A New Location, New People, and a New Chapter

A New Location, New People, and a New Chapter

The recession had created reservations about the use of money and resources, but we did not miss out on every opportunity that came our way. When an affordable building in Oakville went on the market in 1995, we jumped at the chance to buy it. If there is ever a good time to buy real estate, it is when nobody else will, so we got a great building in a fantastic location with visibility from the QEW at an excellent price. We moved all of our Burlington operations into it, and still own and occupy that space today. We have performed major renovations and expanded the office space from 6,000 to 20,000 square feet, and added a 6,000 square foot warehouse.

The economy was starting to recover by the mid-nineties, so business had been picking up, and as we were finally getting out of survival mode, we began moving toward new growth strategies. Gerry Dawson, our original accountant, wanted to retire, so we hired a new financial controller, Patti Lowes, in 1995. She helped bring Naylor into the modern age through her expertise in computer systems.

Around this same time, my partner, Jim Edwards, was looking to exit the business. He was 25 years my senior and he had been a passive investor involved in governance, I was the operator. We negotiated a fair deal, and in 1996 I bought him out. He was a great partner to have, but after 12 years, I was ready to take on Naylor as the sole shareholder. I had fostered relations with the bank, and my personal guarantees were on the loans, not his. Acquiring complete ownership of Naylor meant that we had turned this into a true family business.

The transition went smoothly, and as business steadily improved, we grew almost triple in size from the low point in 1994. The company was incredibly busy and new people were joining our team all the time, and even though we had only just come out of the worst times we had seen, we were still dreaming of getting bigger and planning for the future. There were also some personal issues going on in my life that translated into a desire to further develop the company. Going through a divorce, I had recently lost half of my assets, and was eager to see my family’s resources improved. My plan was to make Naylor the most successful it had ever been by increasing revenue and expanding the company into fresh territory.

By 2000, we were back in force as a $20 million contractor, with both our service and construction divisions each generating

around $10 million a year. We had about 150 employees, and had positioned new people in almost every department, including accounting, estimating, sales and in the field. We reopened a Mississauga office in a bid to retake our claim in that market. Ever since that location had been shut down, we had lost about 80% of the customers we had developed in that area throughout the late eighties.

One area we delved into was something completely new to us: cabling and communications. It was doubly foreign

Paul McFadden at MDS Laboratories in Mississuaga in the spring of 1991. because it was an unregulated field, meaning that the people are not licensed through Ontario’s apprenticeship process in the same way they are with other trades. Jason Spiers was one of our first field technicians in this division, and he has since worked his way up to operations manager for the entire unit.

We also began realizing that we had cut our sales force too deeply. While we had an excellent business and skilled operators, we had a shortage of properly trained people who could get out there and tell our story to prospective customers. To remedy this, in 2001 we hired Paul O’Connor, a wonderful storyteller with a great attitude and lots of enthusiasm. He said he liked our company because when he was working sales for the competition, he could never convince a Naylor customer to leave us. He knew that with customer loyalty that strong, we were definitely doing something right. So he joined our team and in the 12 years he was with us he helped build a unique sales model and a great team that has succeeded in increasing our contract customer service base by over 500%. An integral part of this team was John Little, who started out at Naylor as an HVAC mechanic, and who became a premier salesperson and trainer, working his way up to sales manager - a position he retains

to this day. We grew from $20 million to $58 million in sales for Naylor’s core business between 2000 and 2012. We also have two other related businesses that generated an additional $8 million in sales, and our total employee complement, including affiliate and subsidiary companies, was approaching 3 ..00.

It would seem we had found the magic elixir and we were rocketing into the future. This is the time one should step back and do a proper analysis of what is really good business and what is not. We didn’t do that and we got ourselves in over our heads.

Not everything was working well. We had been in the electrical construction business for over 25 years and our target customer was not spending. We were primarily in the midsize industrial market and these customers were the ones who got hurt most from the 2008 recession. Over 25% of our customer base just disappeared during the years 2008 and 2013 .. – most of these companies either relocating to the US or Mexico or just going out of business. Our secondary electrical construction market was in the mid-size commercial office building space. This too went dormant for several years. Our solution was to go into a new market, the large ground mount solar installations. We were quite successful at securing these jobs and when we acted as an electrical contractor only we were capable of doing a good job and realizing a proper profit. We made a decision to move up the food chain a bit and we became a general contractor and in our first foray as a GC we signed on to do three sites. The outcome was not a good one as we lost a significant amount of money.

We had to rethink where we were really good and in doing this we kept coming back to the conclusion that we were a great service company and we provided important

Steve Walker at Notre Dame High School in Oakville, 1996.