The Business of Contracting
By Jack Tester, Nexstar® Network President & CEO

As owners in the plumbing, heating and cooling, and electrical businesses it is our job to make sure that we run a profitable and ethical company.  We also strive to serve our customers, our employees, our employees’ families and our communities. But, we also need to take care of ourselves. How do we do that? Simple, we have to know how to price our services correctly so we can be profitable and afford to pay ourselves and our employees adequately.

Nexstar’s founder Frank Blau Jr. introduced this idea in The Business of Contracting in 1987. His goal then was to help contractors build a profitable and healthy business, life and legacy, and his philosophy is still applicable to contracting businesses today.

The Business of Contracting by Frank Blau Jr. is about business owners and leaders accepting responsibility for the state of our industry and deciding to change it. It’s about creating an environment where customers are treated with unbeatable service; where employees receive comprehensive benefits and take home a paycheck commensurate with the level of service they provide; where companies like yours earn a profit, grow healthier and leave a lasting legacy for generations to come.

It will be my honor to present Frank’s The Business of Contracting at this year’s Pumper & Cleaner Expo, next week on Feb 25th, in Indianapolis. Here are some key strategies you can expect to take away from the presentation:

• Be purposeful – plan your business to support your life.
• Don’t let uneducated competitors chart the course for your business or your life. YOU ARE IN CONTROL!
• Remember Business is Math: Sales – Costs = Profit
• The business equation starts with the right selling price
• How do you get the right selling price? Sell on value, not on price.

I encourage you to attend my presentation at the Pumper & Cleaner Expo then visit with me and Frank Blau, Jr. at the Nexstar Booth #5361. If you have questions about Nexstar or our presentations at the show, please call Lisa Schardt or Bryan Martin at 1-888-240-7827.

Move Forward by Giving Back – Take 3 Simple Steps

By Lisa Schardt, Nexstar® Network Business Enhancement Coach

Getting involved in your community is admirable. Whenever you donate your time, talent and financial resources, it tends to come back to you. Sometimes it’s in the form of new friends, customers and new business and sometimes it’s just that warm, wonderful feeling inside your heart that comes with giving.

Whatever step you take, community relations moves your marketing forward. Whether you’re sponsoring events, supporting your schools or raising money for a non-profit organization, you’re enhancing your presence in the marketplace and setting yourself apart from your competition. You’re also exposing your business character and personality and that’s a good thing!

Our Nexstar® members are some of the most generous people I know. Take Applewood Plumbing, Heating & Electric in Denver, Colorado. They donate $1,000 to a local charity every month and by doing so, they’ve also inspired countess other peer contractors to do the same. Wouldn’t you like to do business with this generous, giving company? I would!

MacGregor Plumbing & Heating of Harbor Springs, Michigan supports their local Kiwanis, Veterans organizations and baseball teams They top it all off in true MacGregor Highland fashion by sponsoring the appearance of the Sault Ste. Marie Pipe and Drum Band in the annual 4^th of July Parade. As owner Julie Wieman says, “It’s our gift to the community.” And what a gift it is. Residents have noted that when the pipes come down the street, it’s like a roll of thunder! Can I
add that it also puts a little boom in business?!!
In addition to being good in their communities, these stellar contractors are good to the industry. In 2012, Applewood gave $12,000 and MacGregor gave &10,000 to the Nexstar Legacy Foundation to provide scholarships to students pursuing careers in plumbing, heating, cooling and electrical trades.

Here at Nexstar headquarters, we’re all given a paid day off every year to volunteer at a local charity. Habitat for Humanity, food shelves and other charities benefit from our help and I love working at a place that cares more for ME and the
community more than the bottom line.

While giving back builds your external marketing, it can also strengthen your internal public relations. Employees like following a leader with a big heart and if you stop, look and listen, you will hear about things that fill their hearts with passion and they’ll be things that you could support in your community. As a result, you feel good, your staff feels good and the community feels good. Win-win-win!

Take These 3 Easy Steps to Moving Forward by Giving Back

1. Select a non-profit organization or community event that your company can wrap their arms around with passion and commitment.
2. Seek out opportunities for a sponsorship, fundraising and giving and make a commitment to provide support as a company and get your staff and your customers involved. For example, customers feel good knowing a portion of their payment goes to charity and it helps build their loyalty to your company.
3. Sit back, feel good and see the good that comes from your giving.

Oh, one last thing – remember that giving requires that you run a profitable business because without profit, you can’t give back. I can help you get started with that. Call me. 888.240.STAR.

By: Jim Hamilton, Nexstar Network® Business Coach

I want to share with you an acronym that a Nexstar Network® member recently reminded me of. Can any of you tell me what FEAR stands for?

False

Events

Appearing

Real

This acronym is a great thing to consider as we move into 2013. What do you want to accomplish this year? What are you going to say YES to?

