by Christie Chisholm, New Mexico Business Weekly, April 12, 2010
Rochelle Williams and Sid Hamilton didn’t expect business to spike right away when they bought the Construction Reporter in January 2008.
But 26 months later, they’ve seen revenue rise more than 40 percent.
While the company was once solely focused on New Mexico, it has expanded to serve Arizona, southern Colorado and parts of Texas.
How have they accomplished all that during the country’s worst economic meltdown since the Great Depression? The Construction Reporter finds and publishes contract documents for commercial construction projects. The information it publishes helps architects, contractors, engineers and suppliers find much of their work. And with the construction industry hit hard by the recession, the services that come with a subscription to the Reporter are even more valuable.
But that’s not the only reason business is booming. Williams and Hamilton have revamped some aspects of the 60-year-old company. In their first year of ownership, all revenue that didn’t go into operational expenses was reinvested into software and hardware upgrades, staff training and a new Web site.
“When we took over the business, we looked around and became aware that it was a grow or perish situation because of the changes in technological innovations,” Williams says.
The business once revolved around paper—printing “spec books” containing the details of projects, providing rooms filled with drafting tables for clients’ use. But today, cutting-edge software takes center stage for the Construction Reporter’s clients, so it must in their company as well.
A year ago, Williams and Hamilton purchased proprietary software they say has revolutionized their business. The licensing for the software costs $2,000 a year, and they spent about $100,000 modifying it to fit their exact needs.
IPIN (Internet Planroom Information Network) allows clients to see all projects that are up for bid as well as all pre-bid projects. It also lets companies see who’s looking at their projects and what people have bid on.
The Construction Reporter offers paperless project distribution, too. It’s not unusual, Williams says, for large projects to require $40,000 worth of paper reproduction—but that cost can be eliminated, along with shipping fees, when reproduction goes electronic.
Williams and Hamilton say one of the biggest growth drivers for the company was advertising. In its six decades, the business had never advertised, they say. After they spent about $30,000 on ads last year, membership skyrocketed.
When Williams and Hamilton took over in 2008, the Reporter had 480 members. Now, it has 710.
Subscriptions cost either $935 or $1,470 a year, depending on whether clients get basic or premium services. While the two declined to disclose the purchase price for the company or its revenue before they bought it, their 2008 revenue was $850,000, and last year’s was just over $1 million.
The business has gone from seven employees in 2008 to 13 today. Employees now get a $500 per year tuition credit for any classes they take in any field. And, according to Hamilton, staffers receive generous bonuses.
“We believe in treating our employees well,” he says, “making them a part of the success.”
Williams and Hamilton did have to let three employees go in March, but the move was personnel-based and not financially motivated, they say.
Construction Reporter has used its growth to fund community efforts. The company donated 0.5 percent of its revenue last year to nonprofits such as the Roadrunner Food Bank of New Mexico, with a goal of increasing that to 1 percent. It has sponsored events like the Ronald McDonald House’s charity golf tournament in the state.
But along with the business’s growth has come a steep learning curve.
Neither Williams nor Hamilton has prior business experience. Williams previously worked as a nurse, primarily to support her writing. She’s in a master of fine arts program, concentrating in fiction and poetry.
Williams and Hamilton were married for 30 years before divorcing in 2005. They always wanted to work together, but never had the opportunity until after they divorced. They view it as a way to heal their relationship, and sought counseling to help ensure a good business partnership, Williams says.
“We get along much better as business partners,” she says.
She started at the Construction Reporter in 2006, when Hamilton invited her to do marketing for the company. He began working there in 1998 as a software developer, and his prior experience involved photography and marketing.
The two have relied on the advice of the previous owner, Peter Cronican; other businesses; and a fair amount of trial and error. They bought software they didn’t need, and they made a few hiring choices that didn’t work out.
“We’re learning how to be effective managers,” Hamilton says. “It’s a constant challenge.”
Staying ahead of the competition is another hurdle. Construction Reporter’s competitors include large national heavy hitters like McGraw-Hill. Williams says they’re able to stay ahead of the big fish by offering better prices for subscriptions and not “slicing and dicing” information. And instead of just scanning news and job listings, the company’s reporters maintain daily contact with people in the business.
The strategy seems to work for Rick Thaler, owner of OGB Architectural Millwork Inc. Thaler has been a Construction Reporter customer for more than 20 years. He says about 30 percent of his work comes directly from his membership with the company.
“Especially now that everyone is using electronic documents,” he says, “a service like this is pretty much the only way to stay informed.”
Thaler says he sticks with the Construction Reporter because it works and because it’s easy.
“I wish all my business relationships were as smooth and trouble-free.”