Engineered Long Term Savings – Darin Anderson of Salas O’Brien

Darin Anderson, Chairman and CEO of Salas O'Brien

Darin Anderson, Chairman and CEO of Salas O’Brien, grew his company’s revenue Malcolm Lui: from $24.3 million in 2014 to $59.7 million in 2017, a 146% increase, and to around $101 million in 2018.  

Salas O’Brien provides facility planning, design, construction management, and commissioning services.  

In this interview with Eversprint‘s Malcolm Lui, Darin shares how he and his team accelerated their high value sales by:  

  • Merging and acquiring best in class firms to expand their geographic presence and add additional services that can be accessed by all of their offices.  
  • Hiring and retaining engineers who are passionate about their work, who are the engineer’s engineer.  
  • Focusing on larger industrial clients who own their facilities for the long term, who often many other projects they can assist with.  

Computer generated transcript - Salas O'Brien Interview (transcribed by Sonix)

Download the "Computer generated transcript - Salas O'Brien Interview" audio file directly from here. It was automatically transcribed by Sonix.ai below:

Malcolm Lui: Welcome to the High Value Sales Show of Eversprint.com. I'm Malcolm Lui, the Managing Member of Eversprint, and today we're speaking with Darin Anderson, the Chairman and CEO of Salas O'Brien, a facility planning, design, construction management, and commissioning firm. Welcome to the show Darin.

Darin Anderson: Morning Malcolm. How are you.

Malcolm Lui: Well how about yourself.

Darin Anderson: Great things. Good to be here.

Malcolm Lui: Yeah. Good to have you here as well.

Malcolm Lui: Darin, you grew your company's revenue from $24.3 million in 2014 to $59.7 million in 2017, a 146% increase, and in 2018 you hit around $101 million. Before we talk about how you grew your company so fast, can you briefly share what your company does beyond my quick intro, and how your company differs from the competition?

Darin Anderson: Yeah Thanks Malcolm. You know we may as you mentioned we're a Facility Planning Engineering kind of construction management and commissioning firm where we take care of high value clients meaning institutional clients that own the real estate for the long term and we help them make decisions on their facilities so that they are investing properly and that they have the most reliable most efficient and most economical systems that they utilize.

Malcolm Lui: All right. And how would you differ from other companies that do some similar services.

Darin Anderson: You know I would say there are several differentiators One is that we have a nationwide network for national clients so there are very few firms actually have a national network like we do. But I'd say at the end of the day it's our talent and our people. We have ninety five percent retention of our team members year over year and that allows just constant relationships being built and consistency with facilities that we're working on so that there's a high value in a trust. Our business is all people business sets. Do you trust the people who are taking care of your facility. Every facility is unique and different. And so when you've got the same people working on your facility you know and trust them and you appreciate that they have the skills and technical expertise to deliver for you. You just don't change. And so are our people are highly technical. We're known as the engineers engineer and they're trusted everyday by the most revered I would say institutions in the world.

Malcolm Lui: All right. Now for people like myself who aren't in the in your line of business what does it mean by commissioning

Darin Anderson: So after we design a facility we engineer a facility then it's actually constructed and so we hire typically with the the owner the contractor based on criteria of not just cost but really more than any else qualifications and experience. And so then after they build the facility we make sure that the building systems are operating effectively that the building automation systems are operating effectively so that that's consistent with our specifications and standards the facility is going to operate just as we had expected and told the customer it was going to

Malcolm Lui: Right. And in regards to the range of the facilities that you are doing. How wide is it. Are you talking just office buildings only. Are you talking about manufacturing plants. You talk about stadiums. What's

Darin Anderson: Yeah.

Malcolm Lui: The range of what you do.

Darin Anderson: Yeah sure. So I would say are again more institutional clients where there are really high value projects so everything from health care to data centres telecom switches to laboratories universities K12 Yeah that's kind of the range we do all lot of large industrial type of facilities so large manufacturing types of facilities. We also do even a large utility transmission and distribution for large utilities

Malcolm Lui: So you pretty much do it all.

Darin Anderson: A lot. Yeah. Yeah.

Malcolm Lui: Is there anything that you don't do.

Darin Anderson: Yeah. You know we haven't done it. We do a lot of office and commercial and corporate work as well. I would say and even we do retail for some retail customers but know our real where we really differentiate herself is on complex types of facilities or where there's a large program management where there are hundreds and thousands of facilities at work taking basically outsourcing the operation for our client and that we're able to get the throughput and things done quickly. But our though the work that we do is really focused on high value where you know companies will own their facilities for the long term and they want to make the best decisions because the cost of a facility is about a third upfront. So the initial building cost represents about a third of the total facility costs over the lifecycle and then over the next 40 years you've got your all your operations and maintenance and you've got your utility spend so your electric electricity your water and gas. And so by the decisions that you make in the first third of the initial project costs will determine what the remaining two thirds or more of the facility costs are going to be. So we help our clients make those decisions so that they're the best decisions and that they help be a strategic advantage for their clients.

