By Richard Chu
The first few years for many new-business owners can be challenging in the best of times. But the mettle was tested for some of the small-business owners on this year’s list of the top 100 fastest-growing companies in B.C. as they navigated their businesses through the boom-and-bust cycle of the last few years.
Alicia Sokolowski, president and co-CEO of West Vancouver-based Aspen Clean, started a home-and-office-cleaning service with her husband in 2003, specializing in using cleaning products that are certified as 100% natural by EcoCert, a global certification body based in Paris.
Like many businesses starting out, the company realized losses in its first few years, but the business became profitable in less than five years as it continued to build up its pool of clients that booked regular home-cleaning services.
“It’s mainly regular home cleaning with most of our customers,” said Sokolowski. “We go every week or two to maintain the house, but we also do post-construction, post-renovation cleaning, which is more involved. Some builders use us regularly for new homes and when they sell the house to clients, they also become regular customers as well.”
She noted that while the company has not done an extensive amount of advertising and marketing, it’s slowly grown primarily by word of mouth referrals from existing customers. Last year, the company posted revenue of more than $1.3 million, up from $368,103 in 2005, a 265% increase over the last five fiscal years.
While the recent downturn didn’t impact the company’s top-line growth too much, Sokolowski vividly recalls a day in October a couple years ago when nine customers called on the same day to cancel their regular service, citing the recession as the reason. “We were really frightened about what was happening. If that became a trend, how many customers would we have left?”
To nip the potential problem in the bud, Sokolowski started a program to have better follow-up contact with new customers the company were still acquiring and strengthening the connection with their regular customers. “If there was ever an issue, we’d make sure we cleared it up and got on top of it better than we did before. Sometimes a recession makes you fine-tune your operations.”
New models
David Notte, CEO of Wolfgang Commercial Painters, knows too well the need to refine a business during the recession. Over the past few years, the company has had to radically change its business model, with one of the biggest changes involving the cutting of its full-time staff from 20 to four last year.
“We started contracting out our work when the recession hit, changing from an employee-based company with 20 staff that ballooned beyond that in our peak seasons.”
The company recently completed the full transition, helping employees who were interested in staying on as independent contractors by providing training and certification to do the work on behalf of the company. That helped keep the company competitive as it faced narrowing margins and fewer painting contracts.
He noted the market for interior paint jobs dropped off during the recession as building owners delayed those projects, although, the exterior building paint job market has begun to recover as building owners see it as a necessary capital expense.
“Over the past three quarters, people have accepted that while times are rough, they’ve scheduled to paint their building this year and have to do it. If you don’t paint every seven to 10 years, you’re going to run into more problems down the road.”
One area the company did not cut costs in, however, was marketing. Notte said the company actually increased its advertising over the past three years, spending across various platforms from radio and billboards to social media.
“When the recession hit, we tripled our marketing budget in ’09. Business consultants say the last expense you should cut is marketing, and we followed that and stuck to it. We kept saying to ourselves that this is building a brand. It hurt a bit, but it paid off.”
Notte said the extensive marketing campaign has helped the company gain market share as potential clients begin to look for commercial painters for delayed jobs, with the number of job estimates doubling in the past couple years. Because of the changes to its business, the company has also managed to remain cost competitive, enabling it to take on more work than before. From revenue of less than $550,000 in 2005, the company grew to $2.2 million and is on track to grow to $3.5 million this year. The company has grown to five staff this year, and Notte and his business partner, Kevin Parenteau, plan to hire two more sales reps and another operations manager next year.
The company has also started to invest in technology, transitioning its office to a Mac environment and giving sales and operations staff iPads to do on-site estimates or make notes while on site, as opposed to taking notes, or waiting to head back to the office to crunch numbers or evaluate buildings.
“With Google Maps, satellite imagery, iPads and things like that, you’re able to do a lot of things digitally; it’s more efficient and nothing gets lost.”
Smart growth
Keeping up with the latest trends and building on past experience has been instrumental to consistent growth for Vancouver’s Houston Landscapes. Starting out with revenue of less than $350,000 in 2004, the company has grown more than tenfold in the past six years with $3.75 million in revenue.
Jeremy Miller, co-founder and owner of the company, said the business has managed to maintain consistent growth, primarily by increasing the size and scope of its projects for both the commercial and residential landscape markets. The company should earn $4.5 million in revenue in 2010.
While large tower projects were either postponed or cancelled in the past couple of years, the company was able to grow with strong demand in the high-end residential market. “We had a couple projects in the high six figures with residential renovations, which carried us through,” said Miller.
A key market Miller has tapped is the growing demand for green roofs in the region. Houston recently completed the green roof at Douglas College and has been awarded the contract for the landscaping of green roofs at VanDusen Gardens and at UBC’s Centre for Interactive Research on Sustainability.
“It’s a whole side of the business that we’re very engaged in and we’re very keen to have all our employees understand the technicalities of it as one of only three contractors approved to do the work,” Miller said.
For both Miller and Sokolowski, one benefit of the recession was that it became easier to find qualified staff for their growing businesses. Miller noted that one of the challenges during the peak of the economic boom was finding good staff.
“In 2007, if you didn’t hire someone the second they walked in the door, five minutes later they got a job somewhere else,” he said. “But now we’ve set ourselves up with a solid base of employees, and for the most part, our turnover is low. Our senior staff have been with us for four-plus years, so everyone knows the system and our level of service and quality.”