David Johnson is a pastor and the CEO and President of Alpha Insurance Trade Association, an insurance restoration company that makes property repairs paid for by insurance companies and that is dedicated to charitable causes around the world.
He recently took a moment to share his inspiring story with BusinessOpportunity.com’s Entrepreneur Exchange and to discuss the ins and outs of his company’s fairly ingenious, compassionate and virtually recession-proof business opportunity...in his own words.
My name is David Johnson, and I am the founder and CEO of Alpha Insurance Trade Association. I was licensed as a pastor in June of 1978. Later, in October of 1993, I decided to fulfill my pastoral calling through business. The goal was to use my business background to help fund charitable endeavors. To that end, my wife and I became general contractors. By 1995 we were doing over $6 million in gross sales and had as many as 140 jobs going at a time.
We quickly became preferred vendors for a number of insurance carriers, and I ended up being used as an expert witness in many insurance disputes.
In 2004 my life changed. One of our insurance service providers called me up and asked me to stop everything I was doing and fly out to Florida. They had just gotten hit with several hurricanes and there were more expected. They said, "Come on out, just give us three months and we promise we will pay you really well." I was good with “really well,” so I packed up my bags and went to Florida.
Three months turned into three years. It was a very interesting experience. In 2007 the hurricanes began to die down so we packed up our bags and moved to Texas.
After the dust settled, a business plan was conceived that had the potential to significantly fund charitable organizations. So on October 16th, 2009, we changed direction and the Alpha Insurance Trade Association was born. My wife took over the ownership of the construction firm and it was converted into a support entity to service the needs of the Alpha members and to help fulfill our charitable purposes.
Since then, the number of Alpha regional offices has grown. We now have offices in Austin, San Antonio, San Marcos, Round Rock, Waco, Dallas/Fort Worth, Houston, Corpus Christi…and we are still growing.
After we moved to Texas, we found that there was an opportunity that didn’t exist back home, and that opportunity came in the form of wind and hail damage. Texas weather is very cooperative in that regard, I’m afraid. But we handle other things as well―tornados, hurricanes, fires, floods, lightning and foundations…pretty much anything that would be related to an insurance claim. However, roofing is our bread and butter; it keeps us busy year-round. In fact, 90% of the qualifying roofs out there are left unrepaired. The reason is that you can’t see moderate or light hail damage from the ground. Most people don’t even know their roofs are damaged because they never bother to get them inspected. This provides us with a great opportunity, and our members take advantage of it.
The founding principles of our business, as you might expect from a licensed pastor, are honesty and integrity. I am absolutely committed to making a difference. Our mission statement is, “Success without purpose is meaningless and empty.” With that in mind, we have set up a program whereby 70% of the net profits of every job we do are given to charity.
Our charitable organization is called Life Forward International and is currently structured under the umbrella of Waterstone (formerly Christian Community Foundation). Last year we were able to fund the purchase and construction of an orphanage in Sri Lanka.
Another passion that we have is preventing human trafficking among children, especially the little girls who are slated for the sex trades. This is going to be one of our upcoming goals and something we hope we can have a significant impact on in the near future.
The donations to Life Forward International are made on behalf of our members, who then receive those funds as income and enjoy all the applicable tax benefits of those donations. This gives our members a vested interest in the work that is being done. They can even go online and look at the faces of the children that their efforts are affecting.
David goes on to answer Entrepreneur Exchange’s key questions regarding not only his business opportunity, but what it takes to make it in business today in general…
How does someone know if they have what it takes to own their own business? Tell us a bit about how you made the decision and why.
When it comes to our business specifically, you are going to need a strong work ethic. I say that first and foremost because it has been the biggest challenge we have seen for new people coming in. If you are the kind of person who needs a time clock to be effective, this is probably not the best opportunity for you.
