May 2021

Letter from the Executive Director


While the pandemic is far from over, we have turned a corner in this invisible war. As we have done over the past year, we urge everyone to remain vigilant and to take the appropriate precautions to protect yourself, your team, your customers, and your loved ones. Life is far too precious as we have seen with our very own member, director, and officer, Michael Hartman, who passed away at the age of 53. It was Mike who spearheaded the Sales Tax update in 2019 – a benefit which remains available for AACP members behind our Member Section. Over the next few months, the Board of Directors will assess potential avenues to properly reflect Mike’s continued involvement in the industry, and his leadership within our association.

We are pleased to report that over 60 individuals have registered for our 2021-2022 AACP Apprenticeship Program since registration opened 22 days ago. This is a nationally-recognized program which provides your apprentices with direct knowledge from some of our industry’s best. Upon successful completion of the program, your apprentice will be able to apply for their Journeyperson’s License without having to sit for the exam. Tuition may be a tax deduction for your business, and you may be eligible for a Workforce Development grant from the State of Maryland. Don’t delay…Register today!

Free or over $275/per hour? AACP members enjoy a complimentary hour with our legal advisor, Frank Kollman, JD. The second of his quarterly dialogues will take place on Tuesday, June 22, 2021. This is not a presentation. Frank will provide updates on employment, contract and other legal issues which affect our businesses. Send us your question and Frank will respond during his session. This a phenomenal value-added benefit for you and your company.

More and more people are vaccinated. Warmer weather has arrived. Maryland, DC, and Virginia along with the entire nation have begun to re-open. Our companies are busy. These are good things for which we should be thankful. Be sure to say “THANK YOU” to your entire team for their continued efforts and professionalism. One way to say ‘thank you’  is to spend the day on the links. Our annual Golf Tournament will be held on Friday, September 10, 2021 at the Raspberry Falls Golf Club in Leesburg, VA. Join your peers, drink some beers, and have a lot of fun! Register your foursome today.

Cheers,


Peter Constantinou
Executive Director

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Time to Refine Summer Tune-Up Strategies for Condensing Units

Marketing pitches and on-site details can make the difference for profits and customer satisfaction

Contributed by the ACHR News

April means Opening Day for baseball fans, but it also marks “spring training” for many condensing units. While most outdoor units will have survived another winter intact, nearly all will need some routine (or added) TLC to get into game shape for another cooling season. How contractors market themselves for that work — and how they do the actual work — varies more than one might think.

Attracting and Booking The Work

Paoli, Pennsylvania’s DiFilippo’s Service still uses “old school postcards” to encourage scheduling pre-summer tune-ups, said company president Laura DiFilippo. Over the last couple of years, her team has also started to encourage the customer to schedule their next tune-up while the technician is on-site performing the current tune-up. At AirAce Heating & Cooling in East Peoria, Illinois, owner Joel Nieman plans a marketing push for overall maintenance at the beginning of air conditioning and heating seasons. That said, Nieman finds the best tool is an honest conversation with the customer about the importance of proper maintenance.

“We found doing this gives us more sales than offering a rock bottom, loss-leader price,” he explained. “Doing that devalued the service and actually gave the impression that the service was not truly needed.”

Ricky Orta wholeheartedly concurs with that assessment. Based in the Tampa / St. Petersburg area, Orta’s M&R Air Conditioning & Electrical works in a hotbed of advertisements for tune-ups at attention-getting prices. Orta takes those competitors head-on. “I tell my customers, ‘You’re a smart person, and you know by the time they pull up in your driveway, they’ve already lost money,’” he said, listing labor, vehicle cost, insurance, and everything that quickly takes up an advertised $39.99 tune-up price.

“So how do you think they’re going to recoup that money? They’re going to hard sell you.”

Orta says his customers understand, and like him, most of them don’t care for that strategy very much.

