Kevin Strandberg, one of the owners of BWS Plumbing, Heating & Air Conditioning joins today’s show to talk about the industry supply chain. He discusses the shocking price increase as well as the difficulty in sourcing some parts and products.
Reuben notes that there is around a 47% increase in prices over one year. Bill and Tessa ask about the common parts with sourcing issues, their order lead time, and the organic cause of the price increase.
Kevin talks about furnace efficiency, maintenance, and control as well as different kinds of air conditioners such as split air and a high-velocity system, Kevin also highlights that hydronic heat is the most efficient way to heat a house and they give homeowners the most comfort. They give homeowners some advice and preparation tips for home equipment at this time of the year.
Tessa takes interest in the qualifications and job security in the industry. Bill asks about BWS’s work arrangements and service applications. Kevin shares the technological advancement of their company.
Contact BWS at 952-681-2615 or schedule service through their website at bwsheatingandair.com.
TRANSCRIPTION
The following is a transcription from an audio recording. Although the transcription is largely accurate, in some cases it may be slightly incomplete or contain minor inaccuracies due to inaudible passages or transcription errors.
Bill Oelrich: BWS Plumbing, Heating & Air has been kind enough to join us to talk a little bit about the heating air plumbing supply chain that’s going on in 2021. Welcome everyone, you’re listening to structure talk a structure tech presentation. My name is Bill Oelrich, alongside Tessa Murry and Reuben Saltzman as always, your three-legged stool, coming to you from the Northland, talking of things, houses, home inspections, and anything else that’s rattling around in our head. On today’s episode, we have a guest from a local heating and air and plumbing company in the Twin Cities, Kevin Strandberg, one of the owners of BWS Plumbing, Heating & Air has been kind enough to join us. Rumor has it, there are some real serious parts shortages that are going on in the marketplace, or there’s rumblings that this could be an issue, this heating season, so we wanted to dig into the mind of a professional who sees us on a daily basis to see what you’re experiencing.
Kevin Strandberg: Absolutely. Yeah, absolutely. So you know, couple of things that we kinda heard going into air conditioning season this past year, in spring time, late winter, we were hearing rumblings that actually A-coils were gonna be the hardest thing to source, and so an A-coil works hand-in-hand with an air conditioner, and so you really can’t do air conditioning replacement without a coil to go along with it. So seeing that upon the horizon and hearing the whispers, it was kind of a little bit of a panic because in the heating and air conditioning space, while service is a great portion of the business, oftentimes, install is the larger ticket items that kind of help us drive sales and all that stuff. So with that being said, we sat down with vendors and we kind of chatted about bringing in consignment program to get out ahead of inventory chatted with vendors on kind of some of the things that they were doing to get out ahead of things our specific vendors we worked with did a really good job of predicting some of the issues. With that being said, you can’t predict all the variables in it and how long it’s gonna take to source stuff and whatnot.
KS: So, we didn’t experience personally at BWS a ton of issues sourcing equipment, it was more so smaller parts, specialty, copper steel was tough, you know, so actually, one of the surprising ones was flex ductwork. So I don’t know why that was so so hard to source, but we were seeing some pretty good lead times on that, that’s kind of just the summer went better than we anticipated, we were able to supply products and replacement equipment pretty much without any hiccups for the most part, any bigger five-time units or like I said, specialty systems that we needed to order had larger lead times. But for the most part, our suppliers did a really good job kind of anticipating that or a carrier dealer and who we buy our carrier product from is the local supplier, Minnesota area, and they brought in almost three times the amount of inventory, they typically bring in to the point where they had to lease another space in order to house it all. So partners like that are very good when issues are on the horizon and make you foresee that.
BO: That’s awesome. Can we step back for just a second? And Reuben, I want you to jump in and kind of explain the history that we have with BWS because they’ve been on our preferred vendor list for a long, long time, so can you kinda walk through the history of yours and Kevin’s relationship?
Reuben Saltzman: Yeah, Kevin and I have been in a network group together for… I don’t know what is it Kevin like about a decade now?
KS: Yeah. It’s gotta be in the better part of seven years. Yep.
RS: Okay, alright.
KS: So I joined our family business going on eight years ago, and I got involved in that specific networking group right away, so it’s been…
RS: I’ve got no know Kevin, I’ve gotten to know his dad, Bruce, and we’ve had lunch together many times, I inspected Bruce’s house when he bought it, and he’s always my go-to guy to bounce stuff off of. I can always ask Kevin or Bruce whatever I need, they’re always very generous with their answers, and I’ve had them out at my house a few times for stuff that I’ve needed too. So they do great work. Good people to work with. For sure.
BO: How long is BWS been in business count?
