John Ward was broke in 1992, and then he met Frank Blau. Ward took Blau's flat rate gospel to heart and he has turned Applewood Plumbing, Heating & Electric into one of the most profitable and philanthropically minded contractors in the country. The accolades have been pouring in. Applewood was recently honored as the 2009 Large Business winner in the Denver Better Business Bureau Torch Award for Marketplace Trust. It gives away $1,000 a month to small local charities. Ward is one of the founders of the Nexstar Network Legacy Foundation, which gives scholarships to students who want to pursue a career in the plumbing-heating-cooling or electrical trades.

For that and all of the many reasons that follow, John Ward and his team at Applewood Plumbing, Heating & Electric are CONTRACTOR's 2009 Contractor of the Year.

When Blau and his compatriots Mike Diamond and George Brazil founded Contractors 2000 (now Nexstar Network) in the early 1990s, Applewood was member number 15. The company was recently ranked eighth of more than 300 service companies and received the Nexstar Network Select Service Award of Excellence, which is based upon customer, employee and financial success. This is the seventh year in a row Applewood has received the esteemed designation. Applewood is also the 2007 Golden Rotary's Ethics in Business Award winner and the 2008 Best of Boulder Award in the Plumbing Contractors category by the U.S. Local Business Association. The Public Relations Society of America named Ward as its 2008 Businessperson of the Year.

Blau, Blau Plumbing, Milwaukee, and the nation's foremost popularizer of flat rate pricing, told CONTRACTOR that if a contractor is going to devote his life to this industry and if he expects his employees to devote 20 or 30 years to his company, he has “a moral obligation to [him]self and to [his] associates to become wealthy,” so that he can take care of his family, his employees and the community he serves.

Serve it he does. Ward's first act of charity was providing T-shirts for the Belmar Elementary Science Fair, and it snowballed form there. He has formalized the process so that he gives away $1,000 a month to small, local charities. Years ago he was pressured to give money to a national mega-charity at the same time the group was paying huge salaries to its executives, and he believes small local charities do more good.

Applewood's “Caring Community 12 in 12 Giveaway” program typifies its community spirit. Local nonprofits receive $1,000 monthly to support programs, community projects and educational activities. Applewood also supports the Wheat Ridge Farmer 5000, the Denver Old Home Fair, and it still provides T-shirts for the Belmar Elementary Science Fair.

“We saw the impact that a relatively small amount of money could have on these organizations,” says John's son, Vice President Josh Ward.

Blau says Ward is quick to write a check whenever a charity needs money.

“John Ward is in my special circle of friends,” Blau says.

How did he get here?

John was 16-years-old and living in Broomfield, Colo., when he watched a plumber install a dishwasher and garbage disposer in his parents' house. It seemed like a good way to earn a living, so he went to work for that plumber, Paul Starkey. When he went away to college, he worked for another plumber, Don Winters, in Gunnison, Colo.

Ward planned to become a teacher, majoring in English and journalism with a minor in elementary education, but he was drafted out of college. After working as an evidence custodian for the Army's criminal investigation division, Ward went back to working for a plumbing contractor, got married and had kids. He also started a long-term part-time job teaching plumbing at Red Rocks Community College, where he eventually ran the plumbing department.

In 1973, Ward became a reluctant entrepreneur when the plumber he was working for went bankrupt. The guy couldn't even pay him, but he did give him a Milwaukee Electric Tool Sawzall and a Hole Hawg. What followed was nearly 20 years of plumbing by day and teaching at night, sometimes teaching in the morning and then plumbing in the afternoon. Depending on how much new construction work he could find, some years he might make more money plumbing than teaching or vice versa.

They were tough years: “We were lucky to make payroll,” John recalls. His wife, Cathie, holds a master's degree in social work and worked at a battered women's shelter and in child protective services, a vocation at which nobody gets rich.

Then he hit bottom. Ward was working at a ski lodge project where the developer's business plan seemed to include not paying the subs. The developer went bankrupt, leaving Ward $56,000 in debt to his suppliers. He had 18 employees and had to lay them all off. Son Josh came home from Colorado Mountain College in Glenwood Springs after two semesters. The company was John, Josh and one other plumber who had worked for John, a customer list with 500 names on it, no business and thousands in debt.

He got religion

“A lot of times, these guys have to be on their knees and have a Come-to-Jesus moment where they are willing to admit to themselves, ‘what I've been doing hasn't been working,” says George Brazil. John Ward had his moment and Frank Blau walked in. Blau says he taught Ward at seminars in Colorado Springs and in Denver, in addition to meeting with him individually.

Ward took everything that Blau taught him and ran with it. “He knows his numbers right to the T and that makes me very happy,” Blau says.

The key for Ward, Brazil notes, is that he actually did what he was told to do.

“My influence was indirect through the programs and things that I and Frank Blau concocted,” Brazil says. “[Ward] grabbed hold of them and implemented them. The key word is that he implemented them. You can tell people what to do until you're blue in the face, but they don't implement them. He's a success story. He certainly has stood out in the overall scheme of things.”

The company was all service and no more new construction. Josh started entering the customer list into a personal computer that probably had as much memory as a calculator does today. He created direct mail pieces and Yellow Page ads and did the dispatching with sticky notes. They painted the first truck the now familiar orange. They paid $500 a month to the wholesaler to whom they owed $56,000. They joined Contractors 2000. The first year with John and another plumber they billed $300,000, and when Josh predicted that they could top $1 million, it was treated as a joke. When they topped $1 million a few years later, they were growing by 20%-30% a year.

In the midst of The Great Recession, Applewood will grow 15% this year and bill $12.5 million, Josh says. That's down from 2008's growth rate of 43%, but the budget for 2010 calls for $15 million.

They used to track monthly sales by the thousands of dollars, Josh notes, until January 2008 when they topped $1 million for the first time.

It's easier to be a cop

Turnover? Forget about it. It's tougher to get a job at Applewood than it is to get a job with the police department. When John Ward was asked if the recession offered a deeper talent pool, his answer was, “Not really.”

The contractor's background checks are so stringent that 90% of applicants won't get an interview with Service Manager Mike Taylor. And only one out of 10 of those will get a job offer. The contractor only hires licensed journeymen or master plumbers, and electricians and HVAC techs need to be certified by North American Technician Excellence in order to make any real money. After a plumber has been with Applewood for about a year, he can expect to make an average of $85,000, including his base salary and commissions. Benefits are on top of that.