There’s no doubt, America is aging. The median age of the population was 25% higher in 2013 than 1980. The baby boomers are retiring and this has profound implications for you and your business.
1. Finding Techs Will Get Harder
According to the Bureau of Labor Statistics, 39% of HVAC technicians were age 45 or older in 2013. We not only have a shortage of labor, we have a shortage of youth. As more technicians reach age 65 (and few work in the field past age 65), the labor problem is going to get worse.
There are only two ways to solve the technician shortage in your business. You can become the employer of choice in your area or you can grow your own technicians. These are not mutually exclusive.
There will only be one or two employers of choice in a market. These are the companies with the best pay, best training, best benefits, best culture, and best prestige. The employers of choice are not bottom feeders. They tend to be at the top end in pricing and in service delivery.
Growing your own technician used to be reserved for the largest contractors. Today, any size contractor can take advantage of the special training programs like Lennox’ Build-a-Tech program and the Ultimate Service Academy. It still requires investment, but compared to an idle truck, it’s nothing. However, it does take planning.
2. There Will be More Opportunities to Grow by Acquisition
Industry valuation and exit strategy consultant, Brandon Jacobs talks frequently about the need for aging owners to plan for an exit. Unfortunately, few do until it’s too late. With their backs against the wall, they end up passing along their life’s work for a meager return.
Of course, as Brandon points out, this presents opportunities for growth through acquisition. Sometimes the easiest way to capture a customer is to buy one by buying a competitor. You can pick up techs this way too.
Whether you’re an aging boomer or not, every contractor should think about an exit. How much money do you need? Who will you sell to? Are you prepared to finance the sale? How can you make your business worth more? Answer these questions in advance and you will be able to start a new chapter in your life in a much better financial position.
3. Your Customers Will be Wealthier
Do not forget the aging customer base. An aging customer base works in your favor. According to the Census, the median net worth of seniors is nearly five times the net worth of the 35 to 44 year old age group. Five times! Seniors have more money and less inclination to fix things themselves.
Do you focus on the older demographics? Do you look for media focused on them? Do you craft your message to appeal to seniors with money or relatively young consumers living paycheck to paycheck?
If marketing to seniors, some of the traditional advertising media most contractors have abandoned look more attractive. Maybe it’s time to take another look at the yellow pages and newspaper, adding them back to your media mix.
This demographic shift is like a tsunami. Get ahead of it. Plan for it. And ride the wave!
Get a copy of Brandon Jacob’s book, For What It’s Worth for only $19.99 from the Service Roundtable online store. This is the handbook for figuring out what your business is worth and how you can increase its value. For more information, call 877.262.3341 or visit Shop.ServiceRoundtable.com.