KS: Yeah, it’s kind of kind of a cool family story, so my grandfather was in the HVAC business, started a heating and air conditioning company in 1969. My dad then you know graduated high school, went to trade school, became a service tech installer, eventually worked his way into the office and took over the business from my grandpa in 1991. My dad sold that business in 1997, got out of that space for a little bit, and then in 2009 started BWS, so we have have been in business… BWS has been in business since 2009. Our family’s been serving the Twin Cities for quite a long time.
BO: Are you most heavy in residential or what does your breakout of business look like?
KS: Yeah, so when the company first started in 2009, we were almost 100% light commercial, doing a lot of rooftop replacements, tenant improvement, strip mall build outs, that type of stuff and slowly over the course of the life of the company, we’ve shifted to about 85% residential and 15% white commercial so it’s a better business for us, we don’t do any new construction, we only do retro, and it’s a service installation emergency after hours and the weekends. We’re here if the house freezes or your furnace goes out and it’s 20 below or reverse side, it’s 110 and humid and air conditioner goes out. So we’ve just found that the residential business is better for us, every customer is insanely important to us, but if you’re not able to capture every residential customer, it doesn’t impact your business as much as losing one large commercial customer, so just from a diversification portion of that, it’s a little bit of business for us too.
BO: And then on the residential side of that, 85%, how much is service versus retrofit installing new equipment?
KS: Yeah. So, we’re about 50-50 installing service, it’s almost split right down the middle.
BO: Okay.
KS: Let’s see. We have six service techs… HVAC service techs, we have five plumbers and we have three installed HVAC installed crews that they work in two-man teams, so there’s a lead installer and a helper on every team.
RS: Wow. You guys are blowing it up with the plumbing, that’s a fairly new add-on to your service. When did you guys get into the plumbing field?
KS: 2016. So yeah, plumbing plumbing has been a great addition to us, one of the things in the heating and air space is you know September is a perfect example. The majority of September, it was 70 degrees and beautiful when it’s September, and we’ve had a really hot summer, air conditioners have already worked very hard, they’ve already been strained, most likely, if they were going to break at that point, they’ve already broke. If a homeowner is on the fence of replacing their air conditioner at that point, chances are they’re gonna wait till spring unless they’re the rare homeowner that likes to plan ahead and budget and that type of stuff but…
KS: September can be a down month and you can have peaks and valleys in the heating, air business, but the plumbing business always stays very, steady. I mean, extreme temperatures and house freezing and stuff like that are gonna have to spike it a little bit, but for the most part, the plumbing business stays pretty well.
BO: Perfect, well, thanks for the background, because I know a lot of HVAC companies are adding plumbing, they’re adding electrical and they’re bringing everything into the house under one roof, so…
Tessa Murry: I just wanna ask a quick question, Kevin, you may not be able to answer this, but… ’cause I know you’re being called out to the house, that have issues with their AC system or a furnace or whatever, but how many houses do you think in Minnesota have forced their AC, and is that number increasing, do you think?
KS: You know, that’s a very interesting question. I don’t know if I could put… I definitely couldn’t put an exact number on it, I feel like air conditioning is becoming significantly more important to homeowners. I don’t know if it has to do… And again, I’m just kind of shooting from the hip. As far as what my gut tells me, I don’t know if it has to do with more of a younger generation is now buying houses and it hasn’t ever really experienced the… No air conditioning and stuff like that. From my perspective, I would not do well in a house that didn’t have air conditioning.
TM: Me neither [laughter]
KS: And it’s kind of funny when you go out and talk to homeowners on the heating side, it’s like, hey, we can pretty much predict energy savings on the heating side, because I can pretty much tell you that at some point in October, you’re turning on your furnace. And at some point in April, May, depending on Minnesota, you’re turning off your furnace and turning on your air conditioner. That’s a consistent thing, you have to heat your house. In a summer time, I mean, my grandparents like to keep their house at 80 degrees. Me, I’m more of a 68 and not humid. You know what I mean? Take all the humidity out, so it varies quite often, some people use their air conditioner to take the edge off on the really hot days and other people have it going pretty consistently. So are seeing a big influx in is mini splits. So kind of supplemental air conditioning to certain aspects of the house. I think there was a big shift this last year in working from home, obviously with the pandemic going on, and I think that really caused people to realize they spend a lot of time in their house and they wanna be comfortable. So we were seeing a lot of specific offices getting built out within houses. Home offices, and wanting air conditioning to that portion or spending a lot of time upstairs and realizing that they don’t get the best cooling upstairs, and they wanna improve that.
RS: What’s a mini split Kevin?
KS: A mini split is just a different kind of air conditioner. It has like a accordion head that sits on the wall and it just supplies a certain area. It can have multiple heads so you could do… Like two rooms or three rooms. You can have a multiple head mini split, and it just runs with a condenser that sits outside. The advantage is you don’t need ductwork. You look at a house as a boiler or maybe hasn’t had ductwork ran in it, ’cause that can be a very invasive thing to do is to add ductwork to a house, you’re cutting open the ceilings and walls, so very common in houses that have boilers.
