Three years ago, Sturm Heating Inc. decided to take a big step in growing its longtime furnace repair and replacement business by expanding into plumbing, electrical, and new-home installations.


Grow it did. The now 61-year-old Spokane company doubled its work force to 80 employees and also doubled its annual revenues to $8 million. The changes began at the same time that Sturm moved from its longtime location near Indiana and Ruby to a larger, 13,000-square-foot building it bought at 1112 N. Nelson, in East Spokane.


We had been looking at making these changes for years, but when we decided to take the step it proved to be a bigger step than we thought it would be, says Jeff McGee, general manager of the employee-owned company. We didnt think that three years later we would have doubled the size of the business.


Until 2003, Sturm focused on servicing and replacing residential heating and air-conditioning systems, and did retrofitting and new-construction heating and air-conditioning installation for commercial customers, says McGee. It was then that it branched into plumbing and electrical work, and also began working for contractors by installing heating and air-conditioning systems in new homes.


McGee says much of the companys big jump in revenue over the past three years has come through plumbing and electrical services, which now comprise 20 percent of Sturms overall revenues. He also says residential new construction work currently generates about 12 percent of the companys annual revenue, then adds his opinion that the three new services wont ever quite equal or surpass revenues from heating and cooling.


In plumbing, we are now only doing installation on commercial and residential projects, but the future that we havent touched yet is in service work, he says.


Sturm has been a licensed electrical contractor since 1974, but until recently we only did electrical work where it related to our retrofitting jobs, says McGee. McGee says Sturms recent growth spurt has been nice, but its time for the company to temper its hectic pace of the last three years. He projects a healthy, but less dramatic 10 percent annual growth rate for Sturm for the foreseeable future.


In five years, McGee hopes the company will have as many as 110 employees and annual revenues of about $10 million, without making any significant marketing push outside the Spokane County-North Idaho area, where it does about 95 percent of its work.


If youve got good employees and get the work done on time, theres lots of work here, he says.


McGee says Sturm has taken on jobs elsewhere in Eastern Washington, and as far away as Seattle and Nevada, and says demand for Sturm to accept such jobs remains high. He says the company frequently turns away jobs in the Seattle area, where demand is great.


Those jobs are ones we simply dont want to do, because they are too far away, McGee says. If we do the distance stuff, we have to turn away local work, and its a lot better for our employees to come home at night.


He says Sturm has hired roughly equal numbers of plumbers, electricians, and new-construction heating-and-cooling installers as it has made 40 new hires over the past three years.


The addition of its new services came after much urging from contractors here, says McGee.


We kept bumping into contractors who wanted plumbers and electricians, he says.


Sturm routinely works on 60 to 80 houses at any one time, and on some new homes we are three of the subcontractors on one job, McGee says. In those instances, workers from the company install all the plumbing and electrical, plus the heating and cooling systems as well, he says.


The building the company currently occupies includes about 10,000 square feet of warehouse space, where the plumbing, electrical, and heating and cooling divisions are housed under one tall roof, and about 3,000 square feet of office space on two levels.


McGee envisions a time when the company will have to build or buy another building, either to move the entire operation or as a branch facility to house part of the operation. The current location has ample outside space to park Sturms 57 service vehicles.


One trend McGee sees that could reverse if plumbing service work increases as he hopes, is the decline in the percentage of revenue coming from service calls.


Service work is where you make most of your money, he says, adding that the volume of Sturms service work is up, but not as dramatically as the companys overall jump in revenue. By entering the field of plumbing service work, Sturms percentage of revenue from service work should rebound, says McGee. Revenues from service work on air conditioners and furnaces once accounted for about a third of Sturms overall revenues, but its about half that share now, he says.


Sturm Heating was launched in 1945 by Bud Sturm, who owned the business until 1972, when it was bought by Maury Flynn. In 1992, Flynn began the process of transferring ownership of the company to an employee stock ownership plan, which since 1997 has owned the company entirely, McGee says.


Contact Rocky Wilson at (509) 344-1264 or via e-mail at rockyw@spokanejournal.com.