This week’s operator runs a commercial property maintenance company in a major Northeast metro area. He asked to stay anonymous, but he was generous with the details, including the part most owners never talk about.
Before starting the company, he worked in business development roles in tech. In 2008, he left to start this business in an industry that was completely new to him.
The numbers
Revenue last year: $37 million
Clients: 600
Employees: 60, including 15 outbound salespeople
Average monthly contract: $3,500
Target margin: about 10%
Time to profitability: three years
Owner’s schedule today: one to two days a week
What stands out
1. He started at the worst possible time and it took three years.
He launched in 2008, right into the financial crisis, in an industry he’d never worked in. The first year, in his words, was really tough. It took three years before the business was profitable and he could pay himself a real salary.
That’s worth sitting with. Most people expect to know within a year whether something is working. This is what persistence actually looks like.
2. It’s built on recurring contracts.
Last week, the landscaping company I featured was working to build more recurring revenue. This business is built on it. Clients sign service contracts averaging about $3,500 a month, which makes revenue far more predictable than one-off projects.
3. They built a sales machine.
My painting business and last week’s landscaping company both grow mostly through referrals. This company took the opposite approach: a quarter of their team (15 of 60 people) are outbound salespeople. In commercial work, where contracts are bigger and recurring, building a direct sales team can pay for itself many times over.
4. The owner works one or two days a week.
This might be the most impressive number in the whole interview. He’s built a leadership team he describes as better and more capable than himself. His advice: surround yourself with people better than you.
That’s the difference between owning a job and owning a business.
The hard parts
People. Despite working hard on culture and values, he says the human side of the business is still the most surprising and difficult part.
His biggest early mistake was simple: hiring the wrong people.
What he’s learned since:
Hire slow and fire fast.
Be transparent about company goals.
Do what you say you’re going to do.
Promote from within whenever possible and actually follow through on it.
What surprised him
How much opportunity there is to stand out simply through solid customer service.
I hear this from almost every operator I talk to, and I’ve seen it in my own business. In a lot of these industries, being responsive and reliable is a competitive advantage all by itself.
What’s next
He plans to sell the business within the next five years. But his priority isn’t the highest price, it’s the right buyer.
He feels deeply connected to his people and won’t sell without assurances about what their future will look like under new ownership.
His advice for anyone in a corporate job
“It’s so hard to take the plunge, but I can tell you that personally I never felt so alive professionally until I made the decision to go out on my own. It was scary but exhilarating.”
My 2 cents
There’s a lot to like here.
The recurring revenue is the foundation. Contracts averaging $3,500 a month across hundreds of clients give this business a stability most trade companies never reach.
The owner has made himself unnecessary on purpose. Working one or two days a week on a $37 million business isn’t luck. It’s the result of years of building the right team. It’s also exactly what makes a business valuable when it’s time to sell, because the buyer isn’t paying for the owner.
The margin is thinner than I’d want in my own business, but at this scale, 10% is still a lot of dollars. A thin margin on a large, recurring base is a very different risk than a thin margin on lumpy project work.
One thing I didn’t ask: with 60 employees doing $37 million, my guess is that a lot of the field work is handled through subcontractors, similar to how I run my painting company. That would explain how such a lean team supports so much revenue.
And I respect his approach to selling. Choosing the right buyer for your people over the biggest check says a lot about how this business got built in the first place.
Zac
P.S. Own a trade or service business and willing to open your books for a future feature? Reply and let me know. You can stay anonymous.