How One Entrepreneur Grew Sales to $50 Million in a Mundane Industry

It’s not everyday that you get to interview someone who management guru Tom Peters calls a “superstar performer.”

Successful entrepreneur Larry Janesky, Founder of Basement SystemsPeters was referring to Larry Janesky, CEO of Basement Systems.  Larry runs a business that keeps homeowners’ basements dry.  But if you’re picturing Larry in coveralls installing French drains, that’s not him. Not that he hasn’t gotten his hands dirty in the past.  It’s just that he has other responsibilities now.

Peters calls basement waterproofing a mundane industry.  Others would be more blunt and call it a low-growth, low-margin, headache-filled business.

Larry calls it opportunity.  See, it’s all in your perspective.

He’s grown the business from modest beginnings as a home contractor in the early 1990s, to $50,000,000+ annually, with 150 employees.

Recently I interviewed Larry. I expected a straight-forward interview. Instead I got an uplifting “do things differently and go get it done” interview. I felt motivated afterward. I think you will too.

Larry Janesky offers five principles to run your business by:

  • Improve yourself to improve your company
  • Look for opportunities in your backyard
  • To sell, first educate customers
  • Regardless of your industry, be a knowledge company
  • Bring out the best in employees

Let’s take a look at each of the five and what he says about them.

1. Improve yourself to improve your company

“The quality of a small business depends on the quality of the owner’s thoughts.”  According to Larry, a small business is a reflection of the owner’s thinking. He says, “As the owner thinks, so the business goes. I find that you have to work harder on yourself, than on your business. Far more important than doing, is knowing what you should do, so that you are not spinning your wheels forever.”

He started listening to business audio books over 20 years ago.  He says, “I look around and think, if someone else can do it, I can do it.  I just have to learn what they know.”

He’s even started his own motivational self-improvement email tips series called Think Daily.  “I’m trying to encourage my employees and others to think about their lives.”

2. Look for opportunities in your backyard

You get the feeling that Larry Janesky would be successful in just about any industry, any place, at any time.

After graduating from high school, he started building houses.  The last house he built had a small water problem in the basement, and that is how he got into the basement waterproofing industry.

At first, business was slow. “We didn’t have much in the way of product and couldn’t attract dealers.  Then in 1994 we had a big product breakthrough for a drainage system that I patented.  When dealers saw the system, they came running.”

He says, “You don’t have to hunt for opportunities.  There are opportunities everywhere you stand.”

Dry Basement Science, by entrepreneur Larry Janesky

3. To sell, first educate customers

Basement Systems sells through a network of 300 dealers nationwide.  So they must satisfy their dealers, yet also satisfy the end consumer.

The company operates on a handshake with dealers – they don’t try to tie up the dealers with contracts.  “Instead,” Larry says, “we keep them happy. They pay only for product, but we give them a lot of other stuff for free, including training, business consulting, marketing support and software.”

Surprisingly one of the secrets to their sales success in the waterproofing industry is … books.

Larry has written 4 books to help dealers market. He says, “‘Dry Basement Science‘ is the one we use most.  Dealers send it to their homeowner prospects.  It shows ‘these guys are the experts — the pros’ and it helps the dealers compete. Consumers are more knowledgeable today, with the Internet.”

4. Regardless of your industry, be a knowledge company

Basement Systems has 25 patents.  But perhaps the most surprising intellectual property is the company’s software. The software shows consumers what their basements will look like with the products installed.  Larry calls it “a magical thing.”

“We started 10 years ago with the software concept.  I personally took PowerPoint and tried to turn it into animated depictions of what the customer would get.  But we needed something much more powerful,” he said.

“So 4 years ago we developed a proprietary software program.  There’s a section called “My Basement” and we make it look like the customer’s basement, and we walk them through adding our products in their basement.  The program also generates a 4-page proposal along with an image of what the basement will look with the product.  It can be printed out right at the homeowner’s kitchen table with a portable printer, or emailed to the homeowner, who then prints it out right there.  Sales are emotional.  Aesthetics are emotional.  Show the homeowner the aesthetics, and you make the sale.”

5. Bring out the best in employees

“You want to hire the best you can get, certainly.  But more important than that, you want to set up an environment where they can be successful.”

He goes on:  “We have a number of employees who had moved from job to job before they came here, but never felt empowered.  Here they know their ideas are valued.  We don’t tolerate negative people or gossips who bring everyone down.  We have a cool facility and constantly invest in it, so that people feel good when they come to work.  Everyone has the capability of contributing in a unique way, if you just allow them to do that.”

“When you have low morale, it’s the leader’s fault.  You can bring out the best or worst in people — you choose.”

42 Comments ▼

Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

42 Reactions

  1. Martin Lindeskog

    Anita, Have you interviewed Larry Janesky for your radio show?