TM: So you’re seeing a lot more mini-splits in houses that don’t have duct work installed where people want some sort of air conditioning.
KS: Yep, and then another common system that tends to get installed typically in older houses is a high velocity air conditioning system where a unit would sit in an attic, and in some of the older houses that might have hydronic heat, boiler to the closet line-ups, you’re able to run very small ducts that are about two inches down the corner of a closet and you can get it to different levels, and it does provide air conditioning as well.
RS: I know we’ve said this on the podcast years ago when we were talking about our dream house. But when I build my dream house, it’s gonna have a boiler for heat, it’s gonna be in floor heat, and I’m gonna have mini splits to cool the house. That’s the way to go for sure.
KS: You say boiler heat, hydronic heat is the best, most consistent heat, and it’s also the most efficient way to heat a house, keeps you the most comfortable.
RS: Most comfortable.
TM: There’s nothing better than in-floor heat too, yeah.
RS: Yeah, warm feet.
KS: Especially in Minnesota, the January morning and you’re getting up… In our industry, I’m usually in the office by 7:00. And it’s like cold and dark, and you get up and your bathroom floor is warm there’s nothing better.
TM: Yeah. [chuckle] So Kevin, what’s the average cost for someone who wants to install a heat pump for AC? And I know that’s gonna vary based on how many rooms you’re trying to cool and how my heads the system has, but just on average.
RS: Tessa, first you better define a heat pump.
KS: Do you mean mini-split or heat pump?
TM: Oh sorry.
KS: No it’s alright.
TM: Well, can you define the difference actually. [chuckle]
KS: So we don’t do a ton of heat pumps it’s typically something that is done more in a more rural area, we don’t see a ton of them closer to the city. It basically has a feature in air conditioner, in less words, reverse the fan where an air conditioner, exhausts hot air out of it, this would capture the hot air and cool it in. So that’s what a heat pump does. Mini splits kinda what we talked about earlier that would just be…
TM: Yeah, thanks for catching me on that. I meant a mini split. Yeah.
KS: Yeah, so there’s a bunch of variables that go into efficiency ’cause some heat and cool, some cool only. It just really depends how many rooms you’re servicing, I could see one anywhere from 7000 up to 20,000.
TM: Okay, 7000 to 20,000. And if you’re talking about adding ductwork for four star AC system in a house that had a boiler that didn’t have duct-work, you’re talking how much?
KS: I mean, our portion of that job is probably gonna be closer to that 20 to 25,000 just because it’s a very labor-intensive job. You’re having us come out to cut openings, run duct work, and chances are you’re doing some pretty-invasive stuff to a home. Again, there’s a ton of variables that go into it, so this is very rough pricing. I mean pricing is a whole other subject this year that’s been like nothing I’ve ever seen before, and it’s still is. It’s absolutely nuts right now. Typically, we get kind of the annual price increase from our suppliers, that’s anywhere from 3% to 6% right around January, maybe February, and that’s the price increase… That’s it. We are going on our fourth… Actually, November 1st is our fourth price increase with one of our furnace manufacturers, and each one of them has been 8%, so if you look at that add up over the course of the year, it’s unbelievable. And what’s really shocking is the homeowner that maybe had us out last fall, and we gave an estimate on a furnace maybe decided to wait a year and now is having his back out and it’s like you wanna do what? That’s just what it is. I mean, it’s like… It’s insane. These price increases are nuts. Sheet metals, duct work is up I think almost 60%. It’s absolutely nuts.
RS: So if I do the math, that means 47% increase in prices over one year.
KS: Yeah, which is absurd.
TM: Oh my god, it’s crazy.
KS: Our average price of an install for a furnace and air, I would say 12 months ago, again, without pulling the numbers right now, I would probably say you were looking at right around 8000 bucks. And I bet you right now, our average ticket for a furnace and air conditioner is probably closer to 12.
TM: Wow.
BO: Kevin, just to clarify, you guys usually aren’t putting in a ton of duct work, the duct work’s already there, you’re plunking a new unit in and…
KS: Correct.
BO: Is that price that you just quoted, does that have an A-coil in it and a condenser?
KS: Yup. So that debt, like you said, we typically do retro, what we call as retrofit. So, Bill your house needs a new furnace, already has a furnace and air conditioner, we would come out, measure it up, make sure it’s sized appropriately based on efficiency levels you’re going with, square footage in the house, windows, all that stuff, we’d come out and make sure it’s sized appropriately. We would get the furnace, the air conditioner, the A-coil that sits on top of the furnace and works with the air conditioner. We may look at line sets depending on sizing and age of the house and all that stuff, but that’s gonna be pretty much… We’ll probably do a new return drop just ’cause that’s… Return air, sizing has changed a little bit. That’s pretty much what consists of… In our installations. We always give an option to upgrade the thermostat too.
