Building a Company for Success
Whether your plan is to build a strong local company with a great reputation or a national powerhouse franchise with unlimited potential, knowing how to create, and recognize, value is essential. That starts on Day 1.
SECTION 3 OF 3
Opening a Second Location
Is Your Home Services Business Ready to Open a Second Location?
You've built your home services business with steady growth, great service, and loyal customers. Now, you want to expand your service area to gain new customers and grow your company's profits. But are you ready to open a second location, and do you know what it takes?
Starting a new business in a new market requires making sure your business operates in the most cost-effective manner as possible in its current service area, as well as preparing your rock-star team of technicians, installers, and other staff to grow along with you.
Otherwise, any internal issues you're trying to solve by adding potential customers only get worse, not better, when opening a second location, says Crystal Williams, head of marketing at McWilliams & Son Heating and Cooling in Lufkin, Texas.
"Don't go add another territory when your porch isn't clean, okay? You got to have your home porch nice and tidy before you go on," Williams advises. "Again, not perfect, because we're never going to be perfect, but controllable.
"That, and then you need some sort of marketing strategy," she adds.
Some business owners in the trades just decide they want to open a second location, then they try to figure it out as they go. Secretly, Williams likes a "by-the-seat-of-my-pants approach," but says creating a true business plan works much better.
"At the end of the day, I have an overall general outline of what I'm going to do and how I'm going to do it," says Williams, the marketing expert who helped the family-owned residential HVAC company quadruple its revenue from $3 million to $12 million in just a few years.
Based in rural East Texas, McWilliams & Son expanded its Central Market in Lufkin, grew its North Market in Nacogdoches, and entered a new South Market in Livingston. Next stop? Houston.
Williams says service businesses need to approach opening another location like a seasoned runner might prepare for a marathon: with patience, consistency, and a well-organized plan.
"If it's a struggle in the beginning and you feel very discombobulated and disorganized, that's probably how you're going to feel for a while," she says. "Instead, if you prepare the budget, the marketing plan...just start working through your processes as they are and figuring out how they are going to apply to a new market."
Whether you're an HVAC contractor, plumber, electrician, or other tradesman, opening a second location for any small business can seem quite daunting without a plan. For McWilliams & Son, Williams says it was knowing they had all of the "hiccups” under control.
"We knew it was time, because we felt like we had hit our stride in the markets we were in," she says. "Nothing really knocks our knees out from underneath us now."
Here's how Williams opened multiple new locations for a successful HVAC business:
Start an SEO campaign six months before opening.
Find a physical location.
Hire a community marketer.
Launch online branding.
Advertise on social media.
Do direct mail marketing.
Build leaders to grow new locations.
Gain insight into real-time data with ServiceTitan software.
Start an SEO campaign for the target market
Determine your target market for reaching new homeowners, then launch an SEO (search engine optimization) campaign about six months before you're 100% in the new market. An HVAC SEO strategy involves optimizing your website with specific keywords so your company ranks high in organic search results and users click on your web page.
When a user performs a Google search—such as “air conditioning” or “HVAC services"—they see organic results for service companies near them, as well as paid advertisements and featured snippets. Organic Google search results rank by algorithm, and a well-optimized website helps to spread the news about your arrival in the new market.
"Four to six months before I'm going to go into a new market, we launch SEO, highlighting those specific cities, key terms that are going to be popular there, Williams says. “In Texas, we have counties, so we say, 'Servicing this new county.’ Be ready for the few calls that start trickling in.
"If you're going to go into a new market, you have to go in with guns blazing as far as some type of branding play," she adds.
Utilize your vendor partners to help increase traffic to your website, such as contacting your website host to identify ways to increase your SEO presence or add to your Google Local Service areas, or reach out to equipment manufacturers to let them know you want to expand into a new territory.
"You have things at your disposal to use through your vendor partners," Williams says.
Find a location
Simply telling customers your company is servicing a new area may not be enough to establish a strong foothold in the market. You also need to find a physical location, so potential customers remember your name, see your HVAC technicians driving trucks and vans with your company's branding, and start to get to know you.
"People like to do business with people they know and have a relationship with, and so when you're going into markets, even large markets, you've got to do something to establish a relationship with people," Williams says. "To get our footprint solid in those communities, we needed to have a presence in those communities."
When McWilliams & Son opened its North Market location, for instance, they started in a small strip mall with an office staffed only by a community marketer. The company's techs and installers used the office as a central hub of sorts, as they traveled into the area for service calls. The company also hosted job fairs, community events, and even offered free meeting space to local nonprofit organizations.
"We just really started getting a foothold," Williams explains. "Last year, we actually moved to a 10-times larger space. We hired more technicians in that market and it really escalated, so now we have a large, high-traffic location there."
Hire a community marketer
In the HVAC industry and other skilled trades, opening a second location requires companies to go big or go home, Williams advises. Go into a new market with vengeance, she says, and don't be afraid to spend money to achieve your goals.
"A true marketing plan involves a lot more than just changing your website and Google Local Services," Williams says. "It involves putting the right people in place, putting yourself out there in the community, and then having the money to support driving the leads you need to reach your financial goals in those markets."
Hire a full-time community marketer, whose only job is to introduce your company to the city, chambers of commerce, nonprofits, and other organizations. A community marketer can capitalize on word-of-mouth advertising, which can help you get your feet wet in a new market.
