2016 East Coast Contractor Spotlight
Mergers and acquisitions. Oftentimes, when someone hears this phrase they think of lawyers or banking. It is doubtful that a single-location, small business like the one run by contractors Dan Canter and Charles Holden is what comes to mind. Yet, they has been on the buying side of three mergers and acquisitions in this decade alone.
Canter co-founded his first business in 2009, Capital Mechanical Services. Shortly after, he obtained full ownership of the company after buying out his partner. Canter established a solid business in mechanical service, repair and replacement work. Eventually, in 2014, Canter discovered another business opportunity, a merger with Holden Professional Services. Canter and new business partner Holden gave their new company the name that it is well known for today, CH Mechanical.
In just two short years, the company has grown from four to 10 employees, and has successfully bought out a single-employee HVAC shop. CH Mechanical, based in the Greater Indianapolis area, has also expanded its portfolio to include mechanical, HVAC, and plumbing work, with emphasis on commercial projects.
Canter chatted with PHC News about the company’s growth, his involvement in the PHC industry, and his advice for those entering the profession.
PHC: How did you get into this industry?
DC: Right out of high school, I worked in a hardware store. The fellas who owned it had a plumbing and heating company that they worked at the same time, out of the back of the store. I left the store for a while to go to trade school and then the Navy. When I got out of the Navy, one day I was back in the hardware store getting some materials, and the owner asked me if I would be interested in learning the plumbing trade. I said yes, and I started to work for him in plumbing. I ended up getting my plumbing license, then I went to HVAC school at Ivy Tech, where I got a two-year associates degree in heating, air-conditioning and refrigeration.
I did maintenance for a school corporation for a while. Then, I worked for a large mechanical contractor. Next, I went to a mechanical contracting company owned by Citizens Gas. I actually started out as a field technician and moved up. Then, I did sales and estimating until they sold their company. Finally, I started my own business in 2009.
PHC: From trade school to owning your own company, what has kept you in this industry?
DC: Work ethic. My dad was a guy who raised all of his sons right. We all have a strong work ethic, and we’re proud of what we do. In most cases in this industry, you feel like you’re helping someone out when you get a job done, and done right. It’s a challenging profession where you’re constantly learning; new techniques, new materials, and new ways of doing things. I’ll be retiring in the next few years, but I still go to seminars and attend meetings to learn.
PHC: What role have industry organizations played in your career?
DC: I started with Plumbing Heating Cooling Contractors (PHCC) of Greater Indianapolis when I was with a mechanical contractor owned by Citizens Gas, the local utility company. This was in the 90s, when utilities were the “ugly stepsister” of the industry. At one point, the local PHCC chapter was asking if anyone was interested in being on the board because it was time to put new members on. Well, I always went to the meetings, and knew some of the people. Basically, I said I wanted to be on the board and help out when I could. When I got on, a comment was made that because of my connection the utility company, I should be on the board but not allowed to do anything.
As it ended up, I eventually became president of chapter, and I was also on the state board of directors for several years. Most of them came to find out that I am a great asset, and that, at the time, I wasn’t really competition because we had our niche we worked in that usually didn’t overlap.
I started teaching gas sizing and flu sizing for the local PHCC chapter seminars, and it’s been a good ride. The local trade school, Mechanical Skills, is actually sponsored by PHCC. I used to teach in the HVAC department of Ivy Tech years ago. I just completed year 10 as a pluming apprentice teacher at Mechanical Skills. For the last two years, I’ve taught as frequently as twice a week.
PHC: How do you describe CH Mechanical to others?
DC: We treat every project like we own it ourselves. We consider if we had to pay for it ourselves how we would want someone to do the project the right way and get the best results at the best price. One of our slogans is that we do the right thing even when no one is watching. When my partner and I started the company, we were at zero sales. Last year, we were at 1.2 million in sales. We believe it is because we focus on doing work the right way.
We now have a reputation of working well with general contractors. A couple of them from out of town who have worked with us have already said they want to work with us when they’re back in town. They say it’s because we dot all the I’s, cross all the T’s, and make sure things are on schedule. Our reputation is very important, and we guard it religiously. If you don’t have your reputation, you don’t have much of anything.
As far as our portfolio, last year we did about 80 percent HVAC and 20 percent plumbing. This year, it’s going to be about 60 percent HVAC and 40 percent plumbing. We’re pushing the plumbing more. This year, our commercial to residential numbers are about 65 percent to 35 percent. We have a few large customers, some multi-family customers and warranty companies. The apartments that we do are residential equipment, but they’re listed as commercial work.
We specialize in hot water and steam heating with some boiler work. You don’t have many heating and air-conditioning companies that do boiler work the right way any more. We also do a little radiant floor heating. I answer a lot of questions for people about it, and we do it for a lot of additions. We haven’t done any start-to-finish radiant jobs other than my personal home. We have a couple of technicians who are good with controls. We also have one of our key employees who’s great at duct work design, layout and installation. He teaches it and works for us as a project manager and lead for our HVAC work.
PHC: What strategies have you all used to grown your team as business has improved?
DC: We usually go off of referrals and word of mouth. We look for people based on character more than technical knowledge. You need to have a basic knowledge of the industry, but we can train and monitor someone if they are struggling. We have safety meeting every Monday morning to talk about upcoming projects. And if we find there’s an issue, we are not above sending someone to get extra help if they need it.
A friend of mine, a sales rep, one of their managers was actually a waiter who waited on him and his wife one night that they were out to dinner. The guy, a college student at the time, was so attentive and thorough that he decided to actually hired him.
We’re going to hire at least one more person this coming year, possibly more, as I may move to part-time next year as I get closer to retirement.
PHC: What is your advice? For your peers in the industry and those who are just entering.
DC: Because I teach first-year plumbing apprentices, I see the good, the bad, and the ugly. There are a lot of larger companies that hire bodies. On the first night of class, I tell my students that if they’re not going to try and do their very best and represent the industry in a positive way that they should go ahead and quit now, so they don't tarnish my profession.
My advice to the industry is look for a higher quality employee. Hire for their character. Owners, don’t boss your people. There are things you want done right so lead people. Never ask people to do something that you haven’t done. And, don’t try to beat employees down. Try to build them up and make them proud of what they do. Quality employees will be more important than any tool or service truck that you’ve got. They make the first impression of your company to your customers.
To those entering the industry, share with others that they make a better salary in this business, with training, a license, and no student debt. The average pay for a non-union journeyman is $55,000 to $60,000. And, I know many technicians who, with working overtime, are making $100,000 or more per year. You can make a good living. Everybody needs plumbing, heating and air-conditioning. The industry needs to spread the word about this.