ServiceTitan ‘Compass’ Guides HVAC Company Owner from $4.25 an Hour to $10 Million
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Fermin Rivera admits he didn’t take working in the trades too seriously when he was 19, didn’t want to go to college and had no clue what to do with his life.
In the early 1990s, Rivera learned the HVAC trade through hands-on experience and on-the-job training with his uncle “up in the valley” of Sylmar, Calif., a northern neighbor to Los Angeles.
And he made the 1990s minimum wage.
“For me, $4.25 an hour was a lot more money than I had at the time,” Rivera says. “Later on, I moved to like seven bucks. I’m like, man, I’m loving it.”
In 2020, the money is different. Rivera says his goal for Red Apple Air, his HVAC company in Los Angeles, is $10 million in revenue. He’ll chase that number with the help of ServiceTitan’s all-in-one software solution for the trades.
But there were lots of steps, sometimes bumpy ones, between minimum wage and millions in revenue.
Rivera spent some time working for his uncle’s HVAC company, then returned to L.A. in 2005 as a tech for a home services company.
In 2009, he began running his own HVAC business after buying the phone number and customer database from a defunct HVAC company. But struggles during the economic downturn made him uncertain whether he chose the right career path.
“I started to learn a lot of new things, but I really didn't know what I was doing,” Rivera says. “The one thing I would probably do differently is, I would have taken it a lot more seriously. I didn’t know the kind of money that was in it.”
By 2015 — after much soul searching and a month spent in Costa Rica with his wife, Misty — Rivera finally got serious about building Red Apple Air, in the L.A. neighborhood of Harbor City, into a big business.
The Riveras began laying the groundwork to grow the business smartly, analyzing net profits and looking for ways to expand.
“It makes no sense to grow too much if you’re going to be in the negative,” Fermin says. “Because anything could happen.”
The “anything” did happen, a few years later. The Riveras discovered an employee had stolen from Red Apple Air’s payroll and other accounts.
It was time for decisive action, Fermin says.
“I just took a big hit,” he says. “So I said, ‘You know what? Whatever happens, I need to start making some money,’ and we need to make some decisions and just go forward.
“Chaos is a good place to be, because you’ve got to find out which way is up. And that's exactly where I was at — in chaos.”
Fermin found his way out by switching to ServiceTitan in November 2018.
“I had started hearing some of the heavier guys were on ServiceTitan, and I said, you know what? I'm done. I am not playing small any more. If I'm going to go down, I'm going to go down as a big player.
“I'm going to jump onto ServiceTitan, and I can tell you ServiceTitan is a gang of work. It actually made me feel good to jump onto it.
“A lot of things were wrong (with our business), but when you do have one thing that's right and you're going in a positive direction, you've got to grab onto that one thing that is kind of a compass.
“I felt ServiceTitan definitely put us on that compass.”
For 2020, Red Apple Air wants to extend its HVAC service operating hours to 24/7 and generate $10 million in earnings by expanding into plumbing and electrical services.
We sat down with co-owners Fermin and Misty Rivera, their daughter and general manager Faith Martinez, and Sara Orozco, a customer service rep, to discuss Red Apple Air’s plans and how ServiceTitan can help them grow.
Q: What would you say to younger generations who maybe don't know what they want to do and want to learn more about the trades?
Fermin: There's a lot of money to be made in the HVAC, electrical and plumbing trades. If you're good, you can make $100,000, $200,000, $300,000. If you can’t cross that $100,000 mark within two or three years, you’re doing something wrong. I was just talking to a comfort advisor, one of the heavy hitters, and the guy showed me his W2. He's making $900,000, and he’s not even the owner of the company. He sells equipment.
Faith: Find a company willing to train (you) step-by-step. I've talked to a lot of the technician applicants who come in. We put together a test … basic things they need to know out in the field. It's everything they need to know based on day-to-day servicing and installing. The applicants come in after graduating from these trade schools, and they don't know a single thing on the test. (And) make sure this is something you want to do.
Q: What are some issues you deal with when hiring technicians?
Sara: A lot of the applicants think once they get their certification and they come in … they're going to get all of this money, whether they have experience or not, just because they went to school. That's not the case. You need to work your way from the bottom up. A lot of what I hear and see is, "Oh well, I have the certification. I've had at least one year of experience. You should pay me what he's making." But you're not bringing in the revenue that he would bring in, or the knowledge.
Fermin: Mindset is a problem. “What's the least I can do to gain the most amount of money?” Also, scarcity mindset: “I want what he has.” Instead of working together, they become competitive, or they're stealing from each other, or they’re always thinking they’re going to be taken advantage of by a boss … he just wants to get rich off of me.
What they don’t know is that if we actually worked together, he can make just as much as me. We just need to learn to move the ball ahead, achieve whatever was sold, and do it to the best of our abilities—and then their own growth starts from there.
