A combination of old-school work ethic and youthful enthusiasm for innovative new products and markets keeps Mick Gage Plumbing and Heating an industry leader in northeastern Iowa.
Founder Mick Gage, a U.S. Marine and Vietnam War veteran who established the company in 1969 in New Hampton, Iowa, supplies the old-school attitude. He learned his trade in the trenches by helping his uncle install sewer and water lines and well pumps.
Armed with a college degree in business management, his son, Brian, the company's vice president, steers the business into new markets. Generational clashes sometimes ensue, but the results speak for themselves: The company now has 28 employees, a large fleet of vehicles and machines and a second location in nearby Charles City.
"My Dad represents the typical American dream," Brian Gage, 41, says proudly. "He started out with virtually nothing - literally just the shirt on his back. He put a lot of sweat equity into this business, and he still works like a mad man, even though he's 62 years old."
That zeal and determination came in handy during the company's formative years. As Mick Gage tried to establish his fledgling business, he found it difficult to obtain seed money from local banks; the shirt on your back doesn't offer much in the way of collateral.
"One banker told him that no plumber had ever made it in New Hampton, and no plumber ever will make it in New Hampton," Brian Gage recalls. "Then the guy walked out to get a cup of coffee and left Dad sitting there.
"I think that bank regrets that decision."
Support from family helped the company succeed. In its infancy, Gage says he used to play with Tonka trucks in sand piles while his mother, Bonnie, helped his father rough in sewer lines for new homes.
"Sometimes she'd go right from her job as a teacher to help Dad," he says. "I worked here in high school, doing my time in the ditch and helping install furnaces and air conditioners, as well as set toilets."
COMING HOME
After Brian Gage graduated from college, he worked for a wholesale plumbing supplier in Rochester, Minn., for two years. There he cut his career teeth by handling inventory control and working as a salesman.
"It was a great job for someone who swore he'd never go back to plumbing," he says dryly.
But when Gage and his wife found they missed life in the country, they moved back to New Hampton in 1991, where he started working with his father again.
"I took a job as an estimator, and the rest is history," he says.
In 2002, the company expanded, renting a building in Charles City, about 20 miles west of New Hampton. A couple plumbers who used to serve the area either retired or died, leaving a vacuum waiting to be filled.
"Our business built up to the point where we needed a footprint there," Gage says. "Logistically, it just made sense, so we stuck our necks out."
About four years later, the company built its own facility on a high-profile, high-traffic corner in town. That allowed the firm to better serve larger surrounding communities such as Mason City/Clear Lake, Decorah and Cedar Falls/Waterloo.
DIVERISIFY TO SUCCED
Today, the company's business mix is about 60 percent commercial and 40 percent residential work. Most of the commercial work involves plumbing and HVAC installations. Residential jobs generally center on plumbing and HVAC work, plus installations of specialty products, such as radiant-heat floors, alternative-fuel furnaces, hot tubs, fireplaces, and geothermal heat.
In addition, the company installs and pumps out septic systems and rents portable restrooms.
"This is a low-demographic area, so we have to do a lot of different things in order to survive," Gage says.
The company's fleet of vehicles and equipment has grown considerably over the years. On the HVAC and plumbing side of the business, vehicles include 10 Chevrolet pickup trucks (mostly Silverados) and four Chevrolet vans, almost all of them purchased from Mike Molstead Motors Inc. in Charles City.
The company also depends on a 1997 Ford F700 dump truck; a 1998 Dodge 3500 pickup truck; a 1997 Ford New Holland 655E loader backhoe from CNH America LLC; a 2005 Ford New Holland LB90B loader backhoe; a 1995 Hyster H60XL forklift; a Bobcat 753 skid loader; a Model 4014-300 water jetter from U.S. Jetting; a JLG 600AJ platform manlift and a Model 25AM platform manlift from JLG Industries Inc.; a 2008 John Deere 50D compact excavator; a Caterpillar P6000GL forklift; a Skyjack III 3219 platform scissors lift; and a 2005 John Deere 27C compact excavator.