BO: Well, let’s turn our attention to the service side because when I was at a meeting recently, there was a contractor, a heating contractor there that noted, “Get your furnace running as soon as possible ’cause if something’s not working right, parts for existing units are in short supply.” Is that something that you’re seeing, or hearing, or experiencing yourself at BWS.
KS: Yes. Parts are almost harder to get. I should say, are significantly harder to get than replacement equipment right now. And especially, if it’s a unique part for a furnace, there’s often parts that can be… You can buy a generic brand and it’ll work in every furnace that we sell our service, but if it’s a unique part that has to happen, perhaps that’d be from a certain supplier or anything like that, I checked with a supplier that we used yesterday for a lot of our parts, and they’re seeing sometimes up to a 12 week lead time on parts. And I mean, if you’re talking 12 weeks from right now…
TM: Oh, no.
KS: We’re going through some scary temperatures before we get to the end of the 12 weeks. So…
RS: Oh my goodness! And so, that almost makes it where it’s like, alright, if it’s gonna be 12 weeks, what do you do? It’s almost… Why don’t you just replace your equipment than what, use portable electric heaters?
KS: Exactly, and that’s what… I mean, cost-wise, it’s gonna be astronomical to run electric portable heaters to keep a house comfortable. It’s one thing if you just keep one or two in a mechanical and you keep it from freezing for over a night or two if your furnace is out, but if you’re starting to talk weeks and months on end, that’s a scary time. And, as a contractor, I feel like we do everything we can to build trust with the home owner. I feel like, at times, contractors get bad reputations ’cause there are a few bad eggs in the industry that take advantage of the customers and stuff like that, so I think it’s so important to get in and build trust with the home owner. And that’s one thing that really puts us in a tough spot, is when we tell a customer that, “Hey, I know your furnace might only be seven years old, but I’m telling you I can’t… Like I’m calling every supply house I can to get this part and I just can’t get it.” That’s a very tough conversation to have with a home owner.
RS: Yikes!
KS: Yeah, yes. But, I will say…
TM: Have you ever seen this situation happen before Kevin? I mean, has it ever been this bad?
KS: No, it’s never been this bad. There’s been certain products that have either been like cancelled or discontinued, and it can be a challenge to find like a retro for that specific product. An example would be, there’s a system that goes in like a condo, a multi-family building called the Skymart, and they stopped making them. And it had a specific footprint that actually was cut out of the exterior of the building. To find a direct replacement for that since they don’t make it anymore, no one has come up with one. And so, now you’re talking about retrofitting the exterior of the building and all that stuff. That’s a whole different story. I’ve never seen a supply issue, where basic parts to keep a furnace running are basically really tough to get. And, I do wanna put in a little bit of a asterisk on that, that, I’m talking about specific unique parts. I don’t wanna scare homeowners. We’re talking of worst case scenarios here, don’t think that if your furnace breaks you’re automatically out 12 weeks before you can get it fixed. But that is some of the worst case scenarios we are seeing. We try and check with our suppliers, we do keep a supply in our warehouse, that’s the most common parts and stuff like that, so we can have those… Our vans are all stocked with the basic parts, so we can perform a lot of repairs right there in the middle of the house, but when you do run into that unique situation and it is a tough part to get, we’re seeing that.
BO: So, is a basic part a circuit board, a relay, some sort of roller motor, flame sensor…
KS: Flame sensor, yeah. Yeah, roller motor. Some of the circuit boards are getting harder and harder to get to. Some of them have… And, technology is a gift and a curse, right? Like, technology is an amazing thing that’s made things awesome and some pretty incredible features that we can control. I can control my furnace in my house right now and the humidity levels in my house from my phone sitting in the office. Like, that’s an incredible thing. In order to make all that work, obviously, there’s more computers and chips and stuff like that. One of the biggest things is that, that darn chip, and I don’t know many details about it, but that’s one thing that I’m hearing is a huge issue, is chips. Not only in our business industry, but a lot of other spaces too.
BO: Well, at least the furnace doesn’t have this thing sitting on top of it that creates a bunch of condensation that drips down, and if you’re not paying attention, you could spill a bunch of water on top of your circuit boards.
KS: Yeah, exactly. Or rust out a heat exchanger or anything like that. Like, it’s a… At least there is enough for my dad to worry about, right? [chuckle]
BO: So, don’t just look at that thing once when you install it and then come back every five years and replace the filter. You should open it up occasionally, and just make sure there’s nothing out of the ordinary going on that could prevent you from needing a very specific part.
