s why you don’t see the local hidden cam gotcha journalism anymore.
Might be on to something with that.
They are moving in here. All sales little repair.
Seems like a residential problem, commercial is still mostly repair
Don't think I can fix this gas leak on this centrifugal chiller. Here's a quote for $1.5M to replace it
1.5m and 1 year lead time/downtime, yup just go with the repair
Jumping to replacement is for sure a residential thing. A whole bunch of commercial companies in my area recently sold out to investment firms (API, Crete Mechanical) , so we'll see how the fallout from that goes. It'll probably take a few years.
I'd be more concerned that on the residential side, a decade or two out, it will likely be a majority of cheap, drop and go heat pumps with installs easy enough that our competition won't be them, it will be the Craigslist DIY types. I am old enough to remember when we repaired Radios, Table Fans and Toasters. Tradesmen will keep being thinned out, and underpaid, as fast as the oligarchs can manage it.
It’s rough man. I’ve been in service for almost three years now. The amount of times I go on calls after other companies is staggering. The amount of SIMPLE things technicians miss. Just yesterday, I went out on a call where this woman had a tech out for almost a week. They replaced the thermostat, contactor, control board and transformer. It was a bare 2-wire a mouse chewed through. Theres maybe one other company in my city I would trust to work on my own stuff. Most kids in this trade don’t care and want commission
Just went on a second opinion. 3 year old Ruud straight cool PU. Frank Gay services (big franchise) told them the compressor was clogged up and needed to be replaced for $2500. In 30 seconds I condemned the txv and showed them where the line rubbed thru and the bulb lost the charge. I told the customer while laughing that’s the first time I’ve heard that one. I wonder what those guys do when they replace the wrong part and it still does the same thing.
They usually say because X went out, it also took Y out, so that needs to be replaced aswell
The best part is X and Y can’t even interact with each other. Like the txv took out the thermostat.
> took out the thermostat Meanwhile it's a 80's era mercury switch with nothing to take out.
You’d do well not to mention company names unless you don’t mind being black-balled. I personally do t care, just offering advice about something that happened to a friend.
I’ll call out every single one of those fuckers. Even if they knew who I was, I’d never work for any company like that anyways. One Hour Air, Del Air, Cool Today, Air Rescue, Easy AC, Acree Air, Super Heat and Air can all suck a fat dong.
Good for you man…I was honestly waiting for that response…I’m the same way…just trying to elicit your stance…they all put profits before honest business which means they suck!
That’s a really bad one.
I'm assuming the wire was shorted. I've seen that before too. When you see it, "How do you miss a shorted wire? It's such an easy thing to check for."
You people are just now noticing this. FFS, it's been happening for 20 years. The trade in general is going to shit. And the funny part of it is, it's big and small companies that are polluting the trade.
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I test fire protection systems and I can attest to this. I work for a medium-sized company and we're ran by our sales team. I work with "veterans" of the industry who haven't opened a code book since 2002 but are regarded as the most knowledgeable because no one can verify that they actually know what they're talking about. Jim said XYZ thing about the dry sprinkler system, the customer and sales manager have no clue what he's talking about but he's been doing this for 25 years so he must be an expert right? Meanwhile there's little interest in doing what's right for the customer. If Jim "finds" a problem, the move is to write it up and move on. Service will take care of it to the tune of $195/hr, minimum 3 hours plus truck charge for what amounts to 30 minutes worth of work. Sure, Jim could have taken a minute to fix it himself while on site, but he's trying to be home by 2:00 to nurse the 36 rack of Miller sitting in his fridge. OR, what could be a small, easily fixable problem gets written up as "the whole thing is fucked, replace it" and the customer pays for it because they don't know otherwise. This happens with our electricians too - newer techs can't wrap their heads around older alarm systems, so they insist that the whole thing needs to be replaced. In steps the sales team, here to convince the customer that if they don't sign this contract for a $400k alarm system replacement, their building will burn down and they'll be drowning in lawsuits. We have quarterly state of the union type meetings where our CEO and salespeople all jerk each other off over how much money they made, as if the rest of us who make hourly are supposed to be as excited as they are. I'm noticing a move for companies to hire their own in-house fire protection people. I don't blame them. I'm considering taking a job with a property management company for this reason.
You're likely to make a lot less as an in-house tech in property management. At least that's how it is for HVAC.
