The day that Jim Fisher met and hired Pete Valentino — the man who would ultimately buy his remodeling business — came about as a result of two factors: analysis and enterprise. The analysis was done by Fisher in the mid-1990s after he observed the manner in which most contractors retired: by simply selling their tools and walking away from their businesses. “That ran counter to my thought process,” says Fisher, who began to analyze what a successful remodeling company is worth and what increases its value.
The enterprise came in 1997 when Valentino, then 32, showed up, unannounced, at Fisher's door in Fairfield, Calif., and asked for an appointment. Valentino, a licensed general contractor, had recently moved into the area when he happened to drive past the showroom of J. Fisher Construction. Recalling that the company had been named a Big50 contractor by REMODELING magazine, Valentino decided to see if he and Fisher might do some work together.
Valentino got the appointment, and a superintendent's job with the company. Fisher admired the young man's energy and initiative, saying that, “Pete had the fire in him.” Two years later, they shook hands on a deal for Valentino to buy the business, based on a five-year transition plan and a selling price of $300,000. (See “Details of the Deal,” page 52.) On Sept. 1, 2005, according to the plan, Valentino became the new owner of J. Fisher Construction.
“I'm very excited for Pete,” says Fisher, 66, who has come to think of Pete as a son. “He's earned it.”
Valentino, now 41, feels the same about Fisher, and is thankful for the five-year transition period. He says he “got an education you could never receive at any university.”
THE ANALYTIC OWNER Years before Valentino came along, Fisher toyed with the idea of creating and increasing sales value in a remodeling company. His interest was based on a philosophy that has become almost a mantra: “When do you think about selling your business?” he likes to ask. “The day you start.”
From the moment he started his company, Fisher was oriented toward the numbers — gross profit, net profit, owner's compensation, and so on. He perfected this focus during a 23-year career with Sears, Roebuck and Co., where he became regional installation manager with a clerical staff of 85 and more than 225 subcontractors. With his pinpoint focus on the bottom line, he eventually decided: “If I could do that for Sears, I could certainly do that for me.”
Taking an early retirement from Sears, Fisher set out to start his own remodeling company. But he recognized his main shortcoming — a lack of direct sales experience — and so he spent a couple of years selling cabinet refacing for another company. Finally, when he was ready, he started his business in 1986 and incorporated in 1990.
As his business grew, Fisher kept close track of the numbers. “There's a tremendous strength in knowing your numbers,” he would tell Valentino later on. “Then, you're not relying on hunches. You're relying on facts.”
To gauge his success, Fisher wanted to compare his numbers with others in his industry, so he set up a meeting with a remodeling contractor several cities away. But Fisher was shown the door when that contractor found out Fisher was doing a job in his area.
Eventually, Fisher joined one of Les Cunningham's Business Networks groups, which bring together remodeling contractors from noncompeting areas for the purpose of peer review. It was likely a result of this connection that Fisher's company came to the attention of the Big50 judges, which led to the magazine profile that Valentino would one day read.
Fisher figured there are two initial questions in creating a saleable remodeling business: What elements give a remodeling business its value? How do you expand and improve those elements? Fisher hopes the answers to these will preempt a question that he has heard from others in the industry who think it's impossible or impractical to sell a remodeling business: “Why buy a remodeling business,” detractors have said to him, “when you can start one?”