To succeed in your own business, you absolutely must be self-motivated. Nobody I have ever met that has started his or her own business has told me that it was easy. But if you have the stomach and drive to work hard and a tough skin and you are not easily discouraged, then you have a very good chance of making it.
Getting started is the hardest part because you have no customer base. Once the word gets around and people know who you are, jobs begin knocking on your door. But it takes about a year to get there. Until then, you can count on good old fashioned hard work to get you where you need to be.
You also need to have some good people skills. If you are not good with people, this may not be a good fit for you. You are going to need to be able to make people feel comfortable with you, and you are going to need to be able to communicate well.
What was the biggest challenge you faced in your first six months in business? How did you meet that challenge?
The time it takes to train people has been our biggest challenge. Our people have sometimes spent huge amounts of time getting someone trained and then that person does nothing with the training. To help our people with this issue, we have developed an online training course that can be accessed via a username and password and is available 24/7. Now new people can train themselves and our people no longer have to do one-on-one mentoring. All they have to do is answer a few questions every now and then and those who want to be trained can do so at their own pace and on their own schedule. Those individuals who don’t take the time to go through the training materials don’t get much of our time. For those that do and make an effort, we return the favor. This protects our people from putting their time and energy into the wrong people.
What do you think is the greatest challenge facing business owners today and why? Any suggestions for how to address those challenges?
For new businesses, I would say startup capital is the biggest challenge. That is why we have eliminated that cost. In our business model, you can get started with just a few basic tools. All you will need are a computer, a printer, a scanner, high-speed internet and some basic office supplies. You are also going to need a cell phone, as well as a digital camera. However, most cell phones have that built right in and they work just fine. You will need transportation, and you are going to need a ladder. We usually tell new people to get one that is at least 12’ high, something that will reach the roof of a single-story home. You are also going to need a tape measure. With all these things in place, a strong work ethic and good people skills, you will have a very good chance of succeeding in this business.
What is the single strongest piece of advice you would have for someone just starting out in business for themselves?
Starting in our business, you are going to need the resources to last for about twelve weeks. We tell new people coming in to expect that they will need that amount of time to fill their residential pipeline. However, if you don’t have those kinds of resources, you can start on a part-time basis, until you get your pipeline filled. We have had quite a number of people come in on a part-time basis, just until their part-time job makes more money for them than their full-time job, and then they switch over. On a part-time basis, it is realistic to go up and down a street on a Saturday and get two jobs, and then follow up those jobs throughout the week.
If you are out of work now and you need quick money, this may not be the best fit for you. It takes eight to twelve weeks for you to fill your pipeline and begin making a reasonable income. If you don’t have the capital to sustain you and your family for the time it takes for you to build your business, you might want to consider going out and getting a regular job. Then you can work on a part-time basis with us until you get the resources you need.
What would you say is the one thing that new business owners forget about or overlook when they’re just planning/starting out?
The most valuable asset I had when I first started our business in Texas was the thirty years of experience that I had from my time back in California. That experience helped me to avoid the pitfalls and suffering I see many of my peers enduring right now. Granted, the experience was expensive. At one point it almost cost me my life in fact―but it was all more than worth the cost.
The bottom line is experience is priceless. I am at a place now where I can almost foresee the future. I can identify problems and deal with them before others even know an issue exists.
If you are just starting out, you have two choices: 1) You can go through hell for thirty years, like I did, and hopefully survive long enough and gain enough knowledge along the way that you become a success, or 2) You can learn from those who have been there and done that. Believe me when I say that the second option is much less painful. After too many years of trying to figure this out on my own, I have now chosen to feed my soul with the wisdom of others who had to pay dearly to obtain it.
If I were to pick one thing, that would be it. Get a mentor. In fact, get as many as you can. Find them in books, find them in people…whatever you do, just find them. I also would strongly recommend reading The 21 Irrefutable Laws of Leadership by John Maxwell. That is a good start. I built the infrastructure of my business around that book and the results have been amazing. But don’t stop there. I am reading all the time. Every day I am learning as much as I can, and everything I learn is a golden treasure. If you are just starting out and you think that you are so smart that you don’t need help, I have some bad news for you―you’re an idiot. Only those who are smart enough to know there are things that they don’t will survive. Be smart enough to NOT be a know-it-all!
