HIGH-PERFORMANCEHVAC TODAY TMIf You Don’t Measure, You’re Just Guessing!™hvactoday.comAUGUST 2019Differentiating Your BusinessALSO IN THIS ISSUE:Why SBA Borrowing Can Set Your Performance-Based Business ApartHow to Turn Data into DollarsFive Ways to Spot a Bad Duct Traverse AUGUST 2019 3HVACTODAY.COMAUGUST 2019 VOLUME 3 NUMBER 8HIGH-PERFORMANCEHVAC TODAY TMMANAGEMENT:Differentiate Your Business: Turn Data into Dollars Gold is to the prospector as data is to the business owner.David Holt details how data is key to market differentiation.MANAGEMENT:Why SBA Borrowing Differentiates Your Performance-Based BusinessUnlike a conventional bank loan, an SBA loan has more advantages to you as a small business owner.TECHNICAL:Five Ways to Spot a Bad Duct TraverseCan you spot errors in a TAB Report due to bad data? Scott Fielder shares how to do that and why it’s important.MANAGEMENT:Build Success Through Fully Engaged EmployeesAre your employees engaged in your High-Performance HVAC business? Here is why they should be.1614118 DEPARTMENTSToday’s Word .........................................................................................5High-Performance Product Reviews .............................................6Photo of the Month .........................................................................19Member Update ...............................................................................20HVAC Smart Mart ...............................................................................21Ad Index ................................................................................................21One More Thing ................................................................................22AUGUST 2019 5HVACTODAY.COMTODAY’S WORDBy Mike WeilTaking One Small Step ... Celebrating 50 Years of ExcellenceSeveral weeks ago, the world celebrat-ed the 50th anniversary of the Apollo 11 moon landing. Yes, on July 20, 1969 Neil Armstrong uttered the most famous words of the 20th Century as he became the first human to set foot on the moon. “That’s one small step for (a) man, one giant leap for mankind.”And it was a giant leap in so many ways. Be-sides creating a national pride the like of which hasn’t been felt since, the advancements made as a direct result of the science, engineering, and re-search that went into the space program are near-ly incalculable. From the creation of lightweight breathing masks to cordless tools, modern computer micro-chips, smoke detectors, and even the transparent brackets commonly used for straightening teeth – all can be traced back to the moon missions.It all started with one small step.The need to miniaturize computers for space exploration in the 1960s motivated the entire industry to design smaller, faster, and more energy-efficient computers. This also affected practically every facet of life today, from com-munications to health and manufacturing to transportation.Even the tech behind mobile phones and tab-lets that we take for granted are descendant from the Apollo and Gemini space programs. Oh, and they are so MUCH MORE POWERFUL! Hand-held devices today routinely perform in-structions 120 million times faster than the guid-ance system that enabled the liftoff of Apollo 11!Think about it. In the HVAC arena, many of the digital instruments you use to measure and test the systems that keep consumers comfortable and productive and protect our foods and medicines, are born from Apollo technological advances. One thing is clear – that tech and its resulting data became the absolute key to keeping Astro-nauts Neil Armstrong, Michael Collins, and Buzz Aldrin alive and safe on their incredible journey. Data – it’s gathering, analysis, and use is the difference between good HVAC contracting firms, and Performance-Based Contracting™ firms. The fact is, whether it’s a space mission or an HVAC service call, data is vital. It enables High-Perfor-mance HVAC contractors to deliver what they promise and then prove that to customers. Which is why David Holt’s article on Differenti-ating Your Business by Turning Data into Dollars (page 11 or ncilink.com/Data$$) is an import-ant read. He discusses the need for taking mea-surements and conducting tests, then capturing the results to help show customers what is actu-ally going on with their systems. That same data is also used for providing them options for mak-ing their systems perform as designed and selling customers repairs and upgrades. Performing duct traverses is one key way to gather data about airflow. In his article, Five Ways to Spot A Bad Duct Tra-verse (page 16 or ncilink.com/BadData), Scott Fielder highlights the impact of bad data based on improper traverse methods or inadequate doc-umentation. He provides some clear examples and ways to avoid the issues in the first place.These two editorials really