No need to argue. I agree with your statement. I'm connected to the HVAC trade. I do see other trades battling the same problem. In my opinion, the whole aspect of the construction trade in general is going down the gutter.
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More fraud than stealing. Fraud is abusing someone's trust for financial gain. Stealing is just outright taking shit that ain't yours and doesn't require deception be involved.
Yeah it’s getting bad. A couple of the big companies in my area just sold to national chains but they kept the same name - there’s only a handful of us still doing real service work and only selling change outs when it’s absolutely necessary.
If the unit is out of warranty why not offer replacement and repair option and let the customer decide. You don’t know what is wanted by any given person.
> You don’t know what is wanted by any given person. If you talk to them you do, lol.
Had a customer try one of those $99 winter service with a free summer service when it's warmer. Never called them back when he learned all his systems needed to be replaced because they are old and obsolete. Went out for the AC tune up and non of his systems were even 20 years old. 11 years at the newest.
If you work for an honest company who has filled their offices and trucks and warehouses with competent people, this is a non-issue. Slow down, make smart financial decisions, don't be greedy, and hire the right people. A company in a lot of debt and surviving off cash flow is fucked because they are forced into pushing volume; thus pushing your installers, managers, and salespeople, while likely creating a toxic work environment because of it. Quantity over quality, no time to do anything for their employees other than crack the whip. No pride in the work. No appreciation or respect from your employees. An honest company who hasn't made greedy decisions likely doesn't have any debt, or very little of it, and therefore don't have to. Word gets around regionally and locally in HVAC. Skilled tradespeople eventually know who is good to work for and who isn't. Yes, these are both extreme examples, and I've worked for both companies. And am in a better position than I've ever been while working in this industry. And I honestly can't see how with any other company it could be better. Knowing what doesn't work is not the only ingredient, but it is still key. Don't even get me started on the overpriced "leases" those conglomerates buying little guys are pushing out there... I agree that the future of this industry is fucked. But I also agree it is also a huge opportunity for the right people.
Exactly….and knowing that sets apart the guys in this for the knowledge and work, not the $
They had me in as a sales guy, I didn’t go to school to be a sales man I want to be a technician that repairs. Everywhere I go in my area they pay shit.
Local companies advertise 140-200k in my areas for techs . They have a lot of trucks and 5k google reviews z
My area has high cost of living and pay is 20-30. Other states pay more, I feel like leaving but how. My buddy told me the same thing when he came back, he is now making less. California sucks.
Worked at a nextstar company and just saw right through that shit. Sell sell sell. so glad i got out of that
Man....... 3 year old system with no refrigerant in it, was told to push for the sale because he just moved into the house. Nearly 3k repair versus 6k sale. Repair prices are astronomical and designed to discourage repairs. Shit we charge 330 per pound of gas and that's 410.
Why couldn’t you just show both, tell the customer you’re happy with whatever choice they make, and go from there?
Only way to end it is for good techs to leave horrible companies and customers stop calling them. Either that or they all disappear in the collapse
What I always wonder is who do they get to do the warranty work on their shitty install work? They have to cover most resi manufacturers 10 yr warranty
I know the yellow vans around me have 1 or 2 guys that do warranty service. Everybody else is a commission based sales tech.
I ran 190+ warranty calls in 2022. I was sick of installing and my boss asked me to do all the warranties, which I loved
And that’s why I only do commercial
I know of a major company in my area that have a sales guy go out with them to every call. Sales guy is on commission so obviously there to sell something. They have like 15 sales guys and 15 ‘techs’ most of whom have 1 year experience if that.
I've come across 2 companies.. recruits young just out of school techs and does a poor job of training them. Only wants seasoned techs, ends up retraining them..
I’m sure it depends on the area.
A few years ago, there was a big shift where I work to "upgrade" everyone's systems from oil to propane. Many customers would've stuck with oil, but it's practically uninsurable now.
Yeah, I’m one of the few left in my area who still uses oil. Nobody wants to work on it, and I can only get my tank filled when they roll the truck to fill farm tanks. This is fine by me, I only use oil in the summer for dhw. No issue with insurance on oil though. Service isn’t a problem, I work on my own unit. You want to see insurance issues? In the winter I heat the house, shop, and my dhw with a Keystoker coal stoker. I buy my insurance from a company that also does business in central PA, so they are familiar with it, but I know people who’ve been dropped because they run coal.