“So my company’s approach is we charge more for our tune-ups than anybody else,” he said. M&L conducts a thorough maintenance visit and lets the rest reveal itself. If the system, for example, is one year old and there’s nothing wrong, then “at least I’ve gone in and made money on that PM and I’m not taking a loss, and I don’t have to hard sell anybody,” he said.

In Orta’s experience, his company makes more money this way and finds more legitimate problems than those taking a loss leader attitude. One other distinctive aspect of M&L’s tune-up strategy: They don’t market their tune-ups. At all. Orta finds that most advertisements are geared toward maintenance, and people see plenty of them. The idea, apart from lower expenses, is that other companies’ tune-up advertising tends to mostly remind his existing customers to schedule his team to come out. Of course, once a contractor starts booking this work and general interest picks up, the need to manage limited resources wisely kicks in. DiFilippo has a tip for that.

“We strategically schedule technicians by zones so they stay in the same area, and pre-book all multiple-unit customers on our schedule early so we have plenty of time to take care of them,” DiFilippo said.

Preparation and Problem Spots

Most of the ingredients that make a successful tune-up and outdoor unit service visit break down to doing the usual things well and efficiently and/or finding little things to do that distinguish the company’s service. Given the integrated nature of this maintenance visit, some advice extends beyond the outdoor unit.

For Josh Matney, operations manager at Fayette Heating & Air in Lexington, Kentucky, that starts with showing up completely ready and not needing to go make a run for parts or refrigerant. “We feel leaving our client’s home to retrieve the appropriate equipment to perform our service is a waste of their valuable time,” said Matney, whose technicians make sure to roll with the needed equipment and chemicals.

Matney and Orta both shared one other tactic.

“Our technicians are prepared and trained never to use a client’s water hoses or vacuum to perform a service,” Matney said. “We would never eat at a five-star restaurant that asked us to bring our own silverware, so why should our client’s experience be different?”

That policy also avoids headaches for contractors.

“Let’s say we’re using a customer’s hose, and it has a leak in the side of it,” Orta said. “Whether it was our fault or not, we’re going to get blamed for it.” Or if a tech dropped a hose and cracked a nozzle, now the contractor is out additional time and $20-$30 to replace it.

Carrying their own hoses also gives technicians consistency from job to job, avoiding a scenario of unexpectedly high water pressure bending part of the equipment. M&L uses their own nozzles and no-kink hoses that Orta likes because they’re easy to store and don’t require rolling out and up at each job. Once underway, AirAce’s Nieman has his team check for refrigerant leaks at both the outdoor and indoor coil, and they always check external static pressure for the furnace and air handler. A bio treatment for the indoor evaporator pan is part of the process at DiFilippo’s, as is a standard filter for every tune-up.

“We use digital gauges to read superheat and subcooling, and charging jackets to place true load on a/c in cooler temperatures,” DiFilippo added. M&L’s Orta noted that making that effort to check superheat and subcooling also opens the door to bill for the necessary adjustment when a unit is slightly under- or overcharged. “We put our hand meters on everything,” he continued. “I take the tops off all my condensers, we vacuum out the condenser, we use triple D, and we clean the coils, both evaporator and condenser. “We use pan tablets in the drain pan,” he continued, a holdover from Orta’s commercial HVAC background. “My guys wipe down the drain pan. I mean, we do a thorough cleaning.”

Another key detail for Orta is verifying that the float switches work, and especially that horizontal applications have a float switch in the pan and that they are working properly.  Beyond that, M&L’s visits include checking voltage drop across the contactor and tightening all the electrical connections since that’s an area “where you see a lot of burnt wiring” in cases.

Running Orders

The “how” and the “when” of specific tasks on a call like this can make as much difference as the “what” of the tasks themselves. Fayette’s Matney laid out some logic that drives their outdoor unit maintenance sequence of events.
Condensing Unit.

“Just about everyone has walked by an outdoor unit and felt the air blowing out the unit’s top. Common sense would tell you that air passes from outside the coil through the coil and out the top,” he said.

