My guest on this episode is Nick Fedele who recently acquired a 30 employee sheet metal construction business called Metal Alliance Inc near Philadelphia. Nick has a background in public accounting before taking on a management consulting role and eventually becoming a CFO. After 2 years as a CFO, he felt ready to seek out and acquire a business for himself.
Nick and I talk about the ownership transition with the previous owner who wanted to remain involved, his principles for handling situations that go wrong – hence our episode title “death, taxes, and stuff goes sideways”, his strong dislike of paper, and what he’s excited for next in the company. I learned a ton from Nick in this conversation and I’m sure you will too.
Live Oak Bank – Live Oak Bank is a seasoned SMB lender providing SBA and conventional financing for search funds, independent sponsors, private equity firms, and individuals looking to acquire lower middle market companies. Live Oak has closed billions of dollars in SBA financing and is actively looking to help more small company investors across the country. If you are in the process of acquiring a company or thinking about starting a search, contact Lisa Forrest or Heather Endresen directly to start a conversation or go to www.liveoakbank.com/think.
Hood & Strong, LLP – Hood & Strong is a CPA firm with a long history of working with search funds and private equity firms on diligence, assurance, tax services, and more. Hood & Strong is highly skilled in working with search funds, providing quality of earnings and due diligence services during the search, along with assurance and tax services post-acquisition. They offer a unique way to approach acquisition diligence and manage costs effectively. To learn more about how Hood & Strong can help your search, acquisition, and beyond, please email one of their partners Jerry Zhou at [email protected].
Oberle Risk Strategies– Oberle is the leading specialty insurance brokerage catering to search funds and the broader ETA community, providing complimentary due diligence assessments of the target company’s commercial insurance and Employee benefits programs. Over the past decade, August Felker and his team have engaged with hundreds of searchers to provide due diligence and ultimately place the most competitive insurance program at closing. Given August’s experience as a searcher himself, he and his team understand all that goes into buying a business and pride themselves on making the insurance portion of closing seamless and hassle-free.
My guest on this episode is Nick Fedele, who recently acquired a 30 employee sheet metal construction business called Metal Alliance Inc. near Philadelphia. Nick has a background in public accounting before taking on a management consulting role and eventually becoming a CFO. After two years as a CFO he felt ready to seek out and acquire a business for himself. Nick and I talk about the ownership transition with the previous owner who wanted to remain involved, his principles for handling situations that go wrong, hence our episode title, Death, Taxes, and Stuff Goes Sideways, his strong dislike of paper, and what he’s excited for next in the company. I learned a ton from Nick in this episode and I’m sure you will too. Enjoy.
It’s great to see you Nick, and to have you on the podcast. It’s been fun watching your Twitter account as you get into this business so I’m super excited to hear about that, but also love that you got an accounting degree, as I did in school, and became a CPA. I would love to hear about that too. So can you start with your background in being a CPA and work to the business you acquired today?
Yeah, sure. I appreciate being on the podcast. I think I’ve told you, I’m kind of an avid listener. Listen to pretty much the majority of the episodes so to kind of be included in this crew is pretty cool for me. So yeah, to your point, I graduated with a double major in accounting and finance. Went and got my 150 credits to get my CPA license, passed the CPA exam, and then started my career at the big four. PWC was my first job. Spent a couple of years there doing the tax grind. It was fun but it was also brutally draining. I still have pictures of time sheets where I was recording 100 hours plus of work in a single week. I remember at some point during a tax season I had left to grab some lunch and then I was on my drive back and I was on the phone with my dad and I was telling him, “This is nuts. I don’t want to do this. I’m just going to go be a greens keeper.” Because I was driving past a golf course at that point.
And he had kind of talked me off the ledge and he was like, “Hey listen, you put a lot of effort into this. You put a lot of time. Don’t quite give it up yet, but figure out what you want to do. Acknowledge this and figure out how you’re going to leverage what you’re doing and leverage your experience and what your end game is. Doesn’t have to be being a partner at PWC.” So I kind of spent some time at midsize CPA firms in the New York City metro market and then I left to do some management consulting. I wanted to really start to see how businesses are operating. The public accounting portion of my career was really … I got to understand how people and families have built wealth, how they accumulated wealth, how it spanned generations and that kind of stuff. And I had gotten enough of the inside of the technical accounting world on some of these things and I really wanted to get into understanding more of how a business actually functions, how the accounting kind of plays in with operations.
