It’s no secret, many contractors struggle with growth. Not P.J. Fitzpatrick Inc. Over the past 37 years, the company has steadily gone from a single truck to one of the nation’s largest home improvement companies with a spot on the Remodeling 550, about 100 employees, a 25,000-square-foot headquarters and around $25 million in annual sales.
While not every contractor aims for that kind of explosive growth, the story of how the company went from “Chuck in a truck” to the big time holds lessons for contractors of every size.
Like a lot of firms, P.J. Fitzpatrick’s founder, Pete, who’s now retired, initially grew his roofing and gutter firm on word-of-mouth and recommendations. Between 1989 and the late 1990s, he went from that single truck, working out of his home to a construction trailer, to a 6,000-square-foot building. During that time, he hired about 20 employees — an office manager, dedicated estimators and sales people including his son-in-law Rick Stover, who’s now company president — but subbed out most work. Around 2003, P.J. Fitzpatrick was comfortably doing $4 million to $5 million in business annually, Stover said.
“Pete was at a point where he knew if he wanted to grow he was going to have to change the structure of the company,” he recalled. “If he was going to be in a position to have folks work for him he knew he was going to have to make some changes.”
But Stover said Pete Fitzpatrick knew something else that a lot of owners who want to grow never understand, something that would make the difference between setting up a foundation for growth and collapsing under the weight of it. He knew he needed help.
So Fitzpatrick and Stover, who was now general manager, brought in an outside business consultant. “That was the catalyst that started us on our path toward growth,” Stover said. “Most owners, part of what keeps them where they are is they feel they have all the answers.”
Through weekly meetings with their consultant, Stover and Fitzpatrick began laying a firm foundation for growth. That started with organization, meaning all processes and procedures were documented to make it easier to hire, train and evaluate. Once that was done it became clear that rather than letting employees wear multiple hats — sales, estimating, project management, customer service — it would be better to divide those into dedicated positions that would ensure better customer service.
Then came digitization and automation. They went from writing customer information on paper to a computerized customer database. Production schedules also went from the whiteboard to a computerized system that allowed the company to track jobs and things like warranty callbacks.
Next they stepped up advertising and marketing to include newspapers, direct mail and TV. “We got more aggressive about going out and trying to grow our customer base,” Stover said.
With a growth foundation in place, P.J. Fitzpatrick then started building on it. In 2003, it merged with a similar-sized local window replacement company, which immediately doubled the company’s size. “It was pretty rapid growth that year,” Stover recalled. “It’s a lot to almost double your business in size in just one year. You can definitely grow too fast.”
But again, that growth was carefully managed with continued guidance from the business consultants. For example, rather than just taking the new company whole cloth, the team looked at their product mix and eliminated work that didn’t make sense such as additions decks and basement renovations, which all had long lead times and potential for long delays.
“We understood that we were better at projects that have a fairly quick turnover and that can be done in a day or two,” Stover said. “Rather than trying to be everything to everybody, we focused on what we’re really good at.”
With that focus, the company continued to grow to $15 million by 2005 when it moved into its current 25,000 square-foot home. By 2008, when Stover officially bought the company from Fitzpatrick, annual sales were at $20 million — and climbing.
But as with the company’s other transitions, Fitzpatrick’s transition out of the company was carefully thought out with a gradual retirement. He came in four days a week for three more years, then two days a week for another year, and one day a week for another year before he fully retired. “He was a huge help to me during that period,” Stover said.
Along with a period of change, it was a period of still more growth, topping out at $25 million in annual sales at the peak of the market in 2011. Today, the company remains around the $25 million mark, with service in four states and 11 counties.
Looking back on it, Stover says there’s no question using a business consultant was the key to the company’s successful growth. A close tie was a commitment to marketing and advertising to the tune of 10 pecent to 12 percent of revenue, excluding the call center employees. Previously, Fitzpatrick was spending only 1 percent to 2 percent of revenue on marketing. “You can only grow so much through word-of-mouth,” Stover said. “To really make a jump, you have to be committed to marketing and advertising.”
Today, as Stover contemplates future growth, he remains focused the two cornerstones of consulting outside experts and advertising. He and his general manager continue to meet monthly with the business consultants, who he thinks of as his board of directors. He also relies on monthly sales consultants to keep his sales department fine-tuned.
And he’s stepped up his advertising with an in-house designer and a sophisticated tracking system that includes 180 different phone numbers to let him know what ads are working. A database crunches the numbers to show how much it cost to get a call, set an appointment and make a sale. Those numbers are reviewed weekly and monthly with an aim to capitalize on what’s working and throw out what’s not.
While much has changed over the years, one thing that hasn’t is the company’s laser focus on customer service. “At the core of what we do, this is still a very people-oriented business,” Stover said. “Continuing to control the customer experience is one of the biggest challenges we face. But we’ve created a culture where people understand that we’re here to serve customers, and we need to make them happy to be a successful business.”
At 47, Stover doesn’t yet have an exit plan. But he’s confident that no matter when he leaves the company, P.J. Fitzpatrick will continue to thrive. “The more organized a business is the more process are documented and teachable and repeatable, the easier it is to transition out,” he said. “As an owner, you want to be where, God forbid, something should happen to me tomorrow, someone could pick up the ball and run with it.”
Rick Stover offers these six tips for owners looking to grow:
- Learn to delegate: Come to grips with the fact that you have to let go of some of the things you do on a daily basis — and trust others to do them.
- Commit to growth: Budget every year and set revenue targets. Use those figures to estimate how many people you’ll need to handle the growth.
- Don’t lose your customer focus: Growth kills businesses because they get overwhelmed and customer service goes down the tubes.
- Employ consultants: Use them to get a fresh perspective and a better way to do business.
- Get your business out of your head: Write out job descriptions and put all procedures on paper. These are essential to teaching, training and evaluating others as you grow.
- Plan for the day you’re not there: No one expects to get sick or hurt. But it happens. Make sure you’ve got everything in place so someone else can run the business in your absence.
