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How big do you want to be?

Oct. 8, 2014
The growth curve in the mechanical trades is mercurial at best Being a small shop is the way most giant companies got started Doing the right things, consistently, is how to build a company There is no magic bullet; being industrious, reliable and honest is best Growing your company should not be done haphazardly or randomly Educating yourself about all the facets of your industry is an ongoing effort

Each year, industry publications usually do an article on the biggest plumbing and HVAC firms in the nation. Did you ever think about how these firms grew so big? Do you ever daydream about what it would be like to own, or operate, a huge plumbing/mechanical shop (if “shop” is even an appropriate descriptive)? There are a lot of factors that go into the care and feeding of such companies and growth, or managing growth, is one of them.

If you are reading this column, it is safe to assume that you are involved in, or interested in, our industry and have an understanding of the ebb and flow of the commerce that keeps it alive. The growth curve, if there is such a thing, in the mechanical trades is mercurial at best. For the most part, the large or giant firms of today did not start out that way. 

Business first

Being a small (one or two man) shop is the way most of these giant companies got started. There may be the odd exception but, somewhere back in the dim past, even the biggest mechanical firms started as small guys. I will stipulate, for the record, that some of these big guys got that way through cash infusions and investors, but that’s another column. The common denominator for all the growth that occurred after the startups is doing the right things to encourage growth and business expansion.

The rules for starting, running and growing a business apply everywhere in our economy. Doing the right things, consistently, is how to build a company. Hard work and tenacity are how you keep it going and growing. Some might say that the days of growing a small shop into a mega-company are over. I disagree. One simply has to look at the lists of giants in the industry publications to see that. While there are exceptions, each year there are newbies added to the list. 

Successful small companies move up to be medium sized companies doing the things that the big guys do. They do good work. They are professional and consistent in their client relations. They use good business practices. They hire, nurture and keep quality and qualified people. They re-invest part of their profits back into the company and, while looking ahead, they keep their attention focused on the now.

Slow and steady

Longing for “pie-in-the-sky” jobs to make the big time is not a viable business plan.  Successful small contractors become successful medium sized contractors by doing the same things consistently and doing them well. Successful medium-sized companies become successful large companies the same way. There is no magic bullet. Being industrious is good. Being industrious and reliable is better. Being industrious, reliable and honest is best.

When a small company gets a reputation for reliability and honesty word gets around. You might be doing small commercial strip mall tenant improvements or remodels one day, and the next day you are asked to bid on (or maybe just given) an entire project.  Soon, it becomes easier to get a shot at the work you want, simply because of reputation.  General contractors, architects, engineers and other professionals are always looking for quality subcontractors. It makes their job much easier and gives the solid subcontractor the opportunity to expand via these contacts. 

Moving up

Biting off a big piece usually doesn’t end well. Having to suddenly expand your work force and extend your credit exposure because you landed a large project can be a recipe for disaster in the long term, even though it looks good in the near term. Struggling with manpower, equipment, vehicles and needing capital just to work on a big project is stressful to say the least and usually ends in failure, or failures, of the worst kind. As hard as it is to get a good reputation, it is horrifyingly easy to lose it. The industry is littered with the carcasses of companies that grew too big too fast. Solidifying your position as regards how much work and how many people you employ puts you in the position to take advantage of opportunities that come up.

Growing your company should not be done haphazardly or randomly. The big guys got that way by being good businessmen, it’s true, but many have stayed that way because they are repeating the things that made them successful in the first place. Growth for growth’s sake is not the way to go. Expanding your company by doing the right things each time, every time may be slower, but it is the surest way to keep the growth you achieve.

Suddenly your gross volume goes from low six figures to the mid-six figures. Soon, almost without you knowing, it goes from the mid six figures to the low seven’s and you are on your way. Educating yourself about all the facets of your industry, in an ongoing effort, and taking note of the things you do that work, while discarding the things that don’t, will put you in the position to grow, or not, at your discretion.

The Brooklyn, N.Y.-born author is a retired third generation master plumber. He founded Sunflower Plumbing & Heating in Shirley, N.Y., in 1975 and A Professional Commercial Plumbing Inc. in Phoenix in 1980. He holds residential, commercial, industrial and solar plumbing licenses and is certified in welding, clean rooms, polypropylene gas fusion and medical gas piping. He can be reached at [email protected].

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