So I had joined a small management consulting firm and we were working with businesses that kind of spanned industries and somewhat geographies. But it was mostly around implementing and restructuring financial operations and integrating them with the rest of the business. Whether it be marketing, operations, field support, that kind of stuff. So I did that for a couple of years and then jumped out and started my own little management consulting practice. And I got pulled into a project after Hurricane Maria. It was through a friend of mine who was in the public accounting world still that I had worked with. He pulled me into this project that took place in Puerto Rico after Hurricane Maria. So everybody kind of knows the stories of what happened down there. The hurricane ripped through, knocked down the entire power grid. And this company was a subcontractor for the federal government installing and maintaining the entire temporary power grid.
So I got involved with them. It was probably about a year long project. I made about 12 different trips down to Puerto Rico. And for the first time in my career I was out in the field in jeans, a hard hat, work boots, and one of those yellow high vis vests. And I was really starting to understand how the operation was coming together. Working with mechanics, working with electricians, plumbers, laborers. And this was the coolest thing in the world for me. I thought, “This is the holy grail. I’m never going back to the cube farm. I’m never going back to fluorescent lights. I want to be involved in this world.” Like I said, that lasted about a year. We had 500 or 600 guys down there who were working on this project so it was a sizeable project. At that point I had kind of said to myself, “All right, when this project is done I don’t want to do the management consulting anymore. I’m going to try and look to buy something. I made a little bit of money and I want to try and reinvest it in something that fits this newfound world that I’ve gotten involved in.”
So I had looked at everything that spanned landscaping. Warehousing and distribution. I spent a ton of time looking at Fed Ex routes and all that kind of stuff. And I really could not find anything that I liked. It was kind of a challenge. I had no idea at this point that searching was even a real thing. I thought I had this super novel concept that I had some experience and a little bit of cash and I was going to go buy a business. And I thought that I was the smart guy on the block and came up with this new concept. And I remember someone asked me at one point, “Oh, are you interested in starting a search fund?” And I was like, “No, I don’t want to start a fund. What are you talking about? I just want to go buy a business, man.” And like I said, I couldn’t find anything and one of the guys that I was working with in Puerto Rico, he was the CEO of an automotive field services firm headquartered out of Chicago. And he had said to me, “We’re looking for a CFO. We want to do some acquisitions, we want to raise some money, restructure some debt. Your background fits. We worked together on this project. Why don’t you come do this for a while until you can figure out if there’s something else that you want to buy or whatever?”
So I did that for about two years and change I think it was. And we were about 600 employees or so, I think, when I finally left. It was a really good foray into operating a business on a large scale. 32 states I think we were. So got a lot of really good exposure, got some M&A exposure. Really got to understand the bank financing process. How to pull deals together, how to work with bankers and all that kind of stuff. And then I found what would ultimately become the company that I bought in, I guess it was September, October of 2020. Met with the owner. We clicked pretty much immediately. It was different for me in the sense that I’d never felt this kind of immediate reaction that this business is really interesting. This one feels different than the rest of the stuff that I’ve looked at. And then we worked through the whole sale process. Had some last minute bumps and hiccups along the way but things that were more … They were never really existential. They were all kind of circumstantial things that happened as we walked through. But we ended up closing in the middle of April and I’ve been the owner and operating a commercial construction company for a little over two months now so it’s been a fun ride.
Yeah. I’d be curious to hear a little bit more. Could you walk through what the business actually does, the different operations or services you provide? What does that look like?
Yeah, sure. We are an architectural sheet metal contractor. So we do all kinds of construction on the exterior envelope of a building. So standing seam roofs, metal wall panel systems, composite wall panel systems, fiber cement, skylights, entrance canopies, all that kind of stuff. We do a lot of historic renovation work down in Philadelphia. There’s a ton of buildings on the historical registry in Philadelphia. The Liberty Bell Pavilion, we’ve done work there. Independence Hall we’ve done work at. Lot of government buildings, both in New Jersey and in Philadelphia that we’ve done work on. So it’s a specialty trade. It’s mostly metal work, but it’s all kind of surrounding the exterior envelope of a building.
And what told you it was special?
In meeting the former owner and listening to some of the stories that he was telling me about how he approached building this business, there was such a unique focus on quality and reputation. Up until about a month ago maybe, there had never been a website for the business, period. It was strictly one of those parked by GoDaddy pages. So I basically just threw up something in like a half hour from Squarespace just that has the logo and a list of 10 things that we do just so that if anybody wound up landing on the website there was something there. But to not have that, to never do any marketing, to never do anything publicity facing or publicity driven and to build this business with this reputation, this quality, doing such marquee projects was just … That was really, really unique to me. It spoke to the quality and the focus on what I’ll say is just doing business the old school right way, which I think is something that you don’t quite find much anymore.
And what’s been the owner’s role in both teaching you about the business, but any ongoing role they have operationally in the company?
