Prepare for Profit
At Mingledorff’s, we know HVAC contractors want to be successful and respected business owners. In order to do that, they need to make payroll each week, pay their suppliers on time each month and still have profit left over for all their hard work.
Although the economy is good and our industry is poised to have another record year, not all trends are good. A massive strain in the supply chain has infiltrated our industry due to the effects of the global pandemic coupled with booming residential new construction. The massive demand for our products and services has been met with shipping delays and production limitations which are causing the cost of materials to rise sharply. Since early December, we have received over 100 individual price increase letters from material manufacturers about the rising cost of their products.
As a business owner, these rapidly rising costs can quickly put you between a rock and a hard place. Absorbing these costs would be unprofitable, but passing these increases along to your customers can lead to uncomfortable conversations and strained relationships. While this rapid inflation has nothing to do with how you run your business, it forces you to choose between an unprofitable season or uncomfortable conversations. As a contractor, you’re at the leading edge of the supply chain, so your only choice is to face this issue head-on.
Like you, we hate bringing price increases to our customers, but it’s necessary in order to protect our employees’ jobs and our company’s future. We’ve survived numerous periods of inflation over the past 82 years, and we’re here to help our customers do the same in these tumultuous times.
We’re not in this business to just move boxes, but to create successful HVAC contractors. That’s why we’re bringing attention to this issue now. We want contractors to make the most out of the upcoming summer season.
Here’s what we recommend:
Review the cost of material increases you have seen over the last 5–6 months. We’ve put together an informational page with details on the cost increases we’ve seen so far this year and have made it available on our website.
Use this information to do an in-depth review of your flat rate pricing, retail price books, and other quotes or proposals to make sure they are still profitable after the recent waves of material cost increases.
Where necessary, update pricing to customers to ensure profitability is adequate to cover payroll, pay suppliers and guarantee a profit for ownership. Also, consider shortening the timespan your quotes are valid to as little as one week to give you room to adjust if more increases come down the line.
Visit mingledorffs.com/prepare-for-profit to view our summary of the rising cost of HVAC materials. Additional guidance is also available for Mingledorff’s dealers who are interested in further understanding how these cost increases may affect their business or need help implementing these increases with their price books. Our Business Development Group has the expertise to guide your business through these challenging times. Simply submit a request at the bottom of the page and a Mingledorff’s representative will reach out to you privately.
The last thing you want to do as a business owner is open up your books after a busy summer and see your profit numbers were below your projections. If you don’t take action now, unprofitable jobs can compound exponentially when volume increases with the summer season fast approaching. Don’t let your profit escape due to the unprecedented rises in material costs. Enter the summer selling season prepared for profit.