Watsco: A Customer for 40 Years | In Practise

Watsco: A Customer for 40 Years

Owner and CEO at Florida Heat & Air, Inc

Learning outcomes

  • New construction contractor relationship with Carrier
  • Price competition between HVAC contractors for maintenance contracts
  • Why contractors choose Watsco for equipment and materials
  • How the HVAC procurement process has digitized
  • Watsco’s scale advantages and how they share efficiencies with customers
  • How Watsco serve customers through new innovative products such as SBE and OnCall Air
  • The power of relationships for contractors
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Executive profile

Christopher Graff

Owner and CEO at Florida Heat & Air, Inc

Chris is a third-generation owner of a HVAC contractor based in Florida. Florida Heat & Air was founded in 1989 by Chris’s grandfather who built the business into one of the largest HVAC new construction contractors in Florida and one of the largest customers of Watsco in the area. The business is a verified Carrier dealership and has been a customer of Baker Distribution, a Watsco subsidiary, for over 40 years. Read more

Chris, can you provide some context to your business?

It is a family business that my grandfather started, in 1989. My grandfather had been in the air-conditioning business for many years; it was probably the mid-60s when he got into it. Then he built the company and my uncle and mother took over. Through the downturn that we had in 2007, 2008, 2009, we survived and once we had decided we had survived through it, I ended up buying my mum’s half of the company, so I own 50%. I was working in the field all those years as an installer and service technician. In 2006 to 2009, I pretty much did everything, just trying to survive. There were a lot of things I did to try and help the company get through those times. We did and we made it. Now we’re thriving and everything has been pretty good, lately. I would say we’ve had a good five or six years that have been very strong.

What is your revenue split between new build and replacement?

Right now, we’re pretty heavy on the construction because it is what we’re good at. We are about 90% construction and 10% retail. We’re very heavily construction oriented; that’s been our biggest hurdle, trying to even the company out.

Is that just legacy reasons?

We were built as a construction company and didn’t really do service until my uncle and mom took over. It just wasn’t something that was focused on. Even when my mom and uncle were running it, we were just never able to make it grow; that would be a better way to put it.

Why was it so difficult?

Our market is saturated with air-conditioning contractors. I think the last I heard, there were 1,100 or 1,200 air-conditioning contractors registered in the area that we work in. There is a lot of competition. But there is not a lot of competition in construction. That is where we decided to focus our efforts. There is good money in construction; you just have to do a lot of it.

Are most of the contractors in the area really small, one, two or three man bands, that are only doing the service side of the business?

Yes. There are a lot of those. I always thought that, as a bigger company, you would be able to provide better pricing but it doesn’t work that way. Once you learn the business side of it, it becomes obvious that it works in a different way. You can’t provide cheaper prices than the one, two or three man companies, just because your overhead is so inflated. We have much higher costs and it’s impossible to compete with those guys.

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Audio

Watsco: A Customer for 40 Years

November 17, 2020

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