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Sunday, 07 December 2014 22:00

Triangle pursues national growth strategy with existing clients

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Walker-based Triangle Associates Inc. has launched a national expansion strategy with existing clients such as Gander Mountain that will position the company to double its book of business over the next five years. Walker-based Triangle Associates Inc. has launched a national expansion strategy with existing clients such as Gander Mountain that will position the company to double its book of business over the next five years. COURTESY PHOTO

Despite a bullish outlook for construction in West Michigan, one area company thinks its best opportunity for growth lies outside the region.

Walker-based Triangle Associates Inc. believes pursuing geographic diversity with multiple national clients will help the general contractor attain a period of stability and growth, said Paul Lemley, senior vice president at the construction company.

The reasoning is simple, he said.

“(It’s) so we are not a slave to the economic cycles purely in West Michigan,” Lemley told MiBiz in an exclusive interview. “We are able to (expand nationally) because we have processes, people and skills that have this West Michigan work ethic. That is a competitive advantage as we go around the country.”

Coming out of the recession, Triangle saw it would have limited growth in sticking with the West Michigan market, he said. Therefore, the company put an emphasis on partnering and forging close relationships with national clients as it looked to continue a pattern of growth.

Over the last three to four years, Triangle has worked with national retailers such as Wal-Mart Stores Inc. and Walgreen Co., as well as education companies in the private and charter school sectors — namely Utah-based Highmark Development and Grand Rapids-based National Heritage Academies. The construction company also has clients in the medical field who Lemley could not name because of confidentiality agreements.

Rather than taking a model of setting up an office in a new geography with the hope of finding new clients, the company believes it has found a model that will position Triangle to work in approximately 30 states over the next five years, Lemley said.

“All of those clients have the view that it would be better to work with us multiple times and gain efficiencies,” he said, adding that as Triangle works with the clients more frequently, the relationships should grow stronger and the processes should likewise improve.

With annual revenues of around $120 million currently, Triangle wants to double the size of the business in five years, Lemley told MiBiz.

While Triangle plans to continue operating as usual in the West Michigan market, the company’s growth could largely come from other regions, he said.

PRECEDENT FOR EXPANSION

Following a select number of customers around the country is a preferred growth strategy for construction firms, according to industry observers.

“General contractors tend to use relationships they have and travel around the country,” said Norm Brady, president and CEO of the Associated Builders and Contractors of West Michigan (ABC). “(They want to) take good relationships and go where customers take (them). … It is not always the lowest price. The ability to meet schedules is important, but you have to have the relationships.”

As Triangle gears up to begin following large national companies around the country, both ABC’s Brady — a long-time Triangle employee who left the firm last year to lead the local chapter of ABC — and Lemley said that the general contractor’s experience with regional zoning ordinances and its practical knowledge in engineering processes and foundational systems will help it find success in new markets going forward.

While building big box stores for Wal-Mart or Gander Mountain may seem repetitive, the work that goes into the construction — and preparatory work to comply with local regulations — presents new challenges with each project, Lemley said.

“It is a challenge for our people to continue to bring innovation to each project, but that is where the excitement can be,” he said. “They look hard at each project to learn from what they did previously and apply that to the new condition.”

The company’s national accounts team has worked in 14 states on both coasts, according to Triangle’s website.

“The process remains the same, but the technical solution is different,” Lemley said.

GOOD TIME TO GROW

According to recent data released by the Associated General Contractors (AGC) of America, this could be the right time for a company like Triangle to undertake an aggressive growth plan.

The November report from AGC states that construction firms added 12,000 jobs nationally in October and the sector’s unemployment rate fell to 6.4 percent, the lowest for the month since since 2006.

As it pursues its growth strategy, Triangle executives acknowledge that there are certain challenges that come along with the plan. Namely, there can be difficulties with attempting to work with unfamiliar subcontractors in new markets, Lemley said.

As a means of overcoming that hurdle, the firm plans to partner with known subcontractors such as Holland-based Parkway Electric and Communications LLC as it works on jobs around the country.

“Subcontractors in West Michigan are seeing the same thing we are seeing, and they want geographic expansion, so they are coming with us,” Lemley said, adding that the contractor’s existing relationships with firms in other areas of the country can help in keeping costs down for its clients.

A ROAD WELL TRAVELED

Triangle is not the only West Michigan contractor with a presence in out-of-state markets. Other firms such as Wolverine Building Group Inc. have followed clients to new national locations. Some firms also choose to open offices in other regions. For example, Owen-Ames-Kimball Co. has an office in Florida, as does Rockford Construction Company Inc., which has a book of business around country.

Similarly, Triangle also has an office in Jupiter, Fla., but the company is “debating” whether to put additional staff into that office, Lemley said. At this time, Triangle’s focus is on its growth plan with national clients.

“The economic market for construction continues to rebound, and that’s important,” Lemley said. “We are seeing pent-up demand in private money really start to flow consistently into the market.”

Having only been at Triangle since this past summer, Lemley said that much of what drew him to the firm was the national growth strategy. The timing to implement this strategy was also important, he said. Over the past three years, much of the money for new construction was in government projects. But now, Triangle believes that investment will be in the form of private money from national retailers, health care providers and other service-oriented companies, Lemley said.

“Now we have the ability to follow these private clients around the country,” he said, “so the economic conditions are critical to the success of this.”

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