Uncategorized

Mechanical Hub caught up with some business owners regarding business diversification and growing their business in an uncertain economy. 

In this current economic state—with consumer confidence plummeting surrounding recession talk and the realistic repercussions of tariffs, the rising materials prices and an uncertain supply chain—is now the right time to add “arms” or services to the existing business? Or stand pat and ride it out? Or cut back?

The Diversification Game

“There’s always some economic boogeyman around the corner,” says Adam Rotherham, owner, Down Under Drainage, Los Angeles. “Recessions are actually decent times to diversify and invest if you’ve got the capital. While competitors are pulling back, you can position yourself for the recovery,” 

The tariff situation is a wild card though, says Rotherham. “It’s definitely impacting material costs and availability. I’m keeping a close eye on how that develops before making any major moves.”

Rotherham says that being in the industry for three decades, he’s seen the cycles and learned that having multiple revenue streams is crucial for stability. “Since moving to LA from Australia 11 years ago, I’ve found the American market both challenging and full of opportunities that weren’t available back home. For me, diversification has always been about risk management, but also about staying relevant,” says Rotherham.

But what’s stopping Rotherham from going all-in on diversification? “It’s finding qualified people who share my standards. I’m pretty particular about quality. Training takes time away from billable hours, and in LA’s competitive market, keeping good talent is tough when everyone’s hiring.”

Gaven Johnson, owner of Big Sky Plumbing, Springville, Utah, says the company has been conservative in its growth, “but I have a growth mindset.” A very successful commercial new construction contractor, the 25-employee company excels in medical gas, hospitals, anything from townhomes to condos, and now has opened a service side to the business, Big Sky Service Pros. “No job’s too shitty,” jokes Johnson. And while Johnson also says with “tongue-in-cheek” grin that he gets bored easily, the reality is, “We need to be prepared in case of a shortage in new construction work.”

New Employees

As for adding new employees, “I actually went back-and-forth for about a year before hiring my first apprentice about three months ago,” says Keith McGillivary, owner, McGillivary’s Plumbing Services, Gardiner, Maine. Ultimately, the only thing stopping him from doing that sooner was trying to find the right person. “I am super particular and I didn’t want to just hire somebody that was already out in the field.

McGillivary also recently added drain cleaning and sewer line inspection to his business because he kept turning down calls in his area. “It’s a big investment upfront, hoping that it pays off,” says McGillivary. 

Standing Pat

Chris Armstrong, Armstrong Professional Services, Hudson Valley, N.Y., offers a different perspective. “As far as diversification goes, with the recent boom of all the new kind of traditional service plumbing companies and P and H companies turning into home service companies, I think me personally—this June is 21 years l’ve been in business for myself—I already have always been the guy that did plumbing HVAC, service plumbing, well pumps, gas, oil,” says Armstrong. “I pretty much do everything already and I think I’m kind of leaning towards going the other way and tightening down to the things that I make that I get the most calls for and that I make the most money with.”

Armstrong questions that the more stuff one offers, what are they going to do, change tires and add roofs? “If these guys can make it happen, I think that’s great, but I also think part of that kind of takes away from the specialty of our trade as plumbers and gas fitters and HVAC contractors to where it doesn’t look good. I feel like it’s almost going in reverse. Why would you want the guy putting in your heating system that’s that can also do your pool cleaning and put your roof on. I feel like it just takes away from all the trades,” says Armstrong.

One thing that Armstrong stresses is to pay attention to pricing. When it pertains to tariffs more specifically, “l may be losing money not paying attention to these price hikes. I’m used to pricing things out at either a flat rate or adding this lump in that I would normally know off the top of my head, and now I’m way off,” says Armstrong.

A Business Model Twist

Adding a unique perspective on diversification, Khadija Head, owner, Head’s Plumbing Sales and Service, Inc., Atlanta, is looking to add to the company’s existing business models, and that something is water filtration. In today’s society where social media, personal appearance, and health is a sense of currency, we are shifting the focus to ‘It starts with the water you consume,’” says Head. 

