Return to Fast Track 2002 Intro Kara Homes, East Brunswick, N.J.
The Need for Speed
If there's any builder on the list that personifies exponential growth, it's Kara Homes. From 1999 to 2001, Kara accelerated from six closings to 105, from $1.3 million in revenue to $34 million--and the growth curve is still headed up. "Every six months we double," says CEO Zudi Karagjozi, who projects 360 closings and $140 million in revenue this year.
The builder's feat of 483 percent revenue growth and incredible 1,650 percent closings growth is all the more impressive given Kara's territory: land-constrained New Jersey, where this fast tracker must compete with big builders Toll Brothers, K. Hovnanian Enterprises, and NVR.
The first secret? Speed. "My least favorite words are wait and can't," says Karagjozi, who draws on a team of corporate "expediters" to keep projects moving. The second secret: an emphasis on sales. "We're a sales-driven company," says Karagjozi, a former land developer and commodity broker. "We have 10 salespeople, and I don't limit them. They know I want them to make the money."
No. of Employees
|1999||1999 - 6||1999 - $1 million||100|
|2000 - 17||2000 - $8 million|
|2001 - 105||2001 - $34 million|
Amber Homes, Aurora, Colo.
No Red Tape
A carpenter by trade, Jim Harmon worked his way through college building homes, eventually landing at U.S. Home and then Pridemark Development (later bought by KB Home).
He took the business management skills he learned to Amber, which he founded in 1998. In just three years, the builder has zoomed from a $2 million company to a $31 million company by focusing on affordable product for first-time buyers. "We're the lowest-priced, new-home developer in the Denver market," says Harmon, whose homes run from $90,000 condos to $180,000 single-family detached houses.
Such competitive pricing comes only with efficiency, which Harmon has developed by encouraging collaboration among employees and subcontractors. That type of teamwork has kept Amber fast-moving; a cross-disciplinary team of three created and launched the company's Internet-based purchasing and scheduling system in 90 days.
"My philosophy is this: I come from a big builder background. I like to use big builder systems," says Harmon. "I just don't like big builder bureaucracy. I want to empower people to make decisions."
No. of Employees
|1998||1999 - 12||1999 - $2 million||32|
|2000 - 103||2000 - $15 million|
|2001 - 213||2001 - $31 million|
Syncon Homes, Roseville, Calif.
At Syncon Homes, communication is key.
"The minute people aren't communicating," says Brian Hanly, Syncon's president and CEO, "they put up a wall and things fail."
That isn't an option for this integrity-oriented company, founded in 1995 by Hanly and his brother Donnie. Young as they are (Brian is 30; Donnie is 27), they've already determined the difference between "opportunistic" and "strategic" growth--and they've made the strategic choice.
They've supported Syncon's expansion (71 percent annual growth since 1999 and a 139 percent increase in closings) with a collaborative structure inspired by David Weekley Homes, for which Brian worked briefly. For example, Syncon subdivisions are managed by project teams typically composed of superintendent, sales manager, warranty manager, and a representative from the corporate office. "We don't have this hierarchy," Brian says. "Communication goes top to bottom, bottom to top."
Andy Mitchell, president of Syncon's Nevada division, agrees. "If you have an idea in the field, you've got a direct pipeline to the construction manager, me, or the owners."
No. of Employees
|1995||1999 - 113||1999 - $25 million||50|
|2000 - 147||2000 - $34 million|
|2001 - 270||2001 - $73 million|
Lee Wetherington Cos., Sarasota, Fla.
No one can accuse this Florida builder of standing still.
In the past two years, Lee Wetherington Cos. has added a pool company (LeeSure Water Pools), a land development firm, and a design center that, in addition to handling the usual new-home upgrades, sells furniture, window treatments, and wall and floor coverings.
"Instead of growing our revenue by building more homes, because of the limited amount of land in Florida, we added more services to increase our bottom line," says Lee Wetherington, president and CEO. It's worked. Customers are shelling out more for options ($105,000 vs. $25,000), cycle time has dropped by 30 days, and net margins have risen 4 percentage points, to 12.5 percent in 2001.
The company's top line has grown too, increasing an average of 30 percent from 1999 to 2001. So have closings, up 37 percent in the past three years.
It's an upward shift that Wetherington also attributes to his company's newfound emphasis on teamwork. "If people aren't happy and satisfied with their jobs," he asks, "how can they go out and make customers happy?"
No. of Employees
|1981||1999 - 107||1999 - $31 million||60|
|2000 -100||2000 - $33 million|
|2001 - 147||2001 - $52 million|
Thompson Homes, West Chester, Pa.
Share the Wealth
When Thompson Homes instituted profit sharing, the president encountered some unexpected reactions. "The first year when I sat down with a guy and told him what his bonus was, he cried," remembers Matt Thompson.
The luxury builder offers a generous package. Employees may earn a cash bonus as high as 31 percent of their salary once the Pennsylvania builder meets a set financial threshold and the owners (Thompson's parents, who founded the company in 1975) are compensated for their risk.
"We did it around the time when we were starting to grow and the labor pool was starting to shrink," says Thompson. "We saw it as a way to foster a culture where employees really felt they were part of a team, where they could really feel that their contribution mattered."
It's proved to be a powerful motivator. Each year, Thompson reviews the company's six-month performance and tells each worker his or her expected yearly bonus, based on current assumptions. But those numbers never stick once workers have their goals and 25 percent of their projected bonus in their pocket, Thompson says. "Every year, the projected amount [for profit sharing] has jumped."
No. ofUnits Closed
|1975||1999 - 31||1999 - $17 million||18|
|2000 - 29||2000 - $21 million|
|2001 - 28||2001 - $23 million|
Source: Fast Track Survey
Companies on the Fast Track list for four years running, listed alphabetically.
Top 10: As the years go by, this group becomes more and more elite. Just 10 companies have stayed on the Fast Track for four years running--the history of this annual story. Their growth rates may have fluctuated, but their commitment to expanding their businesses obviously has not.
|Rank||% Gross Revenue Change*||Rank||% Gross Revenue Change*||Rank||% Gross Revenue Change*||Rank||% Gross Revenue Change*|
|The Hamlet Cos.||82||14%||78||19%||65||29%||25||96%|
|Pacific Century Homes||26||48%||54||26%||11||136%||6||524%|
|R.J. Moreau Cos.||31||44%||10||104%||48||44%||32||150%|
|Standard Pacific Corp.||88||12%||40||35%||57||37%||47||90%|
|The Villages of Lake Sumter||64||21%||61||23%||62||30%||47||90%|
*Revenue Change = The compounded annual growth rate over three years.