Call it ambition or energy, or maybe a willingness to embrace change. Whatever the reason, family companies under the leadership of a second generation often experience expansion that outstrips the performance of the startup generation. It’s as if the first generation lays the foundation and the second builds on it.
“Our father didn’t ever want to grow the company,” says Chad Peterman, president and CEO of Peterman Brothers, an HVAC, plumbing, drain cleaning and electrical services company in Indianapolis, Indiana.
Not so for Peterman and brother Tyler.
“My brother and I had a vision for creating a large company,” he says. “We brought that vision to the company, set out to learn as much as we could from industry peers and assembled a really good team that shares our vision.”
SET UP FOR SUCCESS
Pete Peterman launched Peterman Heating, Ventilation and Air Conditioning in 1986. Twenty-five years later, when son Chad joined the company, the firm employed 21 people and was firmly established as a dependable HVAC services provider. Two years following Chad’s arrival, Tyler came aboard after graduating from college and teamed up with his brother as vice president of operations. At that point, the company was poised to take a great leap forward.
Today, Peterman Brothers — the name was changed in 2021 — employs 520 people, operates from 10 locations in three states and cleared $103 million in annual revenue last year, with the expectation of increasing that to $115-120 million in 2024. Shops are located in Columbus, Bloomington, Lafayette, Muncie, South Bend, Fort Wayne and Indianapolis in Indiana, Lancaster and Mount Vernon in Ohio, and Louisville, Kentucky.
Chad Peterman credits his father with creating a successful business paradigm.
“Our formula for success has been simple: Peterman Brothers is committed to providing the highest level of customer service,” Peterman says. “That was Dad’s focus when he founded the company, and it will remain our focus in the years ahead.”
COMPLETE HOME SOLUTIONS
Expansion has occurred on several fronts, beginning with services provided. Peterman was asked why plumbing was added to the company’s existing HVAC offerings in 2013 and electrical in 2021. He says it was a combination of entrepreneurial initiative and customer demand.
“Any entrepreneur wants to provide what the customer wants and wants to know how the customer can be better helped,” Peterman says. “On numerous occasions, we already were in a customer’s house on an HVAC call and our tech would be asked, ‘Can you also fix my water heater or my toilet?’ As more and more customers asked for additional service help, we saw there was a need and moved to meet it. Our hope now is that our customers will call on us for whatever home service needs they have.”
The original HVAC service lineup still constitutes some 65% of Peterman Brothers service calls, but the newer offerings are gaining momentum.
“Plumbing probably is the second biggest part of the business and then electrical, but electrical has a lot of runway and is likely to take off and catch plumbing in the near future,” Peterman says.
With a swelling of services, the company necessarily had to expand its lineup of technicians. To its team of HVAC techs, it added skilled plumbers and drain cleaning technicians as well as electricians. Peterman says all team members are specialists in their respective service area. They are not cross-trained to do a variety of repair work.
“When an HVAC tech is on a service call, and a customer says they also have an issue with a plugged drain, we send a different technician for the second issue,” he says.
However inefficient that might seem, it ensures that a customer is being given the highest level of expert service rather than a generic handyman version of service, Peterman explains.
Peterman Brothers exclusively serves residential customers.
“We used to do a lot of commercial work, but residential and commercial are two very different things. As it relates to our company culture and vision, our desire is to serve homeowners,” Peterman says.
The shift away from commercial accounts began in 2015, and the transition to homeowners-only was completed two years ago.
EQUIPPED TO WORK
The growing ranks of specialty service technicians of one kind or another means that equipment yards are crowded with more service vehicles.
“We have about 400 service trucks and vans of all shapes and sizes,” Peterman says.
Each vehicle sports the bearded and smiling visages of the two Peterman brothers.
Inside or trailered behind the various service vehicles are venerable brands of equipment such as Spartan jetters for clearing drainlines, RIDGID and Spartan cameras for video inspections, and Deere excavators to open trenches for repair or replacement of sewer lines.
The company also offers trenchless repair using HammerHead pipe-bursting technology. While Peterman Brothers will install whatever brand of water heater desired by a customer, mostly they deal in Bradford White and State Water Heaters.
HOMEGROWN WORKFORCE
Fast-growing companies like Peterman Brothers sometimes have difficulty staffing their service teams and keeping employees current in service and installation knowledge. In a word, training can be an issue.
Peterman Brothers has attempted to address both training and recruitment challenges by establishing its Top Tech Academy, located on 10 acres on the south side of Indianapolis. The learning center’s 80,000 square feet includes a 5,000-square-foot laboratory.
“That lab is complete with just about anything our techs are going to see in the field,” Peterman says.
It serves two working populations. The academy’s recruiter brings in newbies and introduces them to one of the four areas of service work, thus swelling the ranks of tradespeople at a time when the industry is seeking a new generation of skilled labor.
The facility is also used to keep Peterman Brothers technicians up to date on their skill sets.
“We use the academy to level up our techs, as we call it, to let them refine their skills. The more they know, the better,” Peterman says.
Top Tech students just entering the trades can apply to work with Peterman Brothers while they are still taking coursework. Tuition can be payroll-deducted in small increments. Some of the courses are completed in as few as four months.
“Training is a huge part of what we do,” Peterman says. “We curate training both on the process and leadership side and on the technical side.”
COMMUNITY-MINDED
Peterman Brothers offers an assortment of customer-centric programs that address various specific issues. Its Repair-Refund program, for example, tries to ease the financial pain for homeowners who make a last-ditch effort to keep a heater or air conditioning unit operating only to turn around and have to invest in a new one when the fix doesn’t do the job. The program lets the customer deduct the cost of the recent repair from the cost of a new unit.
“We hope not to use it a lot,” acknowledges Peterman, “but we don’t want our customers to have to throw good money after bad.”
The Peterman Protection Club is a maintenance program that helps to educate homeowners about their in-the-home equipment. As an incentive, the program also gives members priority service when something breaks.
“Because the breaks always come when we expect them the least. We want to give customers something they can rely on,” Peterman says.
It is a popular program, with 30,500 members, and features an underlying charitable element: A portion of each repair call to members is donated to one of four local charities, with members given an opportunity to help select the charities.
And then there is the Peterman Cares program, which is outright charitable in character. It is a means of donating service or equipment to people in need. Each month, Peterman Brothers repairs a unit — air conditioning, furnace, water heater, whatever — or installs a new unit in the home of a family or person facing hardship and nominated for the service.
“We have had a little of everything. People down on their luck. Someone with health issues, or who lost a job. It is cool to see our guys doing the work and the gratitude the customer shows,” Peterman says.
Could the program boomerang on the company, with people taking advantage of the generosity?
“If we get taken advantage of, we still will have helped a lot of people along the way,” Peterman says.
The acts of kindness are not one-of-a-kind. Other companies have similar programs. However, the extent to which Peterman Brothers reaches out is notable. Why do it?
“It is good for the community,” Peterman says. “I suppose there is some business that is gained by it, but for me it is about our relationship with customers. It gives us an opportunity to go out and help those in need.”
BRIGHT FUTURE
Where does Peterman envision the company being in, say, 25 years?
“I hope I’ll be retired by then,” Peterman says, laughing. He adds that in the next decade or two, he wants the company to establish additional offices in other cities and other states — and to do so without losing its customer-centric character.
“It will be tougher, but I hope as we get bigger, we still can be a company whose customers know that when our techs are in their homes, they are our No. 1 priority.”
