“I wanted to open my own business and saw you could become an owner here,” AJ said. “So I talked to Winsupply’s Steve Coen and met with Mark Riedmiller, president of Sacramento Windustrial.”

Turns out Mark had been wanting to add HVAC to his local Winsupply company for a long time and just needed to find the right person. So together with Winsupply Area Leader Kyle Buxton, they came up with a plan:

• AJ would sell HVAC material out of Sacramento Windustrial, with help from Mark and his longtime team.

• If AJ succeeded, he could spin off his own local Winsupply company in Sacramento after about a year, with Mark as his sponsor and an investor.

“The best thing for me was the chance to start slowly by working in outside sales at Mark’s company first,” AJ said.

Before he said yes, AJ did a little more homework.

“I flew to Texas to meet with a few presidents of other HVAC local companies at Winsupply,” AJ said. “I learned about the regional distribution centers and the back-office support services we get out of Dayton, Ohio. That’s when I knew I could do this.”

And he has.

After joining Sacramento Windustrial in February 2020, AJ built a book of HVAC business, got trained and mentored, and learned The Winsupply Way. Although the coronavirus pandemic delayed AJ’s plans to open Winsupply of Sacramento HVAC, AJ finally became an owner and the president of his new company in May 2022, in a building right across the street from Mark’s company.

“AJ’s driven by desire, knowledge and a better way to take care of customers,” Kyle said. “After his first two months in business, AJ’s blown away all the projections for both sales and gross margin at Winsupply of Sacramento HVAC.”

Why did the plan succeed?

“When you incubate a new local company inside an established local company – we call them hub-and-spoke companies – you reduce a lot of the risk for the incoming president,” Kyle said.

Here’s how it worked for AJ:

1. AJ had Mark’s OK to take risks as he began selling HVAC out of Sacramento Windustrial. “When Mark brought me on board, I was the HVAC company,” AJ said. “I could use Mark’s guys to load a truck, but when it came to selling HVAC parts and supplies, I was on my own. It was up to me what I wanted to sell.”
   When AJ made his first buy of HVAC products, “it was terrifying because it was Mark’s money,” AJ said. “I was scared to death I would not sell the material. After a while, I realized that’s why we’re here: to keep buying and selling and serving our customers.”

   As he made more decisions, AJ said he was monitored but not restricted.

   “Mark wanted me to think outside the box to solve problems,” AJ said, “like when we struggled getting the right materials and equipment into inventory because of supply chain problems. When I wanted to use other brands, Mark said, ‘Sure – go ahead.’”

   Soon, AJ started pursuing larger contractors, which required more capital for volume buys.

   “Mark allowed me to go after big jobs I couldn’t have gone after on my own or anyplace else,” AJ said. “He never told me no.”

   
   

2. Mark’s company was a safety net for AJ, who didn’t have to worry about payroll or overhead as he worked strategically to win customers. “During AJ’s first year with us, we subsidized him because he had no sales and margin in HVAC,” Mark said. “He cost us money. We took the expense hit upfront so AJ could be profitable later.”

   That expense hit included HVAC inventory carrying costs, AJ’s salary and the salaries of Mark’s two employees who were helping AJ order, sell and deliver HVAC material to customers.

   “We started seeing some traction,” Mark said, “and by year two, AJ was making us money in margin, profit and earnings.”

   
   

3. Mark provided logistics support – his team and fleet of trucks – to help AJ deliver on his promises to new customers. 

   “AJ gained credibility and trust to build a customer base that would follow him later when he opened Winsupply of Sacramento HVAC,” Mark said.

   
   

4. Mark mentored AJ every day. After AJ told Mark that he had no experience with financial statements, Mark taught AJ how to read the profit and loss statement and the balance sheet; which reports to check daily, weekly and monthly; and how “certain decisions throughout the month will either cost you money or make you money,” Mark said.

   “We also talked about what to pay attention to – like who owes you money, are you receiving materials correctly, and do you have any open orders that weren’t billed.”

   AJ had time to get more training before opening his own local company. For example, AJ attended Winsupply’s annual, regional and online training; enrolled in Winsupply’s Management Development Training Program; and took vendor training.

   AJ also discovered the power of local decision making at Winsupply and its impact on customer service, Kyle said.

   “AJ learned right away he could approach his market the way he wanted and deliver a level of customer service his competitors don’t even attempt to deliver.”

   For two years, AJ trained two of Mark’s employees in HVAC so they could become AJ’s employees when he opened his new local company. Mark, an investor in AJ’s future company, was 100 percent on board with this idea.

   “I knew it would give my employees the chance to be part of a startup,” Mark said. “It was an easy decision since AJ struck me right away as someone I wanted to be in business with: smart, able to invest and willing to take risks.”

   While working as a commissioned outside salesperson at Mark’s company, AJ practiced financial discipline. He set aside extra money over two years so he’d have even more to invest when the time came to open his own local company.

Because AJ learned at Winsupply how to be a great wholesaler and built a book of business at Mark’s company first, he was able to be profitable immediately after opening Winsupply of Sacramento HVAC. Unlike some entrepreneurs, he didn’t have to start off operating in the red for months, or even a year or more.

“For me, that meant a lot less stress and sleepless nights,” said AJ, who’s already begun accruing profit sharing. He’ll distribute profit-sharing checks to his hardworking employees after the fiscal year ends.

Said Kyle: “Starting at a local company first is a low-risk, high-reward opportunity for entrepreneurs who want to get a solid foundation in place before opening their own local company at Winsupply.”