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Should You Expand to an Additional Location?

July 12, 2022
Let's look at some of the factors involved in deciding whether or not to expand your HVAC business.

You might be thinking about expanding your HVAC business into an additional territory. Here are some points to consider, so you make the right move at the right time.

Where to Go

  • Go to an area that's growing in population, not decreasing. Look into the demographics in the area. Unless you like dealing with landlords, stay away from areas that are primarily rental properties. Another factor to consider is whether or not the area is primarily year-round residents. The Census Bureau has a lot of that information online, totally free of charge. (https://www.census.gov)
  • If you're in residential HVAC, go to an area with homes that are about 10-20 years old. If your techs are well-trained and understand the value of replacing equipment, there should be no shortage of replacement opportunities. When an area has a growing population, a lot of people decide to sell their homes, so they have to fix them up. Those home improvements often include replacing the HVAC. Also, when people buy new homes, replacing the HVAC is often a priority.
  • Go someplace where building permits are on the rise.
  • Go to an area where some large corporation is expanding into, so you know there will be a population growth in that area, and that the people who move there will have jobs.
  • Go where the money is. There are exceptions, but my extensive travels have shown me that the contractors that have it the easiest are in the wealthier areas. If you're in a poor area and get an opportunity to acquire or open a shop in a wealthier area, do it.
  • Capital cities tend to do well.

According to a market researcher I know personally, the people in this country who have the money to spend on their homes are older  people. Don't waste too much effort on Millennials.

If You Do Expand

Don't advertise to people that you're new to the area. No one is going to call you because you're new to the area. In my case, I prefer dealing with established businesses, so your being new to the area would be a reason for me not to call you. It's better to just stress all the reasons to buy from you.

Advertise maintenance, stressing the importance of regular maintenance and all the good reasons to choose your company to do it.

If the potential new location is near when one or more of your technicians resides, you can get a good feel for the area by doing some advertising for seasonal tune-ups.

Market Study

Thirty years ago I went to a shop in an area of about 250,000 people. The shop had four technicians. The contractor initially expressed some concern, or should I say disappointment, that I hadn't done any kind of a market study to show that his market area could support him with all the other contractors in the area. My answer was that I wasn't concerned about whether or not the area could support all the contractors and service techs doing business there. My only concern was whether or not an area of 250,000 people could support four techs. The answer was a resounding yes. I then made the point that all we had to do was be better at everything than everyone else and he had nothing to worry about. By the way, the company is still in business, with over 30 techs and installers, and is the largest company in the area.

 Ideally, you should expand into an area where there are no quality contractors. We had three small towns that were roughly an hour away from us. We were almost always guaranteed to be successful when we ran calls in these areas. People told me that by the time they called us, they'd already tried the cheaper local contractor, and pretty much expected a first class company like ours to be more expensive and were looking forward to getting the job done right.

An alternative:

Can you get away with an online presence serving as an additional location?

For instance, our advertising and business cards showed us having multiple locations, but we actually only had three fully staffed locations. The rest of them were storage units. We did that in areas where a few technicians lived. We had a warehouse person that visited each shop and storage unit and replenished stock.

 Charlie Greer is in the HVAC Hall of Fame, has been voted the “HVAC Consultant of the Year” and the “Top HVAC Industry Sales Trainer.” For information on Charlie’s audio/video/or Zoom sales training, call 1-800-963-HVAC (4822), or go to www.hvacprofitboosters.com. Email your comments or questions about this column or HVAC sales to [email protected].

About the Author

Charlie Greer | Owner

Charlie Greer was voted “Favorite Industry Sales Trainer” in 2019 and is the creator of “Tec Daddy’s Service Technician Survival School on DVD,” the video training course that provides you with a year’s worth of weekly sales meetings. For more information on Charlie’s products and services, go to www.hvacprofitboosters.com or call 1-800-963-HVAC (4822). Email your comments or sales questions to [email protected].