He’s been really, really involved still, which has been awesome. And this is one of the things that we kind of talked through the sale process. I am not a tradesman. I’m not a craftsman. We have a big shop. If you put me out in the shop, I would not be able to do anything out there. So I come in and my background is operating and running businesses and not technically specific. So right from the beginning we had talked about what is your desire, your plan for eventually retiring? And this was more of a longterm exit path for him. He’s built a business with a lot of good guys that still have long careers to go. How does he take this business and transition it to what’s going to be hopefully the next 25, 30, 40 years? So we’re continuing to work on what does his retirement plan look like. We don’t have a defined date. He’s still in the office pretty much every day. He’s working every day. A lot of times it’s out in the field. But it’s been incredibly helpful to have him around and he’s still operating a lot of the technical things that are going on in the business.
And you mentioned the reputation was a really important key aspect of this business. How have you felt that reputation shifting from him as the previous owner to you now as the current owner? Or at least, how has it been continuing within the same company even through the ownership change?
We made a really conscious effort when we started talking about the transition to tell people that, look, nothing’s changing. There’s a new name on the stock certificate. The entity doesn’t change. Nobody’s pay is changing. No teams are changing. Nothing is really changing. My background is the stuff that he doesn’t like to do, never liked to do, the stuff that stressed him out. And he does the stuff that coming into this would stress me out. So we really have become a nice team where I’m starting to take over a lot more of the administrative stuff on the accounting side, the finance side. Building processes. How do we approach bidding projects and expanding the scope of the things that we do? So for the guys out in the field, it was, “Hey look, nothing’s changing. You’re still going to see him pretty much every day. He’s still going to be a pain in the butt. He’s still going to show up to your jobs and make sure you’re doing everything.” So it was really approached that way. It wasn’t a huge deal. We didn’t do press releases. I didn’t do a publicity tour. It was very matter of fact because that’s the way that we feel that it is.
We didn’t make a huge deal out of it because to either one of us it wasn’t a huge deal. This is a longterm plan for him to be able to retire. But in the short term it’s just business as usual.
Which of your experiences prior to owning this business do you think was the most valuable in preparing you?
Oh man. I would say the work down in Puerto Rico and then some of my work as a CFO. Understanding things go wrong. There’s three things that happen in life. Death, taxes, and stuff goes sideways. So I don’t care how prepared you are, I don’t care how well you know an industry or whatever the case is, inevitably stuff is going to go sideways. So I think acknowledging that or getting to the point where I could understand and acknowledge that. And that was just an inevitability. And then figuring out how do I plan and address for what I’m going to do when things go wrong. That to me is like the hallmark of small business ownership or small business operation is just being really comfortable getting in a scenario where things are going to go wrong and you have to figure out how to fix them. Just do it. That was probably the number one lesson that I’ve learned.
That’s a perfect transition into talking about everything that went wrong in the first few months of owning this business.
This is going to sound quite unbelievable, but there’s not been a whole lot that’s gone really wrong. You and I were talking that we’re a union shop so we’ve had little union issues here and there. We’ve had cranky customers. We’ve had an employee issue here or there. But I think when you kind of acknowledge and approach the fact that things are going to go wrong, it doesn’t ever seem like things are just going sideways left and right. It just feels like business as usual. So I like to say that I’m pretty comfortable in the confusion and the chaos. It doesn’t really bother me. I kind of actually like it.
Yeah. It sounds like you’ve had some good experience being in a role where things can go wrong and you have to be in charge of fixing them. Is it anything that you’ve done personally or just in structuring your job or your role or day to day tasks that better prepares you for reacting when something doesn’t go the way you thought it would go?
I’ve kind of structured my career around … I learned this early on because I was having trouble in the tax world remembering all of these things that other people could remember. These really specific code sections and rules and all this other kind of stuff. So I don’t know if I would say I taught myself this skill or just really focused on not necessarily trying to memorize things or have an answer right away, but being really good at trying to figure out how to find the answer or who has the answer. So as I was going through this transition process, I put a team of people around me that I knew at some point I would need to call on. So construction specific attorneys, tax advisors. I brought in a strategic consultant. Somebody that does change management, strategic operations, strategic planning, those types of things. So I put that team around me knowing that, like I said, when something pops up I just know it’s a phone call, it’s a text message, it’s an email and I can get a subject matter expert involved. Take that advice. Not necessarily execute on everything that somebody says, but at least it’s somebody who’s there with that subject matter expertise that I can distill the things that make sense to me, the things that I think are applicable to my scenario, and then use that and go execute.
