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How to be the next Inc5000 company (insights from B2B companies that made it) – Part 2

Every entrepreneur dreams of the moment they’ll make it to the Inc5000, a signal of success and industry recognition. We are interviewing B2B Inc5000 companies to crack the code of HOW to get on the list (and ideally stay on!). This series will hopefully become the playbook to your success too. Today, we’re interviewing David Marceau, Founder and CEO of Ridgefield One.

NXT: What prompted you to become a business owner and start Ridgefield One in 2010?

It was out of necessity, because my previous job started to cut our salaries. That wasn’t going well with me so I decided to start a staffing company.

NXT: But wasn’t that a big risk? How did you feel comfortable enough to take the plunge into entrepreneurship?

By the time I started Ridgefield One I was building a new book of business for the fourth time because I had been recruited to do it in the past. It gets easier each time.

My partner (Mom) and I had some personal savings socked away and we used that to fund the company until receivables started to come in, which was fairly quick because I was able to make several placements within the first two weeks of being in business.

It was a huge risk but I was confident I could do it once again!

NXT: So how does a staffing company work? How do you go about finding candidates?

There are two sides of the business – one is the sales part where you try to get clients and opportunities; and the other is also a sales process but has to do with finding and engaging the right candidates so we have a pipeline of talent to place.

We use about a 75% outbound and 25% inbound marketing. We do a lot of advertising: mainly through job boards, a combination of print and online advertising… and radio is something we might revisit in the future. We also work a lot with state and non-profit organizations geared towards helping people find work.

NXT: What was it like in the beginning? How did you expand your business?

We started out as an IT staffing company, and at our company’s 2nd anniversary, I made a decision that we were going to be a $50 million company. Why 50?  Because that’s a good point where we can start acquiring other companies, or become a good acquisition target.

It became clear that being in the IT industry alone wasn’t going to help us achieve that goal.

We then experimented with different verticals, and after some successes and failures we decided to focus on the light industrial sector. (Here’s a definition of light industry)

NXT: How did you experiment? What did that entail?

We’ve written new business plans that never got off the drawing board and we’ve done presentations with VC’s on totally new products and services. The furthest we got was to start a new company doing Environmental Staffing because one of the recruiters who wanted to come work for me had prior experience in it. We tried it out for two years before deciding that it wasn’t a good business to be in and we divested it.

Along the way, we started the Light Industrial business because another recruiter who wanted to jump ship and come work for me had prior experience in that, and it turned out that Light Industrial was a better, more stable business. So we stuck with it and have put a lot of resources into growing it. It helps when you have people on your team that are knowledgeable about a certain industry.

NXT: So what’s different about light industrials that’s so much better? How did you figure out that it was a much better business to be in?

I was able to identify that the light industrial sector had a high barrier to entry, but once you’re in it’s easier to scale. That’s why we decided to focus primarily on light industrial, because the IT sector had low barriers to entry but it was harder to scale.

Anyone can start an IT staffing business because it doesn’t take many people to run it (I’m a testament to that). Which makes it more difficult to become a larger & established company, since you have to fight newcomers all the time. It’s also harder to scale the IT side because it’s reliant on internal employees who have strong technical knowledge and who can also withstand the gruelling labour of constantly selling and recruiting.

On the other hand, Light Industrial requires a lot more infrastructure, organization, and management because of the volume of people you have to place. But also, Light Industrial doesn’t require the same technical background so it’s easier to find employees who work hard and enjoy helping people without also requiring them to learn all about programming and the Best Practices behind it. So it’s easier to scale, once you have the infrastructure in place.

NXT: How is Ridgefield One different than so many other staffing firms?  Why are clients choosing to work with you and come back?

There are 3 key things that we do differently and have been instrumental to our growth:

Better solution

First, we provide a better solution for our clients. A lot of people enter the staffing industry to ‘get rich quick’. As a result, they often lack the skills, experience, or patience to properly qualify candidates. We spend more time on candidate qualification, and build a deeper pipeline of talent.

This takes more time but translates into premium pricing AND stronger client relationships. Because a properly qualified candidate is going to stay at a job longer, and our clients avoid the high costs of turnover.

