For business owners looking to improve their profitability, there are a lot of options for help out there, including accountants, consultants, and attorneys. There are also manufacturer-sponsored training programs and affinity groups that allow noncompeting contractors to benefit from their peers. Now there is a new group on the horizon in the roofing industry that is based in part on the theory that there is strength in numbers.
For business owners looking to improve their profitability, there are a lot of options for help out there, including accountants, consultants, and attorneys. There are also manufacturer-sponsored training programs and affinity groups that allow noncompeting contractors to benefit from their peers. Now there is a new group on the horizon in the roofing industry that is based in part on the theory that there is strength in numbers.
Success Group International has proven adept at sharing the strategies of successful companies to help improve businesses in the construction trades. SGI, a division of Clockwork Home Services, is the parent company of Plumbers' Success International, Electricians' Success International, and AirTime 500, groups which have helped independent contractors thrive in the plumbing, electrical, and HVAC fields. Planning to capitalize with the same formula in the roofing industry, the group formed Roofers' Success International in the fourth quarter of 2005 with a select group of contractors as its founding members.
The group offers its independent members direction in business management, employee training, and help with advertising and marketing programs. Membership is open to contractors based on population, with two members allowed in an area for each 500,000 residents. The group is limiting membership in 2006 to 160 members. Roofers' Success International hopes to build a solid group of contractors with a proven record of success with the hopes of becoming a publicly traded company in the future.
"Our goal is to go public, and we need a large number of profitable companies with solid systems in place to reach that goal," says Mike Feazel, president and CEO of Feazel Roofing and the CEO of Roofers' Success International. "Whether you want to sell your business down the road is irrelevant; in either case, increasing profitability is the key to success."
There are no limitations as far as company size. "We can help contractors of all types and sizes," states Feazel. "We have contractors doing $8 million worth of business, and some doing $180,000. If they feel they have a need for what we offer, we will provide it."
Residential Service
The group is targeting the residential service and replacement market, but the organization is not limiting membership to companies that already specialize in residential replacement; a commercial contractor or new construction contractor can open a residential branch."We're looking for people who want to excel in the residential market," says Feazel. "We're there to help business owners that are already in residential replacement but want to make more money, learn to run a more efficient business, and improve sales and marketing techniques. For commercial or new construction contractors that are interested in entering the residential market, we help them do so with a proven business model, so they can avoid common mistakes."
"We have a lot of experience with contractors who have been in the residential service field," says Terry Nicholson, president of Success Group International. "We believe that by and large homeowners are looking for the same things: good service, people who do what they say they will do, honest, drug-free employees, and quality workmanship. Homeowners are not necessarily looking for the cheapest price. Their home is often their greatest investment. Homeowners are looking to improve their homes, and they want to have trust in the workers who come to the house.
"The service field is the only field where you can stand out, offer elite services, and make a strong profit. In new construction, where the job is likely to go to the low bidder, price is the key. In the residential service market, price isn't the most important component - it's service that matters."
Mike Feazel (left) receives his award from Terry Nicholson after being inducted into Success Group's Home Sevices Hall of Fame.
The Business Model
In return for an initiation fee and monthly dues, independent members receive "a smorgasbord of proven principles and strategies," according to Nicholson, and they can pick and choose the ones they want to use. The group offers all of the benefits of a franchise operation, but none of the drawbacks, says Nicholson, who is quick to point out that the group is not a franchise, and members are not required to pay any percentage of their sales. "At the end of the day, the members remain independent."Nicholson points to several reasons why his group's services are in demand. Foremost among them is the fact that most roofing contractors are hands-on technical types who began in the field. Once they open a business, owners have to deal with questions regarding hiring, human resources, accounting, sales and marketing, and they realize they lack the sufficient background to be effective in these areas.
The SGI method involves identifying the nation's best contractors and using their proven systems as a model. RSI uses Feazel Roofing as its prototype. Nicholson said the group wanted to find a model company that was customer focused, had highly skilled, highly paid employees, and strong profits coupled with sustained growth. They found those qualities in Feazel's company.
"I learned the hard way, but that's not the only way to learn," says Feazel. "Now I can help other business owners with the day-to-day issues that I battle."
Feazel started his own company as a one-man operation in 1988 in Columbus, Ohio, and the company now has over 50 employees, with offices in Columbus and Fort Pierce, Fla. He attributes his company's success to solid marketing strategies, efficient, well-run systems and procedures, and excellent employees. "We've excelled by surrounding ourselves with good people," he says.
