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5 Lessons From the Story of the Service Roundtable

New Year’s is almost here.  In 2017, the Service Roundtable will turn 15.  When you consider how we started, it’s amazing where we are today.  There are some lessons in our story.  If you’ll stay with me, I’d like to share a little about how we started and then share the resulting lessons that can help you and your business.  Be forewarned, this is longer than the usual Comanche Marketing post.


Formation Saturday

On a Saturday in April, I paced nervously.  My presentation was ready, but I went over it one more time. 

The next few hours would not only determine my future, but had the potential to change an industry.  Accordingly, I was coiled up, ready to spring.

The meeting had been planned for months.  People had flown into Dallas from all over the country, on their dime, to attend.  It was crazy to launch a new contractor business alliance.  Personally, I had a rewarding job with a top consulting company, stock options, a wife and young daughters, car payments, and a mortgage.  All were reasons to stay put, not take a wild risk.

Yet, the business concept had me.  It had been refined over a couple of years.  It had become more than a passion.  It was an obsession.  I had to find a way to do it.

The Service Roundtable started as an idea.  It was an idea about a different way to help contractors improve their businesses… broadly, not just the best of the best, but industry wide.  Contractor improvement was the only agenda.  But would contractors back the idea?  Would the industry’s thought leaders support it?

We met in the training room of Tempo Air, one of the nation’s premier HVAC companies.  The president, Steve Saunders, gave everyone a tour.  The facility was impressive, state-of-the-art.  The tour caused people to think about possibilities, about the future.

One speaker after another talked about the need for a concept like the Service Roundtable, about how it could help the industry and fill a role no other organization was covering.  Then it was time for my presentation.  I had to close, to persuade enough people to not merely support us, but to back us financially.

I shared the concept.  I projected growth and performance.  Then, the questions started.

Someone asked, “How are you going to make people use everything?”

“We can’t,” I replied.  “This isn’t about forcing people to do something.  It’s not about requirements.  It’s about contractors taking steps to improve themselves.  You can’t make a horse drink, but you can make sure the stream is fresh and constantly being renewed.  Eventually the horse will get thirsty.”

Someone else asked, “You seriously don’t expect contractors to use email, do you?”

“Yeah, I do,” I said.  “More and more contractors are using email all of the time.  There’s an email discussion list for plumbing contractors that’s extremely active.  Comanche Marketing, my ezine, has nearly 5,000 subscribers.” 

The questioner eventually declined to help fund the concept.

“Shouldn’t this be a non-profit,” another person asked from left field.

I didn’t get a chance to answer.  We had a few professional, angel investors present.  One of them answered, “So what are you saying?  Contractors who are struggling to become profitable should get advice from an organization that’s stated purpose is to not make a profit?  Isn’t that like hiring a 400 pound fat guy to be your personal trainer at the gym?  It doesn’t make sense.”

“Aside from the fact that the people who fund this will want their money back eventually, non-profits tend to be inefficient, non-responsive, and bureaucratic because they lack the profit motive.  Without a profit motive, what is the motive?  The non-profits I’ve seen tend to turn into organizations that serve the best interests of a few people at the top of the organization and turn a deaf ear to everyone else.”

“Who does a better job, Fed Ex with a profit motive or the post office without one?  Who would you rather do business with?  Personally, I’m not going to have anything to do with a non-profit.”

A non-profit was never mentioned again. 

Someone asked how the manufacturers would react.  I answered, “I think they’ll be supportive.  Why wouldn’t they be?  Their goals are to sell more boxes, which means contractors need to sell more boxes.  We’ll help them do that.  We’ll also help contractors charge what they need to charge, which means they’ll be more profitable and better able to pay their bills.”

“What’s going to keep you from turning this into your own piggy bank,” a contractor asked.  “We all know how a business can fund all kinds of personal expenditures.”

The audience laughed.  I responded, “For starters, we’re going to have an outside Board of Directors, primarily made up of contractors.  We’re going to use an outside CPA.  We’re going to issue Annual Reports.  In short, we’re going to operate like a public company.  There’s going to be a lot of people looking over my shoulder.”

While the Board’s membership has changed through the years, it always has been contractor driven.  Today, the Board consists of Ron Smith (author of “HVAC Spells Wealth”), Larry Taylor (former owner of AirRite), Mitch Cropp (Cropp-Metcalfe), Steve Saunders (Tempo Air), Mike Hajduk (Callahan-Roach Products & Publications), David Heimer (Service Roundtable), and me.  Five of the Board members have been inducted into the Contracting Business Hall of Fame.  Two were past national chairmen of the industry’s trade association.  It’s hard to imagine a stronger, more contractor centric Board.  And almost all of the company’s owners are contractors as well.

“So what about utilities,” a contractor asked.  “What are you going to do to fight the utilities?”

I answered, “We’re going to support the local, state, and national trade associations.  That’s their job.  Lobbying and industry representation are a couple of the main reasons they exist.  I get that the utilities are an issue.  They always have been and they always will be.  They might pretend otherwise from time to time, but ultimately the utilities want to boost their revenue at the expense of contractors.  The British model where utilities ‘rent’ equipment to homeowners through their utility bills while contractors become labor only subs to the utilities is awfully attractive to their U.S. counterparts, but that’s not part of our mission.  Our mission is ‘help contractors improve their business and financial performance, leading to a profitable exit strategy.’  Hey, there’s that word again, profit.”

