Wheeler on HVACR: More ways to cut bankruptcy losses
I just got off the phone after talking to an old friend in the HVACR supply-house business, Steve Bellar of IM/Thrifty Supply in Bellevue, Wash. He read my article in this magazine (May 2000 issue, page 69) on how to avoid bankruptcy losses.
Bellar says this concern is one of the main headaches of supply houses in his area. His company has paid a lot of attention to it. He told of the steps his company's management has taken in the past to be sure their customers are in good financial shape and how they have spent hundreds of hours trying to develop plans to minimize their exposure to losses.
IM/Thrifty has tried to get its dealer-salespeople to get more involved in customers' businesses and even to do a little financial snooping, as I suggested in the article, but the idea was found to be generally offensive by his staff, Bellar said. For that reason the program just didn't work. However, a unique opportunity recently met two receptive and creative minds.
The company hired a person with an accounting background to be an HVACR salesman. While such a combination in itself wasn't a workable idea, putting someone with an accounting background -- who could teach -- into our business worked when the right job was found for him. Thrifty didn't put him to work in its accounting office. This man was creative and had entrepreneurial spirit. He saw the need to go into business for himself to help HVACR contractors become successful businesspeople.
The company saw that its dealer base needs what the accountant is offering, and it is actively promoting as well as financially supporting the new business venture. One of the sales incentives it offers customers for meeting certain purchasing objectives is to co-op the cost of having this person come into the dealers' businesses as a consultant. Bellar says, "My customers love the idea."
Sounder customers, better businessBecause the consultant signs a confidentiality agreement, there is no feedback on customers' financial condition, but as a result of the program, the customer base is more financially stable.
Bellar's company has tried financial training programs in the past. They did help some, but the lessons were often quickly forgotten. It seems there is quite a gap between learning the principles and actually putting them to work in a company. This is where actual on-site involvement and implementation really shines.
When I was with Carrier Corp., we had an outstanding week-long accounting course with a rather abrasive (but very interesting) instructor who was an understudy of the legendary Bill Blease.
Bill stayed in the offices of General Motors during the Depression until someone finally listened to his idea of starting an automobile financing program, which later became known as GMAC. After his retirement at GMAC, Blease entered our industry and started his landmark program of training HVACR contractors to be businesspeople. Maybe one-on-one is the next -- and best -- logical step.
The idea of locating industry-specific accountants with training abilities and putting them in touch with your customer base may sound risky and hard to do. And the thought of actually helping to pay for this person's services may sound downright crazy, but it works at IM Thrifty.
Are you worried about bad debts and bankruptcies in your business? Do you have a better solution? If so, please write and tell me about it.