Malcolm Lui: Right now you grow your business pretty rapidly. Twenty four million in 2014. As an 18 year at one hundred and one million so you almost 4 x Your Business with that through acquisitions or all organically

Darin Anderson: Up until 2018 our growth was almost 50 percent via mergers and mergers and acquisitions. We call them mergers while they were technically and legally acquisitions. We call them mergers just from a philosophy. Our approach is to partner with these other regional firms that are like minded than in the other 50 percent was through organic growth. So we've we've been blessed with a balance of both. Merger acquisition growth but as well as organic growth. And that's

Malcolm Lui: Nice

Darin Anderson: Something that's really important for us

Malcolm Lui: Now I think he touched upon the biggest driver of your growth over the past four years. I mean one is of course mergers and acquisition and second one was the organic growth and organic growth I assume is being driven by your people

Darin Anderson: Yeah. You know it's where we try to merge with firms that are kind of best in class in their region and or their industries that they service. Our thesis is to one expand expand into those new territories and bring our national clients in to be able to service those national clients even better through regional growth but then it's also to bring new service lines. So we've been able to grow the regional clients that we've merged with. We've been able to bring our national clients into those regions but also to bring new services into our existing organization that maybe that firm that we merged acquired with has a different skill set that we didn't have before. So it's a combination of adding new geographies bringing additional clients into those regions that they didn't have previously but also bringing on new new service lines that we didn't have before and expanding that across all of our regions. And so those have been been really helpful. And beyond kind of our imagination. And we've had a lot of new new clients that are seeing our our geographic footprint and the quality the people that we bring in and their expertise and they're saying gosh you guys can really help us

Malcolm Lui: Right now. He give an example what you mean by new services as I always would've thought that you've been around you've been doing the business for so for so long that you can cover all the bases or most of the bases

Darin Anderson: Yeah. Yeah I know. Good question. So let's say early on we were known really more just on the mechanical electrical services and so as we grew we brought on our commissioning really a strong commissioning organization and we've continued to grow our commissioning team throughout our geographies. So that's been one addition. We've also added a technology group. So really all the A.V. security and access and so while we were doing it it was not a primary or core function. And so what we've done is really now added core teams that are only focused on that that service line and so we've been able to grow organically just through targeting customers that needs that service bringing on people and talent that really are exceptional in that area. And as a result we now have 650 team members across the organization that are seeking those opportunities where before we weren't seeking them out. So it's one when they're working with a customer and they realize oh I've got a technology structured cabling need low voltage that they know who to reach out to and we've got dedicated people who we trust and believe in to handle that work. Same thing on the commissioning side. In

Malcolm Lui: All

Darin Anderson: Addition

Malcolm Lui: Right

Darin Anderson: To that is it. Yes some other regions weren't doing telecom central offices and now we've developed that competency in that region and grown our business. So

Malcolm Lui: Right. So I guess previously when you didn't have those services you would just work with another partner.

Darin Anderson: Correct. Yeah or yeah or they would just choose somebody else. So now we're able to capture more service with those clients. So sometimes they would just go outside because they didn't they would trust us if we had the work had the competence and capability and just because we when they clients come to us they go we know if you're gonna do it you're gonna do it really well. But we said we didn't do it before and now we're saying yeah we can do this and we've got the right people that are really outstanding in it.

Malcolm Lui: All right. Awesome. Now you mentioned just to recap what you share with me then at least two drivers you mentioned to me know of your growth over the past four years. One of course the people Ninety five percent retention rate the engineers engineers as you put it your or your clients trust them and come to work with them for future projects in an ongoing basis. And then mergers and acquisitions and mergers which give you the opportunity to expand your footprint geographically and also service or service wise. Is there a third driver

Darin Anderson: You know I think it's just the continued focus of the organization you know when when we look for mergers it's really important for us that a lot of people do mergers poorly. And I think we've we've been really very successful in our mergers because we're finding like minded organizations. The geography addition is it is an important thing adding the service capabilities is another but more important than anything else is adding the leadership talent and expertise of the types of clients. So when we're looking for a merger partner we're making sure the character the philosophy the values are the same. And our goal is to take highly capable highly functional teams not people that are looking to retire but that love what they do. The difference in our organization is you as you have learned or people know working with us is that they're very passionate they love what they're doing. They can't imagine doing anything else and they would do it for the rest of their lives. They may just not want to do it for 50 60 hours a week but they they want to do it for 40 hours a week because they're getting you know more in their latter years but their talent and knowledge and skill base is so important. So retaining the team members and developing and mentoring our junior team members to be leaders has been really essential.

