'Never a better time to own a service company'

PLEASANTON, CALIF. — Steve Rivers, the president of Rivers Plumbing, Heating & Air here in the San Francisco Bay area will take over as president of the Plumbing-Heating-Cooling Contractors — National Association at the group’s CONNECT 2013 convention and show in Las Vegas in mid-October. Rivers started his firm, a residential service contractor, in 1979. In the beginning, the firm performed some new construction work and commercial tenant improvement, but they decided to stick with service because they like getting paid consistently.

Steve Rivers, the president of Rivers Plumbing, Heating

PLEASANTON, CALIF. — Steve Rivers, the president of Rivers Plumbing, Heating & Air here in the San Francisco Bay area will take over as president of the Plumbing-Heating-Cooling Contractors — National Association at the group’s CONNECT 2013 convention and show in Las Vegas in mid-October. Rivers started his firm, a residential service contractor, in 1979. In the beginning, the firm performed some new construction work and commercial tenant improvement, but they decided to stick with service because they like getting paid consistently.

Rivers has three children in the business, to whom he hopes to pass on the company.

Rivers was good enough to take the time to answer questions from CONTRACTOR.

CONTRACTOR:I’d like to find out how you got started in the business. When did you know that you’d want to work in PHC contracting? Did you go through an apprenticeship? College?

Steve Rivers: I attended UC Berkeley from 1972 to 1976 and played a little football at CAL. Their athletic department was good at finding us summer jobs and I was exposed to several trades in the early years of my career, having worked with carpenters, roofers, electricians and plumbers. I was always mechanically inclined, and I found working in the trades to be interesting and enjoyable.

C: What was your first job when you entered the industry? What did you learn from your first boss?

SR: I was hired in 1976 by an established union plumbing and mechanical contractor, which had three generations of CAL alumni. They were also very involved in the PHCC and their founder, Louis J. Kruse, was coincidentally the PHCC National president in 1937. I was later promoted and moved into the office as their service manager and learned their methods and systems at running a successful plumbing service department. I enjoyed my position there, interfacing with both their customers and the field employees, but I also realized that I still had the desire to work with the tools.

(Editor’s note: Rivers’ work at L.J. Kruse Co., Berkeley, Calif., makes him a contemporary of the company’s President Dave Kruse, who is a past-president of the Mechanical Contractors Association of America. “I have known Steve for over 30 years,” Kruse told CONTRACTOR. “He’s a good guy. His first job in the industry was with L.J. Kruse. He quickly rose to service manager. He’s a hard worker, very intelligent, personable and a fun guy.”)  

C: Tell me about the Pleasanton area and your region Northern California in general. How does being located in the high-tech Mecca influence your market?

SR: In my opinion, I have been fortunate to have been born and raised in the San Francisco Bay Area. My family here goes back to the late 1800s and of course we have seen quite a bit of development and progress over the years. While most tourists are aware of the cool summer weather San Francisco proper experiences, my business is in the east bay area of Contra Costa County. Our summer weather regularly passes into triple digits, so it is ideal for an HVAC contractor.

Businesses in this part of the country are definitely impacted by ups and downs of the high-tech industry. When things are going well for high-tech, things look up for companies in this area because of the related business that occurs in this region. And when there is a slide, there is definitely a spillover effect for small business.

The positive point to experiencing these ups and downs is that I think most businesses in this area have become pretty realistic, and know what is reasonably possible as far as sustainable growth.  For me, that means that I am very happy with the size of operation I am running, as it is very manageable and perfectly suited for my business goals. 

C: How does your firm’s work break out between the plumbing and HVAC sides?

SR: From a revenue standpoint, we are right at 50% plumbing, 50% HVAC. At this point in my career we perform nearly 100% service, repair and work. Earlier in my career, we did custom homes, commercial TI and a lot of remodeling work, but I’ve found my niche here.

C: Are they operated as separate divisions with separate management and P&Ls, or is the firm integrated with all of the technicians cross-trained?  

SR: Rivers Plumbing, Heating & Air offers all services through one division. Education is a top priority and a couple of our techs are cross-trained. We take advantage of all of the PHCC seminars and training programs to stay on top of the latest information, processes and trends. All of the skilled field and office staff have been with the company at least several years now, so we are aware of our strengths. We are as efficient as possible, and are able to meet the customers’ needs as quickly as we can. 

C: You service a large geographic area with traffic that has to be a nightmare. How do you manage that? 

SR: We try to manage our service calls as efficiently as we can. All field employees take their vehicles home each night and are dispatched via their smartphone and our software.  We’re able to track the vehicles times and locations and stay on top of the schedule pretty well. Having been in business more than 30 years, we know this area very well — that’s an advantage.

C: What do you most enjoy about running Rivers Plumbing?   

SR: I am proud of the role my business plays in protecting the health and safety of our customers, and our commitment to providing excellent service to them. As a family owned and operated company for 34 years, we strive to provide value to our customers.  Our goal is to have customers think of us as their helpful next-door neighbor.

C: What do you dislike, the one task you would rather never do again?