KS: Correct. Yeah, preventive maintenance is very important. And I know, it’s very easy to say “Oh, that’s an expense that we can eliminate.” We do tune-ups anywhere, depending on the time of the year. Anywhere from 49 bucks to 99 bucks, where we come out and do a 21-point inspection and go through the whole thing. It’s like an oil change in a car where we’re not changing oils, but we’re looking at everything, giving it a good look to see if there’s anything small that could prevent something big from happening. And also, as we all know, if anything’s gonna break, it’s gonna be at 9 o’clock at night when it’s 20 below on a Friday. Like it seems like that always happens. And to prevent some of that stuff in peace of mind it’s great to just get your furnace checked annually, made sure, a lot of people, it’s crazy how many people you talk to and they’re like, “Wait, I have to change my furnace filter every month?” And there are certain filters that you don’t, you only change quarterly and stuff like that, but you’d be shocked at how many people don’t realize that they’re supposed to go down and change it. But it’s kind of a nice thing to do.
KS: Just last weekend, I spent time with my… The quality time with my furnace, but changing the furnace filter. And I, because I’m in this space, I have a whole home HEPA air cleaning system. So I changed both filters in there, and UV lights, just putting the new lights in and all that stuff. Just getting ready. I mean, it’s what you gotta do once a year to make sure your house stays clean and nice.
BO: What percentage of the units in our marketplace are high efficiency? And the reason I ask this is if you don’t know, you should know high efficiency furnaces create condensation. It’s just what they do to get the extra heat that would be wasted. That condensation is always very corrosive. And if it leaks back into your unit, it can cause problems.
KS: Absolutely. And I don’t know the exact percentage. It’s definitely trending in, people replacing standard efficiency furnaces with high efficiency furnaces, as you just touched on it vented differently. So some of that depends on ability within the basement mechanical room, wherever your furnaces to be able to run PVC pipe and get it through chases or ceilings and that type of stuff. The other thing that’s important going into winter and it happens every year, but you always have that stretch of just extreme temperatures in Minnesota. It’s every year that we have either a weekend where it’s going to be, 20 below or windshield of 30 or 40 below. And sometimes that condensation on your vent pipe on a high efficiency furnace can freeze because the temperature is so extreme, that’s something you always want to keep an eye on, on the exterior house. ‘Cause if you get a blockage at the end, it’s not able to exhaust those gases, that can be very harmful and even fatal. And the other thing too is if we get large amounts of snow, it’s always important just to pave. I know you got it. It’s not fun to Trek around your yard in the snow, but just make sure that snow is cleared away from there and hasn’t impacted that ’cause that can be a very serious issue.
TM: And for homeowners that are listening to this and don’t know what you’re talking about or what that looks like, can you describe it?
KS: Yeah. So it’s usually two PVC pipes around PVC pipes that come out the side of your house. One will most likely have a little gooseneck on it. And that’s plain and simple way of determining if you have a high efficiency furnace or a standard efficiency furnace, if you don’t have those PVC pipes coming out, or you don’t have at least one PVC pipe coming out, you’d most likely have a standard efficiency furnace. Now, with that being said, I do have seen plenty of houses that the PVCs ran through the roof. So don’t think that if you just walked through around your yard, you automatically don’t have it, but that’s how high efficiency furnace is vented versus the standard efficiency furnace is vented through basically your chimney different than the vent that runs up through your roof, same with water heaters.
BO: Those are a little less complicated and probably have fewer parts on them. And you don’t have to worry about water leaking out of the condensation that you know, out of the vent pipe, back into the unit.
KS: Yep, absolutely.
BO: Okay. So who’s to blame? We’ve got these parts that are taking 12 weeks. I mean, certainly we have to be able to blame somebody. So what have you been told?
KS: I think it’s a combination of things. That’s a very loaded question. I think it’s a combination of things. I think during the pandemic, some plants had to shut down. I know for a fact that Goodman Daikin who owns Goodman and Amana, there have a massive plant in Houston, Texas. I know a couple of years ago is the second largest structure in the US; it’s four million square feet. They manufacture all three lines right there. What’s great about that is it’s in the US. I love that it’s being manufactured in the US but they had an instance where COVID spread within the plant and they had to shut down manufacturing for a specific time. Those things are running as hard as they can as it is. So when you got to shut down, you’re trying to make up for it at some point.
KS: And I think that, that is part of what we’re feeling. I also think just in many different industries, we’re feeling a very tough labor market. And I think it’s tough to find really good employees. And I think that’s a part of it too. And I think the third piece of it is materials, all that stuff. Anything that’s not manufactured in the US that’s having to be brought in from other countries is a challenge to get here right now, too. And I think that’s a huge subject right now, but I think it’s kind of a, the perfect storm of all three of those things. Playing catch up, finding people to perform specific jobs in manufacturing and stuff like that. And then also getting the materials and all three of those together is a bad storm.