The questions went on and on.  Eventually, they wound down.  It was time to close the meeting.  Did it work?  Were we going to raise enough capital to give the venture a chance?  I knew we took a big step when a well-known and respected contractor handed me a check for $25,000 on his way out the door.  I also knew that I had taken a big step.  I was past the point of no-return.

Over the next weeks, funding came in and we reached our target.  We set a launch date for September.  David Heimer assumed the role of IT director, while I focused on generating content.  David hired the first programmer, though he worked without pay.  I did too.


The Early Days

We would meet around 10:00 p.m. in David’s office and work until 1:00 a.m. or 2:00 a.m.  This went on for months.  We launched in September and had 100 members a few months later.  In November, I left my job with the consulting company to go full time.  The Service Roundtable had its first full time employee

The “World Headquarters” was a single room in a converted nursing home that cost $300 per month, bills paid.  One office over was a cello teacher, who greeted students around 3:30 p.m., every afternoon.  EVERY afternoon.

In 2003, we expanded into plumbing.  Later we added electric and solar.  This was also when we began hiring our first team members.  Janet Thomasson, Liz Patrick, and David Heimer all joined full time and are still with us, though Janet recently retired from full to part time.  Our office was an old farm house that with 800 square feet and cooled by window units.  Liz’ office was the kitchen.  We made the best of it and eventually expanded to better accommodations.

While the company grew hand over fist, it was not easy.  We were burning cash.  Our basic rule was we didn’t buy anything we didn’t absolutely need or spend any money we didn’t have to.  We didn’t have slick marketing, but we did have a sincere message.  Because so many contracting companies have similar roots, they related to us and we relate better to them than others groups. 

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Our original business plan called for the addition of a best practices group.  We added it in 2010, along with the Roundtable Rewards buying group.  Both are growing like gangbusters and continuing to evolve.

Through the years, we have remained true to our mission.  It is to help contractors improve their business and financial performance, leading to a profitable exit strategy.  Watching people turn around financially troubled or marginal businesses and make them exceptionally profitable is one of the most rewarding experiences in my business life. 

When a contractor prospers, many people’s lives are improved.  Certainly the contractor and his family, but also the employees and their families.  Suppliers are positively impacted.  The community is as well, especially when they follow our counsel, which includes giving back.

Because we are so focused on helping our members succeed and prosper, contractors tell me there’s something different about the Service Roundtable.  Time and time again, I’ve had contractors tell me that they can tell that we genuinely care about our members and that we’re in this for more than a paycheck.  It’s true.


The Five Lessons

Okay, I promised five lessons based on the start of the Service Roundtable.  Here they are.

  1. Dream and dream big. Create a vision you can share with others. If they can see it, they will help you achieve it. 
  2. Make your mission worthy of your efforts. That will transform your dream into your passion. Make it fun, enjoyable.  The past 15 years have flown by because I’ve enjoyed the work I do and the people I work with.  I can remember some less enjoyable jobs where a month seemed like a year and a year was an eternity.
  3. Expect obstacles. They may slow you down, but they won’t stop you if you are determined to get over, around, under, or through them. Today’s struggles are temporary and will seem insignificant when you are enjoying tomorrow’s successes.
  4. No one is essential. You will lose people from time to time.  Some leave on their own.  Others are helped to leave by you.  The loss is never as great as you imagine and the ultimate outcome is often better than you would ever hope for.  Oh, and make sure you are not essential for your organization either.  I’m certainly not for mine.
  5. Take action. Jim Collins wrote that “good is the enemy of great.” Well, for too many people, great is the enemy of getting started.  There is no such thing as perfect conditions.  There are only the present conditions and they are good enough to get started.

The Results

So how has it all turned out?  Today, the Service Roundtable serves nearly 3,000 contractor members and twice that many users.  We have members in all 50 states, most Canadian provinces, and across Australia.  We have ten local, state, and national affiliate organizations (contact me if you would like to find out how your local association can benefit from affiliating with the Service Roundtable). 

The Service Nation Alliance has more than 250 members and is already sold out in several cities.  Roundtable Rewards has more than 100 partner companies and continues to add new ones.  We own a pair of buildings in historic Old Town Lewisville, one of which we purchased from the Dallas Morning News (new media eating old media?).

With the help of BNP Media, we launched the trades’ first new trade show and conference in 2016.  The Service World Expo was an unqualified success, though 2017 will be bigger and better.

This has been a fun ride, but it’s getting more fun.  We’ve come a long ways, but we will go much, much farther before we’re done. 


Thank You

We couldn’t have done any of it without the contractors who funded the original concept and the thousands of members and partners who support us and spread the word.  While we invest heavily in marketing and advertising, we still depend on our members to spread the word about us, one contractor at a time.

So thank you.  Thank you.  Thank you.  Thank you.

And please, continue to help us grow.  Remember, no one is as focused on contractor success as we are.  We always have been.  We always will be. 

My hope for you is that you have a very profitable 2017.  Dream big.  Be passionate.  Overcome obstacles.  Take action.


Matt Michel

CEO, The Service Roundtable

Topics: Business Design

Posted by Matt Michel on Dec 30, 2016 11:16:16 AM

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