Empire Builder

Empire Builder Plot Summary

Introduction

Have you ever dreamed of creating something truly extraordinary—a business that doesn't just survive but thrives, growing exponentially year after year? Many entrepreneurs share this vision, yet the path from startup to empire remains elusive for most. The statistics are sobering: over 65% of businesses fail within their first decade. But what separates those that crumble from those that conquer? The journey to building an empire isn't about blind luck or even extraordinary talent. It's about understanding and implementing specific strategies that bend the growth curve upward. Throughout these pages, you'll discover the exact formula that can consistently take businesses in any industry from startup to a billion dollars or more. You'll learn how to master unit-level economics, build a culture that drives revenue, implement proven growth strategies, and ultimately create an asset of extraordinary value. Whether you're starting from zero or already running a successful business, these principles will help you overcome the odds and build something truly remarkable.

Chapter 1: Master the Unit-Level Economics

The secret to building a billion-dollar business begins with mastering your unit-level economics. This fundamental principle is simple yet profound: your business must work at the smallest unit level possible before you can scale it. Essentially, you need to build the perfect hundred-thousand-dollar business before you can build the perfect million-dollar business, and so on. The reason 93% of small businesses never reach $1 million in revenue isn't because their founders lack drive or ambition. It's because they fail to get their unit-level economics right. Consider the example of a landscape maintenance business. The unit-level economics would include the monthly payment, fuel costs, insurance costs, and maintenance reserves for one truck, one two-person crew, and the equipment necessary to maintain lawns. By calculating these costs—approximately $10,536 per month or $126,432 per year—against the potential revenue—about $16,500 per month or $198,000 per year from cutting 15 lawns per day—you can determine if the business model is viable. After subtracting the annual operating costs from the annual revenue, this example yields a gross profit of $71,568, or 36%. When you deduct the Sales and General Administration costs (approximately 20%), you're left with 16% in pretax net profit—well above the minimum viable percentage of 10%. With these numbers, you can determine exactly how to scale to $1 million: you'll need 6 trucks, 12 employees, and 450 regular weekly customers. This approach can be applied to any business in any industry. The key is identifying your "make-or-break" issues—the factors that will determine success or failure. For the landscape business, these might include customer acquisition and geographic density. By understanding these factors and getting your unit-level economics right, you build a company with consistent revenue, margin, and earnings from the start. Don't fall into the trap of thinking, "I'll figure out how to be profitable once I'm bigger." This mindset leads to failure. Instead, get it right small—or walk away early. The most important lesson here is that to build a large business, you must start by building a successful small business. Focus on truly understanding your unit-level operating costs, average revenue, make-or-break issues, and capital expenditures. Get these factors right, and you'll be set up for massive future success.

Chapter 2: Build a Culture That Drives Revenue

The foundation of every empire is a strong, dynamic culture. While many entrepreneurs and CEOs primarily focus on revenue, this approach misses a crucial truth: you cannot manage revenue from the top down. You can only control revenue by building culture from the ground up. Revenue is simply the outcome of the business you're running, and all business starts with culture. When Adam Coffey became CEO of a large North American commercial laundry company, he inherited a staggering problem: annual employee turnover of 42%. There's no way anyone can build an empire when almost half of their employees leave every year. Understanding that culture and revenue are directly correlated, he implemented what he calls the "four-legged stool" approach: fair wages, excellent benefits, strong retirement options, and opportunities for growth. Within just twelve months, this culture-first strategy reduced voluntary turnover by more than 50%. By eighteen months, turnover had plummeted to the teens—the lowest it had been in decades. This was particularly remarkable given that this was a trade-based business, where turnover is typically much higher than average. By intentionally and consistently applying culture-building principles, the company dramatically reduced turnover and set the stage for growth. Creating this type of culture means becoming what Coffey calls a "magnet employer"—the employer of choice in your industry. You want to build a business where people want to spend their entire careers, where fathers talk to their sons about the value of working at your company, where daughters eagerly join alongside their mothers or aunts. This isn't just idealistic thinking; it's strategic. When you are the magnet, talent will come to you and stay with you. Leadership attitude also profoundly impacts culture. In every company Coffey ran, he maintained a simple mantra for leadership: "You don't get to have a bad day." Leaders are managing the company's most important product—its employees. Bad days should be brought to senior leadership, not taken out on employees. Equally important is transparency. Unless prohibited by legal obligations, share information openly with your workforce. When employees feel included and informed, they develop the loyalty and buy-in necessary to drive the business forward. Remember, culture and revenue are directly correlated. Build a strong culture by implementing the four-legged stool, managing your attitude, being transparent, and measuring success at every level. When you do, you'll create an engaged workforce that takes great care of your customers—and as a result, revenue will rain from the skies.

