Starting Out with Nothing but High Expectations

By Thomas G. Dolan

May 2007

"I started out with really nothing, when the economy was at its worse, recalls Dave Wallraff, president, Imperial Wall, Inc., Centerville, near the Twin Cities, Minn. "I began basically chasing after tenants, simple jobs. Out of every 100 bids, we might get close on five, but only get three.”

Yet against all odds, Wallraff has built a business that has continued to grow. He opened Imperial on March 10, 2003. (Incidentally, he explains that the company name, though impressive sounding, is not as arrogant as it first appears. "Imperial” is the name of the street the business was on when it started, and "Wall” refers both to his specialty—drywall—and part of his last name.)

Sales in 2003, for the first nine months of business, were $1.5 million. In 2004 they were $4 million, and they continued upward to $7.5 million in 2006. In other words, for someone who started at the bottom, Wall­raff worked his way up very quickly, and has continued on an upward path to success.

So let’s back up to get the full story.

Wallraff started working in a drywall company while putting himself through college toward a degree in civil engineering with a structural emphasis. When he graduated in June 1979, he was offered a job by that company as a project manager/estimator. It started out as a good job and stayed that way for many years, but toward the end, the previously nurturing management had soured. Wallraff found himself in an environment he didn’t like, saw that advancement within the company would be denied to him, and felt used.

"Things were not working out; my blood is not turnip juice. I had been in the drywall business for 23 years, so I felt I owed it to myself to see if I could start my own company.” Yet Wallraff also indicates he did not have a burning ambition to start his own company, and if he had been treated fairly by his former employer, he would have been satisfied to remain there. "It was scary,” he acknowledges. "I was one of five siblings, and the only one to try to start a business.”

On the other hand he says, "I’ve always had high expec­tations for myself, so once I decided to do it, I believed I could pull it off.”

Getting Started
Although Wallraff knew the industry well, he knew little about starting a business. He sought out a nonprofit organization in St. Paul, called SCORE, which helps new companies get started.

"I was advised to get a good banker, lawyer and accountant,” he says. "I was told what to borrow and what not to borrow, and how to articulate a business plan that would make sense to a banker. I needed a lawyer to get incorporated and provide the legal foundation for the company, and an accountant who understood the construction business.”

Wallraff says he is now on his fourth accountant and has gone through two sets of lawyers—not because he fired them, but because they moved on to other projects. But in that time, those people provided him with what he needed.

Wallraff also joined the union and the Minnesota Drywall and Plasterers Association. He also joined the Builders Exchange of St. Paul, "which was a great source of finding projects in the open market and a place to review plans.”

Although Wallraff had his business plan, which he adhered to, it happened that he started "at the bottom of the market, and when I went out to get work it was a real eye-opener,” he says.

It took about one and a half years before the economy started to pick up. Most of his jobs were in high-rises in which a resident would build on a floor or renovate an existing space. There were the times of "hard odds” of getting only "2 to 3 percent of the bids we put out.”

Wallraff says he was doing what he knew. But he discovered that "often times it’s who you know. I was often thrown out with the low bid because I didn’t know the individual there.” How did he get over that hurdle? "By putting your face in front of a lot of people,” he replies. "By doing that frequently and diligently, you eventually end up being at the right place at the right time.”

After proving himself with the tenant work, and as the economy began to pick up, Wallraff diversified into other areas. "Once you get some jobs and show you are good at problem-solving and service, you get a good response. In this industry, good relations go further than a low bid.”

You have to maintain a good image by always acting very professional and putting up a good product, Wallraff says. But you also have to "understand schedules. Here I feel I really provide a service. The general contractor is often going to be under pressure and feel the need to push the job. We try to understand what his needs will be according to the schedule and get a little ahead of the process; we try to see what the roadblocks will be and solve them before getting pushed. And, if they end up pushing anyway, we embrace it rather than resent it.”

Wallraff believes in being very responsive to criticisms and correcting mistakes right away. He saw that lacking in the previous company he worked for. "I knew I could do better,” he says, "A lack of responsiveness to the customer [hurts business]. You can spend six months working on a project, but if on the last day you don’t show up for the punch list, that’s a black mark against you. You didn’t end the job in a positive way. Then it will take 10 positives to end that one negative.”

Heavy Estimating
One area in which his years of experience helped Wallraff is in estimating. "We start out every year and calculate what our costs will be, direct and indirect, and then based on that dollar amount plug in reverse engineering to see what our volume must be, what we must do to cover our costs at any particular time and make the profit we intend. We monitor our plan so we know where we are at any given time.

Wallraff looks at not only direct costs such as the cost of goods and labor, but all the indirect costs, overhead and administration expenses, all the costs associated with vehicles, all the project manager/estimator and office staff salaries, workers’ compensation and general liability, and even things like cell phones, which, he says, is a big one.

Wallraff says, "I’ve been told by our bank and others that we do a good job in this area … many companies don’t know what their total costs are.”

While Wallraff believes his best asset is his estimating and project management expertise, he says, "The toughest thing for me was finding out about interpersonal communications and how to grow with your employees. I have high expectations for myself and others, but people have different needs and different wants. You try to make everybody happy, but the reality is that you can’t. You just have to set standards and go for them. It really is difficult to make it right for everybody. About a year ago I realized it was going to be mentally challenging to put it all together, and I started to feel the fatigue, pretty much because I had been trying to do too much by myself. Now I’m starting to delegate more.

At times his labor force dropped to as low as six people, but currently it has been built up to more than 80. "Not everybody is as equal to the next guy, so you need to grow and go back and retain your best workers,” Wallraff says. "It’s part of the growing pains.”

But Wallraff reports he has ended up keeping the best employ­ees, which he manages to keep even though the competition has tried to lure them away. "When I started this company I wanted to give to people what would have been nice to have been given to me, for instance not having to ask for a raise, but knowing when it would happen. In fact, some of his best employees came from the same company he previously worked for, because they were as disenchanted with it as he was.

An interesting dynamic to Imperial’s growth is that Wallraff has tended to look not so much at the jobs as building blocks but rather the estimators/project managers he’s system­atically hired. Currently there are five, including himself.

He’s known all of them through his past work in the industry. When he brings them on board, he is clear that he is hiring them not only for their professional skills but because of the contacts they have. They are expected to translate these contacts into new sources of work, and are rewarded accordingly.

Wallraff says that with the high expectations he put on himself, "I didn’t want to fail, but in the process, I broke all my rules about raising a family.”

His work took almost all his time, 7:30 a.m. to 5:30 p.m., and then taking the work home at night. But now that his business is on solid ground (after fewer than five years!), he’s putting his life in balance by putting more time into his family.

Wallraff, 45, and his wife, Lisa, recently cele­brated their 20th wedding anniversary by taking a trip to Hawaii. He’s taken up downhill skiing with his two sons, Hayden and Camden, and takes time for golf, fishing, and his hobby of woodworking. In other words, Dave Wallraff has high expectations for himself not only in business but in all areas of his life.