Attendees at the 2015 Best of Success seminar learned about leadership and business philosophies from two very distinct perspectives: the head of a small roofing company growing rapidly in a notoriously competitive roofing market; and the head of a roofing conglomerate that continues to expand its national footprint.
Mark Santacrose, CEO and president of Tecta America, discussed how his company targets and evaluates roofing companies that have something to add to their portfolio. After 22 acquisitions of companies that vary in size, specialties and market share, Santacrose said a great deal of it centers around valuing risk and putting a price on it, which is difficult to do.
“It’s really hard, there’s no real market value to speak of for businesses in this industry and it’s a big, diverse industry,” he explained. “We really look at the nature of our business as being in the risk management business. We put a price on a job and then we manage risk all the way through,” he said.
In 2014, Santacrose’s first year back as CEO following a short hiatus, Tecta generated $397 million in revenue from 50 different operating units strategically located across the United States. That was good for second place on Roofing Contractor’s Top 100 List.
To help evaluate roofing businesses, Santacrose said he makes a clear distinction between what are value drivers versus value diluters in the industry.
Examples of value drivers include intangibles such as building sustainable relationships with customers that can become long-term providers of work and referrals. Or establishing a sales team that maximizes services that differentiate your company from others in the market.
Diluters are aspects of the business that a potential buyer can’t put a dollar figure on. For example, he said he asks himself is the current owner critical to the daily operations, and are they looking to exit the business quickly? High employee turnover, relying heavily on new construction or concentrating on event-driven projects can often prove to be too volatile and impact a business’ value negatively.
“The value of any business across any industry is the present value of future cash flows,” he explained.
Andrew Schmidt is a marketing expert with a knack for thinking outside the box. Keeping true to form, Schmidt started his 30-minute presentation by leading with an ‘ice-breaker’ exercise where he asked attendees to pair up with someone sitting by them and attempt the ‘Top Gun High Five,’ a signature scene featuring Tom Cruise and Anthony Edwards from the hit 1980’s action movie.
“I was told when I came here that we want everybody to take away something of value,” he said smiling.
Schmidt started by describing his journey toward discovering and documenting his company’s purpose statement. Upon forming Core Contractors Inc. in downtown Denver in 2009, Schmidt and his business partners Tomas Wolfram and Jim Horning discussed the need for a purpose statement beyond becoming profitable.
To gain some external accountability, Schmidt said the trio hired a coach.
“It wasn’t that we needed new ideas. But what we needed was that external accountability to take action, to be responsible for things,” he said.
After three months of weekly meetings, the business partners settled on a saying that’s now infused by all 22 employees in every aspect of their business: “Doing it Right Matters.”
“We had to discover the ‘why’ we do what we do,” he said. “In the simplicity of this statement was everything that we cared about. Since then, the company has grown and grown and grown, and it’s almost like we discovered this little secret about what a purpose statement can do in terms of building a culture and driving revenue.”