Self Taught MBA: Going to Where the Going is Good, Part 1 - Fine Homebuilding

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Building Business

Building Business


Self Taught MBA: Going to Where the Going is Good, Part 1

comments (3) August 28th, 2012 in Blogs
FPR Fernando Pages Ruiz, contributor


Located on Ogallalas historic, retail street, Nebraskas Home Improvement Center offers rural customers an attractive showroom and design center that makes Jims business stand heads up above the local competition. 

Still under construction when I visited, Jim is building a home with a warehouse in back on a small (by local standards) acreage a few minutes from his shop. The super-insulated structure will serve as a showpiece for Jims other business passion, energy efficiency. 

Located on Ogallalas historic, retail street, Nebraskas Home Improvement Center offers rural customers an attractive showroom and design center that makes Jims business stand heads up above the local competition. 
Click To Enlarge

Located on Ogallala's historic, retail street, Nebraska's Home Improvement Center offers rural customers an attractive showroom and design center that makes Jim's business stand heads up above the local competition. 


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We have talked about strategies to develop a business niche that works in today's challenging environment. But there's another way to find a productive outlet for your skills and services, and that's to go where the business climate is not so challenging. As of late, I've been seeing news stories about second acts in the building community, and more recently, a "Builder Magazine" piece about contractors following the jobs trail to places like North Dakota, where an oil boom has led to a housing boom.  I recommend reading both articles (just click on the hyperlinks), but both articles focus on big firms and how they seize opportunity when and where it exists. I figure there are small guys going where the going is good, too, but doing so in ways we can relate to. So I picked up the phone and asked around, and ended up speaking with two unique fellows who've moved their business to where the going is good. I'll tell you their stories, both inspiring and informative. We'll start with Jim Sipes and his Nebraska Seamless Gutters.

Going Great in the Grasslands
When you talk to Jim Sipes about his career, he often refers to his faith, and the grateful sense he has been led to opportunity through divine guidance. But you also get the impression that providence may have only played a part, with Jim's keen ear for the knock, and his willingness to open the door to opportunity doing the rest. His approach offers us rich business and life lessons, regardless of faith.

The reason I decided to feature Jim in this blog was his recent move to Ogallala, Neb. Have you been there… or even heard of it? Most of you have not. Just like most of us hadn't heard of Microsoft or Google before it was way too late to invest a few bucks and become billionaires. In this case, Ogallala requires a lot of faith to embrace. It's a little, windswept community of less than 5,000 in western Nebraska, nearly 200 miles from the nearest city of 50,000, and that's Cheyenne, WY. It's the kind of place you may stop for gas and then drive off without a second thought, and I have done this many times in route to Denver. Knowing Jim is a successful man, I knew there was good reason he opened a business in Ogallala, and it was not the great restaurants, the booming population, or the weather.  

Jim grew up in Lincoln, capital of Nebraska, a college town with a small but respectable urban population of about 250,000. It's close to Omaha, a city of nearly 1 million. Jim stumbled into the building trades the way many of us have, after getting laid off from a real job in the late 1980s. Confronting a challenging economy with little prospects of employment, he joined forces with a friend that had just bought a gutter machine, and without any prior experience, he jumped right in-something that became a pattern for him-and his excellent people skills and daredevil willingness to climb tall ladders quickly developed Nebraska Seamless Gutters into a booming business. Well, maybe not that quickly. Nebraska Seamless Gutters began as two guys with ladder racks atop a 1994 Ford Tempo, and grew through hard work and diligent stewardship into Jim's Nebraska's Home Improvement Center today, with 32 employees and a fleet of vans. Over time, Jim added services and product lines including windows, siding and insulation, and won several prestigious business awards.

Although one thing kept nagging at him, the word "Nebraska" in his company name implied a statewide presence. In fact, the company received a steady stream of calls from far off rural areas; calls that Jim's sales crew would regularly turn away. Jim had sought to find local contractors to recommend, believing no customer should be turned away without at least a solid referral, but he hadn't found anyone he could vouch for.

One day, not long ago, Jim picked up the office phone and on the other end was a homeowner calling from Western Nebraska, hoping to get a quote on a very little job, five replacement windows. "I'm not sure why, but I decided to bid the job," said Jim, explaining why he believed God was shepherding him toward new pastures-or prairies. The sales crew laughed, and wished him luck on the five hour drive to bid five windows. But Jim jumped in his truck, sold the job, and then ran the installation, and sold another job, and then another.

"We've sold over $500,000 in our first three months here, and we're on target to exceed $2-million this year," Jim told me, and I could hear hammers and saws wailing in the background. He sounded excited. It was clear Jim had discovered-or been led to-a gold mine. But his experience is not unique.

"This is our new business model," Jim went on to explain, although the town of Ogallala has a population of less than one-fiftieth of Lincoln, Jim's home base, the actual trade area Jim figures within a 100 mile radius of Ogallala serves nearly 600,000 potential customers. Because of its rural location and small local population, the construction community has remained informal and without the professional management systems Jim developed during his 16-year career in a highly competitive urban area. The sophisticated marketing and customer service systems Jim developed in Lincoln have become the cornerstones of his philosophy for small town success, "We are the most expensive contractor in the area, but we provide a lifetime, transferable warranty on our labor, we source the very best products available, and we try to respond to all our customer's needs, including warranty repairs, within 48 hours," Jim told me.

With this winning formula, Jim hopes to open seven home-improvement centers, all in towns of 5,000 or less, offering high-level customer service within geographic areas unaccustomed to contractors that return calls, complete jobs, and provide reliable warranties.

And I should put a period on this story now, but I have to digress: One of Jim's passions plays especially well in underserved areas, and that's green building, something I've talked about often because it keeps proving itself as viable strategy. "We have an in-house Energy Star rater, so we can not only do the job, but help folks get the certifications needed for utility and tax incentives," explains Jim. As we were about to hang up, Jim spoke briefly about his new shop in downtown Ogallala, a historic building he's rehabbing into a showroom, and the super-high-efficiency residence and warehouse he's building a few miles south. "So, apart from the good business you've established, do you like it in Ogallala?" I asked. "I love it here," he answered. 

 

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posted in: Blogs, business

Comments (3)

Edward1234 Edward1234 writes: Thanks you for posting this. You might be interested in checking out fine luxury homes by Brejnik Fine Homes (www.brejnik.ca). They build fine luxury houses. Brejnik team consists of qualified and trusted: Architects, Interior Designers, Appraisers / Lenders, Trades & Suppliers, Geo-technical engineers, Structural Engineers, Arborists, Landscape Architects, Pool & Water Feature.
Posted: 4:54 am on May 15th

DavidGerstel DavidGerstel writes: I'm going to stay put, but even so that story about Jim was just plain good reading. -- David Gerstel --
Posted: 11:56 pm on September 28th

DancingDan DancingDan writes: Great piece, Fernando. There are always underserved markets - not always easy to see them. Nor do we always feel like doing it, but that's the opportunity - figure out how to do the things other people (either your clients or your competitors) don't want to.
Posted: 4:57 pm on September 7th

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