HVAC Contractor

Strategic Business Planning

Strategic Planning Process

Goal Setting

Sales Plan

Service/Projects

Construction

Fabrication

Operations

Engineering

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Strategic Planning Process

A substantial opportunity exists for your HVAC company to dramatically improve financial performance, expand its customer base, diversify its business mix and improve customer and employee satisfaction over the long-term.

Today we endeavor to set specific goals, organizational environment and generate the plan for implementation. We will first discuss current situation, mission statement, message and initial results, possible issues.

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Current Situation, Core Values, Strategic Issues & Planning

Organizational ChartBusiness SegmentsCore Competencies Services ProvidedMissions StatementGoals, Planning &

Implementation

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HVAC Organizational ChartO rg an iza tion a l P ro toco l

E xecu tive Team

F ie ld Tech s

F ie ld - S u p ervis ionD isp a tch

S erviceM g r - V P

S ervice S a les

S ervice S a les M arke tin gC oord in a tor

P ro jec t S a les

S a les -M arke tin gM g r

F ie ld

F ie ld S u p ervis ionO p era tion s

C on s tru c tionM g r - V P

D es in g ers

P ro jec t M g rsE n g in eerin g

Tech s

C on tro ls?

D /B E n g in eerin gV P - M g r

S h op

F A b rica tionF orem an

S h op - F ab rica tionM g r

O th erC on tro ls - R es id en tia l

G en era l M an ag erL oca tion P res id en t

B oard /D irec to rs

O w n ers - L ead ers

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Business Segments Summary

Commercial Industrial Institutional Residential

Service/PMA Special Projects Design-Build Plan-Spec

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Core Competencies

True Preventive MaintenanceNegotiated ProjectsEngineeringDesign-Build ConstructionBid-Spec ConstructionSheet Metal FabricationSpecial Projects-PCSite Management

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Services Provided

Plumbing Engineering/System Design Projects Construction Maintenance/Repair

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Services Provided

HVAC Engineering & System Design Design-Build Projects Construction Repair-Retrofit Preventive Maintenance On-demand Service

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Services Provided

FabricationDuctworkFittingsSpecialty Electrical

(Future)EngineeringSystem DesignProjectsConstructionRepair/Maintain

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Mission Statement

“We will provide our clients with quality solutions that ensure value for their investment, consistent with fair wages and safe working conditions for our employees, while maintaining a reasonable profit to sustain growth and continuity for the Company.”

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Goals, Planning & Implementation

Sales/Marketing PlanMarket SegmentsDelivery MethodsAgreements/

ContractsOrganizational

StructureImplementation

Policy & ProcedureOperational ModelPersonnel

AssessmentFacilitiesTools & EquipmentFinancial

Projections

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SWOT Analysis - Strengths

Reputation in Our RegionExtensive Customer BaseKnowledge - ResourcesHVAC Service/Mechanical D/B

OfferingsHistory – Integrity - CompetencyPersonnel – People - ExperienceSynergy Between Business Offerings

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SWOT Analysis - Weaknesses

Profit Margins/Gross Margins - LowSluggish EconomyBalance in Business Need More

NegotiatedStrength for Future LeadershipLong-term Growth PlanFuture Profits in

Mechanical/Construction Businesses

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SWOT Analysis - Opportunities

Vast Relationships in Our AreaSynergy of Business OfferingsExpansion of Business OfferingsOwner-Direct Sales Approach

Opportunity PC/Negotiated/Retrofit OpportunityService/Electrical/Technology AreasBalance Service/Construction Offering

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SWOT Analysis - Threats

Competition from Non-traditional Areas ??

Technology (Virtual Office Salespeople)Margin Erosion –Differentiate from

CompetitionChanging DemographicsCompetitive Focus on the Mechanical

Business and Service BusinessSome Complacency

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SWOT Result Business Concept

The goal will be to position your company as the preferred provider of total building services in the region.

