Are things getting worse? OT

clammy

Just wondering if things are getting better or worse as far as economy goes and how it,s effecting you and your company,personally it,s back to a slump but the thing i find really funny is a few larger supply house who rarely give me the time of day and who which i am not a dealer have called me a one man shop ,at first i thought it was very strange but as a buddy stated maybe there calling us cause where the only ones who pay there bills straight up and never have accounts past due .Very strange to me due to the fact that i may only purchase equipment from they 4 to 5 times a year and that's that,are things that bad that regional sales guys i have never meet are calling me to set down and discuss why i should buy from them while the big boys who buy 10 times the stuff i do are sitting with there fleets idle .These are strange days indeed peace and good luck clammy

Charlie from wmass

Paying on time or early gets their attention

I learned that a long time ago. Some of the big guys who buy much more than us pay more per unit because the wholesaler will have to wait 3 months to be paid, if they are lucky. Times are slow but quality still sells, maybe even more when things are tight.

TonyS

I was in the supply house the other day

caught up with a few mechanics I haven't seen in while. We talked and complained for over 2 hours until I realized none of us had any work. lol. Its really dead here in Berks county PA. and this double snowstorm didn't help the parking in the city either. Good thing my wife has a job! 

CMadatMe

Quite Quite Quite

Its been very quite since right after the New Year. Traditionally this is a slow time of the year but with the economy in ruins, building not what it once was all of us are seeing it much deeper than in the past.



What I have seen is that the guys that are techie, ie, radiant, mod/cons etc seem to be the ones with the work. With the consumer really doing their homework it seems the guys with the knowledge and the know how are eating everyones fruit. I have one guys thats putting in atleast 3 viessmann a month since Sept. He has been smacking everyone do to his knowledge and expertise in low temp hydronics. The consumer is willing to pay as long as they get what they are paying for. For the first year I sold more mod/cons then I sold atmospherics or draft induced gas boilers combined.

TonyS

No Prestiges so far

The last couple of jobs I put in were for hard working lower income people with larger city homes and a definite budget. I used Utica Keystone boilers( good cast iron push nipple boiler) both jobs were really bid close. I have found many of the guys that were doing plumbing for the new home industry are out of work and trying to make a go of anything they can get, including installing boilers. The skills that I have been using aren't the ones for radiant or solar or mixing control strategies but more on my ability to reuse a expansion tank or knowing when and where I really need an air separator. I can still install a good working system that will last many years for a reasonable price. Have a nice dinner Chris, I'm headed out with my wife too for Valentines dinner. 

DanHolohan

Better or worse?

My thoughts:



A huge amount of building owners visit this site because of our Google rankings (try it yourself - "heating," "steam heating," " hydronic heating).



If you come on here with a negative attitude they'll take note of you and probably never hire you because you're actually stepping up to tell them that no one else is hiring you, which I find astonishing. Why are you showing the world your sad cards? The Wall is not just a contractor's clubhouse. Potential customers are reading you every day and on into every night. This stuff never goes away.



However, if you take a Find a Pro ad for a dollar a day (what do cigarettes cost these days?) and talk about what you can do for people, every one of  your posts will link to a postitive message. People will find you and they'll hire you because, regardless of the economy, things will continue to break and someone has to fix that stuff.



Or you can decide that a dollar a day is too much. And then you can go out into the world and try to get top dollar for your own work, even though you won't spend a buck on telling your own story. Ironic, isn't it?



Food for thought, boys: I built you a place here where you can shine. What you do with it is your choice. And what happens is your decision.



Stop whining and get to work telling your story. What do you have to offer? What makes you worth it?  Why the heck should I hire you?



Woe is me.



You know what I think? I think you should either man up or shut up. ON topic.

TonyS

OK Dan

I am going to give it a shot. I have to take some pics tomorrow of one of my jobs and do your dollar a day thing since there are no contractors for over 50 miles on your site. Next thing I would like to bring up is the cost of cigarettes! I dont know what they cost Dan, but you must since you brought it up....Quit now buddy before they kill you, besides they stink and make your teeth yellow. Third I would like to bring this up to Chris, I know what you meant on your post QUIET ,QUIET ,QUIET  not quite quite quite, since Dan reminded us about all the people that view this site you better change it or they will think you cant spell.