The member that brought this to my attention is a successful contractor who has taken the leap to buying out his competitors. Why? Because he knows that in his market, this is the easiest and fastest way to grow and make the phone ring. Making the decision was something that he struggled with, though.

He was plagued by all of the scenarios running through his head. What would his new customer base think and feel about the acquisition? What if he got in over his head?

The point is, this member did not go into this decision blind–he had a plan and put it into place. He realized that he could not be dominated by the “What ifs?” The fear that he imagined in his head, did not come true.

So hear is my advice as a business coach. Make plans. Have goals. Do not let FEAR get in your way.

By: Jim Hamilton, Nexstar Network® Business Coach

This week, a Nexstar Network® member asked, “What’s a good rule of thumb to evaluate the worth of my company?”

My answer is: it depends on which side of the fence you are on. Let’s look at this from 3 different perspectives: a buyer’s perspective, a seller’s perspective and how your company is evaluated by the bank.

In terms of a selling and buying situation, your company is worth as much as possible if you are the seller and as little as possible if you are the buyer.

If you are the buyer, base the value on the number of service calls ran over a 12-month period.

If you are the seller, let me say this:

Your company is the golden goose that lays the golden eggs every month. If you are going to sell the company, make sure you have a plan to put the proceeds (they money) you are going to receive (after you’ve paid your taxes) into a vehicle that’s going to return those golden eggs. Keep in mind that once you sell the goose, the golden eggs aren’t yours anymore.

If you are looking for an evaluation for borrowing purposes, look at your Quick Ratio. Banks lend money on cash flow. If you’re above a 1:1, you can borrow money. If you aren’t, then you can’t.

By: Lisa Schardt, Nexstar Network® Sales

I give business advice to residential PHCE contractors all the time that fearfully ride through the hills and valleys of the changing economy. They’re afraid to invest in their business and their future because the present has been up and down and filled with uncertainty. And, they’re tired of working longer and harder to meet the challenges.

I get that, but I refuse to accept it for a lot of reasons. First of all, there’s a better and healthier way to work and live. Secondly, you can put systems and safeguards in place that will not only protect you, but also position your business for consistent growth and positive financial outcomes. Thirdly, there are some very smart people out there who can help you and hold you accountable for success.

Ask yourself these questions:

• How am I sitting for 2013?
• What do my systems look like?
• Are my employees faithfully and consistently applying these methods efficiently?
• Do I trust that I have reliable training across all departments, specifically for the technicians and the sales team?
• Do I have a business plan and budget ready for roll out?

If you answered, “yes” to these questions, good for you! If you answered, “no,” I’m here to tell you that you’re not poised to succeed in any economy. You can’t expect to reach your goals if your goals haven’t been set.

As Business Enhancement Coach for Nexstar® Network, I know that many Nexstar members made a profit in the down economy because they followed:

6 Best Practices for Best Results:

• Implement reliable systems
• Efficiently trained your team
• Monitor the progress of your team
• Determine prospective revenue goals
• Develop a strategy and plan for implementation
• Modify strategy plans as necessary 

To accentuate the positive, Nexstar members did all of this with the help of their business coach and in some cases, their Personal Board of Directors. These are peer contractors who share best practices and provide leadership support. You see it doesn’t have to be lonely at the top.

Now, imagine what can happen if you set some revenue goals and strategize on how you can meet them. Imagine yourself surrounded by a group of peers who will share their best practices with you and provide support for implementing them. 

I tap contractors into the peer groups, the systems, the coaching and other business services they need to succeed without fear in any economy. Call 888.240.STAR to find out how I can help you.

By: Bryan Martin, Sales at Nexstar Network

In order to survive, companies must accomplish two things – increase sales and improve performance.

Typically companies do little more than cutting costs while assuming that sales and marketing are the key factors for improved business. My job at Nexstar® Network gives me the great opportunity to lead PHCE contractors to business growth, profit and an improved lifestyle.

CRUCIAL MISTAKES many companies make when attempting business growth:

Doubling the ground coverage does not equal double ROI!

A common reaction for most managers is to require their team to double their efforts on the phone, but doing more of the same will not always mean the same results. Companies need to work smarter, not harder. You need to anticipate the benefits of focused key messaging, while reviewing your client needs and expectations. 

Discounting to increase sales.

This tactic is frequently a panic measure brought about by the first blunder I mentioned. If you have not correctly positioned your product and services, no amount of discounting your product or service will persuade your customer that it’s an even better value for the money.

Do not train your staff – ever!

Many companies consider the training budget a cost, but you should actually look at it as an investment. Are you holding weekly business training meetings? Instead of wondering if employees will leave after you train them, start believing that if you train them, they will stay!

Don’t target your customers.

