The year 2000 should have been a celebratory year for Marc Sylvain. Sales at his company, Sylvain Contracting in Plaistow, N.H., had more than doubled to $980,000, mostly on the strength of his having hired a salesperson. But the up-tick in volume couldn't reverse a procession of annual losses that the company had racked up since 1986, the year it was founded. Sylvain Contracting, which specializes in the installation of replacement windows, vinyl siding, and sunrooms, lost $137,000 in 2000.
In the summer of that year, perhaps his bleakest moment in the home improvement business, Sylvain managed to scrape together $1,000 to attend a management conference in Toronto. It turned out to be a smart decision. Through training and counseling from peers he met via his affiliation with the Ardmore, Pa.–based Certified Contractors Network (which sponsored the conference), Sylvain developed a realist's grasp of what it takes to keep a business running in the black.
That recognition has led to dramatic changes in his company's pricing structure, its approach to selling and marketing, and the development of its personnel.
More Than Magic The financial morass Marc Sylvain found himself in should be familiar terrain to any contractor who ever mistook cash flow for profitability. The effort to turn his business around has been more on the order of a long, hard slog than a magic act. Sylvain, explains CCN president Richard Kaller, simply attained what he calls the “financial literacy” that often eludes small contractors. And once he grasped how much he didn't know, Sylvain demonstrated total determination. Charlie Gindele, one of the contractor's CCN mentors and owner of the highly successful Dial One Window Replacement Specialists in Santa Ana, Calif., observed that his protégé's “ strongest asset was and still is the aggressiveness with which he “implements things, makes them happen, and doesn't let himself get paralyzed by events.”
Sylvain's come a long way from the days when, he candidly admits, he didn't know what overhead was. “The biggest thing for me,” he says, “was to learn how to run my business by the numbers. This isn't a hobby, and the numbers don't lie.”
Those numbers are telling a different story now. In 2004, Sylvain Contracting generated 1% net margin on $3.2 million in sales. Its window purchases alone from lead supplier Great Lakes Window grew by more than 23% to around $200,000, according to Mike Brennan, Great Lakes' Northeast regional sales manager. Sylvain is confident that by 2007 his company will be generating a 10% profit on $5.5 million in revenue.
Me and a Pickup Forty-year-old Marc Sylvain has been banging nails since his teens. His formal education stopped at eighth grade, when his father enrolled him in a trade union. His plainspoken, rough-around-the-edges manner and appearance fit the image of what Kaller calls the “toolbelt contractor.” But even back then Sylvain had larger ambitions. He wanted to start his own company. And, at the age of 22, he did.
“For the first four years, it was me and a Toyota pickup,” he recalls. In 1990 he hired an assistant. Nine years later, he added a production manager to the payroll. But for most of those years, profit was all but nonexistent. Sylvain couldn't even afford to pay himself a salary. “That would've killed us,” he says. “We were showing loss after loss, and my accountant warned me that if I didn't start showing a profit, I'd be audited.” So precarious was Sylvain Contracting's financial condition that the business nearly collapsed when the transmission on the company truck broke down at the same time as its generator.
Fortunately for Sylvain, his wife, Denise, an accounts supervisor for a health-care company, had good credit. But for a long time she worried about the viability of Marc's business. “We were digging ourselves a hole when we didn't need to,” says Denise Sylvain, who last November started working for her husband's company. In fact, for two years in the '90s, Sylvain put his enterprise off to the side and took a job as production manager for American Profile, a $7 million contractor, where he managed 11 crews. That gave him new insights into managing and inspired him to get back to his own company full time.
In 1998, he moved Sylvain Contracting into a 1,200-square-foot showroom and 4,500-square-foot production office and warehouse. He also hired his first salesperson so he could devote time to managing. Sales hit $380,000 in 1999 and $980,000 in 2000. But the company still bled red ink, and the main reason may have been Sylvain's propensity for backing down whenever customers claimed his prices were too high. His sales approach was so price-driven that, on some proposals, “I never even took out a tape measure,” he says.