Darin Anderson: We've kept we've only lost three mid-level or senior level leaders over the last 14 years in our organization of over know we'll call it one hundred and twenty people roughly today. And that just leads that continuity and success of our team members. And they deliver great work. They're fully engaged and now as a we are now 100 percent Aesop organization meaning that our employees have 100 percent of the ownership of the organization. We just transition to a and he's up two and a half years ago even go back 14 years ago I purchased with a partner Eighty five percent of the company from Karl source who he and Dan O'Brien the founder of the firm over 40 years ago and over the next 12 years we continue to develop 40 43 additional shareholders in the organization just as that spirit of hey we're in this organization is a professional services organization together we want to make sure that our heroes and drivers those who were leading the business are participating in the growth and equity of the organization. And that engagement has been wildly valuable that they are fully vested in what we do. We're aligned in our interest completely. There's no you know nobody going off the rails. And so when you have that total focus and alignment of your values together really exceptional things are possible. And there was just a continued kind of desire by more of our employees to be shareholders and we had always been very open book and transparent on what we would do.

Darin Anderson: People could ask any questions at all the time of me. And so two and half years ago we decided to become a 100 percent oil. And so now all of the employees are shareholders in the organization and that ownership transition is happening over the next twelve years basically. But I'd say it's been very very well received. And now it's kind of what I call the Holy Grail is that when you've aligned all of your team members with ownership in the organization they all completely appreciate what it takes to run and drive the business and whether they receive it in performance bonuses or whether they receive it in appreciation the value of the shares where we're all aligned together. There's not a there's not a you know a at a shareholder group and then you know employees we are all team members were all partners together in the success of our business and this is it's a continued evolution of our organization. I think it is an additional strategic advantage of our company is that our values are all totally aligned across the organization from you know the first person who is you know right out of school to me.

Malcolm Lui: Right

Darin Anderson: So it's exciting to see

Malcolm Lui: At it now. Now how do you distribute the ownership. Is it true even off throughout your employees or or is it pretty lumpy like you know 10 percent of the employees own 80 percent the company

Darin Anderson: Yeah it's a great question. So the ups are are highly regulated through Department of Labor so the mechanism is basically is it your cash compensation. What's the limit. I think of two hundred fifty thousand dollars a year somewhere along those lines to the total cash compensation in the organization. So it's a very equitable based on what your valued contributions are. So if we distribute fifty thousand shares I think roughly where we distribute forty five thousand shares a year out of a million so forty five thousand shares are distributed based on what your cash compensation is to the total cash compensation in the organization. So it's very equitable distribution of shares that we make on an annual basis.

Malcolm Lui: Right.

Darin Anderson: And

Malcolm Lui: Okay.

Darin Anderson: Then we do an annual evaluation and people see what the value of their shares are this year and they see the growth in the value of the shares from the previous year as well. So that works really well

Malcolm Lui: All right. Nice. Now looking ahead a little bit for a while. Actually let me ask one other question for you. When you acquire new firms. Do they continue to run standalone and on their own with the leadership team that's in place or are they merged into the family and restructured a bit more than that

Darin Anderson: And that's a great question. Yeah. So I think that's one of the great appeals for us from the companies and clients to say companies firms that are looking and evaluating us as an organization is that we as I think I mentioned earlier they are highly functional very capable organizations that are really good at what they do in the industries that they service. So our goal is to not screw up. Basically I say don't screw up what's working really well. So we want them to continue operating just as they have before. We want the same decision makers the same people scoping the projects pricing the projects delivering just the same way they did to their clients previously. So our goal is to continue to make sure that they're fully empowered. There's no change in the way they operate or the way they deliver to their clients and what we want to do is to share our best practices across the organization from a standards from a specification standpoint so that they can embrace and take what makes sense for them but they're not forced to do anything so it's completely optional. We don't want to screw up their business. We want to make sure that they continue to deliver and own the decisions that they make every day. And that's why we're social because they're strong vibrant firms. So what we do is we do. Mary our back office operations where we make sure that we're on the same kind of operating systems same accounting systems we have the same similar insurance programs. So all of the administrative functions are consistent across organization from a marketing standpoint reporting and that really is the end of the day the operations stay the same We share best practices we try to make each other better but we standardize kind of the back office operations

Malcolm Lui: Right.

Darin Anderson: And our our philosophy is everybody has to be the same or better off than they were before. We we have never let anybody go and it's always hard to find talent in this business. So our philosophy going in is that everybody has to have the same or better benefit program they did before and better opportunities than they had previously as well.

Malcolm Lui: Right. And I imagine because now a bigger part of the family those acquired companies now have more services that they can offer their existing client

Darin Anderson: Correct.

Malcolm Lui: Base

Darin Anderson: Yeah.

Malcolm Lui: And clients that are bigger that they might have had to pass on because they didn't have people across the country. Now they do.

Darin Anderson: Apps. That's absolutely right. Yeah. I mean now. I mean can I give you a quick example is that we expand the service line capabilities and we're able to now bring more depth of experience to the client. So in each. Up until last year. Each merger that we've done we've grown the business either from two and a half to four and a half times revenue in a period of five to six years. So it's been very successful just growing. Growing the business organically bringing service capabilities making sure we're investing in the business whether it's marketing promotion and just you know having that additional depth and breadth of talent to the team really helps reinforce the regional teams position.

