The expansion strategy at Friendly Group seems to include the best of both worlds in the modern trades industry: the power of private equity and the nurturing effects of employee training and development.
On one hand, Friendly Group is always looking to add members to its growing team of companies. But not at the risk of ignoring employee goals and needs.
“Our focus is on people,” says Friendly Group VP of Corporate Development David Noseworthy. “We believe in unlocking latent potential. And in doing that with each employee, you unlock the potential of the company.”
Noseworthy has a business background—engineering, operations, corporate development and equity research. It may be counterintuitive to some private equity groups trying to buy up trade companies, but Friendly believes success comes with an employee-driven focus.
“We felt confident that our approach would be successful in home services,” he says. “Because the idea is that you focus on the employee, their development, taking care of them through benefits, just as a person, so that they can take care of the customer. And then ultimately, the customer will take care of the business.”
The cornerstone of Friendly’s company tagline, “There’s power in the pack,” begins with clear communication, Noseworthy adds.
“We fully buy into being straightforward and genuine—even when that honest conversation hurts,” he says. “Throughout our company, we say what we mean and we mean what we say.”
The company means it when they say training and mentorship are prevalent.
“It’s one thing to set an expectation,” Noseworthy says. “But we want people to make goals every time, so we train them and we guide them along the way—giving them all the mentorship they need.”
That training is both internal and external. Friendly supplements subject matter training by its superstar management team with outside programs run by Nexstar.
When looking to add companies to the power of their pack, Friendly looks for strong management teams that show an interest in creating a positive culture.
“Having a professionalized team creates value for that company,” Noseworthy says. “It also creates value for somebody who wants to invest in your company, and join forces with you.”
Ideally, Noseworthy says, potential partners are experiencing profit margins in the high teens.
“If you’re hitting high teens, you’re doing a lot of things right,” he says. “I scratch my head when I see high 20s because that may not be sustainable. And there are a lot of great companies in single-digit profitability. We’re happy to advise them on things they can do before joining a group like this.”
Perhaps the biggest factor to consider when a company owner is looking at joining a private equity group: your growth plan.
“Do you feel that your company needs to partner with private equity to be competitive 15 years from now?” Noseworthy asks. “Private equity can give your company that boost. And if you’re in that good mindset of ‘I want to scale; I want to build my team fast,’ that’s the way to go.”
David Noseworthy recently joined ServiceTitan’s Jackie Aubel as part of Season 5 of the “Toolbox for the Trades” podcast, which included Noseworthy’s thoughts on:
Determining how you bring value.
Not underestimating the value of relationships and people.
Teaching someone to fish rather than giving them a fish.
Developing your employees from within.
Asking for help before you enact your company’s exit plan.