When it comes to taking over a business, the best and brightest of the next generation work hard to keep one foot in the past and one in the future. While they want to adapt to new challenges and take advantage of new opportunities, they are careful not to discard the building blocks that made the businesses successful in the first place.
The challenges faced by new owners arise from changes in technology, marketing and management. Plumbing & Mechanical this month looks at companies that have made or are making this transition:Don Morin Associatesin Laconia, N.H.; Raven Mechanicalin Houston; andTitan Mechanicalin Kilgore, Texas.
At Don Morin Associates, ownerDon Morinstill runs the business and is involved in the day-to-day operations. “He doesn’t do a lot anymore, but he still likes to come in and stay involved,” says Jeff Chadwick, Morin’s grandson who holds the title of project manager/foreman. When Morin is not in the office, Chadwick is in charge.
At Raven Mechanical, brothersStephen and Raymond Joneshave been running the business as partners for about the last seven years. Their parents,Bill and Patty Jones, ran it previously. While Chadwick and the Jones brothers are taking their family businesses into the future,Carlos DeHoyosdecided to start his own business, Titan Mechanical, six years ago. The company focuses on commercial plumbing, mechanical and sheet metal fabrication work. Projects have included schools, hospitals and correctional facilities.
DeHoyos previously worked for his father,Oscar DeHoyos, from a young age, mostly during school breaks, then continuing to work full time after he finished school. “My father and another man had a mechanical contracting business doing essentially the same thing I now do,” he explains.
Keeping up with technologyWhen Chadwick eventually takes over Don Morin Associates, he plans to adapt the business based on changes in technology and other areas.
“The number of new products coming out is unreal,” he says. “All the boilers are a little bit different and you have to know them all. There are a lot of products we didn’t see 12 or 13 years ago when I started.” Chadwick has found the key to success in keeping up with technological changes is to go to as many classes as he can with the time available.
“For example, New Hampshire introduced a gas license two or three years ago and we are required to attend classes for a certain number of hours each year to renew the license,” he notes. While the classes are required, they do help on the practical level. “We learn quite a bit about what is out there now that wasn’t around even a year ago.”
Staying up with the new technology has an upside in terms of increased business. “Many of our customers are upgrading boilers before they really need to because they want to save money with the increased efficiencies available with the new boilers,” Chadwick says. “We have come a long way since cast-iron boilers. Some are available today with 95%+ efficiency.”
As is the case with Chadwick at Don Morin Associates, the Jones brothers juggle the challenges and opportunities associated with new technology.
“We are a commercial plumbing and air conditioning company,” Stephen Jones says. “We do service and new construction, with new construction being the lion’s share of our work. Our industry has evolved a lot over the last 20 to 30 years.”
These days, for example, most of the company’s construction projects involve building information modeling to some degree.
“In fact, we were one of the first contractors in the region to embrace BIM,” Jones states. “In the past, it was limited to large projects. These days, though, we are seeing it full range - from small churches on up into large projects.”
The challenge with BIM, he says, is that it is expensive and time-consuming. It is often difficult to get the general contractors on a project to see that it involves an additional cost.
Also on the technology front, the company is moving toward paperless and mobile file management. “There are many more meetings on jobs than there used to be,” Jones says, “and we need to be able to access all our project files on the road.”
As a result of advances in technology, Stephen and Raymond Jones have continued their parents’ strong commitment to continuing education. Bill Jones serves as chairman of the Plumbing-Heating-Cooling Contractors Educational Foundation.
At Titan Mechanical, the biggest difference from the past, DeHoyos says, is incorporating technology into his business. “We want to be able to differentiate ourselves,” he explains. “Most of our work involves new commercial construction. Before, we were dependent on snail mail, fax machines and pagers. These days, we use smartphones and iPads. We also use some of the Trimble total station equipment that is available for construction companies.”
Connecting with customersChadwick admits that Don Morin Associates probably could do more with its Internet marketing program. He doesn’t believe the Yellow Pages are obsolete, however, because customers still use them to find a plumbing-and-heating contractor.
“The Yellow Pages used to go a long way,” he notes. “I don’t think that is the case anymore, though, because of everything else that is available. I use the Internet for pretty much everything, and I think most people my age do also.”
Titan Mechanical is emphasizing its online marketing efforts through its website,www.titan-mech.com. The website gives details of Titan’s services and lists past projects. DeHoyos is considering the addition of an enewsletter to his website.
Stephen Jones notes a shift in customer emphasis from his parents’ generation to his own. While building relationships with customers was of paramount importance in the past, customers today seem more interested in the contractor’s known ability to perform and the ability to execute a contract.
“We stay aggressive on sales and focused on keeping work coming down the pipeline,” he says. “We also continue to differentiate ourselves from our competitors or we won’t be the best in the market.”
As a result of the shift in customer emphasis, he notes, “It has gotten a lot more brutal to get paid.”
Management basicsWhile technology and marketing are changing, the way the business is managed will stay much the same, Chadwick says.
“This business has been run very well for 40-plus years,” he notes. “The basic principles my grandfather started the company with still work. For example, we want to maintain the personal way we do business. People thoroughly enjoy talking to someone when they call. They get a person 24 hours a day, instead of an answering machine or a computer.”
When he first joined the business, Chadwick admits he questioned a few things his grandfather did. “However, as I have gained more experience, I have come to learn why he does things the way he does them,” he states. “I also remind myself that the way he has done business has kept us in business for more than 40 years, even through the tough times.”
Similarly, at Titan Mechanical, DeHoyos says the basic ways of running a contracting business remain the same. He maintains a commitment to hard work and integrity.
“Our company was founded by dedicated tradesmen to the plumbing and HVAC industry,” the company’s website states, “and we have continued to add many talented individuals to our team who hold the same attitude and dedication.”
Stephen Jones says that he and his brother need to continue to evolve the company and stay aggressive. “However, we don’t want to lose sight of what got us to where we are,” he adds. “We don’t want to abandon the philosophies and practices of our parents. We want to build upon these as we continue to grow.
“Our parents are very honest and ethical people to a fault. That has been instilled in me and my brother. In addition, we were raised to be financially conservative, and we still are.”