When you are a business owner, there is a lot that you need to know to grow your business. However, keeping ahead of the game regarding current industry trends can be tough because you are busy running your day-to-day operations.
If you are trying to grow your HVAC business in today’s marketplace, you should know the important issues affecting you. Across the board, changes are happening in the business and finance sectors, and the HVAC industry is seeing its fair share of big changes. Here are four crucial factors you need to know to grow your HVAC business in 2022.
Insuring Your Business Just Got Easier
Insuring your HVAC business is easier than ever, from taking out a policy to knowing how much it will cost. Getting tailored insurance coverage is vital so that you don’t overpay. You can easily get information about policies online, and many insurance companies make it easy to file a claim online.
Types of Coverage
There are different types of coverage that you will need to mitigate all aspects of risk in the HVAC industry. According to the Small Business Administration (SBA), picking the right type of insurance is critical to protecting and growing your business. These are the six different types of insurance and the type of loss they protect you against:
- General liability—property damage, injuries, and more.
- Product liability—faulty or defective products.
- Professional liability—negligence and mistakes.
- Commercial property—damages and destruction to commercial property, like vandalism, storm damage, and fires.
- Home-based business—usually added to your homeowner’s policy.
- Business owner’s policies—usually a combination or bundled package of coverage options.
Steps to Buying Insurance
Before you commit to a policy, there are some steps you will want to take to make sure you are going to be fully protected but that you aren’t wasting money on coverage you don’t need.
- What are your risks? Take some time to examine your business and determine your risk factors.
- Who is your agent? Find an insurance company that has policies that match your business.
- Have you shopped around? Make sure you compare prices with at least 2-3 insurance companies before you commit.
- Repeat annually. Make sure you repeat the first three steps every year to continually stay on top of the risks associated with your business. For example, if you change your business and offer different services, make sure you take another look then, as well.
- Buying a policy that is custom-tailored to your business is a good idea. However, watch out for bundled policies that add coverage in areas you don’t need.
Manufacturer Prices Continue to Go Up
Inflation is hitting businesses and individuals on all fronts. As supply chain issues continue to affect our goods and services in the wake of Covid19, prices keep increasing. Until our supply chains can meet our demands, there is no end. It can make bidding for a project difficult and unprofitable.
How do you deal with material shortages and price increases? First, pay close attention if you are working under fixed payment contracts and the price of parts and equipment continue to skyrocket. Then, include clauses in your contracts that help protect you from prices outside your control.
Force Majeure
This clause protects homeowners and contractors from events outside of anyone’s control, such as catastrophic events. Unforeseen events are sometimes referred to as “acts of God,” This type of clause can allow either party to back out of the contract.
Escalation Clause
The escalation clause states that if the price of the goods is higher than what is bid, the contractor will be reimbursed. Of course, not all homeowners will be comfortable signing an escalation clause. Still, most people know that shortages are causing significant price fluctuations and that this is outside your control.
Termination Clause
The clear and concise language that protects your business and the homeowner so that either party can walk away is important in any contract but can be even more crucial in today’s challenging climate.
Mergers and Acquisitions in the Marketplace
Mergers and acquisitions are affecting many aspects of our global economy today. As a result, small businesses of every kind are being affected, and the landscape of HVAC businesses is changing with these global marketplace transformations.
As older HVAC technicians retire, other small businesses are being purchased by private equity firms or consolidated into larger brands. This can make it hard for small HVAC businesses to compete on price points.
How do you overcome the challenge of competing with big brands? Don’t overlook the advantages you have as a small business; make sure you capitalize on your strengths. Small businesses usually have quality employees and deep connections with their communities. As a small business, you can provide a level of customer service that a big business can’t. It’s also much easier for a small business to develop a niche.
A Changing World
We live in a unique time. Our world is changing rapidly, and to maintain profitability and grow your business, you will have to stay on top of the many changes. There are many crucial factors to growing your business today, and it pays to stay on top of your game.