Chapter 3: Implement the 30% Growth Strategy

What is a strong annual growth rate for a company, especially a mature one? When asked this question, most business leaders answer 10%. On the surface, double-digit growth sounds impressive. But is it enough to build an empire? To answer that, consider the Rule of 72: if an investment grows at 10% annually, it will take 7.2 years to double in size. At that rate, scaling from $1 million to $1 billion would take more time than most people have left in their working lives—perhaps even more time than they have left on the planet! The minimum acceptable annual growth rate for empire builders should be 30%. At this rate, your company will double in size in just 2.8 years, triple in 4.2 years, and quadruple in just over five years. These are the results you need to build an empire. But how do you achieve and sustain such dramatic growth? The process begins with what Coffey calls "discovery." Like Dr. House from the TV show diagnosing rare diseases, you must cast a wide net and collect as much data as possible without preconceived notions. When entering a new business as CEO, Coffey would immerse himself in the company's operations. He would request a census of employees, categorize them broadly, and then get in the trenches with people from each category. He went on ride-alongs, worked alongside employees to complete their tasks, and made sure they got to know him too. Throughout this phase, he observed, listened, and took copious notes. After collecting data, the next step is developing a thesis. By reviewing all notes and observations, you can identify themes and connections. Perhaps you'll realize the business's top-line revenue is stalled and margins are eroding, or that the culture is strained because leadership is disconnected from employees. Once you've identified these themes, you can develop a strategic plan focused on key initiatives that will move the needle forward on growth. At CoolSys, a company Coffey ran as CEO, the implementation of this four-step process (discovery, thesis development, strategic planning, and implementation) produced remarkable results. Before his arrival in late 2016, the company's average growth rate was a steady 8.9%. After implementing his transformation process, the growth rate increased to a steady 34%. This new trajectory allowed him to sell the company just three years later for a 4x multiple of invested capital. The key to successfully implementing this strategy is to measure progress constantly, assign ownership of initiatives to your leadership team, and regularly review and adjust as needed. Remember, making some progress on a handful of things is better than making no progress at all. By setting the right growth expectations and having a clear process for transformation, you can bend your company's growth curve dramatically upward.

Chapter 4: Leverage Organic Growth Levers

To bend your growth curve to 30% or beyond, you need to pull specific organic growth levers. These powerful tools can transform your business's trajectory when implemented correctly. The first and most overlooked lever is price. Selling your products or services for a higher price automatically yields an increase in net profit because every penny of additional price goes straight to your bottom line. Yet surprisingly, in almost every business Coffey has worked with, nobody owns price—not a single person has a full-time job dedicated to managing it. When Coffey became CEO of WASH Multifamily Laundry Systems, a company with 600,000 machines in 70,000 locations, the growth rate was stagnant at just 2% per year. Recognizing that every penny made a huge difference, he hired data scientists to build pricing formulas. They created 70,000 polynomial regression models that factored in various statistics—including gasoline prices, geographic area, unemployment rates, and even day of the week—that influenced how much people would pay to do laundry. Each month, they fed the latest statistical numbers into these models, which allowed them to continually refine prices and drive growth from 2% into double digits. Volume is another crucial lever. Your goal should be to not only sell your offerings at a higher price but to sell more of them at that price. Review your sales strategy, improve your online marketing, and consider hiring the right type of salespeople. Hunters excel at acquiring new customers, while farmers cultivate relationships with existing customers to maximize sales over time. Understanding which type your business needs is essential for maximizing volume. Strategic pivoting represents a third powerful lever. Once your core product or service is selling well, add ancillary products or services. Think of McDonald's asking if you want fries with your burger, or if you'd like to supersize your meal. When Coffey ran CoolSys, a company providing refrigeration services to grocery stores, he recognized they were stuck in a highly competitive "red ocean" with depressed margins. His solution was to pivot strategically by creating two new divisions through acquisitions. These divisions offered engineering, HVAC, and refrigeration services to blood banks, telecommunication customers, data centers, and pharmaceutical storage facilities—all "blue ocean" markets where customers paid more and competition was less fierce. The final organic growth lever is tiering products and services. Whether you sell products or services, tiering increases your total addressable market and creates new price points. Mercedes-Benz masters this with their S-class, E-class, and C-class vehicles, allowing them to serve customers at different price points while maintaining their brand prestige. Data shows that about 60% of customers will buy the middle-tier product or service, 10-20% will choose the premium offering, and the remainder will opt for the least expensive option. By assigning someone to own price, testing to optimize price and volume, updating your sales strategy, pivoting strategically, and tiering your products and services, you can put your growth on a strong upward trajectory and prepare for the next step: enhancing your margins.

