How I Started A $60K/Month CRM For Construction Companies

Erick Vargas

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Published: December 29th, 2019

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Erick Vargas

Founder, Followup CRM

$60K

revenue/mo

Founders

Employees

Followup CRM

followupcrm.com

from Fort Lauderdale, Florida, USA

started January 2001

$60,000

revenue/mo

Founders

Employees

Discover what tools Erick recommends to grow your business!

analytics

ProfitWell

other

AdEspresso

Discover what books Erick recommends to grow your business!

Scaling Up: How a Few Companies Make It...and Why the Res... Verne Harnish

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Hello! Who are you and what business did you start?

Hey, I am Erick Vargas, from Fort Lauderdale FL and I am responsible for Followup CRM. We provide a CRM to the construction industry.

We are helping construction companies modernize by helping them organize sales, convert more leads into jobs, and win high margin bids. We are currently at $50,000 a month MRR and on track to continue with steady growth.

how-i-started-a-60k-month-crm-for-construction-companies

What's your backstory and how did you come up with the idea?

Followup CRM is the brainchild of Best Roofing CEO, Gregg Wallick, and I. In July of 2001, Wallick purchased Best Roofing; a South Florida based commercial roofing contracting company. Best Roofing was a $6,000,000/year roofing company that had lost money in the previous two years.

You have to start with the person you want to serve and build backward from there.

You have to start with the person you want to serve and build backward from there.

Over the next two years, Wallick completely re-engineered the sales department of Best Roofing. Like a football coach taking over a losing team, Wallick's first step was to change the culture with a focus on getting back to sales basics. Best Roofing became the first company to use the new cloud-based application later to be called FollowUp CRM.

Take us through the process of designing, prototyping, and manufacturing your first product.

Our CRM is designed by construction professionals for construction professionals. We have a small cohort of clients that direct the product roadmap of our CRM. There are many CRM out there on the market but due to the uniqueness of the construction sales and bidding process, there was no solution that was a great fit for this industry.

We are a project centered, meaning in other CRM you would need to bid to multiple clients and create duplicate opportunities in other CRMS. We use the terminology leads, bids, and projects which is construction focused.

The evolution of Followup CRM

Describe the process of launching the business.

For several years we ran the business as a sales consulting company so that we could learn the ins and outs of the needs of a construction business. Building a company is never a smooth road and one challenge that every entrepreneur faces is getting distracted by shiny objects. Shiny objects are things that distract you from what your focus should be on. One of those shiny objects for us was the fact that we use to provide sales coaching alongside our software but we realized that we could not do both well. So, we spun off a sales coaching company that we partner with. Over the years, we learned that targeting a small niche helps you deliver real value to clients.

Another aspect to consider when launching a business is time and resources. In our case, it took close to 8 months to make a suitable version of our product and be able to sell it to the public with just two developers in the team. Lastly, in order for any business to succeed you have to make sure you meet client’s standards. During our launch, we focused on a soft launch testing with clients with a good personal relationship in order to obtain all their feedback.

Since launch, what has worked to attract and retain customers?

Attracting and retaining customers is a lot of what software as a service is all about. For us, the number one way we get new clients there is three referrals. Our clients love us and whenever they recommend us to another construction company that is struggling with the same issues it is the easiest sale we can ever make. When you’re considering launching a new product it is super important to stick really close to your first 100 customers so you know their pain points that your product solves.

We are just starting to figure out how to fill the top of the funnel. What we have found that works the best is partnering with other like-minded software companies that are selling to our ideal client. And for us, the best partners have been construction accounting software companies. These kinds of partnerships make a lot of sense for us because once the sale is made then we push this old opportunity into the accounting system. When we have identified a partner that we want to work with we host educational webinars so that we can get in front of their clients.

How are you doing today and what does the future look like?

Right now we are on a good path. We are still focused on developing our product so that we can minimize the barriers to entry for our prospects. So we are really doubling down on features like data importing, accounting integrations, and other kinds of integrations. They seem to be the biggest reasons why prospects don’t move forward.

We are seeing great profits and reinvesting those profits so that we can achieve our growth goals. Since we are in an early stage we are starting to focus on the turn and customer lifetime value. Once we have those things nailed down then we will turn our attention to customer acquisition cost in marketing spend to ramp up our growth.

Through starting the business, have you learned anything particularly helpful or advantageous?

Focus. Focus. Focus. The most difficult thing to do is to not chase every shiny object. A lot of times we take shiny objects that are on the fringe of what we are doing and bring them into the center of our attention that distracts us from our core business.

Once you learn how to say no to these kinds of things you can start to get that flywheel the fact that we are all looking for. One of the best decisions we have made is joining a cohort of SaaS founders where we can share and learn bass practices with others so that we can grow faster.

What platform/tools do you use for your business?

One of my favorite tools is ProfitWell. It is a subscription analytics platform that connects to the billing platform that gives you the key performance indicators that you need to know to run your business. All you do is select your billing platform and within a few minutes, it opens your eyes to the health of your business.

Another tool that we are starting to dive deep into is AdEspresso. This tool helps us to drive results across social media marketing efforts. It allows us to create, manage and analyze ads across multiple channels so that we can A/B test what ads performed the best.

What have been the most influential books, podcasts, or other resources?

I am a book and podcast junkie. One of the most influential books that I have read is Scaling Up by Verne Harnish. It shares practical tools and techniques used to scale companies from start up’s $2 billion companies. At the end of the day, it helped the most with my own personal leadership development.

Advice for other entrepreneurs who want to get started or are just starting out?

My one piece of advice that I would give to entrepreneurs who are just getting started is to figure out who it is you want to serve. Most people start out with a product and see who they can serve which is backward. You have to start with the person you want to serve and build backward from there.

Where can we go to learn more?

Website

If you have any questions or comments, drop a comment below!