In this two hour free lecture, Dr. Charles Remund, author of the IGSHPA Design Manual, walks you through the calculations for designing the ground heat exchanger for a commercial geothermal system. To download a copy of the slides, discuss the lesson with other professionals, and get access to additional tools: click here to sign up for […]
I’m in the search for the best sales tool to sell solar pv, solar thermal and geothermal. I am building a renewable energy company, and I’m focused on building the most profitable company I can. We’re a small company, we haven’t raised venture capital so we’re driven by cash, and we like simple, elegant, and effective solutions. So, finding the prefect tool is very important to us. I’m inspired to create a pocket guide to selling renewable energy projects after finding a similar pocket for carpenters (see right). It’s simple, cheaper and super effective. It perfectly supplements the knowledge of a well trained carpenter.
First, let me discuss why finding the perfect sales tool is so important to me and also represents a larger business philosophy. Profitability is extremely important to me and the industry as a whole. Not only do we need to show that renewable energy is profitable but that’s it’s MORE profitable then other activities. By profitable, I mean our net, before tax, profit margin not absolute profit. In order to do this, we must minimize overhead so that we’re very nimble. Being nimble is just as important as being diversified. If jobs in a certain technology dry up, we don’t want the company to die. A sales tool, and the processes and principles it represents, will have a huge impact on our ability to be profitable.
In order to do this, we’re being extremely diligent with our marketing activities. We’re going to make sure we understand what factors lead a client to close faster, for more money, with the least amount of marketing dollars and time spent, and then find more of those types of clients. It sounds simple, it’s hard to implement. The long term goal is that each client leads to more business through word of mouth. They love us so much that they’ll tell all their friends. In order to facilitate this we’ll provide a couple “artifacts”, like a project DVD, to each client after the installation is complete. The DVD will make “sharing” of the project between neighbors easy. To get referrals you first need a few first jobs. We’ll get the ball rolling by creating a “homeowner” workshop. Learn how we create the workshop and presentation here. The workshop will be something that is extremely useful to the homeowner and also provide a personal connection to our company, so they trust and respect us, because they’re know us personally. Our marketing is based on being authentic, transparent, and useful. You heard it right, our marketing is based on two activities. That’s it, very simple.
Although we know how we want the system to look, it’ll take a lot of time and testing to get there.
On the operations side, we’re structuring the company so that it will naturally optimize itself around being profitability while being extremely efficient operationally (no overheard). We’re not interested in paying sales people based revenue commission because they may sell jobs that don’t make money. We will have teams of people work on projects together and be paid based on the profitability of that job because everyone who works on the job impacts it’s profitability. If this seems crazy, read “The Great Game of Business.” Jack Stack is the man.
The marketing activities and operation activities have a huge overlap in many places of the business, but the largest overlap come during the site visit and when the contract is signed. With marketing, we want the highest profit in the least amount of time. This means we’re interested in decreasing the number of leads that we deal with BUT increasing the closing ratio of each lead. It’s much more profitable to deal with 20 leads, where 10 close then 100 leads where 10 close. If you were only looking at the number of closed leads you’d think they were the same. However, dealing with 100 leads take a lot of time and this time is hard to track because its a “soft cost” for the business, but it’s there. Trust me.
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Yes, that’s my picture from my first video tutorial. Last week, I wrote a article on the 4 basic steps to deseigning a geothermal heat pump system for a residential home. To refresh your memory, those steps are 1) perform heat gain/loss calculations 2) size the heat pump 3) size the loop field 4) size the ground loop. To read more, click no the above link to get the full walk through.
I mentioned at the end that there were a few advanced design topics I did not cover. One was the trade off in heating dominate climates between a small unit that is undersized for heating and thus sometimes needs to use (very exepsnvie) electric heat versus a larger unit that can produce plenty of heat, but requires a larger (very expensive) loop field to function correctly. To address these questions, I’ve created a video tutorial using a sample project to walkthrough the comparison. Read past the break for full details and join HeatSpring on facebook to keep the most up to date on free courses, events, tips, resources and news. If you’re a clean energy professional and looking to connect with other geothermal professionals to collaborate on jobs or best practices, request to join HeatSpring’s linkedin group for Clean Energy Professionals
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This is the last part in a three part serious about the three most common errors that geothermal designers make when designing ground source heat pumps system. If you’ve been following, the main concern for a very simple reason, the geothermal industry is small but quickly growing so it’ll be best to minimize any black eyes from poor system design.
In my last two posts, I’ve outlined the first two big mistake made by designers.
Underestimating the importance of accurate peak heating and cooling load calculations
Not Giving Proper Consideration to Alternatives posted on Heating Help.com
The third mistake is simple, don’t overcomplicate the design.
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If you’re new to the geothermal heat pump industry, read the Geothermal 101 Reading list. It has free tools and articles on geothermal design and installation, and sales and marketing best practices.
Working in the ground source heat pump (GSHP) industry, especially in a small company where you are asked to take on the role of salesman and designer, you will find yourself answering the same questions with each new customer. Get used to it. If you work in the industry long enough, you will be asked every question under the sun. How will this system heat my home when the soil temperatures are only 50 degrees? What if I want to keep it warmer in my house? Do I need to buy an air conditioner too? How does a heat pump work? The list goes on and on.
The truth is, the average homeowner doesn’t understand how their central air conditioner works (or the refrigerator in their kitchen for that matter). They just know it works. When you mention the term “geothermal heat pump” or “ground source heat pump” to your prospective customer, all of a sudden you find yourself in uncharted territory. Then the questions begin.
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