demonstrate the im-portance of properly obtained and properly used data in creating excellence in comfort systems. With that in mind, 50 years after Neil Arm-strong’s small step, we celebrate our accomplish-ments in space. Isn’t it time to start celebrating your accomplishments along the path to High Performance as you take steps toward using data to differentiate your contracting business?Just take just one small step today. Mike Weil is editor- in-chief and director of communications and publications at National Comfort Institute, Inc. He can be reached at MikeW@ncihvac.com6 AUGUST 2019HIGH-PERFORMANCE HVAC TODAYSENSORCON INDUSTRIAL PRO PERSONAL CO SAFETY MONITORNothing is more important than keeping yourself safe on the job and everywhere you go. That is why I rec-ommend you carry the Sensorcon In-dustrial Pro Personal CO Safety Mon-itor. It only has to save your life once to demonstrate its value. I have used many personal monitors and have investigated others. So far, I have found nothing that compares to the features, simplicity, dependability, or the longevity of the Industrial Pro device.It has audio, visual, and vibrating in-dications of elevated CO levels. Its re-sponse time is just seconds. You can cus-tom-set CO level alerts for both low and high-level readings. This safety monitor also has a mute button and a maximum level lock feature. The Industrial Pro has a CO range of 1 to 2000 ppm. Hopefully, you will never see the high range in an area where you are working.Its replaceable camera-type battery is easy to change. Many other person-al monitors need to be thrown away if the battery dies. The Industrial Pro also has an EOL (end of life) warning. This will usually show up every six months. This doesn’t mean the instrument is bad, it just needs to be calibrated. There is an easy way to determine if the Industrial Pro is operating properly. Take a plastic food bag and place the In-dustrial Pro inside. Then take a couple of matches, light them, then blow them out and allow the smoke to enter the bag. Close the bag and watch the readings. If they rapidly climb to 15 ppm or higher it is good to go. This is the same test used to check Low-Level CO monitors. Save your life, your family’s lives, and of course, your customers’ lives!If you are interested in learning more visit the NCI store at ncilink.com/Se-norconCO.By Jim Davis, National Comfort Institute HIGH-PERFORMANCE PRODUCT REVIEWSWritten By HVAC Professionals for HVAC ProfessionalsAUGUST 2019 7HVACTODAY.COMFIELDPIECE SC660 WIRELESS CLAMP METER If you are looking for your next voltme-ter, consider some features built into this compact multimeter. It can help you collect additional data to diagnose and communicate performance issues. The SC660 can transmit its readings remote-ly to Bluetooth devices eliminating wires pinched in blower compartment doors. It can also can calculate the operat-ing wattage for indoor and outdoor units on the meter or through the app. When paired with the Job Link app, the system wattage is used to es-timate the unit’s current operational SEER and EER to compare to the man-ufacturer’s ratings. Because the app allows remote view-ing, it becomes a powerful tool to help customers see in real time the impact of poor performance and fan wattage. It shows them why more comprehensive system testing is necessary. If you are starting up new commer-cial equipment or working on a balanc-ing project, this instrument has built-in phase rotation verification, which can be used to prevent damage from operating equipment in the wrong direction. The SC660 has plenty of familiar func-tions such as K-type thermocouple temperature measurement, capacitance testing, and non-contact voltage sens-ing, displaying both a visible LED and an audible tone when sensing high voltage. The SC660 accuracy and range meets the test instrument requirement for all NCI certifications as well as being NIST traceable.If interested in learning more about the Fieldpiece SC660 Wireless Clamp Meter go to ncilink.com/SC660.By Justin Bright, NCI Field Coach and Instructor8 AUGUST 2019HIGH-PERFORMANCE HVAC TODAYbankers tend to shy away from loaning to HVAC contractors. But what if there was a bank that did not rely on collateral to secure a loan. Let’s say the bank was able to have some type of guarantee that they would be reimbursed if your loan went bad. If this was the case, banks would be able to lend based on cashflow and not collateral. But who will step up and guarantee loans like this? The answer is the U.S. Small Business Admin-istration (SBA). Go to www.sba.gov.THE SBA AND SBA LOANS:An SBA loan is guaranteed by the Small Busi-ness Administration and enables banks to lend to small privately held businesses up to five million dollars. An HVAC contractor who applies for an SBA loan is NOT borrowing directly from the