Some contractors prefer to go it alone, but others have come to value working with general contractors and partnering with other ECs as sure ways to grow.

Better than going it alone

Members of the Gossett family, founders and owners of ERMCO Inc., Indianapolis, are staunch advocates of partnering in the industry as a means of growing and prospering.

Ed Gossett started the business in a decommissioned gas station in 1962. The company posted 2022 revenues of $260 million. Gossett’s oldest son Darrell Gossett did not exactly write the book on partnering, but he did write a white paper, “Partnerships and Joint Ventures: A Business Strategy for Success,” that was published in 2017 by NECA’s Academy of Electrical Contracting. The document is on the Academy’s website.

The paper outlines fundamental principles for building successful relationships—treating others fairly, gaining clarity about expectations and responsibilities for each project, checking in regularly to make sure projects remain on track, sharing profits equally and treating partners with respect.

ERMCO has engaged in dozens of major joint ventures, which have enabled the company to do what it otherwise couldn’t, such as:

• Stretch field and management talent further
• Stretch other resources such as bonding capacity, tools and equipment and cash flow
• Properly serve core customers and still handle additional large projects
• Prepare and compare dual estimates
• Share risks across partnered companies
• Learn new best practices from other premier contractors

ERMCO’s early partnering efforts fueled the company’s growth.

In the 1970s, the company worked on DeBartolo shopping centers in several states, looking for “a local contractor with a strong field force, good local vendor relationships and a good reputation in the community,” Darrell Gossett wrote.

ERMCO continues to network with other contractors and chapters, said Greg Gossett, CEO of ERMCO.

ERMCO also frequently partners with the nine other members of the Electric Roundtable, all of which have made major contributions in terms of developing best practices and education standards for the industry.

The Electric Roundtable members share a similar philosophy that partnering with others can yield results far greater than going it alone, Gossett said, adding that ERMCO has embraced that philosophy with long-lasting positive results.

 “In 2008, 2009 and 2010, business was booming in Indianapolis,” he said. “We were working on a stadium, a hospital, an airport and a concert venue. We could have done the work on our own, but we would have lost touch with partners in other markets.”

ERMCO reached out to Sachs Electric Co., St. Louis, and secured the company as a joint venture partner. 

“The advantage for us was that when the jobs were over, we didn’t have to let a bunch of people go,” he said.

The ERMCO-Sachs relationship has grown, yielding additional work for both parties. Sachs has brought ERMCO in on joint venture projects, and the chief financial officer of ArchKey Solutions, parent company of Sachs, now serves on ERMCO’s board of directors.

Seeking partnerships

As a strategy for finding partners, Gossett recommends participation in conventions to meet business representatives and fellow contractors. He also recommends building relationships with product vendors that can recommend partners with proven skills for installing specific types of equipment.

Gossett pointed out that many contractors hold back on partnering for fear of being taken advantage of. For that reason, he suggested investing time getting to know a prospective partner’s strengths, their reputation, philosophy and work ethic, much as you would courting a marriage partner.

Once an agreement is set, it’s also important to respect that partner through open communication and not operate with any hidden profit centers, he said.

“It’s important not to put a partner at any risk their business could not withstand,” Gossett said. “In some instances, your partner may be smaller and they can’t take on that much risk. That’s when you find ways to limit their exposure. You never want to put a partner in a position where they can’t keep their customer happy.”

When that happens, future opportunities for working with them and their customers will go away, Gossett said. “You want to do whatever it takes for all parties to be successful.”

Rapid growth

Tim Whicker started Electric Plus Inc. out of his garage 20 years ago. The Avon, Ind.-based contractor now operates with 450 employees and does about $100 million worth of business annually.

Whicker attributes his company’s rapid growth to maintaining high safety standards, forging a solid reputation and working with general contractors on numerous large projects. Over the years, the work has included healthcare facilities, K-12 schools, universities, wastewater treatment plants, food processing plants and automotive manufacturing plants.

“We do most of our business with general contractors, or we work with business owners who hire the GC and us directly—I’d say 90%,” Whicker said. “I definitely see this as a way to grow. The work we do is generally commercial. If a building is going up, we’re there.”

In 2021, the same week Electric Plus made the Indiana Business Journal’s “Fast 25” list of fastest-growing businesses in the Indianapolis area, the company also received a contractor of the year award from Top Notch, a labor/management association representing union construction in Indiana.

Whicker relishes technical and larger public works projects. 

“Conditions for working with other ... electrical contractors usually involve bigger projects, such as data center/chip plants,” he said. “Most contractors don’t have the resources to do all the work on their own. In those conditions, you can share opportunities. We’ve done it.”

Electric Plus has partnered with Gurtz Electric Co., Arlington Heights, Ill., among others. “We’ve partnered with them in serving clients because they have expertise in BIM and on-site project management,” Whicker said.

Together the contractors completed a dorm project at Purdue University, a central energy project for a hospital and a casino. “It’s been a very successful relationship,” Whicker said.

Like others who are successful in working with others, Whicker is always on the lookout for additional partners.

“So, say one of our customers wants to expand to St. Louis, we’ll reach out to fellow NECA contractors to find labor and expertise and to get the job done,” Whicker said. “We’ll serve as a bridge for setting up our customer’s operations.”

Two-way street

That sharing of business has worked both ways, Whicker said.

Just what company Electric Plus partners with depends on the nature of the work to be done and the availability of resources and expertise within a given market, Whicker said. 

“If one market is a little slow and they’ve got resources they can send our way, it keeps them busy and it enables us to do the work, so it results in more work for all of us.” —Tim Whicker

“If one market is a little slow and they’ve got resources they can send our way, it keeps them busy and it enables us to do the work, so it results in more work for all of us,” he said. “Having access to another contractor’s resources and staff expertise and BIM operators is always a good thing.”

Informing members of work opportunities in the Midwest is Andrew Williams’ responsibility as executive manager of the Central Indiana Chapter NECA. 

The chapter does see larger contractors from time to time coming in to partner with smaller contractors to sub out work, Williams said. 

“That usually happens with larger projects,” he said, adding that, “There’s one right now doing work on a battery plant in Kokomo, Ind., with four NECA contractors.”

Williams has witnessed mixed reactions to these types of arrangements, noting that some contractors are not fans, while others regularly do this work. 

“I would say it helps some and hurts others,” he said. “But that’s the best part of our setup—every contractor has the ability to set their own destiny and choose how they want to work.”

To date, Williams said, only a small percentage of projects in the region have warranted such partnering arrangements. But that could soon change in the Midwest and throughout the country.

“With the Inflation Reduction Act, we are seeing more public works infrastructure projects,” Williams said. 

He anticipates the work will include commercial new construction, renovation work, hospital/medical projects, highway infrastructure and industrial work such as power plants, oil and gas refineries, food processing and other manufacturers.

“Having any business keep growing involves education and training, being able to keep up with the changes,” Williams said. “We’re putting out info on federal grants, training, education opportunities, bidding processes. ... If they pursue this type of work, they’re aware of what’s out there and what’s happening.”

Much like Whicker, Williams said, “GC and subcontractors need to operate like partners on projects. The key is building that relationship. It works through the owner and to the GC who subs to contractors. It also involves good communication, confronting problems early on and working through them quickly.”

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