So beyond just even things where something went sideways, you talk about a few, perhaps memorable experiences within the first few moments of being in this new role within your team or you talked about visiting job sites and seeing your team and the projects you’re working on. Can you talk a little bit about some of the most exciting moments so far?
There’s one experience that I think will probably forever live in my memory and it was probably some point in the first week. I had spent some time with our superintendent who is a really, really, really integral part of the business. And him and I had spent some time visiting different job sites. And we went to the final one and it’s a three phase project. We did phase one last year, we’re doing phase two now, and hopefully we’ll do phase three next year. And we were standing … It’s a huge high school. We’re putting an entirely new metal roof on the building. And I remember climbing up the ladder and we’re standing … This is, by the way, my first time on a really, really, really pitched roof. Never have I done this before ever. So I probably looked like a newborn duck learning how to walk. But I get up right to the peak of this roof and we’re standing there and looking out over this whole school and within a couple weeks we’re going to have all these guys here. And he just looked at me and he said, “This is yours now. Do well with it. You should be really proud.”
And I had never … Fortunately or unfortunately, I don’t really make time for moments like that. I know I probably should but I don’t. So that was, in a physical sense, in a metaphorical sense, like being at the peak looking at what’s coming and what’s there and all of this cool stuff that’s happened. I still think I’m pretty close to the ground level and there’s still a lot more to do. But that was just a moment that I’ll probably remember for a really, really, really long time. That it kind of just all snapped and came together for me that this was this new adventure. But there’s a lot of guys who are working for this company who are doing a lot of stuff and there’s a lot of pressure that comes along with that to make sure guys are working, people are doing well, and all that stuff.
Yeah. It’s quite a burden of responsibility knowing that there’s a lot of people and families relying on this business’ performance. What was your communication like with folks when you became the owner? What did you tell people? What’d you say your goals were? Did you talk about things you’re going to do with the company? What sorts of messages did you share with folks?
I went and tried to spend as much time as I could with guys. We didn’t really want to get in people’s way. But the message really was I’m not changing things right now. I’ve never been a fan of people who come into a business or who come into a role and just mandate change because that’s what they want. They know more about the business than I do. They know way more about what’s broken than I do. They’ve been doing this for a long time. So just because my name’s not on the stock certificate doesn’t give me any real ground to be like, “Hey, I know better than you do,” or whatever. So the message really was things are not going to change right now. Things are going to stay the same. We’ll learn and we’ll iterate. I want to have conversations about things that would make your life easier, things that would make your life better. How do we improve? But at the end of the day, this business got purchased because the business is a great business. The people are really good people. They’re skilled at what they do. The reputation is really strong. Things don’t need to be fixed. They, over the longterm, probably just need to be modernized to be more 2021 or strengthened to have a better basis for growth.
But as far as changes go, you guys don’t have to worry about that. I’m not here to start cutting things and changing things and turning people’s lives upside down.
I’d be curious too, you alluded to it a little bit and I love this part of my episode with Mike Botkin where he talked about the feedback he got from employees on different things that they wanted that they thought could be improved in the company. I’m curious, did you get any feedback from folks as you were meeting the different teams? Were there things that they mentioned that could be improved within the company and what kinds of ideas did they have?
Probably the biggest one, I think, was starting to get rid of some of the paper. We do everything on paper. And paper makes me break out in hives. I can’t stand paper. I live off of my iPhone so for the past couple of years anytime I’ve needed a document I just open up Google Drive on my phone and it’s there. Everything is there. And unique for me to be in a situation where things just are not digitized. So I think there was some of that stuff. I think some more uniformity in some cases around having tools and shorter decision loops maybe on ordering equipment or getting things out to the field. It was mostly just some process stuff. But for the most part, guys like the way that everything runs. It’s a good business. I wish I had some dirty gossip to share and tales of disaster and stuff like that, but … I know Ayo, he had some really funny stories about crazy things that went wrong and I know it makes for really good entertainment and I wish I had some stuff like that, but it’s mostly been pretty benign, believe it or not.
I’m not sure you do, actually. But they would be fun stories to tell after the fact.
Yeah, that’s true. That is true.
I’m definitely a huge fan of going paperless as my former wealth management firm can attest. What sorts of things are you looking to add in that can reduce some of the paper load within your business?
Even things as simple as project files. So when we get a project in, when we put a proposal out, we create a manila folder that’s got the bid info on it. When we get a contract, we take a paper copy and sign it and put it in the folder. Shop slips that tell the guys in the shop what they need to fabricate or what needs to go out to a job site. That’s all on paper. So the medium term plan is to get that stuff in its most basic format, would be to just move it to Google Drive. Scan everything in, replicate that manila folder on Google Drive, and have access to it pretty much anywhere you go. But some of the other stuff that we’re talking about really automating is like having a bidding pipeline that is visible and sharable and kind of capturing some more data so that we can go back and say, “Hey, we bid this project to look this. How did we actually perform in relation to what we estimated or budgeted?” And to do it in a way that wouldn’t require going and digging out folders that are three or four or five years old. Going through stacks of paper and pulling out little data points.