This will be accomplished by utilizing a strategic marketing/sales, engineering and operational plan that is built on proven successful practices to drive business and increase profit margins.

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Set Goals & Objectives

Sales & MarketingOperationsGeneral & AdministrativeBusiness Development

Who…What…When

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Sales & Marketing

Sales Developing Sales Approach (Process) Establishing Cost Codes Estimating Standardization Standardized Take-Off, Summary

Formats Standard Proposal/Presentation Hybrid Start-Up, Turn-Over Checklist, Protocol Sales Tracking Software…Format

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Sales & Marketing

Management Policies & Procedures Manual Sales/Project Management

Responsibilities Market Segment, Specialization Residential Focus Commercial Verticals Industrial Verticals Institutional Verticals Target Key Projects Bundled Offerings

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Sales & Marketing

Management…continued Annual Budget & Approval Process Sales Goals, Objectives, Projections Establish Performance Goals Implement Weekly Sales Review

Active Prospect List Plan & Review Schedule

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Sales & Marketing

Training Development of In-House Programs

Sales Engineers PMA Sales Consultants Tele-Marketing Assistance Sales Management “Everyone is in Sales”

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Marketing

Market AnalysisAdvertising, PublicityPromotionalTele-Market SupportActive Prospecting ToolsPresentation ToolsAssociations, Memberships,

Networking

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Operations

Engineering Management Operations Manuals Policies & Procedures Annual Budget Budget Approval Process Technical Expertise/Resources Training

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OperationsConstruction

Management Operations Manual Policies & Procedures Annual Budget Budget Approval Process Communications Protocols Training Production, Quality, Controls Personnel

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OperationsFabrication

Shop Management Operations Manual Policies & Procedures Annual Budget Budget Approval Process Shop Order – Work Order Process Technical Resources Training Personnel

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OperationsService Repair & Preventive Maintenance

Management Operations Manual PMA set-up, start-up procedures Service Management Software Annual Budget & Approval Refrigerant Tracking COD Customer/Billing Procedures Technical Support Dispatch-Coordination Training

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Operations

Special Projects PC Operations Manual Policies & Procedures Annual Budget & Approval Technical Resources Training

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OperationsSite Management, Facilities

Management Operations Manual Policies & Procedures Annual Budget & Approval Technical Resources Training Protocols Supervision Personnel

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General & Administrative

Office AdministrationHuman ResourcesSafety Program AdministrationComputer – TechnologyTele-CommunicationsReceptionist – SupportSecurity System

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G&A, Finance & AccountingManagementPolicies & ProceduresAccountingBudgetingFinancial Resources

ManagementFinancial ReportingTechnology

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Purchasing - Warehousing

ManagementPolicies & ProceduresMaterials ManagementTools & EquipmentTrainingPersonnel

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Engineering Co-authored equipment selection Installation Maintenance

Range of Services - Integrated Offering

Energy efficient lightingHVAC automationThermal storageLighting controlsTraining servicesTower free coolingBoiler modernizationMaintenance services

• No risk• No change orders• Guaranteed results

Indoor air quality analysisModernizing temperature controlsHigh efficiency heat pumpsIrrigation management systemsAdjustable frequency drivesChiller modernizationLiquid pressure amplifiersFire/Life safety systems and servicesUtilization of local contractors/WOE/MBE

Environmental Commitment

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Competition

Summary of Competition Heavy

Commercial/Industrial/Mechanicals Honeywell, Johnson, Siemans..…. Utilities, Power Companies Large ESCO’s Local Firms (__________, __________……) GC’s/AE’s

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Sales ThrustBuild a Sustainable Competitive AdvantageCurrent Customers/RelationshipsStrategic Account Management FocusPast Customers/Relationships – ReputationHire New People and Grow ThemCategorize Accounts/Account Management

(stars/dogs/cash cows/maintain) – Prioritize Synergy Among Business OfferingsMechanical Customers to Building Service Develop New RelationshipsSeek to Form New Alliances

