Morton, project manager.
(Brian McDonald)
Company: New England Construction
Owner: David Sluter
Year founded: 1985
Employees: 27
Location: 293 Bourne Avenue, Rumford
Type of business: Design and construction company
Annual revenues: $20 million
Ask David Sluter now and he’ll likely tell you that the most important aspect of building anything – from a house to a business – is a sound foundation. But 16 years ago a foundation wasn’t so important as he developed New England Construction with little knowledge of how even to use a hammer and nails.
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In fact, he said he built his business from the top down, applying his business acumen to an industry with which he had only passing knowledge, but one that was booming.
“Most people in this industry started with a hammer and nails in their hands,” he said. “But not me. I had the business skills. It was definitely made easier by the strong market.”
At first the company dealt only with pre-fabricated steel buildings – but soon grew to include more design and build projects.
“When we first started it was just me and my brother,” Sluter said. “We wanted to keep it simple. But as the years went by and we started branching out we were able to hire people with more experience.”
But success would not always be easy for Sluter. In the early 1990s, the country was deep in a recession, and the foundation of New England Construction was also being threatened. The company was forced to lay off some employees, and cut the salaries of remaining employees in half.
“Our profit margin dropped from $4 million to $800,000 in a one year period,” he said. “We barely survived.”
Sluter, who himself was no longer taking a paycheck, saw the condition of his company as a reflection of his own ability to manage the business.
“I realized that I didn’t know enough,” he said. “What I thought I understood, I really didn’t have a firm handle on.”
As a result he enrolled in a management program for small business owners at Harvard Business School.
“It’s like a mini-MBA program,” he said. “It’s three weeks a year for three years. The first year I didn’t even have the tuition for the first year, but I knew it was something that I had to do.”
Today, Sluter believes it was his decision to enroll in the program that has made his business so successful.
“It was the best thing that I ever did,” he said of the program. “When we came out of the period we were committed to success.”
According to Sluter one of the biggest challenges his company has faced since coming out of the recession is assembling a team of professionals capable of expanding the operation.
“Building a good team is one of the most difficult things to do,” he said. “We spent a few years learning how to do that and then piece by piece we have gotten key members to in place.”
Today the company has 27 employees including a human resources manager, three architects, a sales force, and a designer. The key now, Sluter said, is to keep them all challenged.
“Now we are focused on keeping everyone challenged, motivated and focused on change,” he said. “In business you are either moving ahead or losing ground, there is no such thing as a business standing still. If you aren’t changing more rapidly and in the right way, you are falling behind.”
With a customer base that includes all of Rhode Island and parts of Massachusetts, Sluter said his company does a number of things to set itself apart from other companies in the industry.
“We look at the market differently because we are a design-build firm,” he said. “We have limited competition with other specific design build companies. That doesn’t mean that we don’t compete with other companies that can hire an outside architect, it’s just different.”
While the company gets much of its business through referrals, Sluter said his it also has an active sales force that is constantly searching out new projects.
“We have to find people early in the design process if we are going to get the work,” he said. “We actually have a full-time sales force that is unbelievably focused. They are always trying to develop relationships and open the lines of communications.”
And when you are dealing with small to medium size businesses, Sluter said, communication is key.
“Because construction is very risky, we always want to be careful,” he said. “That means one-on-one communication with our customers. That means me sitting down and talking to the president of the company and finding out just want he or she wants out of the project. That way all of the expectations are met.”
The philosophy seems to be paying off. The company has experienced rapid growth over the past three years – growth that is only now threatened by a lack of property.
“A critical issue is definitely finding good property,” Sluter said. “Not only do you need to find good property, but you need to find property that is zoned for the particular use that you want to use it for. That’s becoming increasingly difficult.”
For Sluter, it’s just another challenge to conquer and another lesson to learn.
“You learn by making mistakes,” he said. “I am constantly learning.”
