Napa Sonoma SBDCSanta Rosa and Napa, California

“For this first time in years, my company is making a profit and that’s a great thing! One of the main lessons I learned from working with NxLeveL and the SBDC was how to work on moving my focus to the strategic development of the company. I now know it’s okay for me to look at the big picture, and bring people into do the day-to-day operations of the company. The strategic thinking is what I am best at, and now I know how to focus my business energies in that direction. If I do the right strategic thinking, everything else will flow.”

Gary Pugh

Background

Founded in 1985, Alternative Building Concepts (ABC) offers residential and light-commercial green building contracting and consultation services. ABC specializes in utilizing highly energy efficient structural insulated panels (SIPS) for residential and commercial applications. Alternative Building Concept’s primary goal is to educate consumers on the numerous energy efficient and environmentally-friendly building options available in today’s market so they can make informed decisions as to what would work best for their project.

Challenges

In October 2004, ABC completed the construction of the renowned ‘NowHouse’ in San Francisco - the original green, digitally integrated, sustainable home built in the SBC Stadium parking lot as a demonstration to display the energy efficient and technologically advanced products that are available now to homeowners. In 2005, ABC converted the NowHouse to a green community center in a low-income neighborhood offering services such as tutoring, health education, workshops, faith-based programs, and community outreach.

Beginning in the last quarter of 2006 and continuing into the first two quarters of 2007, Alternative Building Concepts was facing the triple challenge of a rapidly declining demand for new construction, a tightening lending market and double-digit increases in the cost of building materials and labor.

Significantly declining revenues forced a complete restructuring of operations at ABC, including laying off 90% of the permanent staff. Founder and owner Gary Pugh, after years in the industry, was running out of options on how he could keep his business in operation. Gary Pugh knew ABC was a talented builder, and that demand was growing for green construction, but he was unsure what strategic moves he could make to resolve his increasingly difficult situation.

Actions taken

In August of 2007, Gary enrolled in the NxLeveL Entrepreneur Course offered by the Napa-Sonoma SBDC in Santa Rosa, California. The 12-week NxLeveL Entrepreneur course focused primarily on helping existing businesses develop a strategic plan to fuel growth and expansion. In December 2007, along with 50 other Sonoma County entrepreneurs, Gary became a graduate of the NxLeveL program. Completion of the NxLeveL Entrepreneur Course was a huge step forward in the turnaround of Alternative Building Concepts - but it was only part of the solution.

In late 2007, Gary enrolled the assistance of the SBDC to complete an Rx for Business Program. The Rx for Business uncovered both challenges and opportunities for ABC. The SBDC detailed on-site analysis was pivotal in helping Gary understand the vital issues necessary to affect a turnaround for the business. The SBDC was able to help Gary to identify his top strategic opportunities, including key changes in the financial reporting systems that enabled Gary to make more informed financial decisions.

In March 2008, Gary decided that he needed some additional assistance in helping turn his business around. He initiated a series of one-on-one counseling sessions with the SBDC to focus on issues related to improving cash flow, streamlining operations and expanding revenues. In a series of six sessions spread over three months Gary, along with SBDC guidance, developed a set of key strategic initiatives to turn his company around. Gary built a new financial management system from the ground-up, sharpened his skills in budgeting and forecasting, made the project management process more efficient, became more strategic in operating business, implemented job costing & bidding systems, and put a marketing plan into action.

Results

In July 2008 Gary reported annualized revenue projections of more than $1,500,000 - nearly a 300% increase in revenue projections forecasted in January 2008. Gary has been able to add two new positions in the company, and has also formed a separate company. That company, Pacific SIPsSource, will provide education and sales of structural insulated panels to other green builders nationwide.

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Funded in part through cooperative agreements with the U.S. Small Business Administration, the California Governors Office for Business and Economic Development, and other private and public partners;  and nationally accredited by the association of SBDCs.