ENTREPRENEUR OF THE YEAR Sarasota-Bradenton: JIM ABRAMS

ENTREPRENEUR OF THE YEAR Sarasota-Bradenton:

JIM ABRAMS

CLOCKWORK HOME SERVICES

by Mark Gordon| Managing Editor

Like Clockwork

Jim Abrams is a sought-after executive to almost celebrity-like status. It's easy to see why.

Jim Abrams is the Pied Piper of plumbers, air conditioning repairmen and electricians: Wherever he goes and whenever he speaks, people seem to eagerly follow right behind.

Chief executives of multimillion-dollar companies and accomplished entrepreneurs have been known to diligently take notes at a meeting run by Abrams, president and chief executive officer of Clockwork Home Services, a Sarasota-based company that runs several national franchise operations in the home repair services market. And just last month, a big group of salesman and franchise experts, including competitors, gave Abrams a standing ovation at a motivational speech he gave at an industry event in Las Vegas.

Then there was the company event in Orlando last September, where Bob Clanin, Clockwork's chief financial officer at the time, joined his boss for the trip. It wasn't only the cheering crowd of 500-plus franchisees clamoring for more of Abrams that impressed Clanin, who previously served as an executive vice president and CFO for UPS.

Instead, it was what could only be considered an after-party, where Clanin says he watched an "endless procession" of people come up to Abrams to thank him for his motivational role in turning around both their business and their life.

"It was astounding to stand there for an hour and a half and see person after person come up to him," says Clanin, who now sits on the board of directors of both Clockwork and JetBlue Airways. "Jim was like a celebrity."

The admiration can be narrowed down to both Abram's philosophies and his results. The latter is indeed inspiring: Clockwork, which Abrams founded in 1998, has gone from small bursts of sustained growth earlier this decade to a full-blown boom. It passed $100 million in revenues in 2006, for example, and with still seven months left in 2008, the firm has already surpassed $200 million in annual revenues.

What's more, Clockwork has grown its revenues an average of 75% over the last three years, from $59.81 million in 2005 to $182.24 million in 2007. At just over $200 million in revenues, the privately held company is one of the largest in the Sarasota-Bradenton area.

While growing so rapidly, Clockwork has also become a nationwide leader in the fragmented home services franchise industry. Franchises and brands under the Clockwork name include 167 Benjamin Franklin the Punctual Plumbers; 183 One Hour Heating & Air Conditioning businesses; and 55 Mister Sparky electric service outlets.

But it's Abrams no-nonsense, tough-love style of managing and problem solving that has people talking - and listening intently to him when he speaks.

"I think Jim is a unique combination of an amazing entrepreneur and a top manager," says John Young, a former partner with Clockwork's predecessor company, who now sits on the company's board and has known Abrams for 30 years. "Most times you don't see these two qualities in the same person."

And Abrams, 60, weaves through both roles with ease, say people inside and outside the company.

"He gives you such strong words of wisdom," says Michelle Schlingmann, an executive project manager at Clockwork who followed Abrams from one of his business ventures in St. Louis to Sarasota six years ago. "He doesn't sugar coat it or baby you."

Cold calling

Abrams might be sitting on top of the entrepreneurial mountain now, but in 1981, when he first started running his own business, he was in the valley of near-death. "I made every mistake a new business owner could possibly make when first starting out," says Abrams.

Abrams had just put the breaks on a sales career with Trane, the well-known air conditioning company. He had a wife and two young children and was tired of moving to the next big job; previous stops included Chicago, Milwaukee and, for a short time, Philadelphia and Pittsburgh.

Still, running his own business was as a foreign to him as using a Carrier over a Trane. "There was no thought process in becoming an entrepreneur," says Abrams. "I'm an entrepreneur by mistake."

And the mistakes were plural when Abrams first opened Air Experts Inc. in St. Louis in 1981. First off, he opened the business while the country was going through a recessionary period, with Midwest cities such as St. Louis suffering more than most other regions.

Other errors followed, Abrams says. His corporate location, for instance, was a total loser: He rented warehouse and office space in an area now covered by the Lambert-St. Louis International Airport that at the time was not only one of the worst in the city, but one of the toughest neighborhoods in the country.