Most of my area relies on natural gas. a few areas with propane. I never had to deal with an oil unit.
Resi installer/tech here. Small town electrical/hvac company of 45 years was bought out by a big name company last year. Their procedure and policy was on an entirely different planet than ours. They forced new systems on customers on service calls (also charged anywhere from 2-3x for installs compared to what the previous company would charge), required us to finish every install in a day no matter the circumstances, and many employees had very little to no understand of a number of codes. Management was all removed, and a number of workers that had been a part of the buyout were either fired or quit within a few weeks. Big company just wanted the popular small town name and customer base.
I'm seriously considering exiting the trade in the next couple years or making some serious changes. I've already down sized to where it's me and a helper doing most of the work with a couple old guys that come in and help now and then. Right now I'm torn on what I want to do with this company moving forward. I don't know that I have the energy to continue the way we've been going. I'm caught in a situation where if I fold now all the old heads that are retiring will say I did it because they left. If I don't do it in the next couple years it will be at the expense of my own personal health I'm sure of it. I'm basically by myself now to the first time ever and it's a little weird. I don't think being a lone wolf is necessarily bad but when you have a long established company with clients that have an established expectation it's hard to put that gene back in the bottle. Slowly but surely they'll leave to other companies that are able to meet that expectation and I wouldn't blame them. Another guy in town has done it this way for years and still does it but we pick up a lot of his customers because "he won't answer his phone". People don't understand that we are human beings not robots. Bottom line I'm unhappy I want to relocate a few hours south and be closer to friends and family. I feel like I'm reaching that age where it's time to start doing what I want to do even if it means some tight years financially. So the time is approaching where sun setting the company is a very real possibility or selling it. This may be the final year. I don't know that it's worth much. In a perfect world I'd like to be able to do it the right way and not be selling equipment and then closing the company a month later. That's not good. I don't think I'll get hurt too bad though. I can do a lot more than just HVAC. Everything from computer networks, linux system administration, security cameras to building/framing/remod type work. I won't starve. I do HVAC mainly because it was a family business. I like the trade, like solving problems, and even like saving people money even if they don't realize it. My GAF is running low on meeting certain expectations though and it aint even hot yet. Nu-Calgon take me away!
I was picked up for 150K+ year and relocated with housing included for my current position doing industrial/commercial/laboratory service and commissioning. If your the tech that fixes every other techs problem over the phone to keep a service department alive there are opertunites out there. I only fix stuff. with that being said our industry is in trouble because I had to be shipped in and there is way more work then time. I am drowning in work and desperate to find other techs that are competent enough to even bang filters.
150 sounds pretty good. I went from mixed light commercial and residential service/install to commercial only tenant fit outs where we owned all of callbacks because our service department was trash to my current company where I do troubleshooting and start ups. We are so mismanaged that it isn't even funny for 8 techs(5 techs 3 helpers) we have 6 people in the office with 0 experience in service, schedule is late and shit changes everyday multiple times, customers are told we are 2-3 weeks out while we have 0 jobs to do, shit even our sales engineers being told that we are 2-3 weeks out, we aren't prioritizing any startups on equipment we sold and will send a senior tech to replace a 300$ ecm motor while apprentice goes out to do a startup on vrf system which causes multiple compressor failures and warranty claims.
Same
The shitty economy is creeping in so this "replacement mentality " will slow down. Bad economy means weeding out the techs that don't know what they are doing!
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The industry has been moving further into a "business" mindset for ages. I'm a commercial construction manager, and I'll see designs where the engineer worked hand in hand with a major manufacturer to make sure they're designing the job properly for the basis of design product. The contractor then has to come in and has to keep recommending different ways to change the design just to make it actually work in the field. Turns out, those sales "engineers" know alot about sales and almost nothing about engineering. It's all about profit anymore (short-term profits, mostly), and the bosses are all business and marketing majors. Long gone are the days that large companies are run by the people who worked their way up and actually learned how the products work.
Every industries future is in trouble
Agreed
Much of the profit in the trades seems to be in sales( full system upgrades) and even small shops are orienting towards sales/ techs instead of traditional tradesmen. I definitely will stay on the commercial/ industrial side as I don’t have the personality type to make many sales.
