Unique 2.0

Unique 2.0

STRATEGY by Mark Gordon | Managing Editor

Mike Montgomery couldn't believe how little technology there was inside a $15 million air conditioning company. So he bought it. And then he changed everything.

Mike Montgomery, owner of one of the largest air conditioning service firms in the Sarasota-Bradenton market, initially considered buying the company after a 2005 chat with one of the previous owners, a teammate in a Bradenton adult ice hockey league.

What didn't fit well with Montgomery, however, was how the company, Unique Air Services, did just about everything manually. A computer and math geek who built up and then sold a $25 million software firm in 1998, Montgomery couldn't skate around how technologically inefficient the company was.

The company's accounting system, for instance, still used some hand-entered journal logs. Even more maddening: Employees, all 150 of them, didn't have their own e-mail accounts as recently as 2005.

"When I looked at the opportunity, it was a great fundamental business," Montgomery says. "I thought I can't grow this yet, but if I can automate everything, I can really do this."

In March 2006, Montgomery bought the company, which focuses mostly on air conditioning repair and other home services in the existing home market. He then set about automating the business, a painful but necessary task.

The technological upgrades, which cost Montgomery more than $1 million, are paying off. A year and a half later, the $17 million-plus company is still growing revenues, albeit slowly, a rarity in an industry so closely tied to the slumping housing market. What's more, Montgomery says after spending 2008 digesting all the upgrades, he expects the company to expand in 2009, both by opening new offices north and south of Sarasota-Bradenton and by buying smaller competitors in various markets.

The improvement projects were widespread, from accounting to the phone systems to its fleet. The efforts culminated in October, when Unique Air moved into its new headquarters, a 23,000-square-foot former Beall's financial office it bought for $1.93 million.

Now, most of the company is run with a military-like efficiency, right down to how a dispatcher uses GPS technology to see where every repair tech is at any given second, even the speed he's driving.

"It truly is a unique business," says Montgomery. "It would be hard for another company to replicate what we do."

'Pretty embarrassing'

It would also be hard to find people who replicated Montgomery's life, pre-Unique Air.

A Canadian native, Montgomery studied math and science at the University of Waterloo, west of Toronto.

In the late 1980s, he founded a company that developed software for companies in the natural gas industry. That business, TransEnergy, grew to 180 employees and $25 million in annual revenues, and Montgomery ultimately moved it to Houston, where the national gas action was.

TransEnergy's clients were some of the biggest in the industry, including Occidental Petroleum. But by 1998, Montgomery was looking to take a break. So he sold the business and moved with his wife and young family to the Cayman Islands.

A few years later, Montgomery moved his family to Sarasota, mostly so his children could attend a private school in the area. It wasn't until 2005, while playing hockey with Ken Jackson, then a co-owner of Unique Air, that the still-retired Montgomery considered getting back into business.

By the early 2000s, Unique Air, which was founded in 1975, had grown to more than $10 million in annual revenues, as well as 18,000-plus customers in Sarasota, Manatee and Charlotte counties. It also had expanded into new business lines, including plumbing, pools and appliances.

But as the industry evolved, the company's lack of technology and automation turned from an inconvenience into a hindrance. Basically, the company grew in spite of itself, says Montgomery and Paul Orth, another past co-owner of the company who now heads up the sales team.

"Unknowingly," Montgomery says of Unique Air, "they had a whole lot of competitors grow around them."

Orth, who bought an equity stake in the company in 1984, says by 2004, it was apparent the industry was passing the company by. Turns out the timing of Jackson and Montgomery's hockey-based friendship was just right.

"If we stayed as owners, we were going to have to dump money into it," says Orth. "But Mike came in and was willing to do it."

Montgomery's first move was to do something about Unique Air's headquarters, an 8,000-sqaure-foot facility south of Fruitville Road near Interstate 75 in Sarasota. When he bought the company, the building was an overcrowded jumble, to the point where some equipment and tools were stored in boxes and trailers outside the office. Says Montgomery: "It was actually pretty embarrassing."

The new headquarters, in the Manasota Industrial Park west of U.S. 301, is as satisfying as the previous building was embarrassing. The complex is split about half for warehouse and parts storage and half for customer service cubicles and executive offices.

Every employee can now access a work e-mail account from his or her own computer. Departments are grouped together now, so, for instance, an accounting employee doesn't have to walk upstairs and across the entire building to find a finance colleague.

And an extra bonus: The new building has ample space for both the company's fleet of 100 trucks and vans, as well as 100 parking spots. Thus the days of double parking, parking on the lawn and parking anywhere you could find a spot parking are over.

New and improved

Beyond the new corporate headquarters, though, Montgomery has led some significant technology and automation upgrades, which, in turn have led to a company-wide rebirth. "We are just 100% better organized," Montgomery says. "It has brought a sense of calm to the company."

Call it Unique 2.0. The upgrades include:

• A new and improved phone system for customer service reps. In the past, the company operated with six fixed lines: If a seventh person called, be it a current or a potential customer, they were greeted with a busy signal. In other words, Montgomery says, an invitation for the customer to go elsewhere.

The new phone system, which cost more than $100,000, has 23 lines, with capacity for more if necessary. What's more, all the lines are hooked up to a big-screen monitoring system, where reps can see what call is on hold, as well as what each call is about.

"I'm basically providing as much information as I can to the customer service center," Montgomery says. "Customers aren't going to become a number."

• A new and improved fleet. When Montgomery bought Unique Air, most of the trucks were just like the company's old building: Outdated and inefficient. "We have some pretty sophisticated customers," says Montgomery, "and the last thing they want to see is a rusted out van leaking oil."

Montgomery got rid of the worst of the old trucks and replaced them with Sprinters. Those new vans, which individually cost about $40,000, are bigger, twice as good on gas and more reliable, says Montgomery. The company has bought about 60 Sprinters over the past two years, as it has gradually updated the fleet;

• An overhaul of the accounting software. The past system, a combination of journal book and data entries, was both cumbersome and frustrating. Executives were only able to look at certain monthly generated reports. Says Montgomery: "We were almost operating the company while blind."

A comprehensive, integrated Microsoft accounting system fixed that. Now Montgomery and the other executives can access a daily menu of financial options, from revenues to gas bills to unpaid accounts.

In total, Montgomery predicts the upgrades will be the blueprint for future growth.

"I'm not out to beat the hell out of our competitors," Montgomery says. "I just want to be the best."

outside forces

Even though Mike Montgomery has led a $1 million-plus technological transformation of Bradenton-based Unique Air the last two years, he says the company's biggest challenges - and his biggest worries - are external.

The state of the 2008 housing market is an obvious starting point.

And it's not so much the price or pace of sales worrying Montgomery. The company focuses mostly on serving systems in already-existing homes, in addition to a few businesses, so the new homes market comeback, in of itself, isn't the biggest concern.

The problem, Montgomery says, is the collapsing new construction market has meant his competition level has increased significantly. Some of those new competitors, he says, are working on day-to-day margins and are "mucking up the pricing" plans for his company.

Things are even worse for some other firms, Montgomery says. Several small and mid-sized companies, for example, have offered to sell Unique Air equipment and tools at cost.

AT A GLANCE

Unique Air Services

Year Revenues %Growth

2004 $15 million

2005 $15.7 million 5%

2006 $17 million 8%

2007 $17 to $20 million (projected)

Source: Unique Air Services

REVIEW SUMMARY

Business. Unique Air Services, Bradenton

Industry. Air conditioning, home repair services

Key. Company, which moved into a new headquarters in October, has improved its technology and automation, too.