"I started with a ladder on top of my car, and I know it's a hard road out there for the small business owner," says Feazel. "This is not a simple industry to excel in. I started in this industry when I was 18 and started my own business when I was 21. I learned the hard way, but that's not the only way to learn. Now I can help other business owners with the day-to-day issues that I battle."
Training Programs
Education and training are the hallmarks of the group, and it offers training programs for all employees, as well as help with sales and marketing.RSI offers advice on everything from taking calls and scheduling appointments to understanding financials to servicing the customer, including extensive sessions on proper pricing and the group's sales system. "We have tried and true systems that have been used for years - not only in roofing but in other areas of construction - and have been proven successful," says Feazel.
The group discourages contractors from competing solely on price. "One of the big things we preach is getting the right amount of money for the work you do," says Feazel. "You've got to get the right money to build the right company."
The pillar of the group's training program is its Success Academy. Classes like the group's sales training classes are held at its center in St. Louis, and the intense, multi-day class sessions are geared to train a company's sales force in a "solid, proven sales system."
The majority of salesmen today come from work crews, says Nicholson, often in the form of workers who become too old for installation work or become injured. But they soon realize sales isn't easy. "You have to understand communication, how to build value, and how to sell. Our sales system is designed to help you walk a homeowner through a presentation and handle objections as you go, eliminating the bid process."
Marketing Help
RSI also offers help setting up advertising and marketing strategies. Drawing on the advice of advertising experts and the success of marketing programs from members in its groups across several industries, Success Group International has not only culled the best of tried and true strategies, says Feazel, it taps into the creativity of its members to continually develop new ones."With the combined knowledge of the entire Success Group membership, we know what pulls for the Yellow Pages, TV and radio spots," says Feazel. The group offers turnkey radio spots that can be customized for each member or used as a springboard for new ideas.
"We have experts who specialize in creating advertising that appeals to consumers," says Nicholson. "No one contractor can bring these marketing and advertising people together. We have the most successful program, plus we protect it through copyright. Only our members can use it."
Buying Power, Rebates
The group also hopes to provide discounts through group purchasing power. RSI is a relatively new entity, and many programs for buying power are "still in the works," says Nicholson. However, "SGI, with all members taken together, is a $3 billion entity, and this gives us negotiating power."Deals are already in place to allow members to save money on trucks, uniforms and supplies with suppliers such as Enterprise Leasing, Ford Motor Co., Mobil, and Staples.
The group plans to launch a new line of private label products, beginning with a line of private label shingles, with the trademarked name Rhino Roofing and the trademarked slogan "This stuff is tuff."
"Private labels provide a tremendous advantage in selling," states Nicholson, noting that they can help increase profit margins and eliminate price shopping.
The group's aim is to provide its members with lower prices and extended value warranties, as well as rebates on purchases.
According to Nicholson, SGI paid out over $5 million to its members in the form of manufacturers' rebates.
RSI Events
RSI holds expos for its members every six months, and the group introduces itself to prospective members through events called Profit Days. At these meetings, Feazel and Nicholson speak to prospective members and outline the benefits of the group, along with other SGI veterans.Nicholson noted that the Profit Days sessions allow business owners to come and "test-drive" the information for free. "We share strategies in full detail and give you ways to grow your business, recruit the best talent, and get the phone to ring when you want it to ring."
"At RSI and with other companies throughout the organization, we've seen people at the brink of bankruptcy who have implemented our systems and who have eased financial pressure within three months," says Nicholson.
Increasing the profitability of its members not only helps the group get one step closer to its goal of going public - it helps each individual member realize that a wealthy exit strategy is an achievable goal. "For many individual contractors today, the only way to exit is to shutter the business and close it up," says Nicholson. "What we're trying to do for individual contractors when they determine that their day is done and they want to ride off into the sunset is to provide them with a wealthy exit strategy. If we become a public company, they can do so."
Asked what he would tell contractors who were thinking of joining the group, Feazel replies, "Change is a difficult thing. We always do what we've always done, but to really move forward, change is a necessity. The world moves forward every day, but for too long our industry has not. We have to, as a whole, change our industry for the better and change its image, and we are doing that through our members."
"If you want more money, more free time, and the ability to grow your business at a controlled pace - the pace that you want - we can help," says Feazel. "It's all about taking control. We help you control your business, instead of your business controlling you."