I mean, all the data’s there. You could still do it today if you wanted to. It would just be a massive paper shuffle, which somewhat makes you question whether or not it’s worth all the time and effort. But if things were a little bit more digitized and a little bit more structured in the way that data is stored, that stuff becomes super easy to look back at postmortem.
How much paper are we talking about in terms of past files? Is it-
Oh god, I don’t even want to know.
Huge bankers’ boxes of paper?
Yes. I mean, filing cabinets, huge bankers’ boxes. There’s an upstairs area that I’ve not even made my way up to yet that I know is filled with tons of paper. The business has been around almost 30 years so almost 30 years worth of paper.
How much of it is worth digitizing and having someone … I could imagine you could have someone full-time just digitizing past documents. But is there value in digitizing the past two years or five years versus just starting today and going digital only and not worrying about past files?
This is something that I’ve spent a lot of time thinking about. Probably to the point where I now have analysis paralysis. Where I’ve been trying to think about how much effort is worth putting into the historical stuff versus just taking the stuff that we’re doing going forward and just making it a forward looking thing. As far as capturing the data goes. Like taking data points out of documents and actually putting them into, whether it’s an Excel spreadsheet or an Airtable database or something like that. I’m still struggling with how much of that is worth doing historically versus just doing it forward looking. But free startup idea for anybody who is looking for something to do. Start a business that will come into a business that’s been around for 30 years and just scan everything. Come into the office and just be there for like two weeks. Scan everything. Put all documents in a digital folder and then just disappear. I would pay a lot of money for that right now.
That’s an awesome idea. I love that. So with that being one of your projects that you’re excited about, what other projects or additions to the business are you excited to have within the next six months to a year or so?
We’re having a lot of conversations about how do we grow the business to be more sustainable for the next 30 years? The first 30 years is almost in the books. It’s 28 and change. But it’s been really successful. We all know about the labor shortage, the skilled labor shortage in the blue collar world. How it’s hard to find good labor. Recruiting is a challenge. So we’re putting a lot of effort into how do we structure, not only the work that we do and the projects that we’re going after, but how do we structure recruiting, how do we structure career development? One of the big things that I want to do is give people a career path. Take people right out of a trade school or right out of high school, start them out with something that’s not crazy technical, let them get experience and then start promoting them through. It doesn’t happen very much anymore. I certainly didn’t follow this path. I bounced around until I found my way here. But I really want to give people the opportunity to come to a construction company and find a job that they’re going to stick with for the next 30 years until they retire.
So for me, that’s been my big focus is figuring out how to recruit and train and retain people with a really good paying job for a full career.
What have you been experimenting and trying so far in terms of recruiting, let alone training, but just recruiting and finding folks?
The really interesting thing for us is we’re a union shop. So all of our employees are members of the union. There’s different union type arrangements. Ours is an industry union. Meaning that the union hires and puts people through an apprenticeship program. When they come to a job or when they’re out of work they’re on what they call the out of work list. And you can call down to the union hall and just get guys to come and even if it’s for a day or two days, just work on a single project. You can go to the union and get those guys. One of the things that we’re working with is how do we bring some guys in on more junior type things, more lighter type work that’s in coordination with the union but maybe they’re not full union members yet? And kind of giving them a career path to get into the union to learn our side of the specific trade and start to build a career path that way. So that’s one thing that we’re really spending a lot of time exploring and I’m actually really, really excited about.
You also mentioned how the business didn’t have a website and you created one for the first time and there was no marketing. I have no idea how marketing works for a sheet metal business but I would love to hear what your thinking could be, some options for you if you wanted to market the business a little bit more.
Yeah. For most of history it was a this website is parked by GoDaddy page. And within the last month or so I threw up just a really, really, really simple Squarespace landing page that probably, to anybody with any level of web design skill, would make them nauseous. But it was something that … My thought was, when I start to update LinkedIn, people are going to see the name and go, “Oh, let me look up this company or let me find the company page.” And at least it was somewhere for people to land. So that was kind of the thought behind it was to just get something up there. But I’m in the process of walking down different paths as far as marketing goes and talking with different marketing firms for what a real website looks like. We’ve got a portfolio of probably 15 or 20 different projects where we can go and take photos that would be way cooler than anything that you would find on a stock photo site. So it’s developing a place where people can go and see the credibility that we have, see some of the work that we’ve done. We get a lot of inbound traffic. Our name is out there.