Blanketing an entire area with marketing will not only result in an increase of low value customers, but will force technicians to travel great distances to pick up any job, while competitors grab the biggest and best customers. Understand that not everyone is your customer. Know who your customers are, and make that your target market! 

Don’t set goals for your sales team.

By not setting goals your sales team will not know what is expected of them, not know which customers to target and the sales manager will find it difficult to motivate them to a better performance. Sales people who stay within their comfort zone are “just filling orders” as they fly below the radar, along with your business. Give your sales team targeted goals and build an environment that produces success!

Don’t bother with all that motivation stuff!

Selling is a tough occupation and motivation needs to be a regular part of the sales manager’s activities. Identifying the motivation of an individual will help turn an average sales person into a star! But start with your own attitude. Attitudes are contagious – is yours worth catching?

Don’t ask for the business

More than 70% of sales people do NOT ask for the business! They may well build trust and rapport with the customer during their presentation as they identify the benefits while answering all the objections, but then they don’t complete the sale! Often fear of rejection is at the root of this issue. But by not stepping outside of your comfort zone and asking for some form of commitment, you are leaving the door open for the client to say “I’ll think about it.” If you allow a stall, you’ve probably allowed a sale to slip away.

Work smarter not harder! Train your employees, target the right customers, set goals for your team, build a winning attitude and always ask for the business. Stay away from the blunders mentioned above, and your company is sure to grow.  Take this Free Business Assessment to see how your business aligns. I would be glad to help you take a closer look at your company’s direction and goals – Feel free to contact me any time.

By: Rachel Whitman, Nexstar Network Events and Communications Manager

Some of the donations gathered by Cranney Companies to assist Hurricane Sandy victims from Bergen Beach.

The generous spirit and boundless energy of Nexstar Network unites us in the best of times
and in the worst of times. Hurricane Sandy, the largest Atlantic hurricane on record, and reported the second-costliest Atlantic hurricane in history, only surpassed by Hurricane Katrina, has had a huge
impact on the lives and businesses of many of our members.

Yet, despite overwhelming damages and loss, our spirit is not broken. Companies like
Cranney Companies in Danvers, Massachusetts, Raynor Electric LLC in Medford, New Jersey,
and Kaiser-Battistone, in Norwalk, Connecticut, have rallied to help rebuild the communities
impacted by the storms.

All three companies have used social media to build awareness of their campaigns to bring food and supplies into the impacted areas. Sheila Cranney, of Cranney Companies was overwhelmed with the outpouring of support she received from her coworkers, friends and the community after posting on Facebook for donations and help last Monday. As a result of her postings last week, Cranney and her son were able to deliver a service truckload and a carload of food, water, carbon monoxide detectors,
gift cards, clothing and blankets to the Bergen Beach Community Center last Saturday afternoon.

Sheila Cranney had the following tips to any volunteer electrical contractors that are working with homeowners in the storm ravaged areas:

• To complete electrical work in the NYC area, homeowners MUST hire a NYC-licensed electrician to inspect the equipment before service can be restored. If electrical wiring came into contact with salt water, it MUST be removed and replaced. Explain to the homeowner that dried salt can be a conductor of electricity and could cause electrical fault or fire.
• Once a homeowner has hired a licensed electrician, and he or she completes the work, he or she must file a completed, signed and sealed Self-Certification Form.
• Once the form is filled out, the contractor needs to submit the Self-Certification from to LIPA (Long Island Power Authority) by faxing it to 631.844.3643, emailing it to servicecert@service.lipower.org or delivering it to the temporary service center at Beach 108^th Street and Beach Channel Drive in Rockaway Park.

To learn more about the work Cranney Companies is doing to help Hurricane Sandy victims, click here to connect to their Facebook page.

Kaiser-Battistone has a Hurricane Emergency Support Line in place to assist homeowners and businesses in need. Click here for more information.

Kerri Rayor and the team at Raynor Electric have started a food drive. To donate or to learn more click here.

A special thanks to all Nexstar Network members that are helping rebuild their communities and to those member companies that are reaching out to fellow members in need.

The Cranney Companies team wrote heartfelt messages to accompany their donations. Some of the donations gathered by Cranney Companies to assist Hurricane Sandy victims from Bergen Beach are pictured here.

By: Jodi Peter, Nexstar Network Business Coach

We all know that paperwork is no fun, but when it comes to running a successful contracting business, it’s absolutely necessary. As a Nexstar Network business coach, I’ve heard owners share frustrations with staff that doesn’t understand why processing paperwork is vital to the business. Here’s a tip: When techs complain about paperwork, be sure they understand that paperwork is not for you (company, owners, managers)…it’s for the customer and the technician.