Malcolm Lui: Yeah. Nothing I can see that. So for 2019 what what the revenue target. Are you looking for

Darin Anderson: Yeah we're projecting right now to hit 140 million in in revenue and our reboot does you know been in the high teens typically as well. So we expect to maintain that as well. We. Yeah it's it's been a combination we have. We just finished a merger with the firm is based in Chicago and Denver and they're an exceptional exceptional team and so we expect good continued growth from them. It's a relationship that we've been working on for a while and then we actually have two more mergers that we're working on right now and I'm very excited about them but it just takes time to nurture the relationship and make sure that it's going the right way. But our clients we have still good organic growth that's happening across the organization and the team is energized and our clients are are showing very well we're in to we have an exceptional client base. I probably should be careful about our clients but just because we have NDA and they don't like to be aware but I say we're working with let's Wall Street Journal came out with an article about two months ago of the top 10 companies that are going to be investing in CapEx over the next decade and we worked with six of those top 10

Malcolm Lui: Huh

Darin Anderson: Customers.

Malcolm Lui: Investing

Darin Anderson: So when you're when you're putting infrastructure in place you can imagine you know all software a computer datacenter telecom focused you know we're we're working with all the the big organizations and then and many more. We work with over 50 different universities doing everything from their power generation to all that utility infrastructure to building systems and a lot of different cities and counties and now a growing federal and federal practice as well. So it's it's our practice is getting more diversified and clients are realizing that while we've got a lot to be able to bring and offer to clients and it's more we got to get the word out to our our potential clients that haven't even heard of us. What we do we we don't have a big. We don't we don't have a big business development department we don't have a sales team are our team is all solid doers the person that you're person and the principle that you're talking to are the vice president is the person in the team who's gonna be doing the work it's not we have some sales group and then we we have somebody else who is selling you the business it's one of the same

Malcolm Lui: Right

Darin Anderson: Or

Malcolm Lui: But

Darin Anderson: Our biggest

Malcolm Lui: A

Darin Anderson: Getting out there and meeting people.

Malcolm Lui: And most of your business is growing quite well despite not really having a perhaps a formalized marketing program. It's not safe to say

Darin Anderson: Yeah I would say our marketing program has gotten much better we're sharing the word of what we're doing really more passively to share case studies and experience but we don't have a dedicated sales team for sure. We don't have a that's shocking. Most people are stunned but we don't have a dedicated sales or business development team. But we do have a but I would consider to be today a pretty strong marketing program.

Malcolm Lui: Ok. It is shocking to not have a dedicated sales or business development

Darin Anderson: Yeah.

Malcolm Lui: Team. But I think also goes to show how the only conclusion I can draw is that one your current clients are just doing more and more business with you last. And then on occasion I'm not sure they would help you a whole lot on the referrals. I guess he met you before many of them are a bit reluctant a bit uncomfortable letting

Darin Anderson: Yeah you know what.

Malcolm Lui: The world know what they're doing

Darin Anderson: No I'll share. This is a little insightful and we we made this very conscious decision early on engineers by and large are not strong salespeople. That comes as probably no surprise to anybody but what we've really focuses on instead of a client where they may have one project at the time and you have to go sell another project. We work with these institutional clients that have lot of facilities that have multiple that just continually are changing out their facilities or equipment and that always need to work. So when you work with large clients that have large equipment and in facility needs there's always something going on. So our focus is on these types of clients so we sell the relationship and build that trust one time and they keep coming back to you if you do good work. You take good care of them. They trust you. You price the projects the right way and you've always got their back. You know the clients keep coming back to you. Right. It's like anything in life. It's it's a marriage we call it it no different than the relationship with me and my team is it they've got to be able to trust you they've got to know that you're going to look out for them and then the same thing with their clients that you know you're doing the right thing every day and you're taking good care of them even if you make a mistake you're gonna do the right thing. It's not gonna What do we. We've never we've never had any you know or professional liability claim in our organization's history over 40 plus years and say well we don't make mistakes but when we do we're gonna make it right and we're gonna take care of the client at the end of the day

Malcolm Lui: Right. Exactly. Now you said before that your day yet you've got a pretty good marketing theme. What are they doing for you

Darin Anderson: Yeah. You know 14 years ago 12 years ago even 10 years ago we really kind of socked it marketing it was we would respond to a request for a proposal and we would send out a letter proposal and maybe even some qualifications but we we really did not promote ourselves very well. Now what we do is we send out almost at least weekly if not even every other day kind of a case study where clients people who are connected with us whether it's on LinkedIn or who are in our email database we'll send out kind of a case study or a profile of a specific project to the industry that they can learn from so that it shows hey what are other clients doing. What did we do for them so that people can understand the knowledge share that's out there. What are the best examples and what were the savings. What were the issues of problem statements and how did we. How did how was that solved so that they can learn from it so that if ever comes up for them again and also so that they can understand whether what their peers are doing. So we try to promote this knowledge sharing and knowledge ideas with one another and and through that as the relationship builders that hopefully people see that while we're a good knowledge source and we have this expertise to draw on. So we hope that people pick up the call because they they know and they trust us and they they also learn and see the values and the other clients that we associate with as well through that through that association hopefully the way they see us as being that trusted advisor

Malcolm Lui: Yeah. I mean it's a it's a great strategy to maintain top of my presence right. It's in the end and with your institutional investors you know it takes time for them to to find the right partners for them to work with. Right.

