Smart Strategy

May 29, 2018

Kim Paulicelli’s decision to open a commercial HVAC company on Long Island proved to be a smart move. Now in operation for 13 years, Premier Mechanical Services, Inc., is on its way to dominating the industry and cooling the competition. Find out how this savvy business owner turned a good idea into a $30 million outfit.

The journey to owning one of the most sought-after heating and air companies in the area was not a direct route for Kim Paulicelli. While her family operated various HVAC-related businesses over the years, her own career navigated through more diverse waters, including stints in business law, accounting, commercial construction, government, and venture capital.

Power of Agility

It wasn’t until 2005, armed with a full résumé and a wealth of determination, that Paulicelli embarked on her new journey as owner of Premier Mechanical Services, Inc. (PMS).

“I knew I had the work experience to start the company, but I also had an instinct that, since heating and air systems are a necessity in our society, they could weather the highs and lows of any market,” she recalled.

It wasn’t long after PMS opened its doors that Paulicelli’s instinct about surviving a volatile market was tested. By 2008 the construction industry began to feel the effects of the Great Recession, and by 2009 PMS found itself as vulnerable as the rest of the industry. Paulicelli quickly tamped down on spending and conserved her resources, finding creative ways to pay for necessary expenses. These tactics helped ease the severity of the recession’s effects, but she credits an agile strategy for protecting the company then and for continuing to drive its growth today.

“Being in several different sectors gave us an edge to keep going through those tough years. It’s one of the things I was aware of as we moved forward: keeping my portfolio diversified.” She continued, “You really want to be that way in any business, because when one part of the economy slows down, you still have your foot in another door.”

While most HVAC companies tend to focus in one area, such as municipalities or educational facilities, Paulicelli embraced agility and easily transitioned into various sectors, including healthcare, that would help PMS through the worst of the recession. Prior to 2008, PMS had a successful year installing systems in university dorms, which provided the financial foundation to weather what was to come. During the worst of the recession, PMS kept the doors open by taking on large hospital projects. Today the company excels in a range of industries, and that flexibility continues to drive its diverse portfolio.

Strategy for Growth

Although quite successful in navigating the Great Recession, Paulicelli was surprised by the company’s rapid growth. Her business had evolved more slowly and organically in the early years, but as growth picked up speed, she became more strategic in her business approach. Aside from outstanding customer service and the “best Local 638 Steamfitters in the field,” Paulicelli acknowledges her market edge may be partially explained by the unique vibe that comes from operating her business as a woman.

“My business started out with just family, and now the people I hired to work here have become my family,” she said. “Not that I can't be tough... just ask my boys!” Paulicelli's two sons both joined the PMS family after completing their education.

As the sole owner of PMS, Paulicelli became aware of a designation program that allows women-owned businesses to compete for government-funded projects. Certification for the Women’s Business Enterprise (WBE) involves a rigorous documentation and site visit process, one that Paulicelli completed on both a state level and for New York City. The qualification process, while a substantial commitment, has provided Paulicelli many opportunities to work with general contractors looking to satisfy WBE quotas in certain jobs.

“The WBE Certification is meant to put women-owned businesses on a level playing field, especially in male-dominated industries like ours. It has given me an opportunity to work with some general contractors that I never would have had the opportunity to work with. And now we continue to subcontract from them even on projects that don't require a WBE quota”, she continued, “They had an opportunity to see how we operate and they were impressed.”

It’s a busy time in the HVAC industry, with commercial construction on a sharp uptick. Today PMS is a Local 638 Union shop with a few dozen fitters in the field and a growing office staff. PMS is “bursting at the seams” as Paulicelli adds square footage to her administrative offices and shop in order to accommodate the growth.

Partnering for Success

Smart strategy and rapid growth require the right kind of banking partner. After many years of doing business with her previous bank, Paulicelli saw a troubling trend of consolidation among the local branches and customer service becoming more automated and less personal. “That was not what I wanted as my business grew,” she remembered. It was her business attorney who suggested she call Sterling National Bank. The single point of contact with a team-based approach was the right recipe for Paulicelli’s growing business and for her future plans to add services outside the HVAC industry. “Sterling really caters to businesses and provides services that other banks do not. It’s always been that bank that’s been right there saying, ‘Yes, we’ll help you with that,’ every step of the way.” She concluded, “They partnered with me at exactly the right time with exactly the right products to help my business grow.”

Working with a Certified Women’s Business Enterprise (WBE) 

WBE certification is designed to give woman-owned companies the opportunity to compete for projects and to increase exposure with companies that might otherwise overlook them. A closer look at the program reveals there are advantages for organizations who partner with WBEs, as well. WBE certification designates that a business is 51% owned, operated, and controlled by one or more women. While WBE designation has clear advantages for the certified company, there are many benefits in hiring a WBE. Here are just a few:

> Quotas. Working with a WBE-certified company helps organizations meet quota requirements for certain projects funded with federal or state monies.

> Incentives. For jobs outside the government sector, tax incentives may be available for organizations using certified minority suppliers or service providers.

> Innovation. Diversity fosters innovation by cultivating fresh ideas, original solutions, and new products.

> Statement. Working with diversified organizations showcases an organization’s interest in the economic growth of all community sectors.

> Competition. Introduction of additional companies into the pool of existing vendors will drive healthy competition on service levels and pricing.

> Choice. Multiple channels means businesses have better choices for services and goods.

LEEDing the Pack

As environmental mindfulness becomes more prevalent and sustainable construction more accessible, a growing number of businesses are opting for LEED-certified building practices. Whether you’re designing a new office space or retrofitting your existing structure, a green option might be your smartest.

Leadership in Energy and Environmental Design (LEED) is the most notable green building certification program in the world, designed to encourage organizations to adopt sustainable practices. Designated by levels, LEED focuses on the design, construction, operation, and maintenance of homes and buildings. The program is completely voluntary, but there are many benefits that might make sense for your company structures:

> A Bold Statement. Reports show sustainable practices are increasingly important to consumers. A LEED-certified structure shows your customers that you are committed to the environment.

> Early Adoption. Many federal agencies are required to build LEED-certified structures—a trend that will likely become increasingly popular, trickling down to local agencies and private industries.

> Incentives. Owners of LEED-certified buildings may be eligible for tax credits, fee waivers, zoning allowances, or grants. Cost Savings. Smart design not only saves through operational and maintenance efficiency but also reduces unexpected project add-ons.

> A Good Investment. Studies show LEED-certified buildings retain their property values better than others.

Advice from the Pro: HVAC Efficiency

Now that responsible environmental practices have become increasingly important to business owners and managers, companies are looking for ways to reduce operating costs while improving sustainability. HVAC pro Kim Paulicelli offers these low-cost ways your commercial HVAC can help cut expenses and lessen your impact on the environment.

> Install building management controls, such as night setback and occupancy schedules.

> Utilize energy recovery systems to lower operating costs and increase efficiency ratings.

> Use environmentally friendly systems, such as geothermal heat pumps with heat recovery systems.

> Have engineers tackle new design concepts with LEED-certified projects.