A Whirlwind Startup
Starting a new business isn’t usually a cakewalk, but some needs just cry out to be filled. In 2002 Mike Woodson was a telecommunications engineer in Ridgeland, Mississippi,who was facing a probable layoff.He was having lunch with a friend who said he knew someone who was having trouble finding anyone to install a geothermal heat pump, and that sounded like a business opportunity to him.“My response was, I thought you need a volcano for that,” says Woodson. But he started searching the Internet for information on geothermal heat pumps and expanded from there to topics related to energy efficiency. He found an Energy Star Web site that quoted a study revealing that 40% of conditioned air was leaking out of ductwork.“That caught my interest,”Woodson says.He put down his mouse,went up into his attic, and found gaping holes in his ductwork.He called a friend, asked if he could crawl around in his attic and, sure enough, he found holes in his ductwork. His lunching buddy, Jerold Sit, had holes in his ductwork, too.A business plan was born.
That business plan was eventually torn up and rewritten, but the need had been identified.After attending an Affordable Comfort conference, reading reams of home performance material, picking the brains of many seminar leaders, and mastering the intricacies of Manual J and Manual D,Woodson and Sit started Practically Free Energy last March.They sealed their first ducts in May, branched out into more general home performance diagnostics and contracting shortly thereafter, and haven’t looked back. By July, the business was in the black.A little more than one year later, Practically Free Energy have all the jobs they can handle for the next six weeks.They own a blower door, a Duct Blaster, an infrared camera, and “lots of other cool stuff that no one else around here has.”They have a floating crew of from two to six workers, depending on their needs.And they did it all while spending almost nothing on advertising.
What’s their secret? Nothing succeeds in business like answering pent-up demand, but a critical business strategy has been their imitation of a Joe Kuonen trademark: harnessing the power of talk radio (see “The Right Way Is Right,” p. 40).They bought some advertising airtime on a local radio station and talked their way into a monthly show with one of the station’s regular hosts. Most of the questions they encounter are variations on a couple of themes:“I’ve got a room that’s too hot” or “I’ve got mold.” If they get an issue that they can’t resolve on air, they’ll explain they need to come see the house.“It can be like giving a haircut over the phone,” says Woodson.When discussing building science principles on air,Woodson sticks to easy-to-understand metaphors.“We don’t talk about CFM and convection,” he says.“We talk about filling up a house with basketballs.We talk about heat transfer in terms of hair dryers and frying pans.”
Word of mouth and the talk show have generated enough calls to keep Practically Free Energy hopping.They charge $75 for an initial inspection that can last anywhere from 90 minutes to five hours.“The fee covers gas money,” says Woodson. Sometimes the home’s problems are obvious enough that Woodson can identify them without conducting any tests.“I went into one house and the duct tape on the ducts was flapping in the breeze.” But he always conducts diagnostic tests anyway, using his blower door, Duct Blaster, and a smoke pencil.“We always do diagnostics, because otherwise you don’t know what you might miss.” Before they leave a house, they will generate a report with a detailed list of recommendations, prioritized according to the customer’s concerns.Woodson is not an advocate of high-pressure sales techniques.“I will ask a customer if they want a quote on how much it will cost to fix their problems,” he says.“Most of the people who are going to do business with me will tell me on the spot.”His closing rate has ranged from 50% to 80%.
Woodson and Sit subcontract out the more technical HVAC work to a couple of companies, but that will change. Sit is studying to get his journeyman license as an air conditioning technician.They have also signed up to participate in John Proctor’s CheckMe program (see “Conditioning the A/C Technician,”HE May/June ‘02, p. 22).
Asked whether he enjoys his new profession, Woodson answers lightly,“It’s a lot better not being at a desk.This morning I was laying on my face in insulation.” Besides, how else would he get to see the strange tracks that previous contractors have left behind? “We pulled a bag of onion rings out of someone’s ductwork that was from eight years ago.”More seriously, Woodson gets fulfillment from filling customer’s unmet needs.“It’s fun and I’m helping people.”That’s a powerful combination.
Enter your comments in the box below:
(Please note that all comments are subject to review prior to posting.)