Retiring from business can get complicated

March 1, 2006
JOHN GARVELINK COMMERCIAL DESIGN ENGINEERING COLORADO SPRINGS, COLO. I enjoyed and appreciated John Zink's Industry Education column in the January issue of CONTRACTOR ("Handing over the keys to your shop," pg. 18). His suggestions were well presented and right on target. I want to offer just a few added comments. The challenge of turning over the business has many complications. Some of these involve


COLORADO SPRINGS, COLO. — I enjoyed and appreciated John Zink's Industry Education column in the January issue of CONTRACTOR ("Handing over the keys to your shop," pg. 18). His suggestions were well presented and right on target.

I want to offer just a few added comments. The challenge of turning over the business has many complications. Some of these involve banking and insurance matters along with major issues in the bonding arena.

In most cases the owners are financially obligated should a problem develop within the company. They would have to personally cover all costs to finish a bonded work if the company is unwilling or unable to do so. Normally not all work is bonded, but obviously those jobs that are pose a real challenge to turning over the business, and they create major financial obligations should a problem arise.

The big risk for a remote owner is taking the step to trust members of the management team, who have no financial risk with their personal assets. Again, the owners have personally laid their assets on the line for the completion of the bonded work.

There are also issues of latent defects, mold and other exciting matters that carry on with the new company owners for seven to 10 years. Many of these liabilities are ones that you cannot purchase insurance for. If you retain the same company name, you also cannot structure the current contract language to limit the liability for future owners.

Thus, finding someone who wants the risk, financial responsibility, potential for carry forward of unfunded union pension obligations (for union contractors) and all the other potential issues an owners faces represents a real challenge.

Many individuals like the idea of being an owner, but not many are willing to take on the risk or work to assume that role. I have seen many a would-be owner or transfers not happen when a full awareness of all the ramifications are understood.

I can also say that with the current and coming shortage of talent, I would welcome a person of experience who was technically retired but could work part time. This would be at any level — office or field. That part-time approach is part of our plan. We enjoy our work, but we also want to follow other paths.

Part of our transition includes John's suggestion of being away more. Thank goodness, however, for e-mail and mobile phones.

I would offer some wisdom from my grandfather some 35 year ago that is becoming more vivid. He offered the advice, "Have something to retire to." We all like to feel we are contributing and needed.

Anticipating isn't easy


VIA E-MAIL — It sure is a pleasure to get to write this note to confirm Kent Craig's commentary on anticipating ("Learn to anticipate what can't be anticipated," January, pg. 44). I should write a reprisal on the subject because of the adventures that I've been through in my years of mechanical contracting.

I am a self-made project manager currently working for a small outfit that my boss (the owner) and I are venturing into. Though I am not a partner in the business, I carry a big percentage of the day-to-day responsibilities of operating the business. The owner and I go back about 12 years when he was a project manager and I was an up-andcoming installer with three to five years' experience. We worked together at a prominent mechanical contractor in our area at that time.

Through the years I have seen and experienced situations beyond my wildest imagination. One recent example is that upon reviewing our submittals on a jobsite, I noticed the G.C. had changed the size of two louvers to accommodate an already-built structural wall with a 22-in. opening. So I immediately checked with the supplier on the phone to see that the louvers had not been released and conveyed to him the changed size.

"Great, I have averted a disaster," I thought. Especially since I had to talk to him several times before he would release the louvers. After I finally made it through a color selection, I again called the supplier, gave him the color and reiterated the changed size. "Life is good," or so I thought.

After waiting four to six weeks, I received the louvers and they looked good. But my heart hit the floor when the first thing I noticed was that they were not the right size. Long story shorter, but I had to wait another six weeks and got hit with a doubled material cost.

After rebuking the supplier for ordering the wrong dimensions after repeated conversations, he said he would not admit ever having the conversations. But when he released the louvers, he did not have the updated submittals to assure accuracy of the process. He did say he may be willing to split the cost. All I said was that I would let him and my boss settle the issue.

Case in point: We both knew there was a due process, but in our haste we let our human nature take over to make us both fall. I admit my fault, but, but but ...

Well, I won't let that happen again! Oh, and I will not forget to pull a permit before I hang duct either or I'll get another quadruple permit fee; and I will cover duct openings so I won't have to pay the cleaning bill; and I will expect those who do the job to do it right the first time so when there's a problem, I won't have to deal with the problems myself when they are long gone.

I'll keep reading Kent's columns and learning, even when I feel like I should know it all.

PHCC aids success


FALLS CHURCH, VA. — Thank you for the excellent coverage of PHCC members, events and activities in your January edition. I particularly thank Bob Miodonski for the Editorial in which he mentioned the value of the Plumb-ing-Heating-Cooling Contractors and Construction Contractors Alliance to Farmer & Irwin, CONTRACTOR's Mechanical Contractor of the Year ("Get ready to take advantage of change," pg. 72). Bob did an excellent job of explaining the value of a trade association to a successful business.

Labor shortage not pending


VIA E-MAIL — I just read Mark Eatherton's column in the January edition of CONTRACTOR ("What you can do about labor shortages, part 1," pg. 32), and I have a few thoughts.

First of all, things must be very different in Denver because in New Jersey the labor shortage is not a pending problem. It has been the No. 1 problem in this area for 15 years and just gets worse every year.

Second, Mark said the two high school kids were going to get a starting salary the same as he pays his lead techs. These kids have to be dreaming. Mark knows as well as I do that auto mechanics and draftsmen right out of school do not make $20-$30 per hour. Maybe he should have faced reality instead of living in their dream world.

Learn to test for CO


PALATINE, ILL. — Early last year Mark Eatherton wrote a column in which he blasted home inspectors for not knowing anything regarding carbon monoxide, and he recommended that all home inspectors take the National Comfort Institute's CO and Combustion class ("Learn how to use your combustion analyzer," February 2005, pg. 24).

I did, and I can't thank Mark enough for pointing me (and others) in the right direction. I completed Jim Davis' class in August, and I have begun to get my feet wet. I have had to team up with other like-minded HVAC contractors to help since I don't perform the work, only the analysis.

Tools of 'lost art' still selling


HUDSON, N.Y. — I just discovered Dave Yates' "lead joint" article on and really enjoyed it ("The lost art of making lead joints," February 2005, pg. 22).

Thanks to Dave for providing us with further perspective on the tools that we still make and still sell a lot of.

Online help is available


FLUSHING, N.Y. — I just wanted to thank you for having your magazine online at I was looking for some clarifications regarding schedule of values, and Kent Craig's informative column came up on top with a Google search.

I then needed further details and contacted Mr. Craig. He was thorough and most helpful.

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