The portable restroom arm of the business employs a 2004 International 4300 with an 800-gallon steel waste tank and two 120-gallon aluminum saddle tanks for freshwater. For septic tank pumping, the company owns a 2000 International 4000 with a 1,500-gallon steel tank and two side-mounted, 60-gallon aluminum freshwater tanks.
NEW MARKETS
Diversification into complementary markets was crucial for growth. In the late 1980s, the company entered the septage-pumping field. Shortly after that, to satisfy growing demand, it began renting portable restrooms. The company now owns about 300 units, used mostly for construction sites and monthly rentals, plus periodic special events, Gage says.
"Without a doubt, diversification has been essential," he says. "It's the old supply and demand thing. You see demand for something, so you get into it. I abhor bragging, but I will say that we lead, not follow. We're usually the first business around here to get into new things."
Deciding how much more to grow is a little more complicated, however.
"Some business owners say you either grow or die,'' Gage says. "I like to see growth, but not incredibly fast growth. We prefer slow and steady. And we also decide to stay away from some things, even though an opportunity exists. At this point, we'd like to grow a little more, but we're limited by the labor pool."
LABOR CHALLENGES
Like many contractors, Gage Plumbing struggles to find skilled labor, even though it offers paid vacation, competitive wages, a 401(k) program and health insurance in which the company pays half the premium.
The problem is so serious that Gage even took the extraordinary step of offering a company program called Career Builder. If a junior or senior in high school takes a summer job with the company and likes it enough to consider it as a career, the company agrees to pay the student's tuition at a local two-year technical college. In return, the student agrees to work for the company for five years - at full pay and benefits - after graduating from an approved technical school.
"We've been offering it on and off for 10 years, and not had any success," Gage says.
Gage believes that today's educational systems convince students to equate success with only white-collar professions - a doctor, lawyer or software engineer.
"We glorify these roles ... and when students hear the word 'plumber,' they think of a guy with his head under a sink," Gage says.
Gage periodically visits local high schools to tell students about opportunities in the skilled trades, impressing that there's no need to take out a $100,000 loan to go to college and make a decent living.
"They need to look at the trades. On the plumbing and electrical sides, the wages and benefits are good," he says. "If you don't want to do sewers, do HVAC. You can make a good wage."
GOING GREEN
The high price of fuel and growing consumer awareness of "green" products has Gage pointing the company in yet another new direction - toward alternative heating and cooling systems.
"The biggest changes are on the HVAC side of the business, and they're driven by higher fuel prices," Gage says. Geothermal heating is more popular because it's more efficient than conventional heating systems, Gage says.
As implied by their name, geothermal systems rely on heat in the ground around a home. A closed-loop pipe system - most of which is buried outside - carries a water and propylene glycol mixture that absorbs heat as it circulates. When the refrigerant enters the basement, it passes through a heating coil, and a fan below distributes the dispersed heat through normal heating ducts.
"In the winter, the system takes heat out of the ground and puts it into the house," Gage explains. "In the summer, it takes heat out of the house and disperses it into the ground. It's not a new concept, but it's getting more attention.
"Geothermal heat pumps can be up to 300 percent more efficient than a gas furnace. For every $1 you spend on the electricity to operate it, you get $4 worth of heat. The installation is more expensive, but the payback level is good."
Gage also sees more and more customers turning to boilers and furnaces that burn biomass material, such as corn or wood pellets (scrap wood turned into pellets), and wood-burning stoves, which nowadays are so efficient they're virtually smokeless and leave little ash behind. Gage uses a Greenwood biomass furnace from Greenwood Technologies LLC, which is 85 percent efficient.
"You can install them inside or outside and use your heating system's normal ductwork or radiant heat system," Gage says.
To sell hearth products more effectively, Gage felt a showroom was essential. As a result, the Charles City location includes a 4,300-square-foot showroom displaying fireplaces and stoves, plus hot tubs.
"If you're going to sell fireplaces, you've got to have a showroom," Gage stresses. "Too many guys think they can just start selling something ... that it's all plug and play. But you have to think about what goes into it."
And in Gage's case, then go sell your father on the idea.