Two plumbing and HVAC industry veterans have returned to once again help contractors succeed in their businesses. Jim Abrams and Terry Nicholson have launched PRAXIS S-10, a success group for contractors, and PriceFixer.com, a novel approach to selling HVAC equipment.
The duo need little introduction. Their most recent notable achievement was building Clockwork Home Services and selling it to Direct Energy, a North American supplier of energy and related services, for $183 million in 2010.
Founded in 1998, Clockwork featured national franchises for nearly all residential contracting services, such as Benjamin Franklin Plumbing, One-Hour Air Conditioning and Mister Sparky.
The business also provided plumbing, HVAC and electrical contractors with extensive training through, for example, the Contractors’ Success Group, to enhance customer services, practices and technical acumen while also providing tools for better business management.
In all, Abrams and Nicholson have collaborated to improve the contractor’s lot in life for several decades. In fact, Nicholson started his HVAC career in 1981 as a salesman working for Air Experts, a St. Louis HVAC service and replacement business Abrams started that same year after working at Trane from the late-1970s.
After achieving contractor success, Abrams, Nicholson and John Young, a former Trane colleague, went into contractor consulting and also founded Service Experts, an early HVAC consolidator that eventually went public.
What is PRAXIS S-10?
PRAXIS S-10 bears some resemblance to the duo’s former work with the Contractors Success Group.
“Over the years, Jim has developed a 10-step process that we’ve used in many of the businesses we’ve been involved in building,” Nicholson says. “It’s been refined over the years to what I think of as the ‘science of business.’ ”
A Latin term essentially meaning the “application of proven knowledge,” PRAXIS principles are all designed to make plumbing and HVAC contractors better at running their businesses.
Considering all that, you would be forgiven if you guessed the “10” in “PRAXIS S-10” stood for 10 steps. But actually, Nicholson says it’s just a coincidence. The “S” stands for “success” while the numeral actually means “a perfect score.”
“You have to be a perfect 10 to succeed,” he adds.
When we talked to Nicholson in December, he said he’s signed up about 115 contractors in 33 states. PRAXIS S-10 members must be licensed, insured and willing to commit to offering customers a 100 percent guarantee of satisfaction.
Members of the group receive three major components (plus a fourth we’ll explain further below):
That last feature is worth noting since it represents a major upgrade from how Nicholson used to offer training in past success groups.
“PRAXIS University does away with the old classroom-style learning that costs thousands to attend,” Nicholson adds.
The team’s former Contractor Success Group, for example, offered a bevy of courses, typically located in St. Louis. A sales management course might cost $2,500 or a tech training course would be $1,900. The expense of travel, hotels and food could add thousands more depending on how many people might be signed up for the classes.
On the other hand, PRAXIS University is all online, available on demand, 24 hours a day, 365 days a year.
Plus, the training is built into the monthly cost of membership. The online university has most, if not all, the training that Nicholson used to offer in a classroom. In addition, when we talked, the group was in the process of putting the finishing touches on a new course designed to help a tech move into management. The digital training is all based on modules that include a test at the end of each, which must be passed in order to progress to the next stage.
“When you look at the industry, everyone is very technically oriented, salt-of-the-earth people who are very competent and skilled,” Nicholson says. “But they probably didn’t go to business school. That’s where we come into play.”
Also involved in the launch is Jimmy Hiller, owner of Nashville-based Hiller Plumbing, Heating, Cooling & Electric, which has 630 employees, 470 trucks and 12 locations in three states.
“He was one of best students,” Nicholson says.
What is PriceFixer.com?
Members of the group can also chose to partake in another component: The PriceFixer business model intended to help small HVAC contractors who need more highly profitable replacement sales, or plumbers who want to add HVAC to their service offerings.
PriceFixer.com is a website designed to sell HVAC equipment directly to the consumer.
“PriceFixer.com represents complete transparency in pricing HVAC systems,” Nicholson adds. Consumers can log in, pick out what they want and see the complete price of the equipment.
Nicholson admits this public-facing website is certainly on the opposite end of the spectrum from what he and Abrams have done before, but adds that “HVAC pricing has gotten way out of hand.”
Once the equipment is shipped to the consumer, PRAXIS S-10 members could elect a franchise option to install the equipment. (Of course, the consumer is free to have another contractor install the equipment, too.)
PriceFixer.com equipment packages are priced at thousands less than the typical system, Nicholson says.
Ultimately, Nicholson says PriceFixer.com taps into the rise of online shopping.
“Contractors hear all the time from consumers that they can get something for less online,” Nicholson adds. “I can’t change the world, but I can help the contractors profit from this idea.”
According to the company, it has already completed 15 sales and has more than 80 orders in the pipeline.
Nicholson said the equipment purchased though PriceFixer.com comes with a standard warranty, typically five years. In addition, a 10-year extended warranty can be purchased. If a PRAXIS S-10 member installs the equipment, the consumer gets a 10-year parts warranty for free.
Nicholson says PriceFixer.com was designed with the small contractor in mind.
“PriceFixer is tailor-made for the small HVAC contractor who needs more highly profitable replacement sales, or plumbers who want to add HVAC to their service offerings,” he explains.
According to his research, 62 percent of HVAC contractors consist of four employees or less, while 18 percent have between five and 10 employees. Only 8.5 percent of HVAC contractors employ more than 20 people.
“Small contractors battle for market supremacy against large contractors,” Nicholson says. “They lack the resources to train, advertise and market like large contractors. This creates many obstacles for small contractors that threatens their ability to survive and makes it difficult to succeed.