So it’s not so much being proactive in the sense that we’re trying to do outbound marketing and saying to people, “Hey look, here we are. Come hire us.” It’s more when people hear our name, when people are looking, when we send a bid to somebody, we get that extra level of credibility by having a forward facing page that says, “Hey, here’s what we do. Here’s who we are. Here’s what we’ve done. We really know what we’re doing. We’re not just some fly by night guys in the back of a truck.”
Do a few of your competitors not have websites as well?
It’s really interesting. Some of the largest roofing contractors in our market that we do tons and tons and tons of work with don’t have websites. I cannot find the domain. It’s unbelievable to me how many don’t. I mean, there’s a handful of them that do have some web presence. I think a lot of it’s fairly basic. But yeah. It’s astonishing to me how little there actually is out there. So we certainly are not alone in that sense. We’re not outside our cohort, but it’s a really unique space.
Yeah, absolutely. So we have paperless, creating a website. What other rabbit holes have you started to go down with in this business?
I would say finding ways to be more strategic around the projects that we big. We get a lot of work that comes inbound and then I think we’re just kind of being reactive in some of the stuff that we’re bidding. And now I’m focusing on how do we get more proactive and fill the plate so that the plate is bigger, but then not bid everything on the bigger plate? Kind of look through the stuff and say, “Okay, I don’t really like that one. This one’s better.” And get this much larger pie and then start to pick pieces out and be much more selective in the things that we bid. There’s a number of products out there that aggregate all these projects that are out there open for bid, where they’re looking for contractors. And I’ve spent way, way, way too many nights just down rabbit holes trying to understand drawings and understand plans and see how things come together. Where can we get involved? How can we expand scope? All that kind of stuff. So our estimators I think at some point are probably going to get frustrated with all of my questions about hey, can we do this, hey, can we do that, why have we not bid on stuff like this before. But I think it’s helping me understand where we fit in the marketplace and where there’s probably a bigger opportunity for us to play.
I’d love to hear more about what contracts you’ve found are a really good fit for your business. So what would be the perfect down the middle type contract that you’d be excited about based on your learning so far?
Re-roofing with standing seam metal roofs. There’s been products that have come out recently that we’re doing a lot of work with where you can basically go right over top of an existing shingle roof and this metal roof system will last basically forever. If you own the building, you’ll be long gone by the time the roof needs to be replaced. So that’s a meatball right down broad street. But there’s other projects that are historically focused. I mean, like I said, we’re one of the few contractors in Philadelphia that has the ability to do work on buildings that are on the historical registry. So we’ve got a ton of experience with stuff like that. So those are like fastballs. We’ll crush those all day long.
What are some of the particular things you need to be careful of or look out for or pay attention to when you’re working on a historic building?
This is where the team comes into play because I know that you need to restore the building to exactly the same way that it was prior to the project taking place, but this is a perfect example of where I exit stage left and I say, “These are the guys that have spent a career doing this. They’re brilliant in this stuff. They’ve got more experience than anybody. I’m not going to try and get involved. I’m not going to try and pretend I know what I’m talking about.” That’s where the team really shines.
Have you found that a lack of really deep, multi decade level technical knowledge in this company has been a detriment to you or are there some advantages to it as well?
I think there are a lot of employees who have been around for a long time that do carry a lot of that experience. That’s one of the things that attracted me to this business in particular is the fact that that does really exist. There’s a wealth of knowledge and experience that’s 10, 15, 20, 25 years in the making. So from a technical perspective, we’re certainly one of the most, if not the most competent contractor in our segment of the market.
Have you found that to be a challenge for you as the new owner though? Coming in and understanding the company and working with your team?
Not really because I think I’m pretty transparent about the fact that that’s not my area of expertise and that I didn’t stay at a Holiday Inn last night and I’m not going to pretend that that’s who I am. My expertise is really on the administrative side and on running and operating businesses. So I’ll handle that, I’ll handle insurance, I’ll handle bonding, I’ll handle legal issues and contract issues, lines of credit, buying new trucks. That’s my thing. When it gets super technical and guys need to have really granular conversations with real subject matter experts, there’s plenty of people in the company that can have those conversations and we’ll let them do that stuff.
What are some of the different growth avenues available for the company? Is it simply hire more people, buy more trucks, bid more jobs? Or are there some other ways you might be able to grow?