TM: So I was actually going to ask you a question about, we know being kind of connected to these different trades, that it’s really hard to find quality labor, in any of these trades and HVAC, especially too. And so what are you guys doing to try and find people? And what do you think the future of the industry is going to look like?
KS: We’re feeling it even more but we’ve dealt with a labor issue in our industry for a while. I think the trades in some trades don’t get advertised to high school and junior high kids as much as they should. I grew up in the west Metro of Minneapolis in my high school. It was never talked about going with trades. It was always the guidance counselor talk about where you want to go to college and stuff like that. I personally think that if you don’t love school, if you don’t have a passion for going to learn, and you don’t want to go into an industry that you need to have a college degree, trade school is an unbelievable opportunity for significantly less of an investment upfront. And because of the labor shortage you’re able to get out of school making a very nice living at a young age with significantly less debt.
TM: Great job security.
KS: Yeah. It’s awesome job security. And one thing that we’re trying to do is just that get involved at the school level. One thing we try and do is like, I have, one of our service techs right now that really wants to learn commercial service in school. So, we’re flexible around his schedule. He goes to class three days a week and he’s off at one on those three days so that he can go to school. We try and get involved. My dad, Bruce sits on the advisory board at Hennepin Tech on the HVAC side. So, get involved in the school level and try and get guys who are in school or ladies who are in school and give them an opportunity to learn the trades. And I think also what’s great about that is not only can you teach them and develop them, but also it gives us an opportunity to teach them our way of doing things, the BWS way of doing things, where aside from the technical thing, some of the customer service skills, some of the communications, those types of things as well. So that’s kind of our main focus is just getting more involved in the school level.
TM: So do you guys have some sort of like certifications or like an apprenticeship that people have to go through at your company before they can go out in the field and start working?
KS: Yeah, so it’s kind of funny, we were actually just talking about that in our leadership meeting last week, was kind of putting together an actual apprentice program where maybe we could get some kids in the summer time and teach them the basics of running maintenance calls or whatever it might be. So we don’t have that plan laid out right now, but typically how we do it is if they’re going to school and they don’t quite have their… Have graduated from trade school, we’ll have them be one of the helpers on the install team, ’cause what that is, is if you’re bringing a furnace or an air conditioner in a house or a water heater in and out of the house, it’s a heavy thing, it can be hard on our backs, so often times they’re there to help run out to the truck and grab tools or stuff like that.
KS: And just by being on the job site and learning some of that stuff, seeing a lead installer do it and then eventually, you know, you start teaching them specific stuff, going through kind of a checklist we have, and then letting them perform it with the lead installer, you know observing and making sure they’re doing it the right way and all that. So that would be kind of our apprentice program that we have right now, but we’re definitely looking at expanding that specifically on the plumbing side, ’cause both areas are really tough to find labor in, but plumbers, service plumbers right out of school, it’d be great to have kind of an apprenticeship program that we can run them through for the basics of service.
BO: Kevin, are you working around, messing around, with flexible hours? Running crews that start at 11:00 and run till 8:00 or anything to just try to help a young person maybe land two incomes under one roof?
KS: Yeah. So, that’s one thing we pride ourselves on is being a family business and family is important so that balance… I mean we get guys that might start a half an hour, an hour late on specific days because they gotta take their kid to school, that’s one thing being a smaller business and not a corporation, is that we can work around stuff like that. Like I said, one of our techs is in school right now. No problem, as long as that gets communicated to us, it’s a value to have somebody awesome to our team, and that’s kind of what we look for is good people. We can’t teach people how to be good people, you can teach them the trade, but you can’t teach them ethics, you can’t teach them customer service, you can’t teach them common sense on what’s right to do with the customer. So that’s kind of our goal is to hire good people, and from there we can train them on the technical side and work around schedules and stuff like that.
TM: I love that.
BO: Yeah, and I think that young people get thrown under the bus a little too much about wanting to be glued to their electronics and everything else, it’s just like, come on, it’s… Some of that just feels like grumbling that’s unnecessary, and you’re not gonna attract those bees to your honey, if that’s what you’re saying out loud.
KS: Well I think our industry too is going more towards that technology side. I mean all of our guys do have iPhones and iPads and they’re checking in and out of jobs on their iPad with our CRM and our customer management system, and they’re able to get some of that technical side in there. I mean, Wi-Fi thermostats nowadays are incredible that you can control them all from your phone, and to be able to install those and then show the homeowner just how they can do it, what all the different features they can use to control. And the notifications for if they’re out of town and their temperature drops below a certain level or Wi-Fi leak detectors.
