Breaking Down the HVAC Barriers

May 1, 2016

HVAC KingBreaking Down the HVAC Barriers

The year was 1979. The city was Jacksonville, FL. Some would say that 1979 was an ominous year where the stage was being set for the world we live in today. It was the year that the Shah of Iran was forced out and extremist revolutionary forces under the leadership of the Ayatollah Ruhollah Khomeini took over and later, the U.S. embassy in Tehran was overrun, hostages taken. It was the year that Margaret Thatcher became prime minister of Great Britain. And it was the year that the Soviet Union invaded Afghanistan.

It was also the year that a young high school graduate named Charlie Marks, who was working for a food vending company servicing drink machines in hotels throughout the Jacksonville Beach area, made the fateful decision to follow a friend to a company that specialized in something called heating and air conditioning.

“It was like a light bulb went off in my head,” Charlie says. “HVAC sounded really interesting and so I looked the company up in the phone book, applied for and was hired as a helper on an installation crew at Ocean State Heating and Air Conditioning in Neptune Beach.”

It was during this period, as the world spun in turmoil, that Marks began attending the Northeast Florida Builders Association Apprenticeship School. He spent four years (1980 to 1984) taking classes and then went on to earn his Journeyman’s license in several local counties.

“Education became very important to me,” he says. Apparently, so did leadership because by 1991, Charlie was the company service manager with seven technicians reporting to him. Two years later he earned his Class A contractor’s license and in 1998 decided it was time to start his own HVAC contracting firm. He started Charlie’s Tropic as an Bryant® Factory Authorized Dealer. The company, like the world around it, changed fairly quickly over the next few years, eventually becoming a Bryant Authorized Dealer with two to three trucks on the road doing residential service and replacement work.

And the company grew. In 2005 he had the opportunity to buy a building with a warehouse in Atlantic Beach. He finalized that purchase the next year and brought on board one or two more installation crews.

By 2007 or 2008 Charlie Marks mostly stopped working in the field and began focusing on working on the business.

“I decided there were only two ways to go,” he explains. “I could stay very small and do most of the field work myself, make a great living, and be a steady-as-she-goes kind of company. Or I could look more long term. I knew there was really a limited amount of time I would be able to climb in and out of attics, pick up compressors, and carry heavy tools around before my knees and back gave out.

“That’s why I decided to go the route of building a company and pulling myself out of the field. We were in a very small office with a warehouse. It was a big move for us to have our own place and that jump-started us on getting more business. We basically focused on custom homes. Today we do residential service and replacement, as well as custom home work.”

Making an NCI Connection

Like many small-but-growing HVAC companies, business usually rocks until you hit that wall because revenues no longer cover the needed expenses necessary to fuel more growth.

“We were stuck between $800,000 and $1.2 million and couldn’t go any further,” he explains. “I needed a way to break down the barriers to growth.”

That is when Charlie’s daughter Amy, who worked in the business, met a consultant named John Garofalo, whom she thought could help. Charlie was a little incredulous, because he’d worked with several business coaches in the past with very little to show for the dollars he spent. Though it took three visits for Garofalo to convince Charlie he could help, he eventually did convince him and in 2015 the relationship was established. Charlie’s Tropic became a member of the National Comfort Institute (NCI) as a result. His feet were now on the path of Performance-Based Contracting™.

In that time, the company increased its annual gross revenue to about $1.6 million and though Marks isn’t sure if they’ve broken down “the wall,” he says he thinks they are well on the way.

“John helped us change our thinking about what service is,” Charlie adds. “Because of his consulting and our training with NCI, we now look way beyond just equipment replacement. We look at the ductwork, how the air is delivered, how everything is setup, and more.”

He says that on every service call his guys do a full diagnostic, static pressure test, and more. He attributes the subsequent sales attributed to doing this to increasing their service work by as much as 15%.

In fact, overall, Charlie Marks says that performance-based contracting has added between 20 and 30% to the company’s average invoice.

“And we haven’t fully implemented it into the company yet,” he adds. “But we are working on that, one small piece at a time.”

“The biggest thing I’ve learned,” Charlie concludes, “is to learn as much as you can on the business end of running a company because that’s invaluable. Most of us can go out there in our sleep and install and service equipment, but as far as learning how to run a business, not so much. But that’s not enough. You have to keep up with the technology and you have look beyond only the HVAC boxes.

“The secret is education. It’s about knowing when to ask for help. It’s about getting information from reliable sources that’ve done it before and can prove it.

“And get over yourself. By that I mean you have to open up your mind and accept advice from others. I thought I knew what I was doing when it came to running a business. I thought I was pretty efficient at it too. I didn’t know what I didn’t know.”

Charlie added he learned that good business people need to do a lot of reading – something that many technically-oriented contractors aren’t good at doing. He says he stays up to date reading a number of HVAC trade journals.

“I also know that I have to really start paying more attention to the NCI website,” he says. “There is so much great information up there and I don’t take full advantage of it. The biggest problem I face — and I believe others do as well — is that I get caught up in the everyday minutia of the business. The biggest advantage I have is that when John Garofalo tells me to look at different things, I begin digging around the website. My advice to members of NCI – take time to visit the site and explore it. There is SO much good stuff up there all geared toward helping contractors become more performance-based, marketing oriented, and more successful.”

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