The Steam Whisperer (Formerly Boilerpro)

I see great opportunities today.......

This past year was my best year ever.  All high end boiler replacements...custom Slantfin Intrepid gas power burner and modulating input steam boilers and Prestige hot water boilers, consulting work for steam system upgrades and completing many of those upgrades, and advanced control systems, BTU meters for zoned hot water, forced air to hot water conversions, etc.   I already have a number of proposals under way for more Prestiges, steam boiler repipes and system upgrades, and steam system consulting.  I am telling folks we need to get started by mid march if they want it done by fall.    Right now, its the smart money that is being spent.  Those that did not participate in the hollow economy of the past couple decades still have money and are investing it in good places....such as cutting their costs. 

I do not consider myself a heating contractor, but an energy investment specialist in the hot water and steam heating field.  I offer people excellent investment opportunities with returns that are often 100% or greater in a single heating season.  Those with smarts take notice. 

However, I don't just offer the high end only, because it is not always appropriate.  Installing a Prestige boiler in a home that only will cost $600.00 a year to heat just doesn't make sense economically and I will tell potential clients this. I'll install an atmospheric hot water boiler when that is all that can be afforded in order to cut a client's heating costs 30% over a worn out, over sized  and inherently inefficient older model. The new boiler will pay for itself in less than five years.  However, in today's energy market and that of the likely future, these are not long term solutions, but short term measures.  I tell them to insulate before installing a new boiler because it is a better investment.  However, I do not give away knowledge for free.   This knowledge is very valuable and it needs to be treated as such.

If you have more skills and knowledge than installing and maintaining equipment, you need to sell them.  The need and market for these abilities is huge and growing.



Boilerpro

DanHolohan

December 31, 1985

Last time I smoked, Tony.



I look forward to seeing your ad. Thanks for getting it. 

TonyS

Cold turkey ?

25 years ,thats a long time ago Dan,  I am on year 7 after being hypnotized! Best thing I ever did!

Gordy

Dan Hits the Nail on the head.

 In times like these more so then ever. You have to believe in yourself, and your abilities. Because it is YOURSELF that YOU have to rely on. No matter what trade you are in.  I won't deny times are tough, bidding is tight, but there are people with the money out there that choose not to participate in the recession.



 Bottom line if you don't believe in yourself who will??





Gordy

Larry Weingarten

Even contractors...

... need tough love sometimes.  Thanks Dan!



Yours,  Larry

Tim_32

I don't here anybody whining,

just making an observation about current business climate which effects everyone

EricAune

Actually, its not that bad

The jobs are out there.  Homework, study and more homework is what has kept me on top of local guys around me.  Homeowners are eager to get projects out of the way, as it is they are armed with more knowledge than ever before, they are seeking not just the best price but the biggest value.



Some of my recent jobs have been the most costly projects I have ever installed.  Constant circulation, indoor/outdoor monitoring, remote control/access, hybrid gas/electric/solar.  If you can prove to them they have found the best then offering them what they NEED might be exactly what they are looking for.

clammy

leave it to Dan

I have to say Dan you always seem able to  put a positive spin on any thing ,that's a great gift,thanks for showing another side of a coin and what any of us can do to change the present day  economic situation  besides not complaining about it ,for myself i have thought about becoming listed only problem is how thin can a one man shop spread themselves and still be able to do all that every one excepts and still stay true to there craft and there true nature.Thanks again for that positive spin thing we all an use that more then once in a while peace and good luck clammy

shoudabeenaplumba

From what I see

There's work, but no one is making any money.  Jobs that were 1-2 bids are now 3-4 bids, and most of the work we see is state/fed/local and that's almost always low bd.   End of the year work (spend it or give it back) was the real pick up in Dec, now that's gone and the new year takes 'till March to roll again.  Its a big problem because we're buzy as heck but really just spinning wheels.

DanHolohan

Trying to understand.

You say that no one is making money (except for some of the guys who posted above). Unless it's for charity, why would you work for free? To stay busy?



I suggest that times such as these are times to start thinking clearly.

