I generally resist writing about a company a second time, but Windows Plus of Annandale did something that drew my interest because many other companies are in the same boat.
The co-owners bought a rival with the stilted name Allied The Window Center (reminds me of Michael Jordan's The Steak House). My initial reaction to most acquisitions starts with "Why on earth. . . ?" and goes downhill from there.
But little transactions like this cut right to the heart of perennial issues facing thousands of small-business owners across the country. What do you do with your creation as you wind down toward retirement?
Sell to a competitor? Sell to employees? Bring in a family heir?
Windows Plus timed the acquisition of 60-year-old Allied to take advantage of growth in Fairfax County's evolving Annandale section, where income is climbing, businesses are expanding and the upwardly mobile immigrant population is pushing a wave of home remodeling.
There's even a whiff of the Warren Buffett playbook: buying a well-run family business that commands a loyal following that's hard to duplicate.
"What we got is nothing sophisticated, just a company with boots on the ground, an outstanding reputation for service and known by everyone in Annandale, " said Kimberly Wayland, senior vice president and wife of a co-founder of Windows Plus & Allied The Window Center.
Windows Plus co-owners Reg Wayland, 55, and Tom Camarca, 50, say they got a great deal that will more than double revenue in the next four years and allow them to sell the business for millions and retire comfortably.
Wayland and Camarca, who have been business partners since 1990, closed the Allied purchase in February.
"We have something that we will be able to sell for a lot of money," Reg Wayland said.
His number could hit high, single-digit millions, which divided two ways . . . well, you do the math.
How did the acquisition help?
Reg said the purchase doubled his database list of customers to more than 13,000.
The acquisition of Allied, with its storefront headquarters and name recognition, is expected to boost the residential side and its heavy reliance on individual homeowners who want hand-holding.
"This gets us back into residential," Reg Wayland said. "It will be 40 to 45 percent of our business."
Windows Plus makes nice money, but the acquisition may make it nicer. Wayland expects $1 million in new revenue by next year, putting him above $4 million and on the way to $5 million by 2019. His goal is to get $5 million to $7 million in revenue by 2021.
The company earns a 10 percent net profit after taxes, which should throw more than $350,000 to the bottom line this year.
Compensation for Reg Wayland and Camarca comes to about $275,000 each, including salary, retirement contributions, take-home vehicles and a year-end bonus.
The company has 10 employees, medical benefits and a 401(k) match. A salesperson can earn up to $100,000.
Windows Plus sells and installs windows. It does not manufacture. Its bread and butter is installing replacement windows in detached homes, townhouses and condominiums.
It also installs siding, doors and specialty glass. A replacement window is just what it sounds like: It is used in remodeling to slide into an existing rectangle occupied by its predecessor.
Since I first wrote about Windows Plus seven years ago, its condominium business has exploded. It is nearly 80 percent of revenue, thanks largely to the relationships the co-founders have forged with the management companies that run large condominiums and developments.
The company serves all three markets in the Washington area, but it is concentrated on capturing the Northern Virginia market because of Allied's existing customer base.
Windows Plus is carefully integrating Allied The Window Store to fully exploit its deep attachment to the Annandale community. Allied's name was added to the brand. The two companies moved into Allied's popular downtown offices and showroom, where foot traffic is high. Even the company's new hires are local, in the hope that their experience and contacts will bring in more business.
Wayland and Camarca are Annandale lifers, and both started in construction after high school. They met playing in a flag football league and decided to go into business for themselves.
In 1990, they started a general contracting company called TRS, which stood for The Right Stuff. It rehabilitated kitchens and bathrooms, and built home additions.
Their incomes soared to $100,000 each, but they eventually got out of the general contracting business in favor of window installation. They liked its simplicity and profitability — and the fact that their profits were not dependent on a raft of contractors showing up on time.
They incorporated Windows Plus in May 2000, and it has grown into a comfortable business.
The partners focused on avoiding bottlenecks and delays. Windows Plus does the sales, orders the windows, schedules the appointments and everything else. The installations are handled by their set group of subcontractors with whom they have long relationships.
"It's no different than having a permanent crew," Kimberly said. "We have a very trusting relationship with these guys."
Windows Plus relies mostly on word of mouth and referrals, but the co-owners do their share of networking, lunches, dinners and association meetings. The rest of the marketing ranges from yard signs to Washington Consumer Checkbook.
Kimberly and Reg Wayland said the Allied opportunity came along at the perfect time.
"The Allied family [Dean family] could not carry on and manage the business in the same way as they had for nearly six decades," Kimberly said. "They had made their mark. It was time to pass the baton. This is where we came in."
Allied first approached another competitor, and the owner declined because the businesses catered to different customers. But during the negotiations, the competitor suggested Windows Plus.
Reg Wayland said he got a deal.
"I thought they would want $250,000 for the business, and they took $60,000 over three years," he said. "I was shocked."
He bought the Allied The Window Store building for $675,000, which has real potential to increase in value, thanks to the growing economy. Windows Plus sold its own building for $300,000, turning a $60,000 profit on it.
"We never thought about buying another window business, but they had a great reputation and had everyone in Annandale following them," Reg Wayland said. "Windows are a pretty tight niche."
Potential buyers have sniffed around the business for years. One young Harvard graduate circled for a bit. Some large property management companies could be interested because it would give them installation and sales capacity overnight.
"When the time comes, we know we would have to be comfortable with who is on the other end," Kimberly said. "We would reach out to our financial advisers, management companies, close allies and business partners, family where feasible. Whether we sell in five years or 10, we structure our company and operations to be prepared — to be 'dressed up' for the occasion."