Let’s break it down:

• Front of the Invoice:   This is for the Customer (among other things) and documents services rendered, contains customer guarantees, etc.
• Back of Invoice:  This is for the tech – this is where a tech documents what he used on a job so his truck can be restocked.  If a tech doesn’t have the parts he needs on his truck, customer satisfaction goes down, sold hours go down, tech efficiency goes down, tech pay probably goes down when efficiency goes down…it’s a domino effect.
• Summary of Findings: This is for the tech - a tool for the tech to educate the customer to buy, bundle offerings and offer choices for the customer.  It’s just like a screwdriver, wrench or any other tool a tech uses to do his job.
• Timesheet: This is also for the tech – A record of a tech’s  activity so he can be paid. 

Jodi Peter enjoys guiding people down the ever-changing road to achieving their vision of success. She strongly believes in setting goals and exceeding them. Prior to coming to Nexstar, she served as the General Manager of a successful PHC company.

By: Denise Swafford, Nexstar Network Training and Development Manager

I’ve seen a lot of activity about the recent Super Storm Sandy and the devastation she has caused. I wanted to share my personal experiences in dealing with these types of natural disasters in hopes that it might help someone that is going through struggles wondering what to do now. 

First, try to stay positive. Your attitude as a leader is so important. Every move you make is being watched by the rest of your team and your community.  They need reassurance that everything is going to be OK.   By now, hopefully you’ve heard from your team, but if not – your people have to be your first priority.  Make sure you know what your peoples’ needs are.  You need to take care of your people so that you can get your people back to work with their head in the game as soon as possible.  If they need help cleaning up their yards, repairing roof damage, etc. – hire someone to help them with that stuff so they can get back to work. 

Second – if your facility was flooded or damaged- reach out to vendors or relationships you have your community to see if they will allow you to use space in their buildings to operate out of until you can get back up and operational. Vendors have been generous enough to allow some companies to utilize office staff, offer extended terms, utilize office equipment such as phones, copiers, fax, computers, etc.  Third, if you lost trucks due to flooding, reach out to leasing companies such as Enterprise to lease vehicles on temporary basis.  They have been known to work with companies in the past that have experienced Acts of God and offer generous payment terms which allowed companies to get back up on their feet quicker. 

Next, get involved with FEMA – offer to help them set up their trailers, run their plumbing, electrical, hook up their HVAC units. Make friends with them. They can’t refer you exclusively, but they can put you at the top of their list of companies they recommend. Also, remember, cash is king – once customers start calling – they will ask you to bill their insurance company – instead offer them financing through a company such as GE – perhaps even use 12 months terms.  This gives the homeowner up to 12 months to resolve any issues with their insurance company and you get paid right away. 

Once you are in a neighborhood – be prepared to stay there the entire day if necessary. Have flyers or door hangers that you hand out (hand out – being the key word – don’t just put it on the door – knock on the door and talk to people letting them know you are in the neighborhood). Remember to show empathy that you understand what they are going through and you were just at their neighbor’s house and wanted to stop by and see if they could use any help as well. 

Be prepared to maximize every day. I’ve seen other members post very generous messages that they are willing to fly in equipment, they are even willing to fly in licensed technicians to help out.  Remember once a work day is gone, it’s gone forever.  Make the most of each and every day and minimize backlog as much as possible. 

In terms of marketing, remember radio is probably best for a captive audience until power is fully restored.  Offers of safety inspections provide tremendous value to your community. 

 If you have any questions or want more information, please feel free to reach out to Nexstar Network. We’re here to help.

By: Jim Hamilton, Nexstar Network Business Coach

Now that it’s fall and HVAC installs have slowed, what do you do if you have good performers, just not enough install work to keep them busy?

Here’s an idea: Turn your installers into System Check Techs. To do this properly and to make sure your abiding by HVAC best practices, you will want your whole staff involved in the System Check process.

You all should have service agreements that you need to perform right about now. (A sidenote: If you don’t, why not?) I call these visits “System Checks,” because that’s exactly what they are doing–checking homeowners’ systems for any problems before winter hits.

Here’s what this looks like broken into steps.

Step 1: Identify the service agreements by age of the equipment.

Step 2: Send your ACE service techs on Demand Calls and Service Agreements where the system is over 10 years old.

Step 3: Send the techs just under ACE status on the systems over 5 years old, but under 10 years old.

Step 4: Sent your installers to the homes where the systems are under 5 years old. Why? Because most likely, those systems won’t have issues. However, the installers can identify missed sales opportunities: humidifiers, air cleaners, UV lights, set back thermostats, etc… They know how to perform this work, your enabling them to maximize these opportunities. Let them hunt for dollars and look for ways to improve things for the homeowners before the winter season.

The time to start focusing on this is now. Get those Systems Checks done before the demand season kicks in with the help of your installers that you wish to keep on board. It’s that simple!

Jim Hamilton is a business coach at Nexstar Network. If you would like to learn more about Nexstar Network, please give Lisa Schardt or Bryan Martin a call at 888.248.STAR, or click here to learn more about our upcoming Experience Nexstar event.