MacPHJr

Doing Everything Right, Still No Work

Thats the problem. Guys working for nothing, just to work. We are very slow and losing work constantly. We are never the lowest bid. We provide plenty of good info and free education on all the options available. Tell the customer that we are trained on all the equipment we install. We spell out the rebate and tax credit info for them. Provide all necessary paper work. Do a detailed heat loss. Go over every single possible option. Give them a price, which we know is more than fair. Have had customers ask us once that get other prices can they call us back and negotiate. They know we are good at what we do, they want us to do the work, but they want the lowest bidder. We actually had a potential customer call us to double check the guy we lost the job to. Nice. So we are doing everything right, and even advertised on the wall (looks like we have to re-up on that), but still losing work and its not getting any better. We are in an ultra competitive area and every laid off union guy is looking for work and every guy that started his own company during the building boom is looking for work, and that just the way its going to be for a long time. Did I mention we are doing better than most.

DanHolohan

I noticed that your ad (which expired today, by the way)

focuses on technical things, as if you were advertising to another professional. I'd love to see you rework it so that it focuses entirely on benefits rather than on specific products and model numbers. You've got a very good sense of what's going on in the market and why people are hiring who they're hiring. Make that work in your favor by breaking it down to it's essentials. It's really not about the lowest price. If Charles Manson showed up with the lowest prices, would they hire him?



Think it through some more. When others are zigging, you need to zag. What makes you the best value? Think about that, and then tell me, the customer, why that is, and in a way that I can understand - a way that's all about benefits to me.



Think.

Steve Ebels_3

Around here.............

Things are not good.

We  wear a lot of different hats out here in the country because there is no single area that will support our business. We get into light commercial/institutional stuff, residential and the dairy and ag industry makes up about 40% of our sales each year. Usually when one sector is pulled back another one is still up and running. I have to say that for the first time in the 15 years I have been doing HVAC there is no sector of our local economy that is doing well if it is doing anything at all.  We all know that new residential construction is virtually non existent everywhere. I can't name a single commercial, institutional or industrial customer in our main 3 county area that is hiring. And dairy farm guys have been getting paid about $3-4 per cwt. less than their cost of production for the last year. When you ship about 500 to 1,000 units per day at a loss of $3-4 per unit.......let's just say that if this keeps up we are going to lose about 1/2 of our farms here in the next 4-6 months. They have burned through any cash reserves, borrowed everything they could against everything they have and are at the end of the rope. I was talking with the regional manager for Wells Fargo Financial, who has a boatload of these farms financed and he said a lot of them are "walking dead" right now. Even if milk commodity prices rebound to 2006 levels, the farmers will not break even due to interest on current loans. I did not like to hear that as a lot of these people go back generations doing business with my family. Makes me sad.



For the first time ever we have about a months worth of work ahead of us and no bids of any kind out other than one for a steam humidifier. We stay in touch with our customers on our list via phone, personal contact and post cards so no one is forgetting about us. My family has been in business here since 1920 so name recognition is golden to say the least. Advertising and positive attitude have little to do with what is going on here right now. Never seen anything like it. 



Just telling it like it is here in Michigan.

shoudabeenaplumba

Prices are down

Shops are bidding tight.  No surprise.  When the work shrinks that's what happens.  Do we send home techs and risk losing good people because our pride is hurt by a customer trying to take advantage of a slow time?  Jobs where we would have charged a premium for PINA installs/fixes/off-hours are being bid staight, because anything over-and-above is not flying. Prices for service work and small daily installs haven't moved, but larger projects are bid tight.  

 Also, customers that never bickered over work done are now asking for rebates, extended warrantees, freebies. 

DanHolohan

So you are making money.

Just not as much. You're not working at cost, are you?

shoudabeenaplumba

Well, there's money

And then there's money.  Breaking even after the job, but that doens't pay for vacations and heath insurance increases and broken tools and blown transmissions and the like.  Its hard when at 2:30 on Friday you have to call the day, and instead of just rolling the hours up you have to count the pennies, and tell your crew "37 hours this week".

Radiohead

From a comsumers standpoint

I have had little luck finding skilled/educated hydronic heating experts. 



Maybe take some downtime to take some classes?