Chapter 5: Enhance Margins Through Technology

Building an empire requires not just growing your top line but also passing more revenue through to your bottom line. Margin enhancement is a crucial tool in achieving this goal, especially in the face of rising costs and inflation. To counteract these pressures, you must adopt a mindset of continuous improvement, refining your operations to increase profitability. One powerful strategy for enhancing margin is leveraging technology to unlock human productivity. At WASH Multifamily Laundry Systems, hundreds of service technicians would drive to customer locations to repair broken equipment. Sometimes, they needed a specific part they didn't have on their truck, requiring them to drive elsewhere to get the part before returning to complete the repair. Every time technicians engaged in this low-value work (driving), they drove down profitability and decreased margins. The solution was to use technology to automate low-value work so technicians could spend more time on high-value tasks. With vehicle-tracking technology, technicians were automatically clocked in as soon as they left home. When they arrived at a customer's location, another technology automatically opened a service ticket and, if appropriate, started charging for labor. A database utilizing machine learning predicted what parts would be needed to fix the equipment and told technicians exactly where those parts were located in their trucks. When technicians scanned the part's barcode with their device, the customer was automatically billed, and the inventory system was updated to order more parts. Through this technological enhancement, technicians spent far less time on paperwork, ordering parts, and making unnecessary trips. Instead, they focused on high-value work—actually making repairs—which dramatically increased productivity and margins. This approach can be applied to almost any job, from service technicians to accounting staff. The key is identifying each employee group's low-value and high-value work, then finding ways to automate or outsource the low-value tasks. Another margin enhancement strategy is challenging the status quo. During his time at WASH, Coffey discovered that collectors who gathered quarters from laundry machines followed an overly complicated security protocol that had been in place for decades. Each machine had its own key, meaning collectors carried about 500 keys per day. When Coffey asked why, he eventually found an employee who explained that the measures were implemented in the 1960s to combat "gentleman lockpicks" who would steal quarters from machines. Though this problem had long since disappeared, the inefficient process remained. Coffey implemented a "one room, one key, one lock" approach, reducing the number of keys each collector needed from 500 to just 100. This simple change increased collector productivity by over 40%, resulting in millions of dollars in additional earnings. The lesson is clear: streamlining isn't about arbitrary cost-cutting; it's about challenging convention and improving processes. By leveraging technology, challenging the status quo, rethinking your structure, and prioritizing continuous improvement, you can significantly enhance your margins and supercharge your business's growth toward empire status.

Chapter 6: Execute Strategic Mergers and Acquisitions

Even with diligent application of organic growth strategies and margin enhancement techniques, very few mature companies can achieve and maintain a 30% compound annual growth rate without another powerful tool: mergers and acquisitions (M&A). Also known as buy-and-build, this strategy involves buying companies and combining them to form an entity greater than the sum of its parts. The buy-and-build approach has been the core strategy behind every empire Coffey has built. One of his empires was a combination of thirty-four companies, another was a combination of twenty-three. There's a simple reason for this: buy-and-build gives you a way to quickly acquire similar companies or those that support your strategic objectives, allowing you to expand your offerings, reach, and customer base at an accelerated pace. For a successful M&A strategy, you need a fragmented industry—one with so many companies that they can't all be bought by a small handful of buyers. This keeps acquisition prices lower. You also need a clear understanding of what a "good" acquisition looks like for your specific needs and goals. Without this clarity, you risk falling victim to what Coffey calls "Shiny Penny Syndrome," where every business looks perfect and you miss critical flaws. Coffey learned this lesson the hard way when he bought a business that didn't fit his specific profile. That acquisition caused 80% of his management headaches for three full years while bringing in less than 5% of his revenue. The experience taught him to be disciplined about filtering out businesses that don't meet his target criteria and staying focused on those that do. The power of M&A lies in what's known as "reaping multiple arbitrage." As a company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increases, the typical multiple paid for it increases exponentially. When you buy relatively inexpensive companies and combine them to increase your business's size, the arbitrage—the difference between the sale price of your now-bigger company and the buy price of the smaller companies—soars. In one real-life example from Coffey's career, he bought 23 companies with an average EBITDA of $2 million each. He paid 5x EBITDA for each, totaling $230 million. After combining these companies, they were no longer 23 small companies but one larger entity worth 13x EBITDA. The new combined value was $598 million, creating $368 million in profit with zero additional equity invested. The M&A process involves eight main stages: sourcing potential companies, reaching out to determine if owners are interested in selling, filtering to identify those that meet your criteria, issuing letters of intent, conducting due diligence, preparing contracts, securing funding, and integrating the acquired companies. While complex, this process can dramatically accelerate your growth when executed properly. When approaching founders about selling their businesses, Coffey frames it as an exercise in asset diversification rather than simply selling and walking away. He explains the power of rollover investing, where sellers take some chips off the table but roll a portion of their proceeds forward as minority shareholders to get a second payday when the company is sold again. In one case, Coffey bought a company for $16.4 million. The seller took $12 million home and rolled $4.4 million forward. Three years later, after Coffey bought seven more companies, he sold the whole business for a 4x multiple of invested capital. The original seller received another $17.6 million, bringing his total to $29.6 million. Buy-and-build is a powerful tool for taking your business from $100 million to $1 billion or for driving growth in a mature company whose organic growth has stalled. By understanding and implementing this strategy, you can dramatically accelerate your empire-building journey.