Darin Anderson: Exactly. Mm hmm

Malcolm Lui: So they don't really you don't want to switch them out every year or so

Darin Anderson: For sure.

Malcolm Lui: When their current partner has a problem and then it's creating opportunity for you to see if you can help them

Darin Anderson: You can imagine this to your point is that when you when you've been working on a complex Imagine you're at a university. Right in a major university next to you. It's a very complex facility. And so if you you have 15 years of working knowledge and experience there and all of a sudden you want you think you want to replace somebody for an extra ten thousand dollars a year you're at risk of that operation having some major failure or being shut down or losing it and our fee typical in a project is 3 4 percent of a total project cost. But all the intellectual property rights just say most of the intellectual property happens in that 3 to 4 percent of our fees as opposed to the construction cost of the project. So the client doesn't want to take away that intellectual property for an extra thousand dollars ten thousand dollars. They know that once that the the engineers are coming on site is it they know the facilities they know the systems they can get up to speed very quickly because they're so intimately familiar with it where it was takes somebody else months and months if not years to be able to understand the complexity of the operation and how everything works. So there's so much more efficient because you have that institutional knowledge already of the client. And it would be hard hard to replace that oftentimes

Malcolm Lui: Right. So how do you win new business rank as the biggest attractions you want to work with there really have partners who are helping them with that much of what you're doing. And as you mentioned now it's pretty sticky right. You don't want to make a change in and on board somebody doesn't know everything that you're current that the current partner has learned over the past 10 years so how do you get new business

Darin Anderson: That's great question. So I would say on a local regional basis for local or regional clients the oftentimes people will move from our clients will you know get another job offer and they will go to another location and they will call us up because they know and trust us. So that's oftentimes what happens so we maintain that relationship with their previous organization and then you know somebody new goes in other places say try these guys out there really really good. So we get a lot of that referral business. I'd say that's most common for us is just that referral referral business. And then I'd say a second is that now there are very few customers. Should a very few firms like us that are national in scope and so we're getting so many inbound inquiries for companies that realize that we have a national footprint and can service these companies more more quickly and more cost effectively with the highest level of competence. And so just not even a few months ago Uber called us out of the blue on a Friday and said gosh we've got twelve different facilities that we want to add to the build out. Can you give us a proposal by Tuesday. And we did and they realized that we could they could contract with one firm as opposed to four five six different firms that again because they don't have national operations they would have to contract with four or five different firms to do ten or twelve facilities but now they can contract with one firm. And because we have offices in those regions that we don't have the airfare we don't have the down the lost travel time and we know the local code. So we're saving money on airfare we're saving money on Lost travel time. And we know the local codes so we can deliver projects more quickly and without with less risk than than anybody else. So to coordinate that with one one contract one phone call it lessens their administrative time as well as the total project cost. So we're getting more and more of inquiries like that as well

Malcolm Lui: So how can you hang out a proposal in three days. Well there's just a pretty simple project where they want you to explore how you can help them and that was the proposal or was it

Darin Anderson: Yeah.

Malcolm Lui: A

Darin Anderson: So

Malcolm Lui: Cookie

Darin Anderson: That's a combination

Malcolm Lui: Cutter

Darin Anderson: Of. Yeah. So some projects are definitely even more difficult than others. You ever project was not a terribly complicated project it was more of a hey we want to do these tenant improvements in these commercial facilities. How far away are they from our existing facilities and what is the existing operation look like. So we had our teams in the regions put proposals together because they were local. They knew the the facilities reasonably well and they didn't have travel costs and so we asked them basically within a day or two to give us their their fee and propose last night based on some guidelines that we had provided and they got it back and we put one proposal together. So it was a it was just a coordinated effort by all of our leaders within each of those regions to say what is this going to take. Are there any unique or special requirements for these facilities that we need to be aware of and you know anything anytime you put a scope of work together you got to make sure that you're fully aware of what the facilities are like and what the what the challenges are going to be. So after doing that you know the team just coordinated one proposal but the client said hey we can do this for one contract one price and here's what looks like and here's one we can deliver that

Malcolm Lui: Right have has the final decision been made on that proposal.

Darin Anderson: And we did. Yeah we were the fabric there in progress right now on it.

Malcolm Lui: Awesome

Darin Anderson: No no

Malcolm Lui: Deal. And it can grow right beyond the two of

Darin Anderson: Randy

Malcolm Lui: Its other operations

Darin Anderson: Raab brand new client for us and again they they sought us out. We did not have a relationship with them previously and they were looking for a firm no different. I mean this I can give you so many instances of companies that that are reaching out to us that our national in scope and instead of hiring you know 20 different you know E firms or engineering and architecture firms they they can hire one to service all of them and ensure that the best pricing the consistent delivery of documents and a single point of responsibility it's just it's so much easier for them. Right.