KS: I personally have experienced my main drain backing, and it is not a fun thing to come downstairs the next day and see three inches of junk on your floor. It’s not a fun feeling. And so one of the first things I did is put… Honeywell makes these great Wi-Fi leak detectors that’s almost like a shoestring connected to a little tiny box, and it’s connected to my Honeywell Home Comfort app, and any time that shoestring basically catches any sort of moisture, I get a notification. I mean, they’re great to put under dishwashers or a fridge with an ice machine or a water line that goes to it, under a water heater, all those little stuff. But it’s such cool technology. I can prevent things and make the homeowner more comfortable, and peace of mind when they’re traveling and stuff like that. And I think while younger people do tend to go towards the technology aspect, this industry is also trending in that direction and has some opportunities to do some of that fun stuff with the Connected Home and that type of deal.
BO: Kevin, is your CRM and your service applications, are they all under one roof or do you care to share who you use for managing all your work?
KS: Absolutely, absolutely. So, we use a company called ServiceTitan, they’re growing like crazy. I believe last time I checked, they’re like top five on Forbes Cloud 100. It was built by two guys whose parents were in the trades and saw first hand how trade businesses operate. Our whole CRM, our customer management system, our GPS, our clock in, clock out, we would get a payroll report out of that. Everything is through ServiceTitan. The only other software we really use is QuickBooks, and then that’s really more of accounting specific, but ServiceTitan is as good as it gets as far as software in the home service space. We have it automated that as soon as the tech checks in to the job to drive there, the homeowner gets a text message with a picture of the technician and a biography, just a few bullet points on the technicians, so that it’s not a strange face that comes to the door. Now, you’ve seen the picture of who’s showing up to your door and if you look through a window or the hole or whatever, it’s not them, that’s a red flag.
KS: But, just trying to build trust that I talked about earlier, you’re actually able to click on a link in there, which pulls up to a map that’s connected to the GPS in the truck, and you can see the estimated arrival time and where they’re actually driving in the world. So to me, that’s really cool stuff, because when I first came into the industry, eight years ago, we were using a server-based system where I had to physically be in the office to look up a customer’s notes and all that stuff. We’re able to email a customer any notes, email the customer any pictures, email their invoice on site, have them sign on the iPad, so that we can get acknowledgement before we perform any work. Show them estimates, show them different options, it’s just… It’s a very robust CRM software and they’re always growing and expanding, and not to mention that the reporting side is phenomenal too.
BO: Okay, in the world of Internet of Things, is there ever a point where a company like this comes in and then connects all of the service work that gets done on your new furnace from day one through the life of it, so the warranty people can be happy that the maintenance was performed, they know when the filters were changed, and then if it breaks, it’s truly a problem?
KS: You know, that’s interesting. There are certain things going on in our industry where a couple of the major manufacturers are sending out error codes to contractors who install equipment ahead of time. I always think that’s gonna be… We haven’t gotten to that point of monitoring that, ’cause I always think that’s gonna be a very interesting phone call. “Hey, Mrs. Johnson, I’m getting an error code that your furnace is gonna a break in an hour, can I come out and help you out?” If that’s me, I’m like, “Interesting.”
RS: Little Big Brother.
KS: Exactly, exactly. So, I’m sure with technology ever-changing that there’s gonna be some more interesting things that happen. One thing, every Wednesday I’m on a advisory board group with eight other contractors across the country, who are roughly our same size, just to chat, bounce ideas off each other, and one of the things one of the guys has is he has his service manager sitting in the office in front of all these screens, and his guys have kind of like the Google Glasses or whatever, and his service manager is able to help walk them through troubleshooting any issues, or stuff like that, and just double-check that they’re going through the right sequence of operation, and all that stuff, which, again, is a next level of technology and stuff, but going back to the training piece, it’s also a great way that you could take somebody who might not be as seasoned out of school and train. To answer your question, I don’t know when it would get to that point, or how it would get to that point specifically, but nothing would shock me nowadays.
BO: Reuben, have you ever blogged about the Internet of Things?
RS: No. No, I have not done a smart blog. I don’t know enough about it. I feel like any tech blogger with just the most basic amount of information would know way more than I do, so no.
BO: I imagine though, you would have a pretty well-established framework of what should talk to who, why, and when.
RS: I’ve got a pretty smart house, and it’s that I have cobbled together. I can do most stuff with my voice through my Alexa, but compared to somebody who does it for a living, they’d probably scoff at what I’ve got, so it’s all relative, I think.
KS: On the same same way, I think I have like… I got Honeywell for all my thermostats, and can control some other devices, like I talked about the leak detectors, and I think I had ring for the cameras, and the alarm, and all that stuff, and kinda just boils up to a few different things. And a lot of it is connected, and talks together, but there are some pretty cool stuff out there.
BO: Okay. Kevin, we should probably begin to wind this down, but I do wanna ask, do you have any advice for homeowners out there right now at this time of the year, do this, look for that? What can you share just to maybe help take the edge off?
