Arkansas HVACR NewsMagazine April 2018

S tate, National, Chapter News Feature Story

“Planning for Profit” Article by Bill Ligon If you own an HVAC company, you’re also running many businesses, which may include residential new construction; residential replacement; HVAC service; commercial service; commercial new construction; and duct cleaning. Ask yourself the following questions: 1. Do you know your sales in each department? 2. Do you know the “cost of sales” for each department? 3. Do you know the gross profit/gross margin percentage for each department? 4. Do you know your overhead expenses for each department? 5. Do you know your net profit for each department? If you answered yes to any of those questions, you may very well be a “Five Percenter.” The “Five Percenters” are those contractors who earn between 10% and 25% net profit before taxes. If you answered no to one or more of those questions, you may be running your company by the “seat of your pants” method. My guess is that 90% or more contractors do not departmentalize. That leaves about 10% or less in the entire HVAC industry that really know how to price correctly. We don’t departmentalize because, either we don’t know how or we don’t realize just how necessary departmentalization is when calculating your selling price.

Bill Ligon “Planning for Pro fit” 18 Years &

Still Relavent Today For those who remember the Heat Pump Association days, Bill Ligon is an icon of financial success. Bill’s “Planning for Profit” became the game plan for many who previously did not know the difference between margin and mark up. His teaching, along with others like John Collier and Stu Doctor, helped many companies not only survive but succeed. From tool belt to businessman was and still is a tough transition—from being behind at the supply house to taking advantage of the early pay discount. It is a transition that everyone faces but, without help, many don’t make. As an industry consultant, Bill developed Profit Forecaster, the HVAC service management software package, Up-Sell Solutions, a customized presentation manual, and “Planning for Profit”, a four part program to put a dealer on the track toward developing and managing a profitable business. The cool thing about Bill for Arkansans--he lives in Hot Springs Village so he is readily available without expensive travel. Bill is available at 888/320-9220. His web site is www.ligonconsulting.net .