Merger of shops

[gene6]

Has anyone here noticed there more mergers over the last 5 years or so?
Anyone on here been thru a merger?
Or sold your shop to another contractor when you retired?
It used to be there were lots of 5-50 person shops in our area.
Now there are these 200+ person mechanical contracting companies overshadowing us that do Pluming / HVAC and Electrical.
I am interested what peoples experiences are with mergers.
Thanks

 

[Tulsa Electrician]

It happing in Tulsa now with HVAC and plumbing. It allowed them to control the market and supply. Bad idea for the working man. These guys have been put on a fixed cost install. They have the warehouse and can control who gets what at what cost. Hard for a small guy to get equipment and a put out a fair competing bid. I recently did some pricing and the four that merged said they could get equipment and the few self employed guys I called said it's not available.

 

[petersonra]

That seems to happen a lot. it is hard to get decent pricing from suppliers when you are not buying all that much, plus a bigger shop can have a professional buyer instead of someone who just dabbles in it.

Most of the business has always been larger projects and small shops just don't have the people to handle them. A project that is large enough to need a real PM is not something most smaller places can handle, because they have no real PMs. When the project is large enough that it cannot be managed out of the owner's head, it can become a real headache pretty quick.

There are also a lot of projects that have parts that are electrical, and parts that are HVAC, and parts that are plumbing, etc. Having to sub it out to multiple places is costly.

There is also the labor aspect. It is harder for small companies to attract the best talent because they often cannot afford to pay competitive wages, or supply competitive benefits.

Smaller companies have their niches though, where they can be very profitable.