CEO Roundtable: Business Year in Review

Each month, we gather around the table with a different group of Springfield business leaders to discuss industry trends, workforce and company operations. Join us as we get a behind-the-scenes look into our business community from the C-suite.

An excerpt from the podcast follows.

Christine Temple: Your companies made up the top three of our Dynamic Dozen list, which is the fastest-growing companies in the southwest Missouri region. We use employee and revenue growth over the past three years to determine those rankings. What has led to the growth within your companies?
Michael Smith: We started in 2018, and really what my business partner and I found was that there was just kind of a missing component in the niche market that we’re in. We deal in property and casualty insurance software. There’s a traditional development methodology that goes with what we work in. It’s a lot of on-site relationship building, and then a lot of offshore development, offshore quality assurance. What we found and what ended up happening with the pandemic was that there was a shift in the nature of the way that our clients wanted to do business in that they wanted more relationship building and getting to know the vendors that they were using. That’s what we grabbed a hold of. We don’t leverage the offshore component; we do primarily U.S.-based resources. We do have an office in Honduras and an office in Puerto Rico that we’ve kind of tagged our near-shore capability. Really for us, it was just grabbing a hold of that client desire to be more relational.
Temple: What was your revenue this past year?
Smith: In 2022, our revenue was around $45 million. 2023 was harder for a lot of different reasons. In the insurance world, there seemed to be a lot more claims paid out than in prior years, which does have its trickle-down effect toward us as far as the amount of spend that the insurance carriers are willing to push out. We’re still having a great year.
Marc Lee: We engineer, procure and construct or install solar, and most of our mix is residential. We might have about 15% that’s a light commercial industrial. So much of our business is about the customer experience. We do in-home sales. It’s got to be about our values and commitment to the customer and delivering the finest products in a timely delivery and making sure that the customer is satisfied. Year over year, we grew our referral at 337%. That is earned business, and that’s the holy grail for leads in our industry. It’s the cheapest cost customer acquisition. Fundamentally, that is why we’ve grown and been so successful in 2023. Let me talk a little about the solar market. It was a bumpy down market. Over 200 solar (engineering, procurement and construction companies) are going under by estimates, and we grew at least 15%. And then the headwinds we face, 85% of our customers finance. With the rise of interest rates, that’s really changed the dynamic. That’s why these companies – they don’t have good bones, the business acumen – and they are going under. We’re 33rd in the nation right now, and we plan to grow up that list.
Temple: You joined the team this year as CEO. Caleb Arthur, the founder, is taking a different approach, a different look within the company. All that said, curious how you guys are going to end 2023? He had projected earlier this year that you might be up to $85 million in revenue, which is almost double 2022.
Lee: We won’t get to $85 million, but we’ve got solid growth. I would say just under $60 million. And then 2024, it’s not when we’re going to get to $100 million, but when we’re going to blow through $100 million.
Brett Roubal: We’ve been around over 20 years and started right here in the basement of Rochette Dahler’s house. Our first location opened up on Chestnut here. There’s a lot of time that went into building out the processes and systems, learning by trial and error to really get that solid foundation. There was early growth using a franchise model and then a shift to just growing through corporate locations. The growth story for Little Sunshine’s really didn’t take off until the mid-2010s. When we talk about our business, you can only grow through brick and mortar. We can’t grow our business through putting another drive-thru in or selling additional product or service because we’re capped by licensing regulations. We can only provide our educational care services for so many children per location. So really, the only way that we can grow is through acquisition or development. But we do not grow through acquisition. We’ve stuck to our philosophy of our brand. We do only greenfield growth. I wanted to get into developing Little Sunshine’s ourself. We had utilized a third-party developer in the past, and so started kind of building up that infrastructure, that network and capital requirements and design team and construction team and development team. We started seeing the fruits of that labor, I would say, last year and then into this year.
Temple: You had about $80 million in revenue in 2022. Projections for 2023?
Roubal: Our operational business will be up about 15%. The development, some of that just depends on timing. We had actually projected to open five additional schools in 2023. But through weather and permitting and basically just through the construction process, four of those are actually getting delayed. We’re going to have an extremely busy January. We’ll open four schools between Jan. 2 and let’s say the first week in February.