“Although this seems obvious,” Matney continued, “too many companies attempt to clean condensers this same way. Our method is to remove the top of the outdoor unit to gain access to the coil’s interior. After the cleaning chemicals have been applied, the technician can then rinse from the inside, forcing the particles out the same direction they entered.”

When that is finished, the Fayette technician straightens out any folded-over coil fins on the coil. That condenser cleaning is always the last step for Orta’s team “because we don’t want to hose down the condenser outside and then track in dirt with our wet shoes and everything else,” he explained. So their process goes inside and then outside, allowing them to check out often without having to come back into the home. In an environment where preventive maintenance margins are tight and online reviews remain influential, eliminating the risk of needlessly irritating the customer — or having to pay to clean someone’s carpet — is the final chance to fuse effective service with good business sense.

Outdoor Units and the DIY Instinct

“We love it when customers take an interest in their home.” Joel Nieman, owner of AirAce Heating & Cooling welcomes this sort of interest and uses it to strengthen his customer relationships.

AirAce has has used videos, its website, and social media to offer advice to educate consumers on what they can do to safely promote their system’s efficiency. Customer interest in some cases may extend as far as cleaning coils themselves. AirAce’s technicians may share those tips during home visits as well.

“We have found communication with our customers is key in customer retention,” Nieman said.

AirAce’s embrace represents one end of the spectrum for contractor attitudes toward this dynamic. At Fayette Heating & Air, operation manager Josh Matney tries to channel that DIY impulse into two areas: filters and drain lines. His team does take the in-person opportunity to talk about the financial and performance effects of a dirty coil. However, the company line encourages customers to leave those cleanings to a licensed professional.

M&R Air Conditioning & Electrical’s vice president Ricky Orta does sympathize with the new customer who just spent a significant amount of money on a new system and wants to know what they can do to protect their investment. “But as far as do-it-yourself, from a homeowner standpoint,” he said, “I’m 100% against it.” Orta laid out a list of reasons that, like AirAce’s webpage on the topic, begins with safety.

“Most customers are not familiar with how electricity works,” Orta said. Even the ones who know to shut the breaker off for the outdoor unit may “not be aware that the breaker for the air handler, still being on, is still sending low voltage to that condensing unit.”

Newer units that require longer power-down periods and include more advanced controls open the door further to doing accidental damage.
As with other types of appliances and equipment, homeowners who take on DIY outdoor unit cleaning may also take on the risk of voiding their warranty. Orta does tell homeowners who want to participate that they can clean their drain line with a Shop-Vac from outside the home. In addition, in cases like a new installation including a cleanout, he will tell customers they can pour warm water and vinegar down the cleanout every month or so to help keep it clear.

Encouraging that particular task may also benefit the contractor. For instance, coming out to clean a one-year-old drain line “is not a moneymaker,” said Orta, adding that that often involves a customer who doesn’t understand why a system that might even be relatively new system requires this attention so soon. So for systems old or new, Orta does encourage that homeowner habit.

DiFilippo’s Service president, Laura DiFilippo, feels that DIY’ers can take the attitude a step too far, and getting into HVAC tune-up work is one of those steps. “It would be like a dentist sending you a video on how to deep clean your teeth, scrape off the plaque, and check for cavities,” she said. She feels that her company would “miss an opportunity to be their expert, do the work correctly, and talk to them about, new innovative products to help with safety, comfort, and efficiency.”

DiFilippo’s comment raises the point that while DIY condenser and coil-related cleaning can present a balance of risk and reward for the homeowner, it may also cost the contractor a productive conversation. While no single stock answer exists, contractors should consider their position and their own service territory before the situation actually comes up. The “right” attitude likely varies from company to company and from customer base to customer base.



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Interested in Becoming a Member of AACP?

We have three categories of membership. They are:

Contractor membership is open to any company engaged principally in the heating, ventilation, and/or air conditioning business as a contractor, who becomes a contractor member of the national association, and who is not a subsidiary, affiliate, division, or related entity of a public utility.

