• Contractingbusiness 1487 Cb0311 Peergroups Luongo

    The Value of Peer Groups

    March 1, 2011
    Contracting business owners are learning that they can’t go it alone when running a business. They need somewhere to go for inspiration and answers to their everyday questions. An easy way to find those answers is to join a peer group.

    According to a recent readership survey of the January 2011 edition of ContractingBusiness.com, one of the highest read sections of the magazine was the 'Tools of the Trade' section. Tools of the Trade runs each month, and looks at the products, tools, and services contractors use to help make their companies more successful.

    Wouldn't it be nice if you didn't have to wait each month for your issue of ContractingBusiness.com magazine to arrive to learn about what your peers are doing to keep their businesses afloat in this tough economy, or to learn about what marketing programs have worked best in a certain marketplace?

    Contracting business owners are learning that they can't go it alone when running a business. They need somewhere to go for inspiration and answers to their everyday questions. An easy way to find those answers is to join a peer group.

    Matt Michel, CEO of the Service Roundtable, www.serviceroundtable.com, the largest peer group in the industry, explains, "Most contractors operate on an island. They don't feel they can talk confidentially with their competitors. Everyone in the company looks to the owner for leadership, inspiration, and answers. Where does the owner look?

    "Peer groups build bridges between contractor islands. They reduce the sense of isolation and give contractors sounding boards among peers who face the same problems," Michel says. "Typically someone in a peer group has faced the same problem before, so the contractor can benefit from their past experience. Individually, each contractor may be a good business person, but collectively the knowledge of the group is unsurpassed."

    The Service Nation
    The Service Nation Inc. offers three peer groups. The first is the Service Roundtable, which is an Internet-based group. Members benefit from online content, peer to peer discussions groups where leading industry consultants also join in, and the Roundtable Rewards buying program, which offers a certain percentage refund on HVAC parts and products. The second peer group is the Retail Contractors Coalition (RCC), which is for contractors who are extremely focused on building their brands. RCC gives contractors the chance to put private label their own line of HVAC equipment and helps them qualify for rebates. The third group is the Service Nation Alliance. This is a group that's dedicated to standardized practices, processes, and procedures so that certified companies will be more marketable. This gives contractors more choices for acquisitions or for exiting the business.

    ACCA MIX Group®
    The Air Conditioning Contractors of America (ACCA) offers Management Information eXchange (MIX) Groups®, http://bit.ly/eAcJt2, for its members. Members of MIX groups are in similar businesses from around the country that get together on a regular basis, to go over best practices, process issues, and review of each other's business. They share ideas and get feedback from their peers on the ideas they have to grow their companies. ACCA also offers peer connection and information sharing through online peer groups and networks.

    Importance of Peer Groups
    Many contractors have realized that sharing ideas in a non-competitive environment can only help their companies. Paul Hobaica, co-owner of Hobaica Services — the ContractingBusiness.com 2011 Residential Contractor of the Year offers, "Our ACCA MIX Group took us to a different level. It gave us ideas we never had before. You're not reinventing the wheel. It's best to take proven methods that others have found to be successful and use them in your company. Otherwise, it's hit-and-miss, and you're trying some things that work and others that don't.

    "About 75% of all we've implemented in the past five years has come from a MIX Group or other peer group source. We use that template as a baseline and modify it. We don't go through the painful trial-and-error process," says Paul's brother, Mike Hobaica, a co-owner of Hobaica Services.

    Mike is also in a Home Performance Contracting MIX Group with Cropp-Metcalf, Air Rite, Estes Heating and Air Conditioning, and others. "We meet every six months and focus solely on home performance contracting," he says.

    The Hobaicas are charter members of the Service Roundtable. "Over the years, it's been a resource for information we can't find in other places," says Paul Hobaica. Maybe we want to market to a specialty area, or are looking for a document related to drug abuse for the employee handbook. They have an entire library of documents, and ready-made advertising pieces. Contractors are also allowed to upload documents to the Service Alliance website for other contractors to use. Matt Michel has some awesome ideas."

    Ray Isaac, president of Isaac Heating and Air Conditioning, in Rochester, NY. and ContractingBusiness.com's 2002 Residential Contractor of the Year, belongs to several peer groups, but the main two are the ACCA MIX Group and Vistage. Vistage is an executive level leadership group in which small peer advisory groups meet every month to help one another become better leaders, make better decisions, and achieve better results.

