For a residential contractor, the Great Recession has meant a test of survival. Andrew Roby Inc. knows that all too well.
Revenue fell 35% to 40% in 2009 from the prior year, leaving the family-owned business with some difficult decisions last fall.
“The easy answer was to cut all the overhead and cut the company back to just Hastons,” says Trent Haston, CFO and vice president. “But as a team we decided that wasn’t wise. Within a couple of months of grinding it out, sales started coming back.”
The key decision was keeping David McGuire, who was hired in 2008 as chief operating officer. He was the first nonfamily member to run internal operations. Revenue grew roughly 25% that year, but then came the crash in the housing market.
With McGuire worrying about day-to-day finances, Haston focused on drumming up business. He also launched two sister companies to pursue commercial construction and electrical work.
Still, cutbacks were necessary. Andrew Roby trimmed its payroll to 34 in December from 54 in 2008.
One priority was to keep the executive and management team intact. The company reluctantly started subcontracting more work, but kept experienced carpenters, mechanics and laborers. A strong team can respond quickly to job opportunities, Haston says.
He also looked for other opportunities to cut costs. With McGuire’s help, he instituted monthly financial reporting in April 2009. Seeing the numbers month to month helped Haston be more nimble in controlling costs, he says.
Haston wasn’t particularly interested in finances when he joined the business. As a teen, he worked as a laborer for his father, Ron Haston, and grandfather, Glenn Haston. He moved up to be an estimator in the summer before college, and managed projects during summer breaks.
After college, Haston returned to the business as an estimator earning $16 an hour. He asked his father how he could get a raise.
Simple, came his response. Triple the company’s income.
“Within a month we were a little low on receivables,” Haston recalls. “He gave me a folder and said if I was going to complain, I could start collecting money. As I was ready to take on more responsibilities, I did.”
Haston started finding efficiencies and installing better financial controls. In 2003, three years after graduation, he became chief financial officer. That year he hired the first in-house bookkeeper for a company that started in 1950. He also hired the first estimator/project manager from outside the family.
“I think that was the turning point to improving our finances,” he says.
Haston continued as a project manager and estimator for four years, eventually running the sales team. On the finance side, he installed formal accounting processes and procedures. He created a mission statement and drew an organizational chart.
At the same time, Haston launched a business-education initiative for the company’s executives.
It was all groundwork for an eventual regional expansion, one of Haston’s long-term goals.
That was shortly before the market tanked and the start of a new normal.
“We’re a very conservative company,” he says. “Forgive us, Diamond Springs, but we cut out our water cooler. Stuff that saves us $30 a month, we’re doing.”
To read the rest of the story in the Charlotte Business Journal, click here.
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