Wednesday, February 21, 2024

Independent waterproofing company Dry Otter finds its space thanks to owner’s ‘grit’

Kevin Sanders wasn’t mad, but it was time for a change. So without much thought about his Plan B, he quit his job working for a national waterproofing company.

The company treated him well, he says, but at age 44 he didn’t think he earned enough to support his wife, Wendy, and their young son. After 16 years working for someone else’s company, he felt he had hit the top rung of the ladder. That was 10 years ago.

Sanders credits his wife and her parents with giving him the encouragement to start Dry Otter Waterproofing in Denver, a Lincoln County town about 25 miles north of Charlotte. He put the “small” in the term small business, he recalls.

“In October 2013, I got a 1,000-square-foot office in this same area, actually right across the street from here,” he says while seated in Dry Otter’s storefront space off N.C. 16 Business. “I had two offices, a desk, a computer, a truck and zero employees. My name was in every hierarchical box – CEO, accountant, installer – my name was in every single box.”

Sanders survived by hiring hit-or-miss temporary workers and getting people he knew who worked for other companies to help him finish jobs on the weekends.

“At first, you’re doing everything and you’re working all the time,” he says. “But at (his former employer) Dry Pro, I worked 70-75 hours a week, so I was used to that.”

Sanders’ drive continues to push the company forward, says Dry Otter marketing director Erin Blackburn. “He has grit and that’s made this company a success,” she says. “He is generous and is always teaching us important things about business and life.”

Dry Otter Founder Kevin Sanders

A real business

Sanders’ company posted $250,000 in sales in its first year. In 2015, Dry Otter more than doubled that amount to $600,000, then topped $1 million the next year. In 2022, Dry Otter sales reached $3.4 million. This year, the company will top $4 million, Sanders says.

Dry Otter now has 25 employees – almost all of them having been with the company more than two years. To grow real equity, Sanders says, Dry Otter should reach $6 million to $8 million in annual revenue. He thinks the company is poised to hit that mark. Dry Otter leased a Charlotte office in November, and is mulling a Winston-Salem location. For now, the company services a 50-mile radius – an area Sanders describes as being from north to south, Lenoir to Rock Hill, South Carolina, and from east to west, Albemarle to Shelby.

“If you’re not expanding, you’re going backward,” Sanders says.

Sanders hired his first employee in 2014. A year later, Dry Otter had three laborers, including himself, and a salesperson. He hates sales, he says, so he counted that as a win. His wife helped out with the books and ensured everyone got paid on time. By 2016, he hired someone to answer calls and he felt like he had created a real company.

“It took a few years before I could start putting other people’s names in those boxes,” Sanders says. “The real trick is, with all those boxes, you put somebody else’s name in there, and hopefully they’re better than you.

“And that’s what’s helped lead to Dry Otter’s success. We’ve been able to hire some really good people and retain those people,” Sanders says.

Sanders hired Mark Johnston in 2015 to help with sales and installations. The company wasn’t making any money at the time, so Sanders gave Johnston equity as part of his compensation. Johnston later invested in the company and now owns a 25% stake, with Sanders owning the rest.

From Mississippi to North Carolina

Sanders is a native of Tupelo, Mississippi, the birthplace of Elvis Presley. Sanders started playing soccer in elementary school. He was still 5 foot 2 in eighth grade so when his bigger classmates gravitated toward football and basketball, he says he stuck with soccer.

In 1987, he was the state’s Gatorade soccer player of the year. “Mississippi was terrible in soccer back then, so that wasn’t that big a deal.” He was good enough to play soccer at Belmont Abbey College, where he earned a business degree.

After college, Sanders took a restaurant job. “I was making at best $150 a week, living in Pineville, with no furniture,” he says. Two waitresses had boyfriends with jobs for a waterproofing company.

“They were making 800 to 1,000 bucks a week. Digging ditches under houses. It was purely monetary,” Sanders says. “It took six months of me bugging them for them to hire me. I started in January of ‘93 with Professional Waterproofing doing installs.”

The owner of the company had two sons who were helping him, so advancement proved difficult. “Before I knew it, I had been there 10 years, just digging ditches, and I had a college degree,” he says.

Sanders moved to Dry Pro in 2007, and stayed there until starting Dry Otter. At Dry Pro, Sanders worked on the business side, helping him understand the finances of waterproofing.

Beyond his great experience at Dry Pro, he credits Michael Gerger’s book “E Myth – Why Most Small Businesses Don’t Work And What To Do About It’ as a big factor in his success. The book attempts to explain the “entrepreneurial myth,” noting that it
takes more than skillful technical work and a good idea to form a business foundation.

“Most businesses start up because you’ve probably met somebody who’s great at making cookies and someone says, ‘Oh, you should start your own business.’ Or you’ve met somebody that’s the best plumber in the business. He’s the one they always call when there’s a problem no one else can solve. So he says, “I should start my own business.’

“But he doesn’t know how to manage. He doesn’t know how to get the leads. He doesn’t know how to sell them and convert them into a job once he gets them. He’s a great plumber, but you learn that business is made up of about 10 other things you’ve got to be great at. Or at least hire somebody who’s great at it.”

Growing a company

Taking advice from Gerber’s book, Sanders transitioned from a person who did everything to someone focused on growing equity. For the past two years, he has emphasized budgets, streamlining processes and moving Dry Otter toward an $8 million-a-year company. He  hasn’t done any of what he calls the “in company” work.

“Once I decided to start a business, I said I wanted to own a business, I don’t want to work in a business. That’s the only way the business will grow,” says Sanders. He still comes into the office five days most weeks, but no longer at 6:30 a.m. or earlier. When he leaves the office, he heads out to watch his son’s sports practices or games at North Lincoln High School.

“If I don’t come in on Monday, Dry Otter’s still going to work all day. Now I don’t do any in-company tasks on the business. No payroll, no marketing. I hire someone to do those jobs,” he says. “The company isn’t me. I have a lot of friends who own their own company, but they are the company. If they go on vacation for two weeks the company stops.”

Dry Otter budgeted $30,000 a month this year on marketing, and Sanders says he’ll bump that to $35,000 in 2024. Chasing leads, he says, is constant.

“The saying is 50% of marketing works, you just don’t know what 50% it is, and I definitely believe that because we struggle,” Sanders says. “You have to keep up with your cost per lead, and last year our cost per lead was $245 per lead. We’d love to drive that cost down.” Dry Otter only does waterproofing, and contracts out other work. Its average job costs about $10,000.

Making it happen

During his talks to high school students about business, he rarely mentions Dry Otter. Instead he tells them what it takes to be a success.

“I tell them, ‘You can really start anywhere and kill it just by showing up everyday with a Get ‘er done attitude and a little pride in whatever you’re doing. Every trade out there is hiring. You guys at 18 can start tomorrow, and you can be running the company by the time you’re 25 if you show up every day for work and work hard. You’re 100 miles ahead of everybody.’”

For Sanders, it was a push from his wife and her parents to start a business.

“It’s worked out really well.”

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