KS: Yeah. First and foremost, remember to change your filter. That can cause a whole lot of issues, just with if it gets blockage in there and the air is not able to flow, it’s gonna make the blower work harder, and all that stuff, not to mention your house isn’t gonna be as comfortable, and you’re not gonna have as much air flow, it’s gonna take a lot longer to correct, and all that stuff. So change your filter every month. Make sure you do it. Set a reminder, set a calendar reminder, whatever you gotta do.
KS: Secondly, definitely just get an annual tune-up. Like I said, if you can get out ahead of things and be preventative on it, take a look, have a licensed company come out, take a look at your furnace, check on anything. Hopefully, we still have a few more weeks before temperatures really start getting freezing. With a gas fireplace in the house, or like Reuben talked about earlier, space heaters, you’re gonna be just fine right now, it’s still getting up to 55, 60 degrees during the day. The sooner you can get ahead on any issues and stuff like that, the better, finding out if you have issues. And then, like I said, just getting ahead of if you do have issues, making sure you jump on it right away. I don’t wanna sound like the typical hard salesperson, but I would not spend too much time thinking about a decision, I would just either repair it, replace it, but do whatever you gotta do to get it operational sooner than later.
BO: There you have it, don’t wait. [laughter] It will be cold soon enough, you don’t wanna be waiting for that very specific part to show up at your front door, or, actually, at Kevin’s front door, so. [laughter]
KS: Yeah, exactly, exactly, yeah, ’cause oftentimes the homeowner will try and find a part, “Hey, we’re not able to get it for it for 12 weeks or whatever,” and then they go on the hunt for it, it’s like, “I’m telling you, we exhaust all of our options, even to the point of checking with a Home Depot or Menards.” That’s the very basic thing that we’re gonna try and do and see if we can get, and then we have a whole another network of suppliers that we work with. And if they’re not able to source something, pretty much no one can. [chuckle]
TM: Wow.
BO: Well, there you have it folks, you can’t know enough about the equipment that’s in your house, take care of it like they are a member of the family. When they get sick, it’s never at a good time.
KS: Yeah. The only other thing I’d add to it is just make sure you change the batteries in your carbon monoxide detector too. Every year you hear something in the news of the tragic situation of something happened, to be happening to somebody, or a family, or something like that, and it’s a very serious deal, and it can be prevented by just having a carbon monoxide detector in your house.
BO: Thank you.
RS: Yeah, good advice.
BO: Good advice, good advice. Well, we should put a bowl on this one. Reuben, do you have anything else percolating that you wanna ask before I let Kevin go?
RS: No, but one other the tip on that is change the batteries in your thermostat too. A lot of those thermostats need batteries. We talked about that on our Fall Maintenance podcast. And if you’re out of town and your thermostat goes out, you might come home to a frozen house, so that’s another one to address too.
KS: Yep, absolutely.
BO: Alright.
RS: Cool.
BO: There’s too many things to pay attention to. Come on. [chuckle]
RS: Yeah.
BO: I need one app that tells me all the things I need to do.
KS: Just sends you notifications, “Hey, change your filter. Hey, do this.”
TM: That will happen at some point.
BO: They will silence those.
KS: Yeah, snooze.
RS: Snooze.
BO: Alright, alright. Kevin, thank you very much. Again, BWS Plumbing, Heating & Air. Do you wanna throw out your phone number if anybody runs into a situation where they need help?
KS: Absolutely. Our phone number is 952-681-2615, and you can also schedule a service on our website, which is just bwsheatingandair.com. Talking about technology earlier, I was sitting at my computer one day running tight on lunch, had ordered from Jimmy John’s, realized that I just ordered a sandwich, it showed up 15 minutes later, and I didn’t talk to a single person, so I started looking into what we could do to have somebody schedule a service with us without having to talk to anybody. So we do have it, have that button on our website. If you click on Schedule Me, it walks you through a few different questions, you’re able to upload a video, or a picture of what’s going on, and you can schedule a service call, or a maintenance right there.
RS: Pretty cool.
TM: Very cool.
RS: Yeah.
BO: 2:00 AM will never be a useless time again when you start thinking about all of the stuff you wanna get scheduled.
RS: Yeah.
KS: Exactly.
BO: Awesome, you’ve always been a trusted partner, and we really appreciate you jumping on and giving us an hour of your time.
KS: We appreciate the partnership. Like Reuben said, I trust you guys with my house, my dad trusted you with his house, we’ve had awesome luck, so thank you guys.
BO: There it is. Thank you everyone. You’ve been listening to Structure Talk, a Structure Tech presentation. My name is Bill Oelrich, alongside Tessa Murry, and Reuben Saltzman. Thanks for listening, we’ll catch you next time.