It is being able to bid more jobs and be kind of selective in some of the stuff by, like I was saying before, broadening that plate or filling that plate more. And then it’s also expanding into what are different areas of construction or different geographies within eastern Pennsylvania and New Jersey that maybe we don’t necessarily spend a whole ton of time on. When we see a project we just say, “Oh, that’s kind of far. We’ve got enough other stuff going on.” So I think it’s really just being a lot more strategic I think in what we’re seeing come in, what we’re bringing in proactively through some of these bidding sites, expanding relationships with general contractors and roofing contractors, expanding geography a little bit. Those I think are the big ways to grow the business and there’s probably more than enough growth there to satisfy where I think I would like to go.
What haven’t I asked you about the company that you’re dying to share?
There’s so many cool things that we do and they’re all done by people who’ve devoted a career to this specific trade. And I’ve seen some of the projects that have been done and I have no idea how they’ve gotten done. I had no idea they could be done. But the team that we have is just … It is incredibly impressive. And I just look at some of this stuff and just go … It is shocking. And to be able to come into a business that has that skillset with guys that just care with everything that they have, that are so devoted to their trade and devoted to this business, that to me is like … I don’t know how you ask for anything more than that, to be honest with you.
Can you give an example of a project that you’re so impressed by and you’re like, “How did that possibly happen? That’s cool.”?
This one is something that we’re actively in the middle of right now but replacing skylights on some either public buildings or government buildings. There’s a number of these that we’re working on. But you’re talking about hundred foot long skylights that have to be taken off of a building. The inside has to be sealed so that water’s not getting in. Skylights have to get put back on. These are operations where you’ve got cranes moving pieces around, loading and unloading roofs, putting canopies together that are at the entrance of a building where it’s big structural steel columns and all kinds of stuff. It’s amazing to see how some of these things just pop up and how these massive structures just happen with ease. Or relative ease. To somebody from the outside it looks like ease, but it is very, very, very hard work.
Oh, I believe it. With that hundred foot skylight, is that all one piece of glass or are there sections that are taken apart and brought down?
Yeah, there’s sections. It’s taken apart in sections and brought down in multiple pieces.
I was thinking if it was one giant piece of glass that feels incredibly … It seems impossible because there’s no way that that would ever be built, but that seems like a really, really difficult thing. I’m curious about your answers to a few closing questions for me. What’s a class that you would love to teach in college if you could teach about any subject you were interested in?
I would say something communication related. Written/verbal, but also listening skills. I think over the past couple of years I’ve become a real strong believer that the vast majority of problems that I think I’ve come across could be solved by just people listening for a little bit and then being able to communicate what their real needs are, what their real goals are. I think a lot of issues are caused by poor communication, lack of communication, just not listening. So I think if you’re that person, if you can develop that skill where you can be in a situation and whether you’re the one mediating or you’re the one just trying to calm a fire down and say, “Okay, what’s the goal here? What’s everybody trying to accomplish?” I think that’s a really, really, really valuable skillset. I think it would take people far. I think it’s something great to learn to start a career.
Are there any ideas or principles that you keep in mind if you’re having a difficult issue that requires really good, clear, empathetic communication?
I think you hit the nail on the head with the word empathy. Being empathetic to what the other side or what the other person really is trying to get at. What is their frustration? What’s that pain point that they’re trying to solve? They may be telling you one thing, but what’s the real thing that they’re either embarrassed to say, afraid to say, feel silly saying, or maybe they just don’t even really know themselves? So to me, my whole thing is let’s deescalate a situation, let’s have a straight, honest conversation. Look, my goal is to get to something that everybody feels good about so let’s be honest, let’s be transparent and put all the cards out on the table. That to me, if you can enter a situation with that principle or that mindset, I think most times it comes out well.
I love that. What’s a belief you used to hold strongly that you’ve changed your mind on?
Working more hours means you’re working harder. I know early on in my career I don’t think I believed it, but I think I got arm twisted into, that if you were sitting at your desk and you were there “working” that you were really working hard. And I’ve gotten to a point now where I’ve really started to recognize that there are times where I’ll work 10 or 12 hours and get less stuff done than I did if I really had five hours of just focused time to get through stuff. So I think I’ve kind of, in a weird way, always felt that that was the case, but I think now I’ve scientifically proved that it’s true.
So with that new truth, how do you redesign your day or your role and the tasks that you focus on?
It’s something that I struggle with because I know that that’s the case, but I tend to be not the best at drawing an end to my day. I love what I do so my days tend to drag on at my own detriment but at my own … Of my own fault, I should say. So it’s something that I’m consciously working on trying to get better at is putting a defined end to my day, blocking out certain days where I’ll work from home where I can have quiet concentration and get through things quicker. But it is certainly a work in progress.
What do you think has been the most difficult part of that?
