Making the move from contractor to distributor has taught Kenneth Paine priceless lessons during a professional roofing career spanning a quarter-century.
"In contracting you learn how to work with your hands and make money. But business is a game, and you quickly learn to make money with your mind," says Paine, president of Hy-Tech Products and Industrial Heat Sources in Cleveland. "It’s the ability to look at something and be able to figure out how to cut yourself a piece of the pie."
Paine has his pie and can eat it, too. Despite incurring a loss in its first year of business 23 years ago, Hy-Tech Products earned more than $4 million in revenue last year.
"Self-discipline breeds success," Paine says. "It’s a challenge every day."
Starting a CareerWhen Paine started Hy-Tech, he wore a lot of different hats. "You leave home in the morning with a truckload of equipment, and go to outlying areas where people are glad to see someone come there with knowledge and equipment," Paine says. "I targeted small towns early on. Not having a lot of stock with me, I didn’t have enough money to stock things in advance; I still got it to them in a relatively short time. There’s no substitute for customer service and quality equipment in roofing. With the right equipment, roofers can be more productive and profitable. To my customers, I would say, ‘If I made you more profitable, please support me and give me all your business.’"
Paine’s starter plan 23 years ago was to develop rural areas in Ohio before conquering the big cities. "Biggest thing was we didn’t have the manpower, the talent or the money," he says. "We were an undercapitalized company. We struggled through until we got big enough to sustain ourselves, until personnel grew. You understand early, you’ve got to have money and people. It takes both elements to be successful."
As the money started trickling in, Paine continued to help his customers build their businesses. "We help them in many ways, (and) selecting the right piece of equipment that will do the job today, tomorrow and next year is a start," Paine says. "You have a choice with equipment versus manually doing it. My thing is: pay for equipment once. Just keep it clean, gassed and oiled, and it works."
Paine says good equipment is the top reason his customers have been coming back for more. "Features of good equipment are No. 1, do it easier, and No. 2, we can also do it better," he says. "In the case of an automatic seam, it will be flawless if I can do it with an automatic welder. Better work, easier and more consistent. Having that piece of equipment today in roofing is almost mandatory."
"Labor is so expensive," he continues. "Roofers are $50 an hour. The right equipment gives contractors the ability to stay competitive by completing jobs with as much efficiency as possible. And in our business, efficiency equals profits."
Paine affirms that great employees are an essential part of any roofing business, but the right equipment can keep workers performing quality work at peak efficiency. "Every day is a challenge. Every day is different, so you have to adapt and stay in touch with reality," Paine says. "BUR was 70 percent of the market in the 1970s. Now, it’s less than 30 percent. Today, in addition to the existing built-up roof systems, we have EPDM membrane roofing systems, the new modified bitumen built-up roof systems, including SBS or APP, and thermoplastic white membranes, including PVC and TPO."
Paine says with all the new technology for roofing systems, the material is a lot less labor intensive than was the case with BUR. "With the advent of thermoplastic membranes and sheet goods, we’re finding material costs more, while labor costs less," he says. "The result is a greater value for the customer, where more money stays on the roof in the form of quality materials."
Paine's BackgroundPaine, 62, knows about labor costs and productivity rates, having started as a roofer while working his way through college. "My dad was a carpenter. I worked with him in the summers," Paine says. "Room additions, kitchen remodeling, put a roof on a house. I gravitated to shingles. Became pretty good at it. We were paid by the square; the more you put down, the more money you made."
After two years of college, Paine stayed in the roofing business. "I worked for Lloyd A. Fry," notes Paine. "At the time he was the largest shingle manufacturer, who eventually sold his business to Owens Corning in the late 70s."
"I became a plant manager at the Medina plant," Paine says. "Basically went from putting down shingles on a home (new construction was bigger) to working in sales and as a plant manager. I learned how the manufacturer worked. I learned all there was to know about how asphalt products were produced for the roofing market."
Paine soon became general manager of an industrial roofing company, and ultimately vice president of a commercial roofing company.
Paine founded Hy-Tech in 1984 and concedes he named his company in search of a "futuristic" title. "It’s a unique name that put us on the leading edge," he says of Hy-Tech. Paine says the company lost $30,000 in the first year of business. "We never knew it until the end of the year," he says. "I was almost embarrassed. But losing money in that first year made me more focused than ever on succeeding in business.’"
Eight years later, Paine found himself making his first $1 million in revenue. "That imaginary million dollar mark," he says. "Today we do $4.6 million in annual sales."
Last year, Paine expanded his product reach by becoming a master distributor of Leister products and starting his partner company, Industrial Heat Sources. The $4.4 million in sales for Industrial Heat Sources in its first year of operation rivals the $4.6 million in sales for Hy-Tech Products. Hy-Tech Products employs 14 people in its 14,000-square-foot facility in Cleveland.
What the Future HoldsAs Paine looks forward to the future, his company is breaking new ground in technology. "We wanted to come up with some solutions so guys have access to products that were hard to come by in the past," Paine said. "With the Hy-Tech Roof Wizard, you can figure it out for yourself and get it online. Hy-Tech has quadrupled roof drain sales in last three years because of the site. Paul Roetzer’s done a lot with that."
Roetzer, the president of PR 20/20 (firstname.lastname@example.org) and Hy-Tech’s public relations officer, says the Web site (www.hy-techroofdrains.com) is working out very well.
"In 2004, we started working with a Web developer who identified a market for an eCommerce drain site," Roetzer says.
The site features the Drain Wizard, a proprietary tool built by Matt Reeder of Big Tree Media to let people search for spec drains, as well as new and replacement parts. If you click on Drain Wizard, the system identifies the part or the drain you are looking for, and you can order it online.
"It’s an intelligent database that makes it simple and convenient to find exactly what you need," Roetzer says. "The drain site appeals to roofing contractors, as well as building managers, and has been a rather significant piece of Hy-Tech’s growth in the last three years."
For more information about Hy-Tech Products and Industrial Heat Sources, call 800-635-0384.