Associate membership is open to companies engaged in (a) manufacturing, (b) wholesaling, jobbing, and selling allied products or equipment principally to contractors and/or (c) supplying fuels, energies, or other services beneficial to the industry.  Associate membership is not open to retailers or other suppliers who sell principally to the general public.  Associate members have voting rights and can hold an elected office. Subsidiaries, affiliates, related entities, and divisions of associate members are not eligible for membership in the association.

Vocational membership
shall be available to teachers, students, heating inspectors, and other such individuals having interest in the environmental systems industry.  Vocational members shall not have the right to vote and hold an elected office.

GET THE MOST OUT OF YOUR MEMBERSHIP


  • Local, State and National Legislative & Advocacy efforts
  • Participation in the nationally recognized Apprenticeship Program
  • Education opportunities for your technicians and staff - (NATE, CFC, Business management, Legal and Legislative)
  • Industry Resources - (IRS documents, Risk Management documents, white papers, Code Compliance, six e-Newsletters)
  • Member pricing for events and training sessions
  • A discounted rate on insurance for member companies


Things Every Employer Should Know

By: Frank Kollman, Management Labor Law, Kollman & Saucier, P.A.

In no particular order, here is a list of things that every employer needs to know:

  1. There are no secrets in the workplace. Benjamin Franklin once remarked that the only true secret was between a person and a dead man. Agreed. There is no quicker way to get information out into the workplace than to tell a gossipy employee not to tell anyone. Besides, if the secret involves wages, benefits, or working conditions, it may be a violation of federal law to require rank-and-file employees not to discuss it.
  2. Employees cannot agree NOT to be paid for hours worked. Employees cannot waive their right to be paid under the Fair Labor Standards Act, even if the idea is the employee’s. Employees can be disciplined for making mistakes or causing more work, but they cannot be required to re-do work at their expense. If a non-exempt employee is required or permitted to work, he or she must be paid for the work, even if that means paying the employee overtime.
  3. Words matter. Supervisors need to understand that comments made to employees, even in jest, can be used later to prove discriminatory intent. While calling an older worker “old man” may not be enough to prove age discrimination alone, it can be used – with other factors – to prove age discrimination. Cultural references and stereotypes, including responses to joking cultural references made by the employee, should also be avoided.
  4. Written words matter even more. Supervisors must be taught how to write disciplinary notes, job descriptions, and other personnel documents in a way that convince the reader the documents are absolutely job-related and avoid allegations of discriminatory intent. Supervisors, in written documents, should explain what happened in simple English, avoiding words that are vague and lawyerlike.
  5. Employees respond better to inspiration than heavy handedness. Read Tom Sawyer, especially where he convinces his friends to pay him to do his chores. The best supervisors inspire employees to work harder. The worst supervisors browbeat good employees into quitting or doing “the least they can do.”
  6. Talk to your employees. While supervisors need to understand that there are no secrets in the workplace, they must also understand that rumors and lack of information can have a devastating effect on morale. Employees need and want to know what is going on. Bad news is better than no news and the resulting insecurity. Talking to employees can also foster loyalty to a supervisor. Many times, employees have decided not to file charges against their employer because of the respect they had for their supervisor. By the same token, disloyalty can result in more charges.
  7. Know what laws affect your decisions. Anymore, supervisors need a law degree to understand all the laws regulating labor and employment issues. That does not mean, however, that they should not be trained on the law. Some of the laws they should be familiar with are the National Labor Relations Act, the Fair Labor Standards Act, the Occupational Safety and Health Act, the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act, and state and local fair employment practices acts.
  8. Firing an employee stinks, so get over it. Stated differently, supervisors need to understand that they are part of management, and that they owe no one an apology for being part of management. Firing an employee is never pleasant, but it can be done with dignity, and it is almost always the employee’s fault. Supervisors need to realize that by firing a bad employee, they are making work easier for the good employees and themselves.
  9. Do not publicly humiliate employees. Discipline needs to take place in private. Yelling at an employee in front of coworkers will only lead to hostility and resentment. I am reminded of a story involving the manager of the Giants when Willie Mays played for that baseball team. Whenever he wanted to dress down a player at a team meeting, he would start out by yelling at Mays that he wasn’t hustling, trying hard enough, or helping out the team. Then, when the manager addressed a lesser player’s actions, he would not be humiliated because he was in the same boat as Willie. Unless you have Willie Mays working for you, conduct such sessions in a non-public place.
  10. Ask job related questions at interviews. Supervisors need to know what questions can and cannot be asked during job interviews. If the answer to a question is not going to be used to make a hiring decision, the question should not be asked.
  11. Employee evaluations should be meaningful. Too often, evaluations are rendered meaningless by a supervisor afraid to give a satisfactory evaluation to a merely satisfactory employee. It is the rare company whose every employee is “outstanding.”


