Right Time, Right Place

Right Time, Right Place

COMPANIES by Mark Gordon | Managing Editor

In the early 1980s, Rick Allard was in his mid-20s, working 90-hour weeks installing air conditioners in Sarasota-area homes. It was a one-man, one-truck business, and Allard didn't want to turn down any job.

Starting with $200 in the bank and what he calls "sweat equity," he began to build up a client base. He soon hired three people. Still, he told himself he'd be damned if he was going to be crawling around air ducts when he turned 50.

Allard has five months to go before hitting that milestone age and his dream has come true: He has not seen the inside of an air duct since about 1995.

Instead, he has built up his air-conditioning company, Southern Comfort Heating & Cooling, to be among the largest players in the Sarasota-Manatee market. Revenues have grown at an average annual rate of 30% since 2001. It generated $7.1 million in 2005; it expects to generate $9.3 million in 2006 and more than $10 million in 2007.

The Bradenton-based company, which celebrated its 20th anniversary last month, has gone from 17 employees in 2001 to more than 60 in 2005. And it adheres to an extensive training regimen for new employees, both to keep up with new requirements in the industry and for customer service. "We want to be the Lexus of the industry," Allard says.

When Southern Comfort crosses the $10 million (revenues) threshold, it will be among only about three other firms whose sales are in the eight-figure range. And that's out of 250 or so air-conditioning companies operating in the Sarasota-Bradenton area, says Jerry Greenstein of the Manasota Air Conditioning Contractors Association, a local industry trade and advocacy group. (See table.)

The perfect storm

An obvious fuel for Southern Comfort's growth has been the Gulf Coast housing boom of the last five years. But there are several other factors as well, say Allard and others in the industry. The list includes an educated consumer base more concerned with air quality than ever before; new government regulations, such as a mandate to use new a machine known as a 13 SEER (Seasonal Energy Efficiency Rating) air conditioner, leading to new products; and a growing respect for tradesman focusing on working in the AC industry.

"This industry has so much potential," Allard says. "The perfect storm is happening now in this industry and for this area."

Allard didn't know it 20 years ago, but he was bracketing himself for the storm by starting his own AC business. After a stint working as a crew chief for a U.S. Army helicopter unit, Allard moved to Florida. He says he was clueless when it came to air-conditioning systems, but he thought Florida was a good place to start.

He learned the trade through vocational school and on the job. His revenues were about $300,000 a year the first few years as he took on a jack-of-all trades mentality: After climbing the ducts, he did the billing, too.

"When you're out on your own, it's stressful," Allard says. "It just wears the hell out of you. But you have got to keep going."

Allard, with his down-home friendly personality, tall build and long wavy blond hair isn't exactly straight out of central casting for the prototypical CEO of a multimillion-dollar, 100-plus employee company.

But he borrowed a well-known idea from business legends Jack Welch and Warren Buffet five years ago when it came to growing Southern Comfort Heating & Cooling. Sensing a booming market on the horizon, Allard knew the then 17-person firm had to grow, and rather quickly. Like those business titans, he hired smarter people than he to get the job done.

"I knew my limitations," he says. "I needed someone who had been there, done that, to get me over the wall."

Allard hired Danny Marshall, who had previously worked in executive positions for air-conditioning companies in the Orlando and Tampa areas. Marshall officially accepted the position of general manager of Southern Comfort on Sept. 11, 2001, minutes before the terrorist attacks in New York and Washington D.C. And even with the post 9/11 economic problems to come, Southern Comfort moved ahead with a growth plan.

'Owning the market'

Besides getting the right people in decision-making positions, Allard says he realized there were a few other things he needed to take advantage of growth opportunities. First, he needed "lots of cash." He needed more space to store the growth. And he needed to hire and retain employees to carry out the mission.

On the cash front, Allard borrowed money, about $1 million, and put up some of his own funds, too. For space, he bought the property behind his building on S.R. 64 in 2004 and built a warehouse/training facility. The 6,000-square-foot building is in the final phase of construction and should be open later this spring.

Building an employee base has been, and is, an ongoing battle - for Southern Comfort and others in the industry. "Training is a constant part of this business," says Marshall. "We have to work at it every day."

The local air-conditioning group, MACCA, has set up job fairs, and companies have been talking to schools to build up apprenticeship programs. Marshall says Southern Comfort tries to foster a partnership-like environment for employees to move up in the company so they don't jump to a competitor. Others in the industry follow a similar plan.

While the company expects the employee numbers and revenues to keep going up, there are no plans to expand north or south. Allard and Marshall say the plan is to keep growing locally at 20% to 30% each year.

"It comes down to owning the market here," says Allard. "Why go to Hillsborough, why go to Charlotte, when there is a monster in your backyard?"

Southern Comfort

Heating & Cooling

Year Revenues % Chg.

2001 $2.6 million

2002 $4.4 million 69.2%

2003 $4.8 million 9.1%

2004 $6.1 million 27%

2005 $7.1 million 16.4%

2006 $9.3 million* 30.9%

* Projected; Source: Southern Comfort Heating & Cooling.

A Cool Industry

The biggest air-conditioning companies in Sarasota-Manatee counties, ranked by 2004 revenues.

Unique Air Inc. $15 million

Custom Air Inc. $13.8 million

Aladdin Ward

Electric & Air Inc. $11.2 million

Southern Comfort

Heating & Cooling $6.1 million

Cortez Heating &

Air Conditioning $5.7 million

Air & Energy Inc. $3.5 million

Source: Gulf Coast 250, Gulf Coast Business Review.