The flip side of that is some of the contractors I have talked to must be really busy.  They bid jobs at materials at 80% ABOVE MSRP  +labor...  No I am not saying 80% above wholesale.  I really meant MSRP on boilers/indirect hot water heaters/pumps etc...  Stuff they would order from a supply house.

DanHolohan

If you're just breaking even, you're not making a profit.

You have to change things or you'll be out of business.



I'm watching the TV and seeing all those people at the Westminster Dog Show, and the Olympics, and the Superbowl, and NASCAR, and, well, you get the point.



All of those people have enough money to spend on those things, so it's tough for me to believe that they don't have money for heating. They need heat and stuff breaks. Turn on the TV and look at the people cheering in all those stadiums all across America and Canada. They have money.



I am convinced that if you do a superb job of telling your story and proving (that's critical) that you are the one offering the greatest value (and only part of that has to do with price) then you will get the work.



This is not new, and times like these have come and gone before. The problem is that most contractors have depended solely on word-of-mouth advertising for all these years. They never bothered to advertise, or to market. They just sat and waited for the phone to ring, and for years it did ring. But now that it's not ringing, it's time to change, and to make it ring.



Turn on the TV, Matt. They have money.



Time to change.

Steamhead

Where

are you located? 

shoudabeenaplumba

Rich people are good at keepingt their money.

They're not so keen on spending it.  That's how they got rich.  If someone isn't feeling pinched right now they're either very lucky, or weren't asking enough in the first place.

DanHolohan

Please reread Boilerpro, Gordy and Eric above.

What are they doing differently from what you're doing, Matt? That's the key question here.



Thanks for keeping an open mind as we explore this.

joe lambert_2

I found my contractor here

Just my 2 cents, I found my contractor here for a new boiler in Brooklyn.  Got two quotes only and did not nickel and dime them.  Actually picked the one that was able to remove my old oil tank (converted to gas) at a higher price due to the convenience factor.



I did want a mod-con but it turns out would have had to replace my flu for ALOT of $$ that killed the job, and just got a standard HW boiler!!

michael_34

Steve Ebels

For the Farmers, are they using USDA grants to help pay for their systems? I know for solar systems USDA pay 25% of the cost of the system.



I just started talking with Dairy farmers here in Central NY about getting solar thermal to wash their dairy equipment (they need high temps 170*). I would check DSIRE website and IREC to see what they say for Boilers.



I am not trying to be polyanna because I know how rough it is in Michigan (all my family is there). I am sure all bases are covered by you and the farmers.



Only thing I would say to everyone is put the best quality in your work, stop watching the news, be it CNN or Fox or whatever. Take care yourself and family. I don't own a television because of the crap that is spewed from it. Keep your head clear and be happy for good health. We cannot relay on politicians, bankers, CEO's and corporations to help us out. We have to help each other out.



From one Michigander at heart to a Michigander.

shoudabeenaplumba

I'm being realistic.

Seeing things for what they are.  The market is down.  People can grow their business in other directions, taking them into new markets and make it when their core dries up.  Personally, I was for doing that when things were good, so I can't see how a downturn would make us re-apply in a direction we were already pushing.  

When 17 contractors show up to a $20k job that 2 years ago would've MAYBE brought 2-3 of us something's different, and all the positive thinking in the world isn't going to change it.

DanHolohan

Matt,

what makes you better than the other 16 guys?  Where do you rank among them in terms of value. If they are offering better value than you're offering then they should win, right?



Are you the best value? And if so, how are you proving it?



Would you rather I give up and stop asking you these key questions? :-)

Kal Row

dead...but...

as you know i design for a few contractors besides moses fishman of enyq and i have only 1 of his jobs  waiting on a design now - last year this time, i was busier than the only gigalo on an all female cruise, - i am getting lots of high tech services calls though - as when it comes to repair, few contractors seem know what to do with a modern electronically fired/controlled boiler - and with the cold snap - the duty cycle loads just pile up - lowering the mean time between failures

- problem is my local supply house is a "bakery" - he orders "fresh every day"  - never has any parts in stock - people can be without heat and hot water for days - i tell people if go with a high-tech boiler - then they better make it two of them of they are going to be in trouble 

