While the most exciting trends and technological changes are found in the equipment market, the fact is, most of your business profits probably come from the little parts and pieces that make all of those fancy systems work. So, when I saw some new ideas in thermostats at this year's AHR Exhibition in Chicago, my interest was immediately piqued.
We've all witnessed the consequences of China's dramatic economic growth. That nation's burgeoning demand is responsible more than anything else for the global oil and commodity price run-ups of the last few years. Plus, there is the yin and yang of China's cheap imports that have destroyed many of our industries yet at the same time help keep our economy humming with inflation tamed.
Have I mentioned recently how much I love the showroom segment of our great industry? It's true - I have a passion for showrooms and what a wonderful revenue opportunity they can be. I've always set high standards for myself and others - just ask my poor wife and four kids! But you know what, you'll never convince me that setting high standards (as long as they are achievable and reasonable) is a bad thing. Maybe that's why I'm feeling so much frustration as I sit down and write this article.
We are creatures of habit. We like predictability. Change means breaking habits. It means a permanent breach with the old routine. It is not obvious at all how one goes about successfully making change. First you have to figure out just what it is you want to change, then you actually have to exercise some discipline to get yourself to change and finally you have to resist all those external pressures, all those temptations that are pushing you constantly to “go back” to the old ways. Individual change is tough.
The real key to success is the people who work there.
About five years ago I began doing some consulting work for a medium size wholesaler who had one showroom at the time. They were doing about $3.5 million in sales and had five showroom salespeople. The gross profit margin on sales was in the 27% range. The company treated the showroom as a profit center and at the time was barely making a profit.
Business is great, but every silver cloud must have a dark lining.
In February, I had the pleasure of attending a meeting of the PVF Roundtable in Houston. For those of you who have not been to the area, let me start by saying as far as PVF goes, everything IS bigger in Texas. Houston is both the PVF bellwether and the PVF Mecca. How PVF goes in Houston, so goes PVF nationwide - albeit, a little less intensely and a little later. Nonetheless, the Houston market is a strong leading indicator of the health of the PVF market in general.
Product proliferation adds complexity for sellers and confusion for buyers.
Recently, my wife and I contemplated replacing our kitchen faucet and decided to investigate options. Hooray for showrooms, but we didn't feel like wasting hours shopping given that we had our sights set on something pretty specific - a pull-out adjustable spray faucet. So I Googled.
As evidenced by the results of the merger mania of the '90s, many industry experts believe, as was the case in the previous decade, that as many as 80% of acquisitions do not succeed, resulting in billions of dollars invested in failure. Because the majority of acquisitions do not meet the original goals and objectives of the acquirers or other conditions change, some 40% of all businesses acquired will again be sold off within three to five years, according to available statistics.
In last month's issue, I wrote about the new 13-SEER residential air conditioning products and discussed why most manufacturers aren't making the change to R-410A more quickly. However, despite all the hubbub about meeting the new efficiency standards, there were some other interesting new technologies and ideas shown at the Exhibition that are certainly worth discussing.
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