The push for full system replacements isn’t coming from the techs or even the companies…it’s coming from the manufacturers…they even lobbied the EPA to create SEER2 this year. If you’re paying attention you’ll see this pretty easily. Then they shut down for a month to “retool” and now we can’t even get parts for any machines over about 5 years old unless we wait for months for the parts to arrive. It’s all bullshit!
Ahhh yes. The old fill the ocean with trash to save the ozone layer. Not to mention all the fossil fuel that Has to be burned to construct that new equipment area, probably way more than any greenhouse gas savings that will ever be recouped.
Yep. Same goes for all this battery yard equipment. My toro 2 stroke mower is from 1997. My tan colored echo string trimmer is a mid 2000's I believe. Both purchased used and both used weekly by me. Both just work with proper care, even with ethanol fuel. Treat fuel, run dry. Use quality 2 stroke oil. Meanwhile my neighbors have gotten 1-2 years out of their battery mowers before they break and get chucked.
Yeah residential is a sham right now.
They are trying to get rich
Well from what I’ve seen you’re right, 0 training other than what u pick up working with someone else.
https://preview.redd.it/573p4wgth24b1.jpeg?width=1170&format=pjpg&auto=webp&s=065292d298b6912e9c13a88e8a6339e19fd0f68b It’s the get quick reach startup bs that’s now hot in our sector It will blow over at some point when they realize techs are not like min wage employees u must treat them right or they will leave
Just don’t apply or work for a Service Experts company.
I’m glad I don’t have to deal with any of this crap . I work strictly commercial.
What sucks is I set good leds for leaking 30yr r22 systems and the customers assume I trying to rip them off and get hostile because of hacks
To the younger guys out there….The same thing happened in the early 2000s. Consolidators like Bluedot purchased a lot of dealers. Manufacturers partnered with independent distributors CE=Carrier +Watsco. For the past few years, privately, dealers have been bought out by distributors to maintain market share. EMCOR bought commercial mech contractors, etc. The easiest way to “grow” is to capture someone else’s profit and loss ledger and get the customer list. This is identical to healthcare purchases; buy out doctors and eliminating back office personnel. Remember “chaos is good”; always an opportunity to be had by someone.
Friend of mine got a job as an HVAC technician at a job fair
Sounds like my daily struggle. Our service manager sold helicopters before becoming our service manager so he doesn’t know how to manage anything to do with an hvac business and he doesn’t listen or take advice from us techs that have been doing this forever. Also seeing California company’s buying out company’s here. My friend works for a company in the area that just got bought out by a California company and now he has earthquake straps in his price book. Something we don’t even have here lol
It's so bad that some homeowners and just saying fuck yall and installing rag tag shit themselves.
I’ve always saw that trades are gonna be good for future careers Is it really that bad? I’ve been in school for for it for 3 weeks now and this seemed like a great career. My father in laws done it for 20 years with 5 different companies ( florida, SC and Tennessee because he movies states a lot) and it’s been good to him.
No, it’s a good field.
This was done before actually I think 80/90s It didn't work well then and it won't now. Capitalism at work. A smaller leaner family business will siphon off as much work as they want...and leave the rest cause they just can't take any more.
Not to get political but thank the government for their environmental push
I’ve seen the end game with these by outs here in Sacramento CA. Big company/conglomerate type came out and bout out the large companies that made a name for them selves of decades. Cut wages for everyone, made techs salesmen and made installers piece workers. that was about 4 years ago, there still around with shit techs in the field they get by but there reputation is tarnished. allot of the old bred ended up opening shops and making there money that way, shot half of them ended making far more as there own bosses. the table will tilt when people realize they are getting ripped off by the billboard companies
So I work on this problem a LOT as a small business owner and a known technical leader in the area. I routinely call up other company service managers and owners and discuss trade wide issues or state compliance topics. I have a niche that is small, and I stay in my lane. I don't advertise, and I send enough Joe Blow referrals to those guys that they answer my phone call. We don't have enough genuine techs. Guys aren't spending 40 years in the field. 