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HVAC Contractor
Strategic Business Planning
Strategic Planning Process
Goal Setting
Sales Plan
Service/Projects
Construction
Fabrication
Operations
Engineering
04/10/23 2
Strategic Planning Process
A substantial opportunity exists for your HVAC company to dramatically improve financial performance, expand its customer base, diversify its business mix and improve customer and employee satisfaction over the long-term.
Today we endeavor to set specific goals, organizational environment and generate the plan for implementation. We will first discuss current situation, mission statement, message and initial results, possible issues.
04/10/23 3
Current Situation, Core Values, Strategic Issues & Planning
Organizational ChartBusiness SegmentsCore Competencies Services ProvidedMissions StatementGoals, Planning &
Implementation
04/10/23 4
HVAC Organizational ChartO rg an iza tion a l P ro toco l
E xecu tive Team
F ie ld Tech s
F ie ld - S u p ervis ionD isp a tch
S erviceM g r - V P
S ervice S a les
S ervice S a les M arke tin gC oord in a tor
P ro jec t S a les
S a les -M arke tin gM g r
F ie ld
F ie ld S u p ervis ionO p era tion s
C on s tru c tionM g r - V P
D es in g ers
P ro jec t M g rsE n g in eerin g
Tech s
C on tro ls?
D /B E n g in eerin gV P - M g r
S h op
F A b rica tionF orem an
S h op - F ab rica tionM g r
O th erC on tro ls - R es id en tia l
G en era l M an ag erL oca tion P res id en t
B oard /D irec to rs
O w n ers - L ead ers
04/10/23 5
Business Segments Summary
Commercial Industrial Institutional Residential
Service/PMA Special Projects Design-Build Plan-Spec
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Core Competencies
True Preventive MaintenanceNegotiated ProjectsEngineeringDesign-Build ConstructionBid-Spec ConstructionSheet Metal FabricationSpecial Projects-PCSite Management
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Services Provided
Plumbing Engineering/System Design Projects Construction Maintenance/Repair
04/10/23 8
Services Provided
HVAC Engineering & System Design Design-Build Projects Construction Repair-Retrofit Preventive Maintenance On-demand Service
04/10/23 9
Services Provided
FabricationDuctworkFittingsSpecialty Electrical
(Future)EngineeringSystem DesignProjectsConstructionRepair/Maintain
04/10/23 10
Mission Statement
“We will provide our clients with quality solutions that ensure value for their investment, consistent with fair wages and safe working conditions for our employees, while maintaining a reasonable profit to sustain growth and continuity for the Company.”
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Goals, Planning & Implementation
Sales/Marketing PlanMarket SegmentsDelivery MethodsAgreements/
ContractsOrganizational
StructureImplementation
Policy & ProcedureOperational ModelPersonnel
AssessmentFacilitiesTools & EquipmentFinancial
Projections
04/10/23 12
SWOT Analysis - Strengths
Reputation in Our RegionExtensive Customer BaseKnowledge - ResourcesHVAC Service/Mechanical D/B
OfferingsHistory – Integrity - CompetencyPersonnel – People - ExperienceSynergy Between Business Offerings
04/10/23 13
SWOT Analysis - Weaknesses
Profit Margins/Gross Margins - LowSluggish EconomyBalance in Business Need More
NegotiatedStrength for Future LeadershipLong-term Growth PlanFuture Profits in
Mechanical/Construction Businesses
04/10/23 14
SWOT Analysis - Opportunities
Vast Relationships in Our AreaSynergy of Business OfferingsExpansion of Business OfferingsOwner-Direct Sales Approach
Opportunity PC/Negotiated/Retrofit OpportunityService/Electrical/Technology AreasBalance Service/Construction Offering
04/10/23 15
SWOT Analysis - Threats
Competition from Non-traditional Areas ??
Technology (Virtual Office Salespeople)Margin Erosion –Differentiate from
CompetitionChanging DemographicsCompetitive Focus on the Mechanical
Business and Service BusinessSome Complacency
04/10/23 16
SWOT Result Business Concept
The goal will be to position your company as the preferred provider of total building services in the region.
