Information can be acquired through numerous sources such as: trade magazines, trade shows, seminars, other contractors, trade organizations, manufacturers, daily newspapers, customers, franchise groups, attorneys, accountants, books, the Internet, etc. That information is constantly changing, so we must expend effort to keep up with the enormous flow that's available. How we take that info, package it and put it to work in our companies to make it either enhance profits or minimize losses is the act of implementation. As your competition rolls with the punches, so must you to maintain or develop your edge.

Having traveled to numerous cities this year and meeting with contractors and manufacturers, I find that we, as an industry, have developed floating priorities as to how we might prepare for next year and beyond — what may be of number one priority in California, may be number three or four in New York. I thought it might be beneficial if I shared with you some of my year-end notes and updates that were gathered during 1997.

The Consolidators
There is a rapidly growing group of very wealthy investors who are currently shopping for and buying up plumbing, drain cleaning, pumping and HVAC companies — just to name a few. It is happening all over the United States. There seems to be no end to the amount of funds available for acquiring the well managed organizations being targeted. The investors range from Wall Street giants to the famous billionaire tycoons.

Large metropolitan cities are being marked as prospecting grounds for acquisitions. Profitable service organizations are being wined and dined with overflowing buckets of enticing cash. The investors will typically purchase a controlling interest in a company and retain the basic management structure. The former owner essentially becomes a minor partner in the marriage. Once these consolidators purchase a base operation in a desired locale, they begin to search for smaller companies in that marketplace that could round out their product offerings — both to delete competitors and enhance market penetration simultaneously. The goal is to form A to Z type service companies in the building maintenance and construction fields under one corporate umbrella. Everything from chimney sweeping to major new construction contractors is considered fair game. One industry professional said this to me, "Pete, it's the McDonald's approach to business — they do only a few things well. Try going to McDonald's and ordering a hamburger. You get the exact same hamburger every time. Now, try to order that same hamburger without the pickle — it's chaos." No one can argue with McDonald's success, but it's not my first choice for a hamburger either. I sense an industry dumming down through the consolidators. These hidden decision-makers are bean counters, not industry visionaries.