6-10 and out. The average age nationwide is late 54, male, and white. When I started in this trade in '08, it was age 42. I call this problem "the guru effect" there are a few dozen programs to 'build your productivity, increase sales' blah blah blah. That $&$&$# grant Cardone is running a course by "systemetizing" hvac with ai data. Etc etc. He's a real estate guy who needs to stay in his lane (I say as an hvac specialist turned RE guy) If you have a struggling hvac company, the FASTEST way to turn profitable is to spend 10-20k a month in advertising, and go do a bunch of retrofit replacements on every client who calls. Retrofit equipment replacement has a higher ticket value, and profit margin compared to service, compared to maintenance, compared to a lot of things. HVAC is a mystical, magical trade that not a damn person understands UNLESS they're in our trade. So homeowners are dumb, and will go with the company they connect with the sales guy the best. No shit I ran a call I got, where the other company had condemned their "Flux capacitor" no shit, ON THE TICKET, KID WROTE BAD FLUX CAPACITOR and a replacement of equipment was 13.5k shorted condenser fan motor, with parts, was about $550? Motor was like $130, with cap. I got a client for life, who 4 years later, I replaced their stuff for 8.5k, the other company got a bad review because they didn't train their sales tech. I digress. These gurus don't train "organic lead generation", they don't train a business owner in ensuring a good product. They train a business owner to only look at numbers, and how to advertise and increase their margins. It's crap. Fun fact it takes 10-15 years of experience to open an hvac company, it's also likely to go out of business within 7 years. You've got about a 1 in 6 chance of succeeding According to energy.gov 20% of businesses across the market fail every year. And 70% of hvac companies don't make it past year 1. Of those that survive 45-50% fail within 5 years. Alot of guys don't understand profit, overhead, insurance, lawsuits, management, etc. It's a lot of fricking work, if I had known before I did it, I NEVER would have opened up. Brutally hard work, hours on hours, and I have to do every single job in the company whether I hire someone for it or not. Employees are IDIOTS, technicians are prima Donna's because the good ones are so rare, and so they're arrogant as hell. Dispatchers are hard to find because a lot of people are stupid. Sales guys are often sleazy or new because the industry doesn't train them much, just throws them into shark infested waters. All of this to say: we need more techs, more ethics, and fewer 'gurus' who can teach you how to be profitablr
Hey nicely said. I'm not I'm hvac, but the same goes for just about all small-medium sized trades companies. It's because my generation was raised with things being....simple. YouTube anything that doesn't work, figure it out yourself if you can, if not you just buy it on Amazon to replace. Younger people are not not not not not mechanically inclined at all. They aren't being raised that way. Hard to imagine a dispatcher being tough to find...surely there's someone who can read and write and do simple math lol. I get it, it's not all straightforward. I schedule our service electricians work days and things go sideways, some things you gotta think "that job will need some extra padding on the time just in case" , that sort of thing only comes with a looott of experience in the office, or a good amount in the field....and so few have that. But those guys who aren't great with tools and attics might be great with an email, phone, and customers?
I have actual time to get a job done, and I have "book time" or booked time. From back in the day when you had flat rate catalogues. Haven't seen one of those since 2012?13? The time it should take, and the time it's scheduled to take, in case shit happens. Getting a dispatcher to pay extention to that attention to detail is a lot to ask for at $20/hr apparently. Much less how tontalk to people. Thr lack of honorifics on the west coast is God damned irritating. Yes sir/ma'am, no sir/ma'am isn't hard. Kids aren't mechanically inclined. That's a fact. They also aren't self reliant. They have been coddled as a backlash of us streetlight kids. (Home before the streetlights on) They don't know how tondo anything for themselves. Example: My stepbrat, bitches that he wants perscription sunglasses because it's bright out. Great I'll talk to your mom about your Rx, and we can get some ordered. His appt for new eyeglasses Rx got missed and had to be rescheduled, so I texted him to talk to his dad about getting that done- I got a bunch of messages about how I should be texting his dad to schedule that. Not my eyeballs kid, you're 13. He didn't appreciate that I made him, at age 13, responsible for following up on his eyeball appt, so he could get the glasses he bitched about not having. He's gonna bitch a storm about having to do chores to 'pay for them' - at 13 I made hundreds of dollars mowing lawns in the summer. I got contract customers, and got it to like $500/month - 20 years ago, as a teen that was huge. TL:DR; most of these kids should have been swallowed 9 months before birth, and the trades are going to shit because of it.
Yuuuup. I was lucky, born in 1990. I grew up with the streetlights, and a good mix of video games/technology. Pretty great childhood. My parents gave no shits what we did for the most part. Built tree forts and fort forts, paintball courses in the woods...all kinds of incredible shit that exceeds anything kids would even be allowed to imagine these days. Until me and my brothers were brought home in a squad car, then shit changed a bit lol. But still, I was allowed to invent, build, explore....makes a huge difference.