This will be accomplished by utilizing a strategic marketing/sales, engineering and operational plan that is built on proven successful practices to drive business and increase profit margins.
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Set Goals & Objectives
Sales & MarketingOperationsGeneral & AdministrativeBusiness Development
Who…What…When
04/10/23 18
Sales & Marketing
Sales Developing Sales Approach (Process) Establishing Cost Codes Estimating Standardization Standardized Take-Off, Summary
Formats Standard Proposal/Presentation Hybrid Start-Up, Turn-Over Checklist, Protocol Sales Tracking Software…Format
04/10/23 19
Sales & Marketing
Management Policies & Procedures Manual Sales/Project Management
Responsibilities Market Segment, Specialization Residential Focus Commercial Verticals Industrial Verticals Institutional Verticals Target Key Projects Bundled Offerings
04/10/23 20
Sales & Marketing
Management…continued Annual Budget & Approval Process Sales Goals, Objectives, Projections Establish Performance Goals Implement Weekly Sales Review
Active Prospect List Plan & Review Schedule
04/10/23 21
Sales & Marketing
Training Development of In-House Programs
Sales Engineers PMA Sales Consultants Tele-Marketing Assistance Sales Management “Everyone is in Sales”
04/10/23 22
Marketing
Market AnalysisAdvertising, PublicityPromotionalTele-Market SupportActive Prospecting ToolsPresentation ToolsAssociations, Memberships,
Networking
04/10/23 23
Operations
Engineering Management Operations Manuals Policies & Procedures Annual Budget Budget Approval Process Technical Expertise/Resources Training
04/10/23 24
OperationsConstruction
Management Operations Manual Policies & Procedures Annual Budget Budget Approval Process Communications Protocols Training Production, Quality, Controls Personnel
04/10/23 25
OperationsFabrication
Shop Management Operations Manual Policies & Procedures Annual Budget Budget Approval Process Shop Order – Work Order Process Technical Resources Training Personnel
04/10/23 26
OperationsService Repair & Preventive Maintenance
Management Operations Manual PMA set-up, start-up procedures Service Management Software Annual Budget & Approval Refrigerant Tracking COD Customer/Billing Procedures Technical Support Dispatch-Coordination Training
04/10/23 27
Operations
Special Projects PC Operations Manual Policies & Procedures Annual Budget & Approval Technical Resources Training
04/10/23 28
OperationsSite Management, Facilities
Management Operations Manual Policies & Procedures Annual Budget & Approval Technical Resources Training Protocols Supervision Personnel
04/10/23 29
General & Administrative
Office AdministrationHuman ResourcesSafety Program AdministrationComputer – TechnologyTele-CommunicationsReceptionist – SupportSecurity System
04/10/23 30
G&A, Finance & AccountingManagementPolicies & ProceduresAccountingBudgetingFinancial Resources
ManagementFinancial ReportingTechnology
04/10/23 31
Purchasing - Warehousing
ManagementPolicies & ProceduresMaterials ManagementTools & EquipmentTrainingPersonnel
04/10/23 32
Engineering Co-authored equipment selection Installation Maintenance
Range of Services - Integrated Offering
Energy efficient lightingHVAC automationThermal storageLighting controlsTraining servicesTower free coolingBoiler modernizationMaintenance services
• No risk• No change orders• Guaranteed results
Indoor air quality analysisModernizing temperature controlsHigh efficiency heat pumpsIrrigation management systemsAdjustable frequency drivesChiller modernizationLiquid pressure amplifiersFire/Life safety systems and servicesUtilization of local contractors/WOE/MBE
Environmental Commitment
04/10/23 33
Competition
Summary of Competition Heavy
Commercial/Industrial/Mechanicals Honeywell, Johnson, Siemans..…. Utilities, Power Companies Large ESCO’s Local Firms (__________, __________……) GC’s/AE’s
04/10/23 34
Sales ThrustBuild a Sustainable Competitive AdvantageCurrent Customers/RelationshipsStrategic Account Management FocusPast Customers/Relationships – ReputationHire New People and Grow ThemCategorize Accounts/Account Management