What marketing strategies have you found to be most successful in growing your business?
As I stated, our industry is insurance restoration, which is repair to property that is paid for by insurance companies. Our success and the demand for our service are not tied to the economy; they are tied to the weather. That is one of the reasons our people are doing so well despite the economy.
When I first started doing this, I would go to a neighborhood that was damaged by hail, and then I would walk up and down a street and identify the roofs that were old and nasty. If it is an old roof, chances are that in the state of Texas it has been through several hail storms. I would go up to those houses with the beat-up roofs and knock on the door and I would let them know that their roof might possibly qualify to be paid for by their insurance carrier. Then I would go ahead and give them a free inspection and see if that was the case. I only focused on areas where hail had caused damage, so it was almost always a sure case that they were eligible.
I would go out on a Saturday in an area that had suffered hail damage and go door to door. Usually I could pick up two or three jobs in a day. This is probably about average. I am not a very good salesperson, but when you are trying to sell something that is being paid for by someone else, it makes it a lot easier. The record in our company is 15 in one day.
It can also be a great opportunity for our customers when we approach them this way because we offer a significant referral incentive. I have offered this opportunity to folks and they have literally taken me by the hand and walked me up and down the street introducing me to their neighbors. We actually will pay $100 for any referral that turns into a job. Two of our customers in Corpus Christi, TX are in a referral war of sorts right now, each trying to outdo the other. Needless to say, our people love it!
The referral program also provides a great opportunity for college students. If a college student that has average sales ability, like me, goes out on a Saturday and gets just two or three jobs in a day, well, that’s two or three hundred dollars in referrals. There are not many places where a college student can go out on a part-time basis and make that kind of money.
It is an opportunity for kids too. We had one kid that was up in the Dallas/Fort Worth area who was the kind of kid that would run around the neighborhood and knock on doors asking if he could mow your lawn for five bucks or wash your car for two...whatever it might be. He was just a natural salesman of sorts. So he got a hold of this opportunity and started walking up and down the street knocking on doors and got three referrals his first day. The kid was in heaven!
What is it about the business/industry you are in that made it so attractive to you?
As I said before, our industry is insurance restoration. The demand for our services is not tied to the economy, but it is tied to the weather. That is one of the reasons our people are doing so well right now, despite the current economic climate. Also, it is a lot easier to sell something to a prospective customer if the thing you are selling is being paid for by someone else. That is what makes insurance restoration so lucrative in a struggling economy…any economy for that matter.
After the initial start-up phase in business, what obstacles do business owners face as they try to grow their business and remain successful? Any advice for how to overcome those obstacles?
The paradigm shifts in business are constant. For example, we are developing a product right now that I believe will change the way roofing is done. We can take a normal roof and turn it into a solar panel for about the same cost as a new roof and eliminate our customer’s electric bill. Can’t give away too many trade secretes here, but the world of roofing is about to change. Staying on the cutting edge of technology is critical in our fast-paced society. Our association is determined to be on the leading edge of that curve.
What on-line, software or other resources have helped you the most in managing all aspects of your company? Why and how have they been helpful?
We operate our company from a central server located in San Antonio and all our people are linked to that server via a remote desktop connection from their home offices. In essence, we have a nationwide organization being operated out of a bunch of home offices.
We use Open Office as our primary business program because it does everything Microsoft Office does, except it is free. We have a proprietary application of that software built into a Job Master that runs the infrastructure of all our jobs.
Our estimating program is called Xactimate, which is the same program that most insurance companies use. This program can be accessed on the server via a remote desktop connection as well.
