Indiana Geothermal Uses Jonas Software to Expand Their Business Model - and Increase Sales by 30% in a Single Year
Executive Summary
To stay competitive in a changing market, the Midwest’s premier geothermal earth loop contractor added product supply to their business model. The company needed a tool for tracking and selling their new products, so they turned to Jonas Software for a solution.
Customer Profile
In business since 1989, Indiana Geothermal provides geothermal system design and product supply, and performs hundreds of earth loop installations each year. As an earth loop contractor, the family owned and operated company acts as a subcontractor to install the underground pipe for heating and air conditioning companies.
Depending on the time of year, Indiana Geothermal has anywhere from 15 to 70 employees. Recent revenues have skyrocketed, from $1.7M in 2007 to $3.2M in 2008. Also in 2008, the company captured a 50 percent increase in profit margin, making it their best year ever.
Geothermal is defined as "heat from the earth." With geothermal heating and cooling systems, heat is extracted from the earth by pumping water through a loop of underground pipe. Geothermal energy is an efficient, renewal resource that is cost effective, reliable and environmentally friendly. These benefits, coupled with advances in earth loop contracting techniques, have made geothermal furnaces a rapidly growing alternative to gas systems.
Business Challenge
Prior to 2001, Indiana Geothermal used QuickBooks for accounting. When they outgrew the entry level program, the company began searching for a construction-specific solution that offered a service dispatch board integrated with payroll. “That portion of QuickBooks didn’t really seem very smooth,” recalls Indiana Geothermal founder and president, Kris Kyler. “We needed a program that would better handle our customer database.”
After several months of research and evaluation, the company narrowed their search to a handful of software providers. Although Indiana Geothermal initially decided on another program, they ultimately purchased Jonas Software. “We were about to purchase another program when the Jonas sales team helped me see the light,” Kyler explains. “And in the end, I’m glad we went with Jonas.”
The company began using Jonas in 2002. Everything was running smoothly until four years later. That’s when the new construction market began to change.
Until this point, the company’s primary focus had been on new construction. But in late 2006, Kyler noticed that the bottom was falling out of that market. To remain successful, the company needed to change their business model. So Kyler looked for new ways to generate revenue and offer services that their competitors did not.
Selling equipment to their customers seemed like a logical plan. Current procedures at Indiana Geothermal involved the retail purchase of equipment for installation at a customer’s site. Kyler concluded that eliminating the middleman would allow the company to purchase equipment and parts at wholesale cost and sell them to the customer for a profit.
Adding this new dimension to their business would require several changes – changes in staff, changes in current procedures and changes within their software program. “After months of negotiations with various manufacturers, we were able to secure an equipment product line to add to our services,” Kyler explains. “This required something that no one in our company had dealt with before: inventory management.”
Indiana Geothermal was about to start selling ClimateMaster furnaces – which are geothermal furnaces instead of gas furnaces – in addition to installing earth loop in the ground. Although the company owned the Jonas Inventory module, it hadn’t been fully implemented. Plus, they needed a tool to handle on-the-spot sales. “Before,” Kyler states, “we purchased products from supply houses. Now we were the supply house! We needed a way to track and sell our new inventory, so I thought I’d see if Jonas had a solution to help with this.”
Jonas Solution
With more than 40 integrated modules available within the Jonas solution, the software provider was easily able to address Indiana Geothermal’s new business management needs. “We ended up purchasing the Counter Sales module, which integrates with Inventory,” says Kyler. “We were pleased to find that these solutions handled serial number tracking and live inventory, just as we had hoped.”
The Counter Sales module was the ideal fit for Indiana Geothermal. With this addition to their Jonas solution, the company would not only know what equipment they had in stock (via the Inventory module), but they would now have a tool for selling products to customers on-the-spot.
Benefits
Since the implementation of Inventory and Counter Sales at Indiana Geothermal, business has never been better. Adding product sales has led to increases in both revenue and profit margin, and the company’s growth doesn’t appear to be slowing down. “By restructuring our business and adding new functionality to our Jonas software,” Kyler states, “our sales went up 30 percent in a year that could have been a disaster.”
Kyler credits the continued success of Indiana Geothermal to his employees’ willingness to embrace change – and adopt the Jonas solution. “It was clear to our staff what was happening with the economy, so everyone was receptive to the changes being made to expand our business offerings and increase efficiency,” Kyler says. “In relation to staff productivity, we’ve been able to save time on inventory counting. Since we now have a database that provides real-time access to our product stock, there’s no need to physically count our inventory every month.”
Although calculating return on investment (ROI) is difficult, Kyler feels that Jonas is a good value, providing the functionality and product stability needed to optimize their operations. While the company rarely needs software support, the response Kyler receives is always prompt. “I don’t call the support line often, maybe once every two or three months, and I usually phone in with a question rather than a problem,” he says. “I find that the support process is fairly smooth and turnaround time on my calls is pretty good. I also find that with every update provided by Jonas, the program gets better!”
Since restructuring, and adding Jonas Counter Sales, Indiana Geothermal has eliminated much of the competition. “No one out there does everything like we do,” Kyler states. “Once we became the supply house, we started to attain new clients, including some of our former competitors.
Looking Forward
Kyler is still wrapping his head around the changes at Indiana Geothermal. But he will definitely turn to Jonas if another business challenge arises. “In the immediate future, we don’t anticipate any other software needs. But once things settle down, that might change,” he says. “I recently discussed the new Document Management module with Jonas, and how it can help take our business paperless. That will be our next step, but probably not for a couple of years.”
In the meantime, the entire company is enjoying the flexibility and user friendliness of their Jonas solution. “When we hired a customer service representative with no prior Jonas experience, she was quickly able to learn the program’s ins and outs,” Kyler says. “Changing computer programs is one of the most painful things a company will experience. But the Jonas team made it as painless as possible. Jonas was the right choice for our business needs.”