Malcolm Lui: Yeah definitely

Darin Anderson: Twenty five different contracts to administer lower you know travel costs and the same consistency of product

Malcolm Lui: Do folks share how they found you.

Darin Anderson: Oh no I don't know that you know it's a good question.

Malcolm Lui: That

Darin Anderson: I

Malcolm Lui: Would

Darin Anderson: Don't

Malcolm Lui: Be

Darin Anderson: Know

Malcolm Lui: Interesting to find

Darin Anderson: The

Malcolm Lui: Out how they came across. Was it just a simple Google search or were they on

Darin Anderson: Yeah

Malcolm Lui: Your eating list past

Darin Anderson: That

Malcolm Lui: Five years and

Darin Anderson: Would be

Malcolm Lui: Bonnie

Darin Anderson: A good question.

Malcolm Lui: Said. Yeah.

Darin Anderson: I don't know.

Malcolm Lui: Interesting. So to hit your 140 million dollar target you're growing your business 40 percent from one hundred one to two hundred forty this year. What's the biggest obstacle that your team needs to eliminate to achieve this target.

Darin Anderson: That's a good question. You know I think we have a couple of things. We've got several initiatives that we're working on. One is we have four. We're operating on two different platforms right now from an accounting and operations and so we're upgrading our systems to ensure that they are the same and consistent across the organization. And we are continuing to improve our database and marketing platform. So those are two areas that we're still continue to make some systems improvements. While it's good today we want to make it great. So the team is working on unifying our systems and standardizing the back office operations which is good. Just to make sure we're reaching out to our customers and that we can put proposals together more quickly and teams together more quickly. So that's one area but really on the the the initiative is making sure that we're sharing our story with our clients and that we are communicating all of the service capabilities. You know earlier on are some of our own even team members didn't even know the full capabilities of our organization. So we were focused on making sure that our are. Our own team was aware of what our capabilities were. And then when the operations or the situation came up to the client needed some skills or services that they knew that we could deliver that form. So it's continued execution for us making sure that our our team is aware of what our full capabilities are across the organization and that collaboration between the teams now having 22 offices it's making sure that the teams are sharing resources and sharing utilization and selling each other's services. And it's just it's just execution execution for us. We have as I mentioned we just finished a merger and we've got two more this year so that will bring probably about two thirds of our growth this year. And then the other third will be just organic growth with new and existing clients

Malcolm Lui: Right. So how are you going to tell you know what metrics you can be measuring to assess how well you're doing with overcoming these obstacles

Darin Anderson: So we we look always very carefully how we're growing our existing client base. So you know one of my well I should say so first one just on a sales and sales and growth standpoint. We always look at our proposal activity. We look at just basic marketing metrics. How how many people are seeing our information. How many people are looking at it. Do they download videos to download white papers. So we're trick tracking our kind of marketing activity to see how many eyes and ears are out there and who is looking at our site as well. So we're very careful about seeing who is what kind of traffic is on our Web site who's checking us out and being strategic with that from a follow up. But our biggest opportunity is with our existing clients today we while we are you know with each of our clients usually the largest vendor if not the only vendor. But we're usually one of the larger ones. But there's still so much more market share for us to get with even our existing clients because there are multiple relationships and decision makers within each organization that we work with. So we want to capture just more for market share with our existing clients. And that alone will drive massive growth for us. So we've got now we're now investing and have invested in say national architects to drive industry growth where we had maybe a team before but they were so focused and their heads were down on driving projects. Now we're investing in a little bit more on the BD side so that there is a a what I call a national architect or a leader on an industry practice that is really driving that strategic strategic growth so relationship driven focused on certain client existing clients as well as new clients that we're targeting to achieve that organic growth. So it's an investment that the company is making in key leaders that some that have been inside the organization and some that have been outside that are just leaders either existing they've been clients of ours or that are just the leaders in their industry

Malcolm Lui: Right now. Before you said your biggest opportunities are within existing clients because they're kinds of pretty big and there are different decision makers to stand up their organization who are working on different projects. Is that what you meant by the opportunities within your existing client base.

Darin Anderson: Correct. So they're there maybe you know 10 decision makers within a client still say horizon for example you know we do work with horizon there are you know four other firms that do a lot of work for and on a national basis as well. What we want to grab more market share that maybe we're working with four of the 10 decision makers we want to we want to get all of the market share from those decision makers but growing into the other decision makers as well.

Malcolm Lui: Right

Darin Anderson: And they may not know us as well we may not have the experience and they have other people they've worked with but they haven't tried working with lots of Brian

Malcolm Lui: Right. So what's the plan. Do you know who these decision makers are. If not how do you find them.