SR: I wouldn’t take on work as a subcontractor for large generals anymore. The work was always competitive and the pay was slow to occasionally non-existent!

C: Are you involved in green plumbing or high efficiency HVAC? What is your company telling its customers about saving water and energy? What are you hearing back from your customers? Does the California Green Code have an impact on your business?

SR: I feel that as an industry, we are all involved with high efficiencies and saving resources.  The manufacturers have made it easy to offer the consumer high-tech options that were just ideas a few years ago. As I don’t perform new work anymore, Rivers is probably not at the cutting edge of what is available, but we always offer our residential customers a choice and try to guide them towards better long-term solutions to their problems.

C: After all your years in the business, what are the most important one or two things that you have learned?  

SR: I started my business as a one-man operation and watched it grow to over 20 employees several years back. The challenges the economy gave us forced me to get smaller again, and I found that I had much better margins and much less stress with a company half that size. While I am always looking to grow, I probably won’t get too much larger at this point in my career.

Over the years I’ve learned to be proud that I am operating a small, family-owned business that provides such a valuable service to customers. Often contractors think they should be striving to run bigger companies. I’ve come to realize that’s not for me. Like many PHCC member contractors, I am interested in running an efficient, profitable business that meets the needs of my customers, provides opportunities to grow professionally, and helps me maintain a good balance between work and family. 

I’ve also learned that is very important to have a network of contractors you can turn to for help. I’ve found the best resources for kicking around ideas, and learning what will and won’t work, through my membership in PHCC. I can talk to contractors who run bigger or smaller businesses than mine, but many of our issues are the same — they just add a different perspective. I encourage all p-h-c contractors to consider membership in PHCC, as well, and check out all we have to offer at www.phccweb.org.   

C: Do you have offspring in the business? What do you want your kids to know about this business? 

SR: Our daughter Kelley has worked for several years in our office and sons Pierce and Ryan have worked in the field and know that the company can be theirs if they continue to work hard and show interest. They know there has never been a better time to own and operate a service company than now. I want them to be independent and happy with whatever choices they make in life, and they know there is an opportunity continuing to work in the company.

C: What is the biggest problem facing contractors in Northern California?

SR: At the state level, we have had a long-term goal of improving the quality of all our licensed contractors and their employees through implementing both continuing education and a licensing or certification requirement for all field employees. There has been resistance at several levels, but our state association continues to lobby in this area. PHCC of California offers a Federally Registered Apprenticeship Program statewide, with training schools in Sacramento, Alameda and San Diego. Plumbing-Heating-Cooling Contractors of the Greater Sacramento Area Plumbers Unilateral Apprenticeship Committee offers a State Registered Apprenticeship Training Program in Sacramento available to contractors in 46 Northern California counties.

C: On a national basis, what are you hearing from PHCC-National Association members as being the biggest problem for contractors?

SR: We recently completed a member survey, and learned that improving profitability, hiring qualified workers and thriving in an uncertain economic climate were the top challenges facing PHCC members.

C: What is PHCC doing to try to fix that problem? 

SR: We’re tailoring several programs and services to help our member contractors meet these challenges. For instance, there will be seminars on these topics and more at PHCC’s annual convention, CONNECT 2013, which will be held Oct. 16-19 in Las Vegas. 

C: As a trade association, what is PHCC’s greatest challenge? 

SR: Meeting the needs of a diverse membership in a constantly changing business environment. Contractors these days are bombarded with all sorts of new technologies, regulations and business strategies.  We need to get through all of the “clutter” to convince them we can help them succeed in this changed environment.   We’re also challenged to develop programs that are truly relevant for specific business types, like service or new construction, and to anticipate needs as technology undergoes more change.   

C: How important is political action to PHCC?

SR: Our greatest challenge relates to federal and state regulatory agencies that are moving ahead on regulations with limited industry input. Examples on the national level are the expansion of lead paint regulations to commercial and public buildings, and the implementation of the new health care law. We are actively working with the EPA to help mold a new lead in paint regulation so that is not overly burdensome to our industry. Following PHCC’s testimony on Capitol Hill on health care reform, Congress continues to push the Administration to either delay or de-fund provisions that will negatively impact small and large businesses. 

PHCC National continues to lobby for legislation that would make regulatory agencies more accountable for the direct impact a regulation would have on small business. PHCC believes it is very important that we have a strong voice in the legislative and regulatory process, and encourages all members to engage in our grassroots efforts so that our voice is even stronger.  

C: If you could accomplish just one goal this year as president for either the association or its members, what would that be? 

SR: As the new president, my main goal will be to encourage our membership to think outside the box about how we run our association and what changes we might consider to improve the PHCC at every level. Everything changes with time and we will be looking at how we can evolve to better serve our members.

All trade associations are facing new challenges in how to best represent their members, while realizing that an overwhelming segment of contracting firms do not participate, yet still realize the benefit of their work. Can there be some way to get this huge silent majority of contractors involved? There is no easy solution to this question but it is one we will continue to work on this year ahead.

 

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