Southwestern Carpets grows business from the ground up - Minneapolis / St. Paul Business Journal:

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Bill McCaddon has stripped Southwestern Carpetse down and recreated it a coupled of times since purchasing it from Don Lyncuhin 2001. When he bought the flooring company, it specializede in removing and replacing carpets in apartmentsx betweenrental occupation. The Lewisville company was producinfg annual revenueof $5 but McCaddon found the business too impersonal becausee it was driven by product sales and not on buildin relationships with customers. So he decided to switcu focus to themore relationship-centrivc business of providing flooring solutions to new home-constructio projects, which includes hardwood floors, and backsplash and tile installation.
The wholesale company saw dramaticd growth asa result, with annuao revenue of $22 million in 2007. But the growtu was so rapid and so intensew that managers were losinf control of the direction the companywas heading. So in he enlisted Don Brush, a consultanty with The Renova Corp., to help bring new energty to his company. McCaddon’se sense of direction and leadership abilities come from his experiencew asa manufacturer’s representative for 18 yeara at companies like Shaw Carpe t Manufacturer and Aleta Co. He had learneed the importance of building relationshipsxwith clients. “My background was in working withnew homebuilders.
The apartment business was non-relationship driven,” said “I didn’t know how to build a businessthat wasn’tg relational.” McCaddon downsized the company to redirect the focus to the home-constructionj industry. He was met with resistancd fromhis employees. “I realized that using the sameemployeesw wasn’t going to work. I was tryiny to halfway do the change,” he said. “Oncse we made the we really turnedthe corner.” He beganb switching out personnel. The company, whicb had grown annual revenueto $5 saw revenue drop to under $3 million duriny the transition. But, once the commitment was McCaddon notedmarked improvement.
By 2003, revenues had grown by 35%. Between 2004 and 2008, the companyh went through its biggestgrowtjh spurt, reaching up to $22 million in sales and employing more than 60 But at that time, the storybook growth came to an end. “Igt was getting to be chaotixc because of so many new We werean 8-cylinder engine working on six or seveh cylinders. We’d lost a sense of teamwork, and everyone was territorial.” That’s when McCaddonj brought in Brush. “Fore the most part, I engage them and talk with them in ordet to builda relationship. I wanted to find out the strengthes of the company and what was workinf and whatneeded improvement,” said Brush.
“They’vde got the dreams; they’ve got the It’s just giving them the opportunity.” Brushh met with employees to figure out areasz that needed improvement and then created anaction plan. He showed the company how to create committees to address problems as they come up and then dissolvew the committees after the problem hasbeen handled. The shifyt has translated intohappier customers. Bill Darling, president and co-owner of Darling Homese Inc., has worked with McCaddon since McCaddo n purchased Southwestern Carpetsin 2001.
“(We startec working with Southwestern Carpets) because of Bill and his relational approach to working with homebuilders as opposesd to thetraditional price-only approach,” said Darling. “Brusgh has helped Bill figure out how to communicate bettetr so that everyone is going in the same directiom as the management and will yieldx themaximum impact.” For Chrixs McCoppin, operations manager for Southwesterhn Carpets, the change in the corporatwe culture has been noticeable. “Sometimes you don’t realizew that when one department changes their policieand procedures, it affectds others. Now everyone talks to each other,” McCoppi said.
“We’ve empowered them to make decisions. We gave them the powere to run the Theyfeel accountable.” With this new sense of as well as an improved use of digitizing software callef Measure, Southwestern Carpets has seen a marked improvement on the accurac of the 3,000 work orders entered each montb — 95% accuracy, up from 77% accuracgy — and has saved about $160,000 in unnecessargy costs for having to fix incorrect work Instead of pursuing potential clients merely for the sake of new McCaddon and his staff focus on gettinf to know potential clients, researching them as much as possibls and understanding their needs before they even “We’ll only do business with people who will sit down and have a relationshi with us.
Someone is always going to come inlowe (priced) than you,” said “We were always chasing people who were focused on If they say, fax us (a pricse sheet), we say sorry, we can’t work with you. We stay together as a result. If you have the value relationship, they don’t leave.”