Darin Anderson: Right. So yeah sometimes we don't know all of them and we haven't been able to identify them but that's where we had our leadership. We've we've been investing in these industry strategists will say who are working with our principals those who are the relationship drivers and who are responsive for product delivery saying All right let's identify who these people are let's make sure that we go out and target and get to know them and build that relationship so they understand what sort of Brian is all about. We share a value and vision statement with them and listen to them really at the end of the day of what what what are they looking for and how does that how does that marry with what's also Bryant can deliver. So it's a it's a nurturing of the relationship because it kind of goes back to that trusted relation. It's hard for people to make change unless somebody is really screwed up. It's hard for those clients to make to make a change unless they really see a compelling value opportunity and that's that's where we need to be more deliberate and more focused. And we've historically just had our head down doing good work and you know people keep giving more work to us and more and more and then they share the knowledge with others. But we want to make sure that we're growing even more market share and that means that we've got to be a little bit more proactive as opposed to just waiting for for good referrals

Malcolm Lui: Yeah yeah. One point you in your business get so big that referral flow may not be steady enough to drive the organic side of your growth.

Darin Anderson: At least as fast as we may want.

Malcolm Lui: Yeah yeah definitely. Now you talk a little bit about your value proposition and maybe I can just kind of recap it from what I gather from your composite from our conversation sounds like your value proposition is one you helped institutional investors who would like to have perhaps one single point of contact for four regional or nationwide facilities development that rate

Darin Anderson: Yeah I'd take that for a minute and articulate it as clearly but I'd say clients come to us one because they've got several million dollar it could be a ten million dollar. It could be one hundred million dollar it could be a five hundred million dollar project. They come to us because they want to make sure that the investment they're making with us in the small fees that we're helping them limit or minimize or make the appropriate capital expenditure on the facility. But they come to us with a decision to say I'm going to own this facility for the next 40 years. Tell me what systems I should put in place to ensure they're reliable that they're energy efficient so that I'm minimizing my total spend over the next 40 years which is not just the first third which is the initial building cost but also what's the operations and maintenance costs going to be. What is the utility spend going to be over that next 40 years and discounting that back to today. What's the best decision. So we do that lifecycle cost analysis for the client. So you may pay a little bit more upfront but you're gonna save a ton down the road by these decisions. And so clients come to us because they trust we're independent.

Darin Anderson: They know they're going to. We're gonna make the right decision we know how to engineer it we know how to tie these into your existing facilities and they just trust and believe us. And so those are those are the primary reasons that people come to us just because we have the competency and the capability and the experience with these very specialized niche industries and they know and trust in our decision making. And so combining all of those factors with that technical expertise. That's why people stay with us. I mean I in fact I don't recall a time where we've. This is hard to hard to imagine. I don't recall a time where we've lost a client. We've we've just clients don't go away from us because it's this is a long term relationship. People trust our team members they know they're going to make the right decisions for them they know we're open book we're very transparent we were objective and independent in every way and we want the best outcomes for our client and they see that in our decision making in the way we approach it and we're totally totally accountable for results for our client

Malcolm Lui: Right yeah. And it shows as well it kind of goes in line with the retention rate of your employees as well and probably the link the linchpin and it holds it all together because

Darin Anderson: Exactly

Malcolm Lui: The relationships that stick with the within and with their clients as

Darin Anderson: Exactly.

Malcolm Lui: Well. All right. Spring back on marketing a little bit. I notice how your company doesn't do doesn't have any paper click ads that I can see your SVOD presence. Not very strong from the tools that I have. What's what's your marketing marketing team's thoughts on paper click and SEO

Darin Anderson: Yeah. You know we probably could be doing more of it that are because our approach is so targeted with a select type of people and clients that are decision makers who would can we're going to choose Saul so Brian. So we try to be very very careful and very targeted in our marketing approach. So usually it's with the CFO those of you know Vice President senior vice presidents regarding you know construction and facilities for major institutions. So it's a select number of people that would be seeking our service. We're not a you know that every every. We just we don't need to be marketing and promoting to everybody in the world or even to a broader group. It's a very small slice of people that are going to be selecting us. And oftentimes it's architects that are selecting us and they may have the lead relationship so probably about say 35 40 percent of the work that we get is through architecture firms that have that lead relationship with the clients. And then about 60 percent of the time because our work is so engineering focused is that we will have the lead relationship with the client because they're just heavy heavy year engineering projects. So we we market and promote to architectural firms and then we also market and promote directly to clients for larger engineering focused types of projects. So we probably can focus more on SEO but just on a very targeted basis to do these types of customers. So it's something that they were we're always open where we're still trying to figure this out every day

Malcolm Lui: Right. Yeah well marketing. It changes right. I mean the technology changes their audience changes the messaging has to change because things change. It's a moving target never

Darin Anderson: Others

Malcolm Lui: Stands

Darin Anderson: There are still a lot of people that we would love to share our story with and have no idea who salt and brine is and that's that's the opportunity for us. How do we how do we make that connection and establish the beginning of a relationship so they hear about us and hear what we do and they go oh gosh I need to talk with these guys these are these are really talented people and I could I could see working with them.