gov-ernment. The SBA only guarantees (insures) bank loans to small businesses that meet the SBA’s size criteria for that industry. It is this guarantee that makes the HVAC industry bankable. This applies to all contractors – both High-Performance and non-High-Performance.As a borrower, you work with a bank that is en-abled by the SBA to make this type of loan. Does your business qualify for such a loan? The size cri-teria for a business is that it produces $15 million or less in sales. Even if your company is doing more than that, there is an alternative size standard under which you can qualify for an SBA loan. Unlike a conventional bank loan, an SBA loan has more lenient terms, aligning with the SBA’s mission to expand business ownership and cre-ate jobs. Terms are generous, up to 10 years on a business loan for a business acquisition or work-ing capital and up to 25 years for a transaction in-volving real estate. Any service and replacement HVAC company is a great business to own and operate, but a High-Performance contracting firm has so many differ-entiating aspects that it can truly be a dominant force in any marketplace. Managed correctly, there are great profits to be realized and due to air upgrades, duct renova-tions, and equipment replacements, there always is the opportunity for larger dollar (and high gross profit margin) invoices. Perhaps equally as im-portant, with comfort expectations today, there is no chance the need for your services will end any-time soon.Like any small business, it is just a good practice to maintain a line of credit or access to money loans to capitalize acqui-sitions – whether those are for buying another company or to in-vest in growing your business. Such capital in-fusions can help when you need more trucks for your duct renovation crews as you expand into Performance-Based Contracting™, or for equip-ping field techs with the best instruments for do-ing the measurements necessary to do their jobs.The fact that traditional banks are not clamor-ing to lend to HVAC companies is surprising. Or is it? Traditional banks lend money and secure their loan in the form of collateral. If your busi-ness is unable to pay back the loan, the bank gets the collateral. This is where the challenges start.Having been inside hundreds of HVAC busi-nesses, I’ve found one consistent characteristic: most contracting firms do not have much in the form of collateral. For this reason, traditional Why SBA Borrowing is Important to Your Performance-Based BusinessBy Brandon Jacob, CPAMANAGEMENT“UNLIKE A CONVENTIONAL BANK LOAN, AN SBA LOAN HAS MORE LENIENT TERMS, ALIGNING WITH THEIR MISSION TO EXPAND BUSINESS OWNERSHIP AND CREATE JOBS.”AUGUST 2019 9HVACTODAY.COMKEY DIFFERENCES BETWEEN SBA AND CONVENTIONAL LOANSThe key difference is that an SBA loan does not require business assets or the owner’s personal assets to be enough to fully secure the loan. The reliance is on the character and resume of the owner/guarantor, as well as the ability of the business to operate successfully. It also looks for historic financial statements to demonstrate the strength of business cash flow to meet all pro-posed and existing debt payments while continuing to pay the owner a comfortable salary. This is important for an HVAC busi-ness where there will not be enough assets, like real estate or equipment, to fully secure the loan with a tradi-tional bank. An SBA loan provides the opportu-nity for businesses with the cash flow, but not necessarily the collateral, to se-cure funding to grow. This also means that your son or daughter, for example, who worked his or her way up through the business from technician to gener-al manager, can now possibly purchase the company from you without neces-sarily having the personal assets to ful-ly secure the loan. This is a major plus as up until now many owners of HVAC companies had to carry a seller’s note to complete the sale. Sellers now have the option to sell and receive all or most of the proceeds from the sale upfront rather than hav-ing to wait 10 years and cross their fin-gers that the buyer pays them back.Many banks may offer SBA loans but There are no bank covenants that will restrict your business’s growth as long as the loan is paid back as agreed.SBA loans can be used to acquire a business, whether you are an exist-ing HVAC company looking to buy a competitor or a general manager who has been the identified successor to the current owner. The loans can also be used to refinance existing business debt, to purchase equipment, or for working capital. SBA loans can be used to acquire real estate for your new headquarters if you want to buy or build your satel-lite location. Or you can use them to add on to your existing property. Ap-plicants must be able to demonstrate that the loan will be used for a sound business purpose. Next >