"Our secret sauce really has been these community marketers," Williams says. "Just launching people whose sole job every single day, 40 hours a week, is boots on the ground at every function, introducing yourself to the cities, to the chambers, to the nonprofit groups, and just getting plugged into those communities.
"If you can find someone who's already plugged into the community, that's even better. They kind of already have a following and they're able to really capitalize and maximize those relationships," Williams says. "We start with that."
Launch online branding
Online branding efforts might include buying digital radio ads, displaying marketing messages on large billboards, or simply driving a van around in the new market.
A sign that says, "We're coming soon!" with your company's branding can go a long way to tease new customers into wanting to learn more about your business.
Williams also advises increasing your marketing spend by about 15% for at least six months, and really drilling down and targeting customers by ZIP codes.
"Stop focusing on the fact that you're in a metro market and focus on a dang ZIP code, and start pushing in there with highly targeted displays," she says.
Put big signage on the building to increase your visibility, then host community events to show you care about your new neighbors.
Advertise on social media
With 93 percent of consumers using the internet to find local businesses, it’s critical for any service company to establish a robust online presence, including on social media platforms.
Your website should include your business name, contact information, phone number, contractor's license number, photos of completed jobs, and positive customer testimonials or referrals. You can also link your social media sites and any business listings on consumer-review sites.
Social media pros recommend signing up only for platforms you intend to manage full-time, otherwise it becomes too overwhelming. For best results, focus your efforts on the ones with the most traffic—and highest payoff.
Use your social media channels to promote a well-done job with beautiful, high-definition photos and videos, showcase customer testimonials, promote services and hours of operation, and highlight special offers, promos, and giveaways. You may also want to consider allowing customers to book jobs through social media sites.
With social media, you can target potential customers based on location, income, preferences, and more. Consider investing in Facebook Ads, or paid promotions on Instagram or Twitter to meet your customers online.
Do direct mail marketing
Once all of the above pieces are in place for about six months, start a direct mail campaign using print and direct-mail marketing strategies as part of your business model. Sometimes sending a postcard or mailer to homes proves more effective than sending spam email.
Williams says direct mail marketing can be as simple as sending a flier to households within a certain ZIP code with a message that says: "Hey, we're so glad to be in your area now, and here's what we're offering."
"Then, we just roll with it," Williams says.
You can also send customers a refrigerator magnet or calendar to keep your company top-of-mind whenever homeowners need repair services.
Companies interested in opening a startup business in a new location can tap into ServiceTitan’s Direct Mail marketing feature, which allows you to automate and send out direct mail pieces using existing customer data. It also tracks deliverability of each postcard, magnet or other promotion, so you can see which ones convert to sales, and ultimately more cash flow.
Build leaders to grow new locations
Chris Hunter, ServiceTitan’s Director of Customer Relations, compares growing a service company to how a coach develops a winning sports team. For instance, they:
Execute a winning game plan.
Monitor performance during the game.
Give feedback for ways to improve.
Huddle with the team’s other coaches to plan a strategy for the next game.
“That's exactly what we're doing as a business owner, as a manager, or as a leader in this business,” Hunter says. “We need to make other people successful. It's no longer about 'my' average ticket, 'my' closing rate, or 'my this' or 'my that.' It's about how well our team can play, if we all want to win together.”
Williams prefers to promote leaders from within first, then operate new locations as satellite operations initially and manage them from the company's home base. After about a year in the new location with its own community marketer and general manager, the HVAC systems company begins hiring dedicated comfort advisers, technicians, install teams, and other staff specifically to beef up the new location.
"Your team should not be the last people to find out what you're doing," Williams says. "If anything, make your team members, leadership, and especially field technicians and field people, make them aware of what your plans are."
Instead of letting them worry about how much farther they'll need to drive or how their workload might increase, try to get them excited about servicing the new market.
"If you make them a part of that process and show them what it can do for them, what it's going to do for the company, their buy-in will be so much better," Williams says.
Gain insight into real-time data with ServiceTitan software
Whether you need help with invoicing customers, managing service agreements, updating pricing for real-time access on the job site, or training your techs to sell more products to help homeowners increase energy efficiency, ServiceTitan field management software gives you access to the data you need to find the right solutions.
"The best thing that ServiceTitan allows us to do is pull apart our data," says Williams, who uses the information to gain true insight into how her company is performing, from installing a new air conditioner and repairing heat pumps to adding refrigeration for air conditioning systems.
As a marketer, Williams wants to focus on:
What's happening overall with the company?
What are your customers' buying patterns?
What's the average ticket for your team of comfort advisers?
What's your closing rates on marketed leads versus tech turnovers in those markets?
"Being able to dissect things down to those minute little details is imperative to truly building a strategy that is based on facts and numbers. At the end of the day, your numbers don't lie," Williams advises.
Table of Contents
2. Building a Company for Success
3. Setting Your Company Up for Success
4. Driving a Company Culture
5. Setting a Path to Maximum Profitability
6. Billing Structure: Determine Your Pricing
7. Marketing Practices
8. Call Center Practices
9. Call Center + Field Practices
10. Best Practices in the Field
11. Field + Office Best Practices
12. Keys to Success in the Office
13. Management and Office Best Practices
14. Human Resources
15. Preparing Your Company For Sale