Alright – so today we’ve got the honor of introducing you to Adam Starek. We think you’ll enjoy our conversation, we’ve shared it below.

Hi Adam, thanks for joining us today. Risk taking is something we’re really interested in and we’d love to hear the story of a risk you’ve taken.

I went to Colorado College and majored in Philosophy. I ended up transferring to CU Boulder, and the same year my parents began construction on three really unique post and beam straw bale buildings on their new farm (our childhood home burned in the Four mile canyon fire years before). I decided to defer my application to CU for a year to work as a laborer, and then a carpenter for the General contractor doing the construction – Leaf Running-rabbit (Owner of Running-rabbit Fine Art In Home Building). I learned a lot and really enjoyed working with my hands. After a year off, I finished my philosophy degree at CU Boulder and began my job search. Jobs were hard to get in the aftermath of poor economic conditions in 2012. I had a good gpa and a degree from a good school (in my opinion!) and I applied to 40 or 50 jobs and got nothing. All were entry level and payed less than carpentry, but I thought I needed to ‘use my degree’. So I went back to working for RRFAHB as a carpenter, worked my way up to lead carpenter. At that point Leaf had a general manager running the company. He eventually burned out over the stress and I moved into the General manager position, running the whole business for a cut of the total profits. After two years Leaf decided to retire and I was faced with a choice – risk losing my job (if the new buyer didn’t want to pay me, but do my work them self), or take the risk and buy the company. I was able to get seller financing, so I only had to pay 10k down, and put the rest on a 7 year loan. It felt like a lot of pressure, and I didn’t know if leads would keep coming in or not . And I always had the option to try to start my own business from scratch, but that seemed to come with even more risk (even though I would save hundreds of thousands of purchase price).

Luckily I had the opportunity to see all the numbers first hand for two years, and I felt that I could pay off the loan and still pay myself. I took the jump, re branded to Running Rabbit Home Building. I made a new logo and website and hustled. I Did all the office work, and managed every job, and continued to do 750k-1m in revenue for a few years.

I have now owned the company for 5 years and don;t regret a thing. We have a great pipeline of jobs coming in, a long list of happy clients, and good relationships with many architects around town. Last fall I sold 49% to a new partner, and we are growing! We did 2.4M in revenue last year, and we now have 4 project managers besides myself. We transitioned our carpenters from 1099 subs to W2 employees, and we continue to add benefits, grow the business, and improve our clients experience.

When I bought the business I wasn’t really buying any assets, just the name recognition, and the current jobs and crew. It felt like a big financial risk and burden, but It turned out to be a great decision.

Great, appreciate you sharing that with us. Before we ask you to share more of your insights, can you take a moment to introduce yourself and how you got to where you are today to our readers.

Running Rabbit Home Building Inc provides residential contracting services. We do Additions, remodels, and new builds in Boulder County CO. We take all jobs – from a bathroom remodel or a deck, all the way to custom new home construction. The biggest gripe I hear about contractors is that they don’t pick up the phone – We are very responsive.

We work for cost plus, so clients see every receipt from home depot, every invoice from subs, and clock in’s for every hour worked by our carpenters – plus the markup. No hidden costs or fees – full transparency.

I think we fit a good niche of being small enough to be cheaper than the most premium contractors in the area, but the quality is just as good (we use many of the same subcontractors) – we just don’t have the large overhead.

We are responsive, flexible, transparent, and provide a really high quality product.

Can you tell us about what’s worked well for you in terms of growing your clientele?

Growth is a funny thing. My business partner wants to have a 5 year plan with revenue and growth goals – and I think it’s a great idea, I just don’t know that you can actually plan something like that and just ‘make’ it happen. The best path to growth for us is to get bigger jobs. 20 jobs a year many only 25-100k, (plus some in the 250k-750k range) might be just as much revenue as two 1M+ new builds.

But I don’t get to just decide to do a 1M new build, a client has to come to us with plans and a budget for a job that big, and only then do we have a chance to get that job.

So in my mind we do the best we can on every job we get, eventually our network of happy clients, and architects we’ve worked with bring us larger and larger jobs, and we can slowly work our way up.

I see growth as something you can’t necessarily “make happen”. But you can plan for it and work hard and hope!

We’d appreciate any insights you can share with us about selling a business.

I recently sold 49% of my business to a partner. I floated the idea to him early on, but I didn’t push too hard. We ended up mulling the idea for a year or so before it actually came together one afternoon on a long phone call. Valuation is the hardest thing, it’s so easy to justify the price 100k higher or lower, and each party naturally sees it opposite. My business ended up selling for about 3x profit (both when I bought it, and when I sold 49%). From my time spent scrolling bizbuysell it seems many businesses sell for between 2-5 years of profit (with some grey area around how much the owner is making ‘before’ profit. By these numbers it seems like it’s never really worth it to sell a successful business, and when I breakdown these numbers to my friends that’s what they say: “why would he sell it to you if he could have just kept paying your salary for 3 years, and then continued to make a profit forever?

And in many ways it felt the same selling it. The business pays me and my partner equal shares, and ideally his share of is enough for him to pay his bills each month – including paying me for his share. So he’s ‘buying’ himself a job that pays enough to cover the price. Things may not be easy until the loan is paid off, but once it is the numbers get much better.

Contact Info:

• Website: rrhomebuildinginc.com
• Instagram: @runningrabbithomebuilding
• Facebook: https://www.facebook.com/runningrabbithomebuilding

Image Credits
Amelia Ann Photo http://ameliaannphoto.com [email protected]