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.”

Anita Campbell Anita Campbell is the Founder, CEO 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.