HVAC Breaking News

March 4, 2005: White Paper Reveals One Contractor In Five Closes Annually

March 4, 2005
/ Print / Reprints /
ShareMore
/ Text Size+
DALLAS - An analysis of government data reveals an annual business closure rate of 20 percent among plumbing and HVAC contracting companies, according to a white paper published by the Service Roundtable.

"According to government statistics, there are roughly 200,000 plumbing and air conditioning contractors," stated Service Roundtable CEO Matt Michel. "Just over half are sole proprietorships or partnerships without a payroll. Our estimates are that nearly a quarter of non-payroll contractors close annually. Overall, one out of five close every year, only to be replaced by new starts."

Michel said, "There's fairly solid data on larger shops, but little is available for the smallest contractors. They're overlooked by nearly everyone. They are the industry's underclass."

According to Michel, the statistics reveal that one of the surest ways for a contractor to increase his or her business success rate is to grow. The closure rate drops rapidly with contractor size. For example, only 6 percent of contractors with five to nine employees close every year.

"As an industry, we should be doing more to help the smallest contractors. The large contractors of tomorrow are the small contractors of today. While growth isn't a requirement of success, it does increase the odds. There are many successful small contractors. There are also many small contractors who fail or operate just well enough to hang on. These contractors are less likely to pay their suppliers and more likely to underprice their services. This hurts everyone."

The white paper, "Business Closure Rates For Plumbing & HVAC Contracting Companies," is available on the Service Roundtable Web site at www.serviceroundtable.com.

Publication date: 02/28/2005

Did you enjoy this article? Click here to subscribe to The NEWS Magazine

You must login or register in order to post a comment.

Multimedia

Videos

Image Galleries

2014 ACI Home Performance Conference

The 2014 ACI National Home Performance Conference & Trade Show was held in Detroit.

Podcasts

NEWSMakers: Michael Willburn

Michael Willburn, president, Infloor Heating Systems, joins the program to discuss his company, radiant heating, industry trends, and whether contractors are becoming more interested in radiant heating. Posted on July 11.

More Podcasts

ACHRNEWS

NEWS 07-21-14 cover

2014 July 21

Check out the weekly edition of The NEWS today!

Table Of Contents Subscribe

R-22 PHASEOUT POLL

Some in the industry are calling for the EPA to halt production of R-22 as of 2015. What do you think?
View Results Poll Archive

HVACR INDUSTRY STORE

plumbing-hvac.gif
2014 National Plumbing & HVAC Estimator

Every plumbing and HVAC estimator can use the cost estimates in this practical manual!

More Products

Clear Seas Research

 

Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications, Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.

DON'T MISS A THING

Magazine image
 
Register today for complete access to ACHRNews.com. Get full access to the latest features, Extra Edition, and more.

STAY CONNECTED

facebook icontwitter iconyoutube iconLinkedIn i con