    "It's the largest CEO peer group in the world," Isaac says. "It's non-competing, non-industry related firms in a local community, that get together on a monthly basis. We share ideas, do issue processing, listen to public speakers, and go over business topics and human-interest topics. It's all very valuable."

    Similar to the Hobaica’s experience with ACCA MIX Groups, Isaac has many takeaways from the meetings.

    "Every month, I come back with five or six bullet items that we can work on," he says. We have a Personal Action Summary that we fill out and are held accountable for. It's a list of things that we're going to work on until our next meeting. We also solve issues at these meetings. Somebody will present an issue and we’ll go through an issue-processing format. We'll all come up with suggestions and then we circle back to the individual that was having the problem at the next meeting to follow up on it."

    Isaac's MIX Group only meets twice per year, however, its members communicate daily.

    "We’re constantly on the phone. I have about six emails that have gone back and forth with mix group members just today. I probably have another three or four emails from my Vistage group, too. These groups become part of your daily process and part of your every day functioning. I sent out something for my group to look at yesterday and I've already received feedback on it.

    "You get an unpaid board of directors that's there to provide you with input and suggestions. Many of the companies in both Vistage and ACCA are not large enough to have a board of directors, and we're not public companies. It can become lonely, and you need these groups to act as the board of directors and give you the guidance you need, and ask the hard questions that a board of directors would," Isaac says.

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    Ideas & Encouragement
    One person who's all too familiar with that lonely feeling of starting out on their own is John Price, president of Aloha Aire, Texarkana, TX.

    "When we started out, we looked like every other service company and contractor in town." Price explains.

    In 2002, Aloha Aire decided to rebrand its business and that's when it became Aloha Aire. Not long after that, Price joined the Service Roundtable's Service Nation Alliance. It helped him take his business to the next level.

    "Being a part of something like the Service Roundtable has helped confirm our ideas about rebranding. It helps keep your image fresh and clean," Price says. "We gain encouragement from other members to attend industry events like HVAC Comfortech – where you're able to learn from the best, and see and hear first hand how others have started right where you did and struggled just like you have."

    Price advises anyone thinking of joining a peer group to get started ASAP.

    "Why would you float on a life raft, when you can climb on the cruise ship? Why fight this battle yourself? You have to be willing to say I don't know all the answers and I want to go to people who have done it and have been successful with it," he says. "If they're willing to talk to me, why in the world wouldn't I join?" Peer groups are ideal opportunities every HVAC contractor —large or small, can use to learn and grow.


    Power of the Peer Connection. Peer connections are a big draw within Nexstar® Network, Little Canada, MN, a business development and best practices organization that provides comprehensive business training, systems, and support to independent home service HVAC, plumbing, electrical professionals. Through their idea sharing, Nexstar member contractors have provided fellow members with proven strategies for operations and growth.

    Get Moving!
    When Roberto Luongo, president of Bosco Plumbing in Brampton, Ontario joined Nexstar in 2001, he was looking to connect with other plumbing business owners who would help motivate and hold him accountable. He admitted that too many times he had decided to make a change or implement a new plan, and then fell short of seeing it through. His employees accepted the shortfall because Luongo claimed he was too busy and after all, who wants to cross the boss? Mark Presgrave was happy to oblige. Presgrave, owner of My Plumber, Manassas, VA was quick to inspire and share his proven business strategies with Luongo, but he'll also return a curt reprimand if he doesn't implement the ideas.

    Four other home service business owners will also motivate Luongo to make his move. They are his Personal Board of Directors (PBOD), organized and guided by Nexstar, complete with contracts of agreement and confidentiality.

    Providing 'Tough Love'.
    All members of this PBOD count on guidance from each other. They conduct monthly phone calls and two times a year, the group holds a mini "peer group meeting" at a shop, an offshoot of the larger events, organized by Nexstar. During the two-day meeting, they walk through the operation, take away tested strategies and give back by sharing ideas and opportunities for improvement.

    Bob Hamilton's business — Hamilton Plumbing, Heating, AC & Rooter, Overland Park, KS — was the first stop during a recent meeting. The group provided some tough love.

    "They tore me up on my HVAC service department," Hamilton says. "I was under the impression that its sole job was to create leads for installations. I was losing money on the HVAC service side, but I was making it up on install. I was fine with that, because both sides together were making money. The PBOD said I was missing the boat and service can be a profit center on its own." As a result, Hamilton changed the way the company thought about service, implemented the PBOD's processes and now he's making money in every department.