As I have said before, supervisor training is often overlooked by employers. Companies will not allow supervisors to spend $25.00 without approval, but they are allowed to hire and fire employees, exposing the company to thousands of dollars in liability, without a single minute of training. Maybe 2021 is a good year to rethink that policy.


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About the Author

Frank Kollman

I am a graduate of the Johns Hopkins University (1974) and the Syracuse University College of Law (cum laude, 1977), where I was an editor of the law review and the Survey of New York Law. I have practiced law in Maryland since 1977 and established the Firm in 1988. I was raised in South Jersey, five miles from Atlantic City, which in those days had no casinos. I could see Convention Hall from my backyard across the tidal marshlands.

Upon graduation, I spent my first five years practicing labor and employment law with two of the largest law firms in Maryland. In 1982, I joined a firm that had concentrated in labor and employment law for over forty years, where I became a partner in 1984. While at that firm, I created and edited an employment law newsletter, Employment Issues. In addition, I produced an educational film for hospital management concerning unions.

By 1988, I knew that I had to work in a firm that reflected my character, and the only way to do that was to start my own place.  This firm, the people in it, and the work we do is my biography.  Anything else is a footnote. I have practiced management labor law for over 40 years. To me, telling a client what is legal can be markedly different from telling him what the best business decision is. The best business decision is the better choice. There are other lawyers with impressive credentials, but there are few with the devotion I have for my client’s cause. I lecture, I publish, and I have done public service. I am a monthly columnist on labor and legal issues for the National Clothesline, the newspaper for the dry cleaning industry. I represent a wide variety of businesses, construction companies, health care institutions, and trade associations, both union and nonunion.

Join Frank at his Quarterly Legal Update Sessions to ask any questions you may have regarding HR, Employment, and Labor Law, complimentary!

Register Here for the June 22nd Event

If there is something specific you would like Frank to discuss, email us with topics at info@aacpnet.org.

Which Employee Affects Your Bottom Line the Most?

By: Leslie Titcomb, Director of Service, Shapiro and Duncan

I have asked many owners and managers of service companies over the last 30 years, this exact question.  Who affects your bottom line the most?  The answer I get always surprises me.  Most often, I will hear it is the sales person or the technician.   The correct answer is the dispatcher and let me explain why.  Your dispatcher handles all of your customers, all of your technicians and your maintenance contracts, repairs and quotes.  Let’s start with the customers.  When a customer contacts the company, they don’t talk to the owner, the manager, or even the technician first; they talk to the dispatcher. If the dispatcher does not give that warm and fuzzy feeling to the customer, and build a relationship with them, then you will eventually lose their business.  The dispatcher needs to know your products and abilities in order to answer customer’s questions, or being able to get them the answers in timely manner.   Next, is your technicians; we love our techs, but we all know how high maintenance some of our technicians can be.  The dispatcher is their primary contact with the office. Managers and supervisors do not talk to the techs as much as your dispatcher does. The dispatcher has to be at any given time, a friend, a therapist, a baby sitter and oh so much more just to appease the technician and to get them to accomplish everything we are asking them to do.

