The late Sam Lucarelli taught his son Jay a lot about business, dealmaking and how to live your life with honesty and integrity.
“The first thing I learned with regard to dealmaking and integrity was, ‘You don’t have to be like me. You’re not like me. I’m me. Sam is Sam and Jay is Jay,’” says the younger Lucarelli, president and CEO at Minute Men Staffing & HR Services.
Lucarelli took over the family business in 2013 after his father’s death and has guided the company to even greater heights, with 600 corporate employees and more than 60,000 employees who are placed every week at locations across four states. He spoke at great length about his experience leading the business in a cover story in Smart Business magazine last October.
Lucarelli has also become a student of real estate dealmaking, taking steps to expand Minute Men’s physical presence and position the company for even greater growth.
Smart Business Dealmakers spoke with Lucarelli about factors that must be considered when exploring a potential deal, why buying more space now will save you a lot of stress later and more lessons learned from his father. What follows is a transcript of the above video, edited for readability.
Special note: When you talk to Lucarelli, it doesn’t take long to realize how proud he is of his father and his family. That pride can also be extended to the city of Cleveland. In this bonus video, he explains how your location and your real estate can help tell the story of your business.
Don’t take on debt if you’re not ready
We’re always keeping our eye on the marketplace for potential acquisitions. We have made a few acquisitions, but they were of much smaller companies — fire sales, people going out of business, things of that nature. I follow what some of our larger public company competitors do. They grow significantly by acquisition. We’ve always wanted to follow that trend. But one of the things we’ve been very proud of is the fact that our company has been debt-free since its inception.
One of the things that sometimes scares us is the fact that with some of these larger acquisitions, that we do not want to leverage the company. It was just something my dad always hammered into our brains about debt, debt, debt. He was very debt-averse. He would rather be smaller and debt-free than larger and any type of leverage. Especially in our business because we have no assets. Being in the staffing business, obviously the most important asset is the people we supply to our clients. Other than that, it’s all cash flow and receivables.
Leverage is key to the success in our business and being able to finance the payrolls that we garner when we send out the employees to our clients. As we progress into the future, there is going to come a point where acquisitions become a more important component of our growth. At this point, I’m more or less taking the opportunity to learn. That’s the other thing. It’s so much different when you grow a company by sales, geographical growth, opening up new offices and internal growth. At the end of the day, you’re still getting your revenue by selling what you know. When you start getting into mergers and acquisitions, it’s a whole different ballgame.
Buy more space than you think you need
I think one of the biggest things I learned when we were expanding and acquiring real estate more for the specific purpose of the growth of our business is don’t buy what you need right now as far as space. If you need 10,000 square feet, go buy a building that is 20,000 square feet. If you’re a growing company, you will not believe how fast you can grow into it.
It always happened to us where if we moved to a larger space and we had more space than we needed, every time we did that, in relative terms, we’d grow faster. It was almost like the bigger the building we had, we felt like we had to fill it up. So we had to grow. If you’re looking for new space, always buy more than what you are in need of at this specific point because you’re going to grow into it. It saves you a lot of time and hassle of having to grow your capacity and then go find more real estate.
Do what you say you’re going to do
I learned a lot from my father. The first thing I learned with regard to dealmaking and integrity, the first thing he told me, was, ‘You don’t have to be like me. You’re not like me. I’m me. Sam is Sam and Jay is Jay. I have a different personality and you have a different personality.’ My father was very outgoing. He loved to sell. His favorite expression was, ‘If Sam doesn’t sell, Sam doesn’t eat.’ I’m a little quieter. I don’t want to say laid back, but I guess you could say I’m a little more introverted.
He said, ‘It doesn’t matter what your personality is. It’s what comes out of your mouth. Whatever you say you’re going to do, you better do. There is always a time when you say you’re going to do something and something happens and it’s not your fault. You better be to the customer, apologize, fix it — whatever needs to be done to come as close as you can to what you told that customer you were going to do. Never lie to a customer. Never overpromise. Never under deliver. More than anything else, your word is your word.’
My dad was one of the few people, he didn’t want a contract from you. He wanted to shake your hand. I remember he would always be very cognizant of how people look toward him, how they look toward our business, how they look toward our family. I just try to exude that. I’d rather get screwed than be somebody who screws somebody. At least at the end of the day, that’s your integrity.