Malcolm Lui: Yeah. Now we discuss this all throughout our conversation so far. And you just kind of highlighted just now briefly can you share again. Who your ideal clients are.

Darin Anderson: Yeah. So yeah our ideal clients are those that own their real estate to play for the long term and that really value high competency engineering expertise where you know that trusting relationship is expected for the long term it's like a marriage that they know that we're gonna look out for them and we're going help them evaluate the best the best decisions for their facilities so that they're saving money that they're reliable and that the most value to their pocket at the end of the day is the value was what's the total lifecycle cost analysis going to be of a facility ensuring that it's 100 percent reliable at all times failure is not an option. You know are the Microsoft of the world the apples the world the the T Mobile's the horizons the AT&T is imagine if any of their facilities failed their facilities failure would be millions and millions of dollars in lost revenue on a minute basis. Well same thing is downtime for most organizations would be expensive for some of the we work with it's really expensive. Right.

Malcolm Lui: Yeah

Darin Anderson: So

Malcolm Lui: Definitely

Darin Anderson: They come to us going hey I trust you. I'm not so worried about the fees. I know you're going to be competitive with it but make sure that I'm building these these facilities and saving a lot of money in the millions and millions of dollars on an annual basis as well. So we take care of smaller firms smaller clients and projects than we do larger projects as well. It's just where technical competency is is expected in their complex facilities and they go to these guys who I can appreciate. We'll do an exceptional job tonight. I know and trust

Malcolm Lui: Right now you. Before that the phrase institutional clients. What in your mind is an institutional client.

Darin Anderson: Yeah we're where they own the real estate for long term as opposed to developers who will typically sell a project right after it's built. So institutional clients on the real estate for you know 40 50 years type of thing. Yeah that's typically what I am looking for from a real estate standpoint

Malcolm Lui: Okay so the institutional client may be a company like horizon that's going to be owning own assets or it could be a property development firm that intense on this facility

Darin Anderson: Yeah.

Malcolm Lui: For a long

Darin Anderson: Yeah

Malcolm Lui: Time and lease

Darin Anderson: Exactly

Malcolm Lui: Out the states to

Darin Anderson: Correct. Yeah

Malcolm Lui: The varieties

Darin Anderson: Yeah

Malcolm Lui: Of the

Darin Anderson: Yeah. If you're looking for. Hey let me get the quickest build the quickest dirtiest less expensive build and I'm gonna sell this. You know after it's finished and I get at least up. Great isn't I can we worrying about you know what the the the electricity spend is going to be over the next 10 years or five years. They don't care about it for six months they just want to sell the property. So ours are. All right what's what is your what are the operations and maintenance expenses going to be for that facility when you gonna have to replace that equipment. One of the system's going to fail and you're gonna have to replace it all out. What's actually gonna cost you for the electricity you know month after month. Well that's right. Each your bottom line. If we can put a system in that's a hundred thousand dollars more but it's going to save you forty thousand dollars more a year. Does that make sense. Of course it does. So these are the decisions that we help our clients make

Malcolm Lui: Right. Right. Those that have a long term focus.

Darin Anderson: Exactly

Malcolm Lui: All right. And what's the best way for those ideal clients to get in touch with you and your team

Darin Anderson: Gosh you can call. I'm available all over the web. You can see me. Darren Anderson at Silas O'Brien dot com my phone number 9 4 9 3 3 8 9 3 9 4. I am always available on our team. You can see it's not hard to find. Just type in solace of Brian and look up any of us and we're there to respond almost. We'll call it 22 7.

Malcolm Lui: Yeah. Would you like to spell out your name and e-mail. Because Daryn and Anderson can you spell out a couple of different ways.

Darin Anderson: Thanks Malcolm. It's Darren D.A. are I and Anderson a and d e r s o n at solace O'Brien S A L A S O B as in boy are i e and dot com.

Malcolm Lui: All right. And one last question for you. If you wanted to have a billboard for solace O'Brien on one of the freeways in California that are moving quickly not that that always happens that often but when you do have that rare occasion what would your billboard message be and keep in mind people you have about six seconds before they drive by the billboard

Darin Anderson: You have an engineering challenge or a facility that you want to best call falls O'Brien you will never regret it we will take great care

Malcolm Lui: All right. Got it. It's been great having having you on my show. Gary I really enjoyed hearing how you grew your company so fast.

Darin Anderson: Yeah. Thank you Malcolm I appreciate what you do to help get the stories of entrepreneurs out there in the marketplace we need we need more of it so it's a pleasure for me to be one of those you interviewed thank you.

Malcolm Lui: You're welcome.

Malcolm Lui: We've been speaking with Darin Anderson, the Chairman and CEO of Salas O'Brien, about his company's rapid growth. For interviews with other fast growing, high value sales companies, or to learn how we can accelerate your firm's high value sales through automation, visit Eversprint.com.

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