According to Rotherham, the plumbing trade isn’t what it was when he started. “With new technologies, changing regulations, and shifting customer expectations mean you’ve got to evolve or get left behind,” says Rotherham.

To sign up for our weekly newsletter, https://mechanical-hub.com/enewsletter/

On this week’s Mechanical Hub weekly update, we talk about the unpredictability of the weather, Utah’s Fluoride ban in drinking water, April Fool’s jokes, a visit with our friends from Viega and the Appetite for Construction podcast, which features Jorge Arias, vocational plumbing instructor at the Correctional Training Facility (CTF) Soledad State Prison in California.

Did you know that on this date in 1979, the infamous Three Mile Island accident occurred, which was a partial meltdown of the Unit 2 reactor of the Three Mile Island Nuclear Generating Station, located on the Susquehanna River near Harrisburg, Pennsylvania. It is the worst accident in U.S. commercial nuclear power plant history?

 

Illinois’ Top Apprentices Showcase Elite Skills at Statewide Competition

Building Better with a Holistic Approach

Mechanical Hub Podcasts

For one lakeside condo, hot water isn’t just a luxury—it’s a necessity. The unit serves dual purposes: a recreational retreat for its owners and a rental property for guests. That means hot water needs to be dependable, ensuring comfort for everyone, every time.

When the new owners of the condo purchased the property, one of the first orders of business was to have a whole-unit inspection prior to completing the transaction. What the inspector found was that while running the water throughout the condo, the water ran hot after only a few minutes of use, making its way for turning the shower into what is essentially known as a cold-water sandwich, and nobody wants to experience that.

After further “inspection,” the culprit was a nearly 30-year-old water heater, which—in terms of water heater life—had made a really strong run. But it was time. Time to replace with a similar unit in terms of reliability. “We were so impressed with the longevity and durability of the existing water heater, we decided to swap the unit out with a nearly identical one, with new and improved features,” said the condo owner. “If we can get even similar or even better performance out of the new unit, we’d be extremely happy.”

The upgrade included the swap out of an aged State Courier 510 unit with a residential 48-gallon State ProLine Lowboy Electric Water Heater, which is a residential product built to commercial-grade standards, and is only available for purchase through professional wholesalers and contractors.

As one might imagine, for a one-bedroom condo, space is at a premium, and you guessed it, the mechanical space resides in a small storage closet, which makes it ideal for a low-profile unit with top mount access. Due to the size of the working mechanical space, and because all appliances in the condo run on electric, the choice was simple.

Because the ProLine’s compact lowboy design and top water connections, it was ideal for this tight space. The installation—with a cramped working area and low-height clearance—was seamless for the local plumbing contractor. But the real advantage? The ProLine’s advanced features which include:

• Consistent hot water delivery with a first-hour rating of 60 gallons
• High efficiency with a 0.93 Uniform Energy Factor (UEF) rating
• Commercial-grade durability, featuring a long-lasting lower Incoloy stainless steel element
• State’s industry-leading tank protection, including:
• CoreGard™ stainless steel anode rod
• Blue Diamond® glass lining for corrosion resistance
• DynaClean™ automatic sediment-cleaning system to extend tank life

And while the previous State unit lasted for more than a quarter of a century, the condo owners have the peace of mind knowing that with dual 4,500-watt heating elements, the ProLine delivers powerful, reliable hot water—ensuring no more cold-water surprises. And with State’s 6-year limited tank and parts warranty, the condo owners also can rest easy knowing their investment is protected.

Finally, because the residential ProLine unit was a recently swapped in, the condo owners have had somewhat limited use, but are extremely satisfied with the hot water production. The owners are confident in the ProLine—in the end, it was the reliable choice when looking to maximize hot water output while seeking energy savings. “We’ve used it multiple times, and BOOM! There is no better feeling knowing that we, and our renters, will have consistent hot water and comfort while bathing or showering,” said the condo owner.