Bahman Azarm, owner of Solo Construction Services Co., in Southport, Conn., heard through the construction community about a local remodeling company owner who was struggling. Azarm knew of the contractor, and viewed this as an opportunity. That was four years ago, at a time when Solo Construction Services typically ran about eight jobs. "I called and told him we had a lot of work," Azarm says. "I said I was looking to hire someone, I knew he was good, and would he consider working with us? He said: ‘Let me talk to my wife and think about it.'" That former company owner still works for Azarm and is "doing quite well," the remodeler says.

Hiring former owners as carpenters, project managers, salespeople, estimators, or office managers can be a big plus for all concerned. The hired gets a job and the one doing the hiring adds to his staff someone who knows how homes are designed and built, products ordered, work sold, and change orders processed.

Sweet and Sour

But hiring a former owner as your employee can also have its drawbacks — big ones. Issues around job control, job costs, and supervision could emerge if you don't do your homework. The same personal problems that led that former owner to falter or give up on his business — a messy divorce, a substance abuse problem, financial irresponsibility — could just as easily prevent him from being a good employee for your company. So although the benefits of hiring a former owner are often great, the opportunity also carries with it certain risks. You'll probably be paying them more money, and if they come to work for you and fail, the result could be an issue of morale. 

"They're usually guys who are tired of the rat race and can't stand the pressures," says Gary Crowley, owner of Crowley Construction, in Colchester, Vt. Crowley, who has had former owners respond to employment ads he has placed, says that he prefers to hire such people as project managers because "they can run their own jobs, and they understand the business aspect of remodeling so that I don't have to explain it." Crowley says that means in hiring a former owner, he'll need to spend less time on jobsites himself.

Due Diligence

The responses to the following three questions can determine whether or not hiring that former owner will work out for you. First ask about why he gave up owning his own company. "Find out how and why he is available," Azarm suggests. That will tell you a lot.

Second, does the position you have in mind for him actually match his skills and talents? Many former owners weren't good at either selling, estimating, or design work, which is why they got out of the business to begin with. So are you hiring him to sell or to manage projects? Is estimating part of the job?

And third, given what you know about the former owner's personality and work ethic, will he be a good fit with the culture of your company? You could be hiring someone who challenges your authority at every turn, and you likely won't discover this until it's too late.

Not all former-owner stories have happy endings, of course. Some former owners never quite blend with the company that hires them. They bring bad habits or are haunted by their inability to sustain a business of their own. "Sometimes there's resentment that they weren't able to make it happen for whatever reason," notes Bob DuBree, owner of Creative Contracting, in North Wales, Pa.

In DuBree's case, he hired a former owner who was an excellent carpenter but "had a chip on his shoulder" and left to once again start his own company. Another former owner he had hired said "all the right things," but after he left, employees, clients, and vendors came forward to unload about him. "They said: ‘Boy am I glad he's gone.'"

The upside of hiring former owners is the technical skill and experience they bring — something it would take a long time for novices to acquire. For instance, over the years, the various office managers at Billingham Built, a design/build remodeling company in Erwina, Pa., rarely understood calls from the field involving detailed descriptions of change orders to be priced and processed. They simply didn't know construction. So when the local National Association of the Remodeling Industry chapter called in response to owner Joe Billingham's need for a new office manager, Billingham had the chance to hire a former cabinet company owner and kitchen/bath designer.

"He was comfortable with QuickBooks and with my systems for estimating and contracts," Billingham says about office manager Cliff Root. More than that, Root, who also had experience working in the IT department of a law firm, suggested that the company acquire a construction management software program called BuilderTrend, and proceeded to install it. Now, through the company Web site, Billingham Built clients can access plans and drawings, project pictures, and a separate private e-mail to keep tabs on how their jobs are going.

"There's nothing I enjoy doing more than construction and design," Root says. "I just was not interested in having that level of responsibility anymore."