Most companies think that anybody can dispatch, THIS IS NOT TRUE!  I feel strongly about this.  It surprises me the lack of training and time to train them that is allocated.  If the dispatcher does not understand what the repairs are, and who is qualified to do them, then you will lose money.  Sending the wrong technician can cause callbacks and warranty calls.  And, it can upset your customers.  If they do not know the area that you service, you will have technicians driving all over town criss crossing each other. Again, not productive and frustrating for your technicians.  If the dispatcher has not been trained to manage and understand your contracts and quotes, then you could have them sending out techs to jobs without the correct parts or tools needed.  The dispatcher is the stop gap, they need to make sure that everything needed for the service call, maintenance or quote is ready, from the parts or filters to the correct technician, and they understand the hours it is quoted for.  If they haven’t been trained properly for all of this, you are not going to be profitable.  Technology is good, but people have lost touch with the value in actually talking to people.  You need to make sure that you dispatchers are physically talking to your technicians.  They are calling customers. Emails are fine and a good follow up to phone calls, but we are service companies, customers return to us because of the personal touches and the contacts they make.  We are not pen pals, put a voice to a name so the customer will call and say “Hi Leslie, I need your help”.  Bottom line, you need to make sure that you have all of the correct tools in place to make your company a success.  Your dispatcher is one of your most important tools.  Take the time to train them on all aspects of your company.  The payoff will be substantial. To any of you who I have not convinced and you want to discuss more, please feel free to call me.  I love a good debate.  And remember, I said who effects the bottom line the most, not who is or isn’t important.


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About the Author


Leslie Titcomb

Leslie Titcomb, is the Director of Service for Shapiro and Duncan, a Mechanical Contractor in the Washington Metropolitan area.

She has been in the trade for over 30 years.



Understanding the Value of Your Business

Presented by our sponsor - Federated Insurance

If someone were to ask you what the value of your business is, would you know the answer?

There are different methods that can be used to value a business: book value, adjusted book value, Earnings Before Interest Taxes Depreciation & Amortization (EBIDTA), multiplier of sales, and straight capitalized earnings, to name a few. Which method makes the most sense for your business will depend on the type of business – it might be based on the things that you have, such as assets or liabilities, or maybe the profits that the business produces.

Let’s take a closer look at some of the most common methods:

  • Adjusted book method – This method looks at the fair market value, rather than the lower, depreciated value, of a company’s assets and the total amount of debt (liabilities) that the business has. This can be a good method to use when the assets, rather than future earnings, more accurately reflect the value of the business.
  • Book value and goodwill – This method allows for an adjustment to book value for intangible assets, such as customer relationships, employees, name recognition, and location. Those things represent the goodwill of the company. Goodwill isn’t listed on the financial statement, so a multiplier is used try to determine this value compared to other businesses with a comparable adjusted book value.
  • Straight capitalized earnings – This method solely looks at the historical profitability or stream of income the business produced in a given year, and how reliable that stream of income is. The value is determined by identifying the amount of capital that needs to be invested at an expected fair rate of return in order to generate income equal to the company’s average historical income. This method is often preferred when the earnings, rather than the assets, are a better reflection of the business value.


Why is knowing the value of your business so important? Knowing the value of your business is the first step to any kind of planning you many need to do. Usually, this is the largest asset you own, and a value is needed when drafting a buy-sell agreement, estimating your future retirement income needs, and/or creating an estate plan. Knowing the value can help ensure you receive a fair price and the full value of the business that you spent a lifetime building in the event of an owner’s voluntary or involuntary departure, and can also help avoid conflict with other owners, family members, and the IRS.

Business valuations can be expensive, costing anywhere from $1,000 to $10,000 or more, depending on the complexity of the business. Talk to your Federated marketing representative for more information about our value estimator service, which, while not a replacement of a formal business valuation, can provide you with a general idea of the value of your business that may be used as a starting point with your attorney and other advisors for business succession or estate planning discussions.



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