Being proactive

Second, I think many people forget a big difference between B2B and B2C. When you’re in the B2B business like we are, you HAVE to get out of your chair. You can’t be an order taker. A lot of people fall into this trap – they put up a sign, build a website and think that business is going to come to them that easily.

It’s a relationships-based business, you have to go out and MEET people, and you always have to be selling but not in the sense that you’re giving a pitch.

Superior customer service

In general, I hire caring, conscientious people who develop a passion for their work. They choose to make themselves available 24/7 – I will sometimes email my staff while they’re on vacation, not expecting a response until the following Monday but then I get an immediate response. I have to write back to them and tell them to put down their phones and forget about work for a few days.

NXT: How has your business grown from 2010 till now?

At the beginning with our IT focus, we would generally have a dozen or so openings, and a few permanent placements here and there. Going into the light industrials sector and expanding into two more states have been key to our growth.

Now, we have 70-120 openings depending on the needs of our clients.

What’s great for us in the light industrials sector is the high level of turnover in people. It’s just the nature of the business… people don’t stick around for long. Which means that there are always positions to fill.

NXT: Despite your rapid growth, I noticed that you have an internal staff of only 4 people…

The goal right now is to make sure we grow and increase our profit margins every year. So far, the few of us are able to handle the workload. In our first year, we started with 9 employees because I thought it would be a sign of ‘growth’ to have a specific number of people. But it just increased our overhead costs, and it wasn’t sustainable. Right now, we’re able to staff and manage 150+ openings before we need to think about bringing on additional help.

NXT: How did you start with 9 employees “out of the gate”?

Our first employee was someone I knew, who trusted me. It was still the Downturn so all of our internal employees in our first year were out of work and were therefore willing to take a chance on a start-up.

NXT: What do you wish you knew earlier when you started the business?

Financial management. In the beginning, I was too focused on revenue generation and allowed others to manage my financials, which was a mistake.

It was only when I took on the role of CFO/Controller about two years ago and really dug into the financials that we began to see a turn for the better.

Understanding the cost side of the equation can be the difference between being in business or out of business.

NXT: What are you struggling with now?  

I’m looking to focus on more strategic things to grow the company. In the beginning, I was the one doing the outreach and landing clients, but now I’m at a point where I want to be more hands off so the machine can run itself.

It’s like, if you’re a construction worker and you run a construction business, you can’t be both at the same time. There comes a point where you have to focus more on the business, and the operational side doesn’t need your individual contribution.

NXT: What advice do you have for newer business owners?

Step outside of your comfort zone! Especially if it will help you run a more stable company in the long run. Going back to my CFO role, I had a fear of handling the finances because I wasn’t sure if I was going to be good at it. It was something I had never done before and avoided for a long time. But it got to the point where I could only rely on myself.

NXT: What are some industry trends that you’re seeing in the staffing industry? How do you plan on growing the company even more?

I’m a Board Member on the Connecticut Staffing Association, and every business owner has the same problem: we can’t find enough good people to place. There’s a tremendous amount of demand for employees, and not enough supply.

One of our growth strategies is to look for people in surrounding counties, and help people find transportation for the jobs we’re fulfilling. We’re investigating into ways to expand that further and look nationally for candidates.

The difficulty there is that it’s hard to convince somebody to move their entire families for a light industrial job. Unlike in the professional sector, a job seeker will move their family for a pay raise and help boost their career forward. That doesn’t happen in the manufacturing business, but we’re looking to change that mindset.

 

A huge thanks to David Marceau for his advice and insights as a business owner. He is the CEO and Founder of Ridgefield One, a staffing company focusing on the light industrial sector. Currently, his company spans three states: Vermont, North New York, and Connecticut.

Ridgefield One

Tessa BoardStudios.com

Tess is a Business Development Associate at Board Studios Inc, an animation production agency that helps B2B companies simplify and communicate more effectively. She's passionate about B2B business models & marketing, and spends a lot of time working on partnership development, content marketing, and scouring for the best business books for BookVideoClub.com. Her blood type is an authentic caffè macchiato.

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