Our server also houses the training materials you will need to get your jobs done, as well as everything you could possibly imagine that’s related to our business. In essence, all that you need to know in order to be successful is available to you on the server 24 hours a day, seven days a week.
What did you do before you decided to become your own boss, and how have those skills helped you in your current business?
I often ask myself, “How in the world did I end up here?”
I am a licensed minister and former pastor who has chosen to fulfill his pastoral calling through business. Shortly after I got married I became acquainted with some amazing businessmen in a large church back in Los Angeles. These men were very successful and wealthy and were loosely called “Dollar-a-Year Men.” They got this title because they went on staff at their church and were paid a dollar a year, but they poured hundreds of thousands of dollars into their various passions and were making a real difference in people’s lives. As a young minister in my early twenties, I saw what they were doing and was most impressed. In fact, they modeled for me what would become my newfound “calling.” I committed the remaining years of our lives to making as big a difference as we can. In January of 2009 our family moved the company to Texas.
My wife and I reestablished the company in Austin, Texas with a new commitment―to operate out of faith and commit 70% of the net profits of every job we do to various ministry purposes. Apparently God thinks this was a pretty good idea and has been wonderfully blessing our efforts ever since. Truly, he “…is able to do exceedingly, abundantly above all that we ask or think.” (Ephesians 3:20).
Top on our list of priorities is to help relieve the suffering of children in third-world countries. The current focus is in Sri Lanka. A three-decade civil war with the Tamil Tigers has left the national government with insurmountable challenges. Thankfully the war ended in early 2009, but the human suffering among the children is unimaginable. Entire family groups have been wiped out leaving young children and even babies with no one to care for them. In an effort to help, we have partnered with a local missions group and funded the purchase of eight acres and the construction of fifteen buildings.
Also on our list of priorities is to secure the freedom of children sold into slavery, particularly the little girls slated for the sex trades. One of our upcoming projects will be to partner with several outstanding groups that deliver children out of slavery and place them in orphanages (and sometimes directly into homes).
What process do you follow to successfully close on a lead and make the final sale? Any tips?
There is a training series on our server that talks about this in depth. I don’t want to give away any trade secrets here.
If you work from home, what are the greatest benefits to doing so? What are the drawbacks, and how do you manage them?
Everybody in our association works from home. We set it up this way on purpose. I have operated businesses both ways. For me, being my own boss and working from home is priceless. I’ll never go back to an office again…I hope.
If you own more than one business, how have you integrated your businesses to juggle it all successfully? Any suggestions?
I currently own four businesses. Andrew Carnegie said, “I would rather have one percent of 100 people’s efforts than 100 percent of my own.” That is how I do it. I train other people to replace me and then move on.
If you bought into an already existing business opportunity, distributorship, licensee opportunity or small franchise, how and why did you make that choice?
I never did buy into an existing business. I have always created my own opportunities, so I am not the right person to ask. I set up our program so there is nothing to “buy into.” You are given the tools to fully operate and build your own opportunity into whatever you want to make it. You have no boss and you don’t have to share your profits.
What is/are your favorite motto and/or quote when it comes to business? Any final words of encouragement and/or inspiration for the budding entrepreneur?
I’ll say it again because it bears repeating―“Success without purpose is meaningless and empty.” It's our mission statement. Conversely, success with purpose is most fulfilling indeed. If you are going to succeed and have a meaningful life, get a purpose―not a self-serving purpose, but one that makes a positive impact on the world.
If your purpose is to be rich and famous, I suggest you take a closer look at the people that are. Their lives, for the most part, are miserable train wrecks. Is that what you really want? There is nothing wrong with being “rich” or “famous.” I am rich myself (by most people’s standards), but without a purpose, my life would be an empty shell. No amount of stuff will fill an empty, purposeless life.
I believe the greatest tragedy in life is not death, but rather having to endure life with no meaning. Get a purpose. Create your business to be a tool to make that purpose happen and then you will have something worth fighting for.