  2. Sometimes the most mundane businesses deliver the most rewards because people pass them by in favor of opportunities perceived as ‘sexier’. I know of a company in Oregon that paints the stripes on roadways and has several special trucks designed to do just that. The owner of this company does extremely well doing something we take for granted. When you can make something out of nothing, you can uncover a lot of potential as indicated here. It takes a curious mind and focus to make it work.
    Thanks for this article!

  3. TJ McCue

    Motivated? For sure. But I’m sitting here feeling quite inspired by these golden nuggets of wisdom, enthusiasm, and energy. I couldn’t agree more with Larry’s ideas.

    The one that resonates the most is “educate first.” Selling today, in my opinion, is far less about what you can tell a prospect and far more about how you can share ideas, insights, information that helps them make the decision. Too many times, in sales, we think we have to finish our presentation, finish our pitch, talk to fill every silence. The reality is the buyer is going to make his or her decision for the product/service that fits their needs. I know that sounds like a “duh” sort of comment, but how much pushing do we need to do? We don’t need to push; we need to pull.

    I also love the non-sexy industries, niches. I liked Patrick’s example, too. Awesome. The world is ripe with this kind of opportunity. More, please. More interviews like this!!

  4. Quite motivated, am impress.
    This shows there is no limit to sales when applying the appropriate sales tactics

  5. I especially like number 4 as it shows what lateral thinking, persistence and innovation can lead to.

    It also shows don’t always look at the latest fad for a great business idea.

  6. Denise O'Berry

    He sounds like an inspiring leader. What a great tribute to his success.

  7. Joel Libava

    Anita,
    This business is a great example of something that homeowners never think about-until they have uninvited water seeping into their basements.

    Larry made the decision to use a dealer network to expand his business, and it sure looks like the right one.

    Amazing numbers, and a high margin business.

    Thank you for reporting on a very successful guy!

    The Franchise King
    Joel Libava

  8. Anita Campbell

    @Patrick: “When you can make something out of nothing, you can uncover a lot of potential as indicated here.” To me, that’s the mark of a true entrepreneur … making something out of nothing, or at least out of something others overlook. :)

    – Anita

  9. Martin Lindeskog

    Anita & Patrick Prothe:

    I agree with your comments. An entrepreneur is creator, making things happen. We have to thank the French language for this word. From Answers.com:

    “The word “entrepreneur” (f. entrepreneuse) is a loanword from French. In French the verb “entreprendre” means “to undertake,” with “entre” coming from the Latin word meaning “between,” and “prendre” meaning “to take.” In French a person who performs a verb, has the ending of the verb changed to “eur,” comparable to the “er” ending in English.”

  10. Perry Marshall also spoke about the credibility-building marketing of “Dry Basement Science” in a video on his site.

    http://www.perrymarshall.com/marketing-credibility/

  11. If you have to do number 3 and educate customers that they need your product and your a small business, I think 9 times out of 10 you’ll fail becuase its difficult to educate a market. Probably much better is to ride on the back of a new trend or wave. Much more affordable than educating a market from scratch.

  12. Larry is now on my list of people that I want to meet in person. Such optimism and drive are infectious and I wouldn’t mind catching some of both.

  13. Smart…especially teaching dealers about your product so that they can easily explain to customers why they need and should use your product. Nothing bothers me more than when I ask questions about a product that no one can answer.

    Larry sounds like a very busy man but he would make an excellent expert contributor here. I’d love to read more of his great advice.

  14. Anita Campbell

    Hi TJ,

    It’s so true about education. As Larry Janesky told me during the interview, consumers have access to so much more information today with the Internet.

    Wouldn’t you rather be the one providing the helpful information and becoming a trusted resource, rather than your competitor? If we think about it, most of us would.

    – Anita

  15. Anita Campbell

    Hi Martin, sorry I missed your question earlier … yes, I would like to have him on the show. Thinking of a topic. Or maybe we do a similar topic as this article, but a deeper dive….

    Anita

  16. Martin Lindeskog

    Anita,

    Thanks for your reply. Yes, go deep, down to the basement! ;) I look forward to listen to the interview.

  17. Kare Anderson

    This post is especially powerful – for the “pull” approach he took, providing his dealers with the credible education tools that enable them to focus on relational selling (and not needing to create the books because they were provided with them).

    Like social media, used right,
    educational info (pithy, practical tip sheets, books, ebooks and more) that enable a customer to see the obvious benefit in buying
    will always trump advertising.

    Also appreciated the notion of looking for local opportunities – genuine needs that must be filled (why not by “me”).

    What an inspiring, timely success story. I have three start-up clients I am sending this to.

  18. Wow, this blog really hit home. You are such an inspiration to me as a young entrepreneur. I have been trying to promote my new ideas and have had a hard time figuring out how I needed to do that efficiently. I am publishing my site through multiple search engines and have also put my business link on http://www.CostaRicaHQ.com! These are just a few things that I’ve been advised to do and have gotten some feedback. But your blog really opened my eyes to the possibilities! Thank you!

  19. TJ McCue

    This was running around my head all day, Anita. Thanks for inspiring me, through Larry’s thoughts, to be fearless and empowered. Sometimes the small biz life overwhelms, but posts like these, with inspiring stories and quotes can change the tide (of a company and the person running it).