- lets face it - a cast iron boiler with a standing pilot - will loose a thermocouple in aprx 15yrs, add electronic ignition, and a mid-western style thunderstorm will take it out in 10, put in a motorized draft damper and your down to 7, add a combustion fan and your only good for 5, make it a mod-con and you are married to it - with no divorce possible!!!

not saying we shouldn't all use modcons - but the reality is, "green" costs "green" - and i think about Rush Limbaugh's request for 3 global warming proofs all the time, 

1) prove to me that it's really hapeneing

2) prove to me that we really did it, that it's not just part of a reg planetary cycle like the mini ice age of the 1300's or a part of  antartica NOT being under ice during the greek empire (it's on their nautical maps)

3 )prove to me that we can do something about it

Dave Yates (GrandPAH)

need a laugh?

In talking with a mechanical contractor this morning about the state of things, he said: "Things are so bad - even the folks who had no intention of paying for the work aren't calling!"



9/1/79 - the day I struck out on my own - in the middle of a recession. Folks told me I was nuts. (No comments required(G))



If you're slow and waiting for the phone to ring - don't! Get out and get involved in your community - networking always pays off - especially if you're involved because you care about others. Join Rotary or Toastmasters and offer to speak (for free) anywhere anytime about things the audience will be interested in hearing.



Learn at least one new thing every day. (Try limiting that to just one thing - can't be done in my opinion.)



Get up and get out - with a PMA (positive mental attitude). Negative attitudes create an aura others can feel, which causes them to avoid being near you.



If you're feeling really low - volunteer at the nearest shelter to help with serving a meal or three. Guarantee you'll count your blessings.



Help immigrants in your community by teaching English as a second language.

Constantin

Hi Larry...

Saw an article on your house in Home Energy (I think). Neat stuff and congratulations on your hard work being acknowledged.



As for the economy, my side of things is countercyclical... haven't been busier. So many rulemakings, so little time, and the teardown lab is getting mobbed with colleagues and the stuff they need to get pricing on. Hopefully everyone makes it through this cycle OK.

shoudabeenaplumba

Value is why you pay an architect

I'm talking large, bid jobs for state, county, town, city and federal. I'm not talking about a residential install/upsell. I'm not talking about new sales for smaller (< 20k) jobs. These larger jobs change our cost structure and allow us to streach out the bumps and hiccups (harder now because no one pays on time, but that's another story). These jobs are specified down to the last detail. Everybody is bidding the same equipment, the same wire, the same pipe. Everything is the same for everybody, including the warranty and what is expected after the job is complete. The "customer" doesn't get a say. Its low-bid. Period.



Why even bother bidding these jobs? Because once you get in you can point out the glaring holes in a system and upsell. Then there is money, plus service which is where we make our money. Also some of these larger clients expect us to be there seeing how we've been their partners for over 20 years.



Right now, however, even when you can really help a customer with the quality and long-term value of a system they are not willing/able to budge on extras. They may want to, but the money isn't available to them to make the decision.

DanHolohan

I think I understand, Matt.

Your business is based on this?

Paul Fredricks_3

Been there

I used to work for a commercial company and I hear where Matt is coming from. These bid type jobs are very tough. One thing that can be done is getting creative, a little value engineering. Give a price the way they want it, but then show them you can do the same work for less by changing the scope of the job a little.



I know it can't always be done, and I don't know what happens if they like your idea and have to redo the bid package. That would be a discussion you'd need to have with them before the bid is submitted. "If I can show you a way to get the job done for less money will you give me the job?" Something like that. I know, easier said than done.



Just thinking.

HydroAirJoe

..willing to help out here

Ok,

I want to help out here.  I'm tired looking at the crappy piping on my 10 year old bolier system.  The circ is on the return, and after reading Dan's book, I've want to change this along with some other changes (i.e. get ride of the tankless coil). And I'f I really like you, may even spring for a new more modern bolier to replace the WM GTO-4 (even though it;s a good old school bolier).  Willing to pay for knowldege and qulaity work since I appreciate that since I am an EE by trade.  Any suggestipn for farifield county ct?



thxs

HAJ

REX

bad

economy is bad for now,will get better,if you saved you will make it,if you didnt you wont.

DanHolohan

Thanks.

I rest my case.