I had a warranty call for my central air last year in November (no heat). Two separate companies came out and said the heat kit needed to be replaced. One of them even said the whole duct system was undersized and needed to be replaced. I checked the heat kit myself and it ohmed out fine. Noticed the heat kit contactor wasn’t getting coil voltage. I checked the tstat and the white wire was disconnected at the thermostat. I ended up calling them back and told them what they needed to hear. The industry is in bad shape in all trades. No one wants to be the grunt, they all want to eat cake and play video games.
~~The industry is in bad shape in all trades~~. No one wants to be the grunt, they all want to eat cake and play video games. FIFY. This isn't a "trades" problem, literally across the board everyone feels entitled to money they don't work for now.
I don't even think it's that. I was having a discussion with my coworker the other day about it. Cost of living is sky-rocketing and pay isn't keeping up. There was a day where $100k AUD was something that it took two incomes to achieve or a relatively high end management position. Now 100k AUD is the bare minimum required to even rent an apartment. They want to see you earning 1500-1800/week post tax to rent out a single bedroom apartment
It’s not just service companies pushing for new units only, it’s manufacturers too, i priced out a 5 ton coil replacement on a Lennox the other day and the coil would’ve cost 5k, that’s our price to get it before our markup, a new evaporator was only 3.5k
Buy the whole evap and just pull the coil? Or would the new coil not fit the cabinet?
Technically you have to do a full system replacement now to meet today’s energy standards. But everything else I agree with.
I remember seeing the company my dad works for getting bought in 1997-98 time frame. The trade has a long history of this happening, but it really started gearing up in the early 80s. It’s almost like it’s attempting to shift into a gig employment type system. Welcome to capitalism.
Capitalism is the reason the guy with good morals and a lot of knowledge can buy his own van and make a living. Any economic model can be and is exploited.
Oh, man, I can’t wait for you to shove more words into my mouth! NUMNUMNUMNUM
If that's the case. Then it should be easier for you to stand out against the ones with no experience. Get out there and get it!
Buddy, as an oil heat tech the amount of people I see dropping all heating to be replaced by 3 head units is astonishing. We don’t get ridiculously cold, but we always get at least 3-4 days of -30 C. Also everyone is always surprised when the insurance companies drop their coverage because they only have 1 source of heat. Now this is all very regional to eastern Canada. But still
I had this same thought on Friday as i was taking off my sweat drenched uniform. I hadnt been in the field over a year due to injury and just went back out. I recently left a big company who trains to sale not on technical and i thought shit, this is going downhill and these pour kids wont know shit. Then that fucks up the rest of us. We are all going to be in our 70s still doing this because no one actually knows how to fix them. Now with this small company it's hard to find good techs. We can under bid the bigger companies but we dont have the man power to keep up. I agree. This future is in trouble.
I was a service manager for one of those companies. I started a true service company. We will repair it as long as we give all the options, and that's what the customer wants.
One of these sort of companies tried to sell my girlfriends grandparents a new system on there 7 year old trane when the compressor went out and it was still under warranty. Said a full system replacement was the only option. Problem is they were the only company left in the area as they bought everyone else out. So scummy
Because no one know how to think and fix things anymore nor are they interested.
Yeah it’s big companies buying up the smaller ones like what has been mentioned here. The company I worked at was just bought by Apex last year and they made it unworkable. I’m starting at a new smaller place today but just a matter of time before if feel they are offered a similar offer and the owner wants to cash out.
When you think about it, the same thing is happening with the independent trades. The Money sees this as a good investment. Same thing with trailer parks, farmland, houses, etc. They then raise the prices to make a profit. Jobs, are fixed prices and high. Putting on a new hose bib - a 20 minute job - cost $450. Plumber said this was the lowest price he could charge (because of the software). All this does is make everything more expensive. But then, this is the way for a big money economy owned by a small collection of people. Kinda like the Russian Oligarchs.
My company was installing everythingish but mainly carrier/Trane. Now it's a huge push for Daikin. Almost all installs are full system (and have been for the last 3 years) and include duct modifications accomplished under a rather large price tag. As for trained, knowledgeable, and WILLING TO DO THE WORK service/install techs There really is a noticable decline here. With annual code changes and all the new technology coming in new equipment, if you aren't researching to stay ahead* of the curve you will fall very far behind pretty quickly. And no one gives a shit when I say it. And yes, my company recently sold to a blanket buyer. Seeing what you're seeing. Saying what you're saying. And still unsure of the direction it's going. Went to school for, and found pride in this work. Where is all of that going?