    1. Improve yourself to improve your company

    “The quality of a small business depends on the quality of the owner’s thoughts.” According to Larry, a small business is a reflection of the owner’s thinking. He says, “As the owner thinks, so the business goes. I find that you have to work harder on yourself, than on your business. Far more important than doing, is knowing what you should do, so that you are not spinning your wheels forever.”

  20. Anita,

    Thanks for another great thought-provoking article. I have several clients that I will be sending a link to. I particularly like points 3 and 4. In this day and age, even the most mundane businesses must think of themselves as knowledge companies.

  21. I would be glad to contribute much more! Anytime Anita. People who would like to follow work I am doing to help other businesspeople can sign up for my blog “Think Daily” at thinkdaily.com
    My new book is awesome (if I say so myself!) and will be printed and available in about 90 days. It’s called “The Highest Calling”.

  22. This success story gives small business owners something to strive towards, such an inspiration! These five principles are things that businesses can easily put into practice, and it shows that they really pay off! Thanks for posting this!

  23. The five points raised are all solid, although in some cases we think it is better to find educated clients (those who already know the intrinsic value of a product/service) than take the time and energy to educate. However the point about showing your expertise to clients is very true.

    The Start Up Sage
    Business Switch
    http://www.business-switch.com.au

  24. When dealing with small businesses a key role is to invest in customer relationships. Once you got a customer it is much easier to keep it than to get new onces.

  25. “If you have integrity, nothing else matters. If you don’t have integrity, nothing else matters.” — Alan K. Simpson

  26. Me gusto el post muy bueno para motivar a uno para ser emprendedor y ver que las oportunidades existe y que solo es cuestion de uno de atreverse o no a tomar las riendas del asunto
    pienso tomar muy en serio estos 5 pasos y buen aporte ojala te saques otro saludos desde lima PERU

  27. I believe number 3 to be of primary importance here. Educate the consumer regarding your product and/or service and your results will greatly improve. This provides real value to your customer base, vs just hitting them with just another pitch. This also helps create referrals.

  28. “I find that you have to work harder on yourself, than on your business.”

    Totally agree with this statement. We can never achieve a level of success greater than our level of growth. So if we want to be successful in business, we must commit to constant and never ending self improvement.

  29. Anita Campbell

    (Editor’s note – I am adding this comment which was emailed to me with permission given to post it. The comment is so inspiring that I wanted to share it here.)

    Anita, I wanted to reach out and introduce myself. Long time reader here. The last year has been rough. New customers dried up since last fall and other customers cut back by as much as 20% on orders. Our supplier with the best prices went bankrupt. We had to let 2 employees go. Looking at the numbers makes me blue. I’ve taken to questioning myself. Then I read Larry Janesky’s article. His advice gave me a stark insight. Suddenly I realized that part of the problem is me. I have given up inside, cried uncle and stopped trying. The article gives me new hope and energy to try a few different tactics. Here’s to a fresh start.

  30. TJ McCue

    Glad to hear we’ll hear more from Larry Janesky!!
    Since he’s a humble guy, I tracked down his new Twitter accounts so we can team up here and help build his Twitter base for him and with him.

    http://twitter.com/LarryJanesky
    http://twitter.com/thinkdaily

    As a quick aside, I know it is a branding decision, but it is one that I’ve gone through a few times. Do I build out my own name as the brand or my small company name. I see great value in building the co name. But since I’ve been mostly self-employed, you’d think it would be only one company name, however, I’ve had several. Some of my companies made it, some flopped. I have now chosen to use my name as my main brand in the social media space as I at least know, with relative certainly, that I won’t ever be known as “the guy formerly known as TJ McCue…”

  31. TJ McCue

    Oh, and I’m second in line to meet Larry after Robert Brady.

  32. There is always hope, Never Give Up! Failures are just a stepping stone to success which everyone goes through including the most successful entrepreneurs, let go of all past resentments, learn from your mistakes, seek new information and knowledge on a daily basis then move on!

  33. Hi , I am finding i agree with you on most everything, We were a small basement waterproofing company so we tried PPC Ads which were costly at 3,k for 4 days when it rained and only getting 1-2 jobs but now we have a hired a full time web designer and seo company that has really took us from virtually non existent online to now becoming a real player in the basement waterproofing business,The best part is we know our budget each and every month which helps our growth and hiring abilities. and know more surprise ppc bills
    Rick

  34. One of the things I appreciate the most about how Larry’s businesses work (and as a former employee of almost six years) is his common sense, disciplined approach to the simplest and most overlooked challenges within the industry. Simply “Come on time”, “Instill confidence in the consumer”, “Use only solutions that will work”, and so on. They certainly innovate the industry in more profound ways, including their virtual basement design technology and their advertorial books, but I think the fact that there is an actual, reliable delivery of service ensured behind each job is the backbone of his success — and a relentless goal for him.

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