Design-build home remodeling company in Williamston, Michigan
A nine-year employee turned first-time owner of the established design-build remodeling company he helped grow.
Background, challenges, and motivation
I’ve worked at Odd Fellows Contracting for almost nine years. Owning the business was something I’d been interested in for a long time. The previous owner had talked about selling at some point, so I kept pushing on that until it finally happened. This is my first business. I was working on my deal at the same time my wife, Gunilla, was acquiring hers, so we went through the process together.
Background on the Business
What business did you acquire?
Odd Fellows Contracting, a design-build home remodeling company in Williamston, Michigan, serving the greater Lansing area. The company handles both design and build-out for residential remodeling and has been around since 1988. The acquisition also included Odd Jobs, the company’s handyman division.
When did the acquisition take place?
Late May. At the time of this interview, Brian was almost two months into ownership.
Condition of the business at purchase
An established company bringing in about $4.5 million a year, with 26 to 27 employees across both companies. The team stayed in place through the transition, and the previous owner now works with the company on a contract basis. Over the previous five years, Brian had intentionally phased the previous owner out as the face of the company in marketing, so customers connected with the company and its processes rather than one individual.
What attracted you to this business?
Having worked there for nearly nine years, Brian knew the business from the inside, already had access to the financials, and had wanted to own it for some time.
The Transformation
Business plan for the next year
The business is in a period of fast growth, so the focus is hiring and filling roles to keep up with the increase in work. Longer term, the goals are improving the overall gross profit margin, which is getting close to target, and expanding the Odd Jobs handyman division into new areas.
Top priorities in the first 90 days
Hiring to support growth.
First operational changes
Adding a couple of key roles to support growth and introducing quarterly profit sharing for employees.
Staffing or team structure
Everyone stayed in their existing positions. Where the previous owner was one person managing 20-plus employees, there is now a management team that divides that responsibility. The company is actively hiring because of a very busy year.
Marketing or customer acquisition
About two years before the acquisition, Brian began moving the company away from traditional TV and radio advertising toward digital and social marketing. The company is now fully digital, and Brian credits those changes with a large part of the current growth.
Systems, tools, processes, and financial management
The company now opens its books to the whole team each quarter, sharing where it’s strong and where it’s struggling, so everyone can help improve profitability while delivering a great customer experience. Brian is also bringing in fractional support, including an outside HR group he’s currently interviewing and outside help with finances and bookkeeping.
Results
Revenue at acquisition
About $4.5 million a year.
Revenue now
On pace for about $7 million this year.
Financing
The deal was seller financed. The seller started with a higher price in mind, but after reviewing profitability, the final purchase price came in significantly lower than he originally expected. Seller financing at a 7% interest rate allowed him to earn additional return through the interest.
Team morale or retention
Very positive. The previous owner was a great guy but was stretched thin managing the team on his own. Employees are excited about the change, and profit sharing has built more buy-in and a sense of ownership across the team.
Customer satisfaction
No disruption. Because the previous owner had been phased out as the face of the company over the years, most customers didn’t know him, and the ownership change didn’t affect their experience.
The Role of Exit School
How Exit School supported you
Exit School was integral in talking through negotiation strategy. Brian spoke regularly with Jon and Amy about how to have certain conversations, how to discuss pricing, and how to structure the deal. They also recommended legal help and supported the purchasing strategy throughout.
Most valuable part
“Knowing I had somebody that I could talk to that had experience in this. No matter what would come up, I knew I had a resource, and they would always come back with great recommendations because they’ve gone through it.”
Specific tools or systems
The negotiation webinar was very useful, with great tips he was able to apply. As an employee with existing access to the financials, Brian didn’t need the due diligence tools for his own deal, but they were a huge part of Gunilla’s acquisition.
Personal Reflections
Most rewarding part
Seeing how excited the employees are that he’s part of owning the business, and that they’re glad about the direction the company is going.
Challenges and how you overcame them
There are more daily responsibilities than you’d ever expect, like handling paperwork and insurance when someone gets hurt on a job site, on top of everything you were already doing. Brian is addressing this by bringing in fractional HR and finance support to take portions off his plate.
Advice for new operators
“There’s no way I would have been able to do it alone without the support of a group like Exit School. There are so many complicated things with insurance, legal, and financial that I would have just said, no thanks. Have a good team behind you that understands it.”
