By TERRY MCIVER, SENIOR EDITOR, WITh GEORGE R. "READ" FRYMIRE
At all times, Read, left, and Tom Frymire focus on workmanship, quality service, training, and communication.
One way to compete: communicate. ‘Teamwords' is Frymire Services' employee newsletter. ‘The Yellow Truck' helps the company provide helpful information to customers.
This year has brought some old challenges back to the table. Contractors active in the residential construction sector are faced with slowing housing starts, increased costs, downward pressure on margins, skilled labor shortages, and increased theft. Facing these challenges since 1950 in the Dallas/Fort Worth metropolitan area, is Frymire Services, Inc. This second generation, family-owned mechanical and plumbing contracting and service firm has weathered tough times in the past, and The Frymire's strategy to succeed in troubled times starts at the core of its business practices.From production to sales, Read and Tom examine business methods, quality, and business development practices, to stay ahead of market trends.
To survive the recessionary times of the 70s and 80s, the company adapted and expanded, and in so doing, became a smarter, more service-oriented business.
Here are eight techniques Frymire Services has used to survive tough times. Try them in your business to help your company thrive, despite inevitable economic slow periods.
1. Earn Key Recommendations
Favorable ratings or awards from leading construction associations go a long way in solidifying a contractor's reputation, and might keep the phone ringing during a downturn. Major home builders often present annual "Vendor of the Year" awards to subcontractor groups, and the National Association of Home Builders (NAHB) Research Center for quality and workmanship bestows National Certified Trade Contractor status on superior HVAC companies. In addition to its award program, the NAHB also sponsors a quality assurance program which helps contractors become leaner, and improve quality and reduce defects and callbacks. It's one way to learn how to become a truly low cost/ high value provider.
2. Team Up With Suppliers
When you can't control everything, capitalize on what you can control, such as your purchasing power. By consolidating vendors — that is, selecting vendors who value your business, and are willing to work through processes — you can build more purchasing power and enjoy more efficient, on-time delivery of materials, in a more economical way. A duct vendor, for example, might be willing to customize duct length to eliminate waste. In a business where every penny matters, assemble a team of suppliers who will work with your needs.
3. Use Technology to Save Time and Money
Talented employees can help you make new technology profitable. Employees and suppliers can work together to electronically transmit take-offs from AutoCAD files directly from engineering to suppliers, to prevent mistakes and excess keying of data.
"We've minimized the number of key strokes per order, by developing kits for each residential plan," says Bill Weeaks, chief financial officer.
"Instead of keying 10 items, now we just key one, saving a considerable amount of time, and reducing the risk of human error."
Other departments may automate their processes in a similar manner, with streamlining as the goal. For example, Frymire Services' customer service department set up an automatic service request program, to improve efficiency.
4. Align Offerings with Client Needs and Wants
In a mature industry with a slowing market, it's essential than your sales force be focused on customers' needs and wants.
Home builders are understandably interested in finding ways to cut costs while still providing high quality, so you have to find alternative ways to work with customers on price, while not further sacrificing already thin margins. In some cases, zoning might be an option, or providing a different grade of equipment.
5. Stabilize Your Workforce
It's no secret that payroll is one of the largest — if not the largest — company expense. To manage it better, consider using subcontracted labor for residential new construction, while focusing your talented, in-house staff on the service side.
6. Continue Training and Development
Enough can't be said about the value of a hard working, loyal, and ethical workforce.
Teach everyone in your business to be a critical thinker. Your employees are the ones who know where the waste and inefficiencies are. If you want to succeed, keep everyone engaged in developing better processes. Stay on a learning track during slow periods. From providing NATE training, to supporting the Construction Education Foundation, to providing on-site Spanish courses, encourage — if not insist — that employees continue their HVAC education.
Contractors should also consider implementing field manuals, to minimize callbacks, and help new employees make the transition to field service.
7. Maximize Co-op Marketing Dollars.
Don't leave money on the table when it comes to co-op marketing. Many vendors will share in marketing expenditures to keep their brand in front of your customers and prospects. The financial assistance received from vendor programs can help the contractor avoid cutting his or her marketing expenditures.
8. Refine Processes
In an industry that thrives on changing technologies and methodologies, complacency and stagnation will bring defeat.
Maximizing efficiency is an on-going battle. After you revise and implement changes, go back and revisit the processes and refine them again. Never stop building a better mouse trap. Validating plans is an important element in minimizing expenditures. Compare plans to "as-builts," to minimize waste and potential mistakes. It's not unusual for plans to get changed in the field. By staying on-top of as-builts, you will continue to find more efficient ways of doing business.
Keeping up-to-date with product trends is invaluable. Assign staffers to regular product and quality trends, to evaluate new product opportunities.
There are many solutions, then, to the challenge presented by business downturns. When faced with this kind of challenge, face it like a professional. Examine your strengths — such as favorable vendor relationships — and capitalize on them. Take stock of what needs work — perhaps selling more service agreements — and make it better. What doesn't bring you down will only make you stronger.
About Frymire Services
Approximately half of the company's business is single-family HVAC construction, with the balance of the business split between residential and commercial service and replacement. George R. "Read" Frymire, and his brother ,Tom, assumed control of the company from their father, Bob Frymire, in 1996.
Bob Frymire founded Frymire Services on April 1, 1950, with $300, a used station wagon, and a total net worth of $1,800. He leased a room in a camera store warehouse for $25 a month, and grew the company through hard work and determination, selling and installing window units and floor furnaces.
"After dad made a sale in the morning, he'd do the installation in the afternoon himself," Read explains. "By the mid- to late 50s, Frymire Services was installing chilled water systems in apartment complexes, and we were a dominant player in the commercial market."
When the recession of the late 70s and early 80s hit the U.S. economy, the Frymires realized the quality reputation they had established from the company's inception would prove to be invaluable. In the 1980s, Frymire Services was one of the first companies to participate in the Air Conditioning Contractors of America's (ACCA) quality training program, which improved the workmanship of all Frymire installations.
In recent years, major home builders have awarded Frymire's single-family construction division with a Vendor of the Year award, and Frymire Residential New Construction was the first Texas HVAC contractor to achieve National Certified Trade Contractor status from the National Association of Home Builders (NAHB) Research Center, for quality and workmanship.
"We're proud to achieve certification three years running," Tom Frymire says, "and we've used the program to continually hone our processes in the new construction division, and in other departments. We've learned to quantify results and identify improvement opportunities. NAHB's quality assurance program made us a lean enterprise, boosted quality, and reduced the number of defects and subsequent trips to installations."
George R. Frymire is president of Frymire Services, Inc., a residential and commercial HVACR company based in Dallas, TX. He can be reached at 972/620-3500.