Early in his career, Alon Toker of Mega Builders in Chatsworth, Calif., equated volume with success. He spent most of his time increasing the number of leads and training sales staff to close on sales. By the mid-1990s, the remodeler had 124 employees (including 18 salespeople), a phone room with 24 stations, a 3,600 square-foot building, and more than $8 million in revenue.
In 1999, several factors caused Toker to think about how he ran his firm. First, the cost to generate leads kept rising. Second, he found it difficult to deal with salespeople. Also, as the firm's jobs became larger and more complicated, it placed a greater demand on the sales team. Due to their lack of experience, many of them made promises to clients that were hard to keep. Finally, Toker found he was working as much as he was when he started the business and was not having fun.
Toker now works in a 600-square-foot studio office and all his field crews are independent contractors. He is a project supervisor, his wife is the CFO, and they have one full-time superintendent. Last year the company's revenue was $3.4 million. “It's a very lean, profitable company,” Toker says. “It's the best thing I've ever done for the company and personally.”