Posted: December 01, 2011
Realigning with your strengths
A lesson in business success in volatile timesBy Larry Turner and Doug Phelps
Integrity Electrical Solutions (www.integrityele.com) emerged from the ashes of the abrupt closure in early 2010 of McBride Electric. A Denver-area icon since the late 1960's, McBride had offices in 11 cities nationwide. A successful business model of being a premier electrical service provider that built McBride's reputation had given way to a mid-2000's change of targeting large-scale project work in the construction industry. The business faltered in the staggering economy, and the owners decided to cease operations nationwide.
Chris Cumpton, the former general manager of the Denver office, seized on the opportunity to reestablish a premier electrical services and data solutions provider. Together with partner Mark Heikkila (also a McBride employee and marketing manager), he made an offer to purchase the local office. The offer was accepted and Integrity Electrical Solutions opened on April 5, 2010.
Integrity Electrical Solutions provides comprehensive services in electrical, data, lighting, energy reduction and renewables to industrial, commercial and residential customers. With this renewed focus to what it does best, past Denver-area customers quickly returned. The business was profitable in 2010. Expected revenues are on track to reach $3 million in 2011.
Chris projects continuing steady growth at about 10 percent per year. Cash flow is strong and the company has no debt. The company received a 2011 Summit Award for Excellence in Electrical Construction, in the Service category.
Issues and opportunities during this time of business transition:
Chris made some tough decisions to get overhead down. Staff was reduced by half, mostly in field personnel as he hired some former McBride employees. Office staff was reduced as key employees stepped up to manage extra duties. Inventories of parts for services work was cut to minimal, emergency needs in an on-site warehouse, giving way to service technicians stocking their vehicles directly from parts vendors as needed. Chris was careful to establish a vision and mission consistent with company goals, with guiding core values of excellence and integrity. The culture is "bottom up" where employees are encouraged to make decisions. Employee growth is intentional, hiring on fit over skills. Chris is the leader, not the boss.
In the whirlwind of the process to purchase the business, Chris pursued advisors to ensure all the legal and financial aspects were properly addressed. The purchase of the business was in cash. He has a superb banking relationship, which includes a line of credit that he draws upon infrequently to shore up the 45-day window in accounts receivable.
Chris invested in critical software that helps the company be responsive to customers. This includes in-the-field project estimating software, and the company utilizes Zoho for its customer relationship management. The office is fully networked and systems are up to date. Plans for 2012 are to add an electronic GPS dispatch system for the 14-vehicle service fleet, so that the company can be even more responsive to customer needs.
Integrity Electrical Solutions places a high priority on customer satisfaction, and the opportunity to reinforce this was key in the transition. They left nothing to chance: hired marketing professionals and invested in sales training, as well as implemented a CRM. There is no mass media advertising, as the main customer target is businesses. Instead, the company has chosen to expand its customer base through SEO, social media, and other online marketing solutions.
The company's website is constantly evolving. All marketing efforts are relationship based, with the intent to provide long term terms solutions to all electrical needs. Contrary to the "wait for the phone to ring" mentality typical of the industry and waiting for calls and chances to bid RFPs, Integrity depends on a proactive "go and tell" approach. The sales and marketing staff focuses on making outbound calls to current user customers and to warm leads. The biggest ongoing challenge for the company is identifying the best fit in customers who understand and appreciate the high priority in the company's core values.
Customers & Growth
The end-user customer base consists of manufacturing, government, food service, office, data center, retail and multi-family clients all along the Front Range. In 2010 the company fell short of their goals, but 2011 to date it has exceeded targets. The customer mix is about 60 percent commercial, 30 percent industrial and 10 percent residential, with services in electrical (power/hard-wire) at 80 percent, energy at 15 percent, and the remainder in retrofit lighting and data systems.
The marketplace for energy, in oil and gas as well as in renewables, is growing and changing with great opportunities for the company. Integrity Electrical Solutions has done well through the transition and the return to a core focus of providing daily and emergency electrical services. For Chris, the company name describes his team's passion and commitment in conducting business.
Do you know of a company that has gone through some challenges over the past few years and is now on a positive way forward? Feel free to contact me and we would be happy to speak with them and potentially publish an article on their successes.
Larry Turner is CEO of Roundhouse Advisors, Inc. and has over 25 years experience growing, starting up, repositioning, and revitalizing organizations. Roundhouse Advisors is a consulting practice focused on helping businesses increase enterprise value by managing pain, growth and owner exits. Larry is a consultant, public speaker, and the author of two books “Owner Exit Planning: Leave On Your Own Terms” and “Mapping Your Recovery: Grow sales in difficult times”. For additional information visit www.RoundhouseAdvisors.com
Doug Phelps is Vice President of Business Development at Roundhouse Advisors, Inc. and has executive experience in worldwide Services and Products Management, with an extensive background in domestic and international operations and business development, marketing strategies and sales, and productive relationship building for small to midsize companies and non-profit organizations. He is on the Board of Directors for the South Jeffco chapter of Thrivent Financial, serving community needs for residents in the area, and also serves on a committee for Lutheran Family Services of Colorado, supporting the fund-raising activities for the organization.