Chapter 7: Create Effective Branding for Maximum Value

There's a direct correlation between branding and price when selling your business. Throughout his career buying and selling companies, Coffey rebranded every single one. While founders and previous owners often resisted these changes, fearing the loss of brand equity, the reality was that customers rarely cared about name changes as much as the owners did. Consider the example of Web Service Co., a coin-operated laundry company. The name came from the founder's initials (W.E.B.) back in the 1940s. When the internet emerged decades later, "web" took on a completely different meaning that had nothing to do with laundry. Despite resistance from the owners, who worried about losing sixty years of brand equity, Coffey renamed the company WASH Multifamily Laundry Systems after the founders exited and private equity arrived. Anticipating backlash, Coffey set up a call center with scripts to guide representatives in discussing the rebrand with customers. How many customers called to complain or even discuss the name change? Zero. Nobody cared. This illustrates an important lesson: you may have a sentimental attachment to your brand, but your customers generally don't. A rebrand may be necessary in several situations: when your company name detracts from your value and confuses people, when your reputation has become tarnished, or when sales are lagging and you need to kickstart growth. Even if your name clearly describes what you do and your reputation is solid, periodic rebranding keeps your organization fresh and relevant, making it attractive to both customers and potential buyers. When refreshing your brand, be intentional. Work with professional marketing firms that specialize in branding to create the impact you want. Your goal should be to present a professional, unified face to the market—a name and brand that convey who you are and what you do, with some sizzle added for good measure. Beyond having a name that sizzles, you need a brand presence that resonates emotionally with people. For over a decade, Coffey has conducted a spot poll at his seminars and lectures. First, he asks attendees to raise their hands if they own at least one Apple device. Consistently, 90% raise their hands. Then, he asks how many still have the box their device came in. Again, 90% raise their hands. This reveals that Apple has developed such strong brand affinity that customers cannot bring themselves to throw away empty packaging that serves no further purpose. Interestingly, the 10% who don't own Apple devices are typically engineers or tech people who buy Android products because the technology is arguably better. This demonstrates that market dominance isn't about having the best technology—it's about creating the strongest emotional connection. Apple has mastered building a people-first culture and brand that customers resonate with so deeply they keep empty boxes as mementos. If you can apply this "Apple-effect" to your own company, you can replicate the affinity Apple enjoys among its customer base. When you do, buyers will recognize this value and pay far more for your business. Consider whether your headquarters clearly communicates your brand, core values, and company identity. If a potential buyer visited, would they be blown away? Getting these elements right can add another multiple to your company's valuation—potentially worth millions or even hundreds of millions of dollars in additional value.

Summary

The journey to building a billion-dollar empire requires mastering specific strategies that work in concert to bend your growth curve upward. From getting your unit-level economics right at the smallest level to creating a culture that drives revenue, implementing a 30% growth strategy, pulling organic growth levers, enhancing margins through technology, executing strategic mergers and acquisitions, and creating effective branding—each element plays a crucial role in transforming your business into something extraordinary. As Adam Coffey reminds us, "Rome wasn't built in a day. The same holds true for building your own empire." Success comes from implementing these tools consistently, strategically, and with the right mindset. Your first step should be evaluating where your business stands today against these principles. Choose one area to focus on immediately—perhaps mastering your unit-level economics or identifying which organic growth levers you can pull right now. Remember that building an empire is a journey of continuous improvement, and each step you take today brings you closer to creating something truly remarkable tomorrow.

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Adam Coffey

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