Rent for the place was $400 a month, says Abrams, and it included utilities and bars for the windows. Crime was rampant at the location, from batteries being stolen from the company's trucks to an employee being robbed at gunpoint to thieves sawing through the roof. The FBI even once caught the number two criminal on the U.S. most wanted list in the neighborhood.

"I was in that place for two years," says Abrams, "and I never let my wife and kids visit me there."

There were some rookie business mistakes, too. Abrams opened the company in June of 1981, for example, but the local yellow pages ad deadline closed in March and published in October. So Abrams would have to wait until October 1982 - 16 months - to get an ad in the phone book.

That meant a lot of cold calling for customers and getting creative in marketing. Abrams never went anywhere without a thick stack of business cards, passing them out at church, the barbershop or on line at Burger King.

"I was focused on becoming the largest [air conditioning repair company] in St. Louis," says Abrams. "I was always looking for opportunities."

The hard work paid off. By 1985, the company had become one of the most dominant HVAC contractors in the local market and by 1988 it was one of the fastest growing firms in the country, with more than 100 employees and $12 million in annual sales.

While Abrams considers himself to be an accidental entrepreneur, his self-reliance could be traced back to his youth in Detroit. The son of a World War II veteran who later worked in the auto and travel industries, Abrams was the first in his family to graduate from college when he earned a B.S. in business administration from Western Michigan University.

It was the summers before and during college though, where Abrams first saw the payoff running a successful business could provide. Back then, in the mid-1960s, Abrams worked as a bartender for a catering company that hosted parties for the affluent and high-society of Detroit's suburbs, in places such as Grosse Point. One extravagant affair Abrams worked was a 16th birthday party for Henry Ford's granddaughter.

Says Abrams: "I had no clue you could own a business and make that kind of money."

Correcting mistakes

Those thoughts frequently crept into Abrams' head as he figured out life after college, first as a high school teacher in Detroit, where he earned $5,200 a year. He later took a job running the franchise efforts of Weight Watchers in southeastern Michigan, a branch that later expanded to other states and even Mexico and Canada.

But Clockwork Services is where Abrams has hit his entrepreneurial stride. The company actually owes its birth to a mistake Abrams and Young, his old friend from the Trane days, longed to correct.

The pair initially founded another nationwide home service repair company, Service Experts, Inc. in the 1990s that they ultimately took public. But just as the Nashville, Tenn.-based firm was poised for more explosive growth, the chief executive officer Abrams and Young hired made what the duo now refers to as several big strategic errors.

The CEO "abandoned the business plan," Abrams said in a March 2004 Review story of the executive he and Young hired.

"He started buying unlike companies. He wanted to put his own mark on the company [but] the weight of management took the company down."

So Abrams left the firm and retired to Siesta Key, with the solace that his onetime worth in the company was as high as $25 million.

But while Abrams' retirement routine - walking to one end of the beach, drinking an iced tea and swimming back to the other end - was good for his figure, it was boring for his mind. That, and the lingering thought that he was right about how to build a national franchise of home repair services around customer service, motivated Abrams to get back into the game in 1998.

Clockwork is the result of that motivation. And so far, the high levels of success the company has reached have vindicated Abrams - not to mention his fan club of franchisees and employees.

Now the company is poised for more growth, in addition to a potential public offering by the end of next year. Abrams says there are two major challenges left for Clockwork, in financing and consistency of performance.

On the former, the company took a big step last month when it signed a $120 million credit line with Wachovia and Prudential Capital Partners. That kind of credit in such a restrictive loaning market is proof of how good the company is doing, says Abrams.

The latter challenge of performance, says Abrams, is partially one of just buckling down and doing it.

Says Abrams: "Our goal is to become the world's largest and most profitable home services business."

Entrepreneurial TIP:

Q. What is the toughest challenge you have ever faced?

A. "In building a fast growth business you must be willing to accept that you may outgrow the capabilities of key people who helped you at earlier stages. Frequently, this means disappointing or even terminating the people you are working most closely with. These are the same people whose family you know and that you have great hopes for. I don't think I will ever like this aspect and believe this will always be my 'toughest challenge.'"

BY THE NUMBERS

CLOCKWORK HOME

SERVICES

Year Revenue % growth

2005: $59.81 million

2006: $111.87 million 88%

2007: $182.24 million 63%

3-year cmpd. annual growth: 75%

Employees

2005: 226

2006: 559

2007: 935