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Operations Plan Utilize Strong Operations Leadership in Strategic PlanAccurate Pricing and Estimates, ApprovalsUtilize the Estimate Review ProcessDevelop High Performance Teams for Service OfferingMaintain Departmental AccountabilityDevelop a Profit OrientationFocus on Customer Needs/Value-based OfferingsStick to the Strategic Sales Process

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Strategic Initiatives – Sales/Eng/Ops

Federal, State, Military AlliancesEMS, PC, Retrofit, Controls FocusDeregulationAlliances with Strategic PartnersSynergistic Sales TrainingAdd Key Team MembersOperations Involvement/Estimate ReviewBundled Offering Among Our Company

Business Units

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Sales Focus - Part I

Target Market ProgramCustomer Value Management ProgramFocus on Quality DeliveryBuild a Power Sales TeamGet Key People on the TeamUse Critical Opportunity Review (COR) Process (Strategic Accounts)

Bundle Offerings across Contracting BusinessesHire Key Competitors’ PeopleFocus on Sales ProcessReward a Profit FocusStrong Sales Management FocusDevelop Sales Tools for Replication

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Sales Focus - Part II

Total Building Services (solution)Outsourcing ConceptExtensive Sales TrainingInstill Discipline in the Sales/Engineering Cycle

Regional FocusCRM Strategy - Yr. 2003 TechnologyFocus on Value Based OfferingUtilize Relationship Selling Use Strategic Selling Process

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Marketing OutlineProductElectricalSpecial ProjectsConstructionService

PriceValue Based OfferingJustification of Program -

Financial/EnergyFocus on Increasing GM

%Value Engineer All

Programs

PlaceOur AreaExtended Region

PRSales FocusAdvertisingPublicitySales Promotion

PeopleSkilled TeamSell Entire Offering

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Contracting Business Portfolio

Mech

D/B

PC

T&M

Mech

D/B

PC

T&M

2006 Business Plan 2007 Business Plan

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Financial Plan

The following is a high-level financial plan that defines financial model, pricing assumptions, and reviews yearly expected sales and profits for sales year 2007 with a comparison to sales year 2006.

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Financial Goals & ObjectivesShort-Term (Year 2006) Example

2007 2008 Revenue Objective $35,000,000

$37,847,500 Construction $28,250,000 $29,097,500 Service $ 6,750,000 $ 8,750,000

Gross Margin $ 6,083,000 $ 8,326,450

Gross Margin % 17.38% 21.5% Profit $ 1,407,000 $ 2,460,088 Profit % 4.02% 6.5%

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Resource Needs

Technology Requirements PC’s for Sales Team, Software Tools Database Program, Service Management

Personnel Requirements Acquisition of Key Team Members Key Sales People on the Team

Resource Requirements Sales/Marketing Budget, Financial Support

Operations Support for the Plan

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Risks & Rewards

Risks None to Reputation Minimal to current core Construction Business Upset current Status Quo

Addressing Risks Focus on Long-Term Success Plan

Rewards Increased Revenue to Company (Build Service) Increased Margin and Increased Profit

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Key Issues

Near Term Get moving to capitalize on plan in

2004

Long Term Keep Focus of the team Stick to the Plan Gain Momentum

Execution of the Plan is Critical

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Wrap-up: - Management Keys to Success

Leadership Team Planning (SBP Workbook)Target Job Sales/Delivery Review ProcessSales/Eng/Ops Teamwork (Meetings)Strategic Account Management (Profiles)Monthly Sales ForecastingTracking Progress (Activity Log)Quotations (bookings track quotes)Delivery Plan – Man-Power Plan

Action Plan

Issues PrioritizedActions DeterminedAction Items AssignedTime Frames DeterminedTracking MechanismKey Meetings & Follow-upTransforming the Business - Adjusting

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Key Issues- Actions, Notes:________________________________________________________________________________________________________________________________________________________________________________________________________________________________

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