I think it’s not a widely accepted thought process. There are certainly people who acknowledge it and understand it, but I think from a broad, industry wide or company wide or society wide perspective, I think most people who probably disagree with that. So in a scenario where you say come into the office at 8:30 and you’re going to work till 3:30 or 4:00 and you’re going to be focused. And then you leave at 4:00. The vast majority of people still go, “Oh, you’re working an early day today, huh?” Or something to that effect. Because most people think that that’s … They still hold that same belief. And I think that’s probably the biggest challenge, is starting to walk the walk so to speak and let other people know, “Hey look, this is okay.” There’s been studies. A lot of the Nordic countries have done studies on stuff like this where shorter work days, fewer work days, more compressed schedules actually are better for productivity, better for morale, better for mental health, all that type of stuff. So I’m not going to fix it by myself but I will damn sure try my hardest to make some impact in my little corner of the world.
It sounds like a lot of that work would also be making sure you have a good team around that you can delegate tasks to such that you’re not filling your day up with tasks that aren’t maybe the best use of your time at that moment. If you think of day one to now, today, within your business, how well do you think you’ve improved your daily task set in terms of the value that you get out of your time?
It’s interesting. I think in buying a business, in a weird sense, you’re almost trying to take on tasks from other people. You’re stepping into a role that either didn’t exist in the past or is replacing somebody else. So in the beginning I think you’re doing a lot of task taking on. And then my playbook is and is going to continue to be take on and experience tasks as much as I can and then figure out what’s the right way to structure the team and myself to reallocate, automate some of the things, be smarter about how we do things. So I think it’s different than the way that you see it in the startup world where a founder comes in and they’re doing everything to begin with and then have to start dishing things out or delegating things. I found myself in the beginning kind of raising my hand, being like, “Hey, I’m here. Give me things to do. I can help out. I’m capable.” So it’s weird in that sense.
Is there a particular process that you could share as an example or anecdote?
This was really funny. Deliveries. We make a lot of deliveries out to job sites from our shop and stuff like that and one of the early things that I said was some of our project managers, they’re really, really good at doing things that aren’t deliveries. They’re very, very skilled and they can be out measuring and estimating and looking at new jobs and doing all sorts of stuff. And I’m very capable of driving a pickup truck and a trailer and bringing something to a job site that then frees them up to go do something else that is highly skilled. So I’ve continually raised my hand. I’ll tow a trailer, I’ll make a delivery. Just to kind of help out and get the guys out doing the stuff that they really can be doing and should be doing.
Yeah. I remember Rich Jordan talking about hiring assistants for his plumbers who could make quick runs to the store if they needed a new part or dig to a pipe if they needed that while the plumber could go work on something else. So I’d be curious to see within a year or two what your team and employee structure looks like. That’ll be fascinating.
Yeah. Rich Jordan. I’ve spent some time getting to know Rich. He’s one of the most impressive that I’ve come across in my career at being able to just be super dialed in in process improvement. Short decision cycles. Him and I have had a couple of conversations about stuff like that and I feel like even just watching a lot of the stuff that he says public facing on Twitter is just … It’s just impressive and there’s not really another word.
Yeah. I agree. He’s on my short list of people that if he ever raises money for something, I’m giving him every dime I have.
Yes. Exactly. I’m with you. Please, if he forgets to give me a call, Alex, please call me because I’m with you on that one.
I’ll definitely add to the call. That’ll be a great one. Hopefully it comes one day. What’s the best business you’ve ever seen?
I came across a company probably about a year and a half ago or two years ago that was a fire sprinkler testing, maintenance, install business. So they would go into commercial buildings, install sprinklers, they’d do the annual or quarterly or monthly testing that was required. They’d do all the maintenance that was required. It was mandated by law that this stuff had to be installed and had to be tested on a specific cadence. That one was … I had seen it. I had come across it. It was long gone and bid up way higher than what I could ever possibly entertain paying for a business. But that was one that to me was just a no brainer that this was just such a quality business.
What else was really interesting about it? I’m curious how deep into the company you went.
I did not get to get too deep, but they had some proprietary equipment that they had manufactured to make their job easier and a little bit more efficient. But by the time I had gotten my list of diligence questions in and started to have some basic conversations, I mean, it was gone. And it got snapped up real quick. So unfortunately I didn’t get too far into it, but it’s probably one of those that I’ll forever go, “Man, I wonder what would have happened there.”
This has been awesome Nick. Thank you so much for sharing your time. I love hearing about folks entering new businesses and figuring out how things work. But learning about sheet metal, who would have thought we would both be doing that? So thank you for sharing your time. This has been so much fun.
I appreciate it. Thanks for having me on.