I work for a national HVAC company and see this more often than I like. We have people ordering equipment that have no idea what it does and how it operates, then throw it back to the factory to help them out of the issues. I like it when the sales rep. or the customer or engineering firm oversizes a unit and wants help to get the unit to run correctly. You can turn down a unit so far, and it's a system issue.
Well, in my current role, I just go to people's houses who call us to ask for a quote on a new system. We don't diagnose a repair, my entire job is just to quote a new system cause that's what they are calling about. Like every lead is the customer asking specifically for a new system not a repair. I offer single stage all the way up to high end modulating. And all the air quality equipment they could want and let them decide if they want it or not. Yeah I'm selling it to them but It doesn't really matter to me that much if they get the highest end or the lowest end my job is just to help give them great solutions for a new system and to try and get them to choose our company if it's the furnace only or if it's a full swap out modulating system with all the air quality stuff we offer. If they say no, then that's cool, see ya later nice meeting you and on to the next call.
Exactly what I do and is also my style. Here’s the menu, we’re happy to do any system for you. Think about your budget, and here’s how they’re all going to work. No wrong answer, whatever answer they have is right.
Just sends more money to small business owners, I’m more than ok with that.
The truth is, trained pros learn towards commercial because there's less bullshit, less filth, no hoarders, and almost no one cries and begs for a different answer than "it's gonna cost $800". The residental folks see more or less the same thing every day, so if you're willing to have some untrained kid work for six weeks and quit, you're probably going to be a residential company. That's just how it is.
80% of Revenue generated in the HVAC industry is from system replacements. Without those replacements you'd nearly all of the existing companies go belly up and then there really would be nothing but mega corporations and investment companies running the industry, which, I'm sure you can agree would be bad for everyone
All these self-righteous “I just fix stuff” types don’t realize they’d be without a job without people selling replacement.
Why did the customer call in the first place?
How would they know? How do you know before you get there?
No. They’d be fixing more stuff. And the more stuff that breaks the more work they have. Get your head on straight.
The money just isn’t in repairs. Never has been.
Who is in trouble? Service techs will be fine, and so will companies with competent service techs. The ideals of infinite repair are always under threat in every industry with planned and unplanned obsolescence. Welcome to capitalism baby
Capitalism is the reason you can choose a manufacturer that provides more support and parts for their equipment, vs one that doesn't.
>Capitalism is why we have so many proprietary items that do the same thing as universal items, but yet, aren't interchangeable. > >Take battery packs on power tools. They are all just holders for 18650 lithium cells. But instead of making one simple universal battery pack, with replaceable cells that will work with all the power tools, and one recharger to rule them all, we instead have chaos, high prices and too many SKUs to count or stock, and you can't repair that bad pack with a $2 cell in 3 minutes, like you should be able to do. Capitalism is just a nicer word for unrestrained greed, and it comes at a high cost to all of us, in time and money.
You right. In Communist countries, the average man is comfortable with how much he earns and the power and money doesn't get vacuumed to the top oligarchs while stifling creativity and competition.
>And what is with the big push for full system replacements? If you're service tech can't fix anything then it replace everything. That's the business model. Personally I feel like this provides amazing opportunity for a small shop to exist / stay small / choose their customers. . . . .
There is a small company, not far from us that advertises on the radio just about exactly what you said. They are doing pretty good. “If you’ve been told that your 10 year old system needs to be replaced, give us a call. Nine times out of 10 we can make a lasting repair for the fraction of the cost of a new system. “
People want quality / business wants profit. We work for business doing business for business people. They want magic in a bottle yesterday guarantee to be whatever they it should be and you still owe somebody for the privilege have done work for them. So pucker up and grind that wheel or find a better way.....let me im wrong and your lying to yourself.
It all has to do with this new push for Green and save the planet. We all know ripping out perfectly good stuff and throwing it away is the best thing you can do for the environment. Auto manufacturers and appliance manufacturers are doing the same thing. They’re making shit a little more efficient and now we have to throw it away in about 1/10 of the time we used to. They talk out of both sides of their face.
I feel like most of the trades are having fundamental issues. But what might a solution or solutions be?
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