If we can trigger a different mindset, I think the industry will make better use of the people they have, and also be able to recruit much easier.
Q: What good qualities do you look for in an HVAC technician?
Faith: High energy. Attitude is very important. You can teach them the technical side, but you can’t really teach someone to change their attitude. We can’t really babysit them. We want technicians who show determination and commitment to doing the job.
Sara: We want to build a really strong company. We have this training, and we show them it's going to be 47 videos, and they're like, "Oh, I don't want to put that type of work in. I don't want to commit to that.” They just want to take the easy ride, and that makes you wonder about how they're going to take care of our customers. Are they going to be lazy about it?
Faith: They're just very sloppy. You would be surprised at the people who come in for interviews. Just not presentable in any sense, and no fire or interest in wanting to learn what we show them. It's not something they want to do.
Fermin: When we're hiring them, it's just making sure they’re aligned with our core values. We have the interview process. Step one, step two, step three, and then if that's a go, then we have a hands-on test. Just easy stuff, just to see if they can even literally hold a drill. There's some people who can't hold the drill. They have no hand-eye coordination.
Once we get through those, then we have installation videos and service technician videos. I spent six months just shooting video after video after video, and then writing up what I was going to be covering on these videos. The idea was as I bring people on, it's just going to minimize my time and save me the hassle of training them.
Q: What are the levels of HVAC service technician at your company?
Fermin: It’s helper, installer, and then you move into maintenance. From there, you go into service and repair, and then comfort advisor.
Q: Before ServiceTitan, did Red Apple Air utilize another software platform?
Sara: Yes, but it was so generic and you couldn’t do everything you wanted in one platform. Someone showed me ServiceTitan. I was like, “OK, if we’re going to go big, we need something with a really good platform. If the big guys are using it, then that’s what we want to use.”
Q: How did creating more sales options with ServiceTitan change your business?
Fermin: I learned from (entrepreneur consultant) Joe Crisara. I do the six options. I don't do good-better-best. Your average ticket becomes a lot higher. Before, when I did good-better-best, my sales were actually a lot lower. Then I went to six options ... my best was way better than what my best used to be. My middle one was a couple of levels higher. A couple of levels higher means a couple of thousand dollars more. I've added maybe $2,000 or $3,000 dollars more. Most people will end up somewhere in the middle. … My middle option gives them four options.
Q: What other features of ServiceTitan work well for Red Apple Air?
Fermin: For me, it was the options sheets. That's kind of what sold me on it. I was able to create my six options and show them to customers pretty easily. That's what I like. For me, it's a pretty big part.
Sara: I love the dispatching board, and the call booking. Our dispatching board is great for technicians. It shows when they're late. I love that you have other information on future jobs, what is on call, what's succeeding. We can track the technicians, communicate with them. I love how our customers get notifications and reminders on the jobs. They appreciate that. And I love having all of the pricing and invoicing. That is my go-to for all payments to make sure I’m accurate on what I’m sending out.
Faith: All of the reports have been a complete help to us when it comes to invoicing and making sure everything has been paid. Sometimes if there is a lost invoice, I look through every single job just to make sure because I'm still a little bit uneasy with (relying on software). But overall … It has been a complete game-changer.
Misty: I like that it keeps track of what she has done, what I've done. That's my favorite part. It will say what he did, what she did, and there's no miscommunication. I can go back to the notes. We really love the voice recording (of customer service telephone calls). That is one thing that has really been a game changer for me, just because I'm trying to do too many things.
Q: What is your grand plan for Red Apple Air in 2020?
Fermin: Basically, we're setting up all the systems so we can get to $10 million as soon as possible. That's why we need the KPIs (key performance indicators), and why we're going to start working on it. For this year, it's just straight up, get to the $10 million as soon as we can, and do whatever we’ve got to do to get there — with a good net profit, obviously.
Then, we want to start expanding. Hopefully, in six months, we can start buying. The goal is to buy a plumbing company, possibly an electrical company, and bring in their people and their database to just start growing. We know exactly where we're going. We just need a couple of resources to make it a little bit better and to be able to forecast what we need to do, and we're hoping that ServiceTitan can help us get there.
ServiceTitan is a comprehensive HVAC business software solution built specifically to help service companies streamline their operations, boost revenue, and achieve growth. Our award-winning, cloud-based platform is trusted by more than 100,000+ contractors across the country.
Ready to learn more about what ServiceTitan can do for your business? Contact our team to schedule a demo today.
ServiceTitan is a comprehensive HVAC business software solution built specifically to help service companies streamline their operations, boost revenue, and achieve growth. Our award-winning, cloud-based platform is trusted by more than 100,000+ contractors across the country.Learn More