(stars/dogs/cash cows/maintain) – Prioritize Synergy Among Business OfferingsMechanical Customers to Building Service Develop New RelationshipsSeek to Form New Alliances
04/10/23 35
Operations Plan Utilize Strong Operations Leadership in Strategic PlanAccurate Pricing and Estimates, ApprovalsUtilize the Estimate Review ProcessDevelop High Performance Teams for Service OfferingMaintain Departmental AccountabilityDevelop a Profit OrientationFocus on Customer Needs/Value-based OfferingsStick to the Strategic Sales Process
04/10/23 36
Strategic Initiatives – Sales/Eng/Ops
Federal, State, Military AlliancesEMS, PC, Retrofit, Controls FocusDeregulationAlliances with Strategic PartnersSynergistic Sales TrainingAdd Key Team MembersOperations Involvement/Estimate ReviewBundled Offering Among Our Company
Business Units
04/10/23 37
Sales Focus - Part I
Target Market ProgramCustomer Value Management ProgramFocus on Quality DeliveryBuild a Power Sales TeamGet Key People on the TeamUse Critical Opportunity Review (COR) Process (Strategic Accounts)
Bundle Offerings across Contracting BusinessesHire Key Competitors’ PeopleFocus on Sales ProcessReward a Profit FocusStrong Sales Management FocusDevelop Sales Tools for Replication
04/10/23 38
Sales Focus - Part II
Total Building Services (solution)Outsourcing ConceptExtensive Sales TrainingInstill Discipline in the Sales/Engineering Cycle
Regional FocusCRM Strategy - Yr. 2003 TechnologyFocus on Value Based OfferingUtilize Relationship Selling Use Strategic Selling Process
04/10/23 39
Marketing OutlineProductElectricalSpecial ProjectsConstructionService
PriceValue Based OfferingJustification of Program -
Financial/EnergyFocus on Increasing GM
%Value Engineer All
Programs
PlaceOur AreaExtended Region
PRSales FocusAdvertisingPublicitySales Promotion
PeopleSkilled TeamSell Entire Offering
04/10/23 40
Contracting Business Portfolio
Mech
D/B
PC
T&M
Mech
D/B
PC
T&M
2006 Business Plan 2007 Business Plan
04/10/23 41
Financial Plan
The following is a high-level financial plan that defines financial model, pricing assumptions, and reviews yearly expected sales and profits for sales year 2007 with a comparison to sales year 2006.
04/10/23 42
Financial Goals & ObjectivesShort-Term (Year 2006) Example
2007 2008 Revenue Objective $35,000,000
$37,847,500 Construction $28,250,000 $29,097,500 Service $ 6,750,000 $ 8,750,000
Gross Margin $ 6,083,000 $ 8,326,450
Gross Margin % 17.38% 21.5% Profit $ 1,407,000 $ 2,460,088 Profit % 4.02% 6.5%
04/10/23 43
Resource Needs
Technology Requirements PC’s for Sales Team, Software Tools Database Program, Service Management
Personnel Requirements Acquisition of Key Team Members Key Sales People on the Team
Resource Requirements Sales/Marketing Budget, Financial Support
Operations Support for the Plan
04/10/23 44
Risks & Rewards
Risks None to Reputation Minimal to current core Construction Business Upset current Status Quo
Addressing Risks Focus on Long-Term Success Plan
Rewards Increased Revenue to Company (Build Service) Increased Margin and Increased Profit
04/10/23 45
Key Issues
Near Term Get moving to capitalize on plan in
2004
Long Term Keep Focus of the team Stick to the Plan Gain Momentum
Execution of the Plan is Critical
04/10/23 46
Wrap-up: - Management Keys to Success
Leadership Team Planning (SBP Workbook)Target Job Sales/Delivery Review ProcessSales/Eng/Ops Teamwork (Meetings)Strategic Account Management (Profiles)Monthly Sales ForecastingTracking Progress (Activity Log)Quotations (bookings track quotes)Delivery Plan – Man-Power Plan
Action Plan
Issues PrioritizedActions DeterminedAction Items AssignedTime Frames DeterminedTracking MechanismKey Meetings & Follow-upTransforming the Business - Adjusting
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Key Issues- Actions, Notes:________________________________________________________________________________________________________________________________________________________________________________________________________________________________
04/10/23 48
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