For this special CEO Roundtable podcast, leaders from the top three companies of the 2024 Dynamic Dozen sit down with Springfield Business Journal Executive Editor Christine Temple to talk about their recent years of fast growth and projections for the year ahead. This month’s guests are Drake Hughes, partner and president of Keep Supply – the fastest-growing company on this year’s Dynamic Dozen list; Phil Melugin, founder and CEO of Phoenix Home Care & Hospice; and Rick Waggoner, senior vice president and chief development officer for Convoy of Hope.
An excerpt from the start of the podcast follows.
Christine Temple: You all make up the fastest-growing companies list that SBJ calls the Dynamic Dozen. We use a formula of employee and revenue growth to determine those rankings. Talk about what has led to the expansive growth that you guys have had in the past few years.
Drake Hughes: We practice Great Game of Business. So, I’d say a big part of it is teaching financial literacy to the team. We also have a team that believes in the ability to grow fast. And then really we track a lot of sales activities, and that’s been one of the No. 1 drivers for us to continue to grow over time, adding people doing more sales-related activities.
Temple: And you have really focused on website growth?
Hughes: Our biggest lead generator is the web, but from there we take those leads and pursue them with our sales team of about 55 inside salespeople.
Temple: Where are you on track for in 2024? More growth? And what’s your revenue looking like?
Hughes: We will end this year right around $51 million. Next year’s plan is to be at $84 [million], so continuing to see growth there. Our run rate rate’s probably around $65 [million] right now, so it’s not as big from where we’re at today because we continue to grow a lot over the year. But we are slowing down in hiring a little bit and just focusing on efficiency in 2025, with our critical number being gross margin per employee next year. We’re looking at profitability per employee.
Rick Waggoner: We’re a little bit different in that we’re a nonprofit. So, revenue for Convoy of Hope is really donation revenue. And it’s interesting because it’s harder having come out of the for-profit world where you set projections and then you get the sales team motivated and go; we’re a little more dependent on the generosity of our donors. For us, it’s more establishing a fertile ground where growth can happen. We talk about things like the principles of fundraising, things like leading with friendship, excellence as a value, being world class at saying thank you, providing concierge-level service, deep engagement to our donors and partners. Because at the end of the day, we are not smart enough or strategic enough to force anybody to write a check to Convoy of Hope and there’s no product or service that anybody gets in return. So, it is a little bit of a different model, but I think some of the same principles apply. Just internal excellence in making sure people understand where they’re at, what the goals are, and then just being good stewards of what we’ve been given in terms of resources.
Temple: In terms of the funding that you’ve needed in the past few years, you’ve had these massive grand openings of large new buildings and training centers in the area. Has that really spurred some of the donations – the activity and the excitement around these new facilities and what they might mean for the organization?
Waggoner: I led the capital campaign for the campus out on the west side of town. We told donors, if it means giving $1 less to program in order for you to give us money to build this building, then we don’t want you to do that. So, what we found is a lot of donors who said, “No, we really want to be part of scaling for the future, so we want to help you put this facility in place.” And it did bring out a lot of new donors who like to give to brick-and-mortar sort of projects. So, I think a lot of new donors were attracted. And certainly now that it’s there, it’s helped us so much in terms of visibility and even with recruiting new team members. It’s been just a great asset as we ask people to move to Springfield as Convoy’s grown. That’s the big thing. We want people to come here and work and live and pay taxes in Springfield.
Temple: What’s roughly your operating budget?
Waggoner: There’s the cash only budget, which this year will probably be around $130 [million]-$140 million. If you include all the product donations, we’re probably going to finish the year around $670 million.
Phil Melugin: Home care and the growth that we’ve seen in it is uniquely driven by it being a consumable. In senior health care, which of course is the foundation of much of the home care services that we provide, is probably hyper in its characteristics from a consumable basis. So that allows for extensive growth. We may get a person who chooses Phoenix to engage with them in their quest to age in place. We, on average, care for an individual for two years, but it’s not uncommon to care for an individual for 10 years as they work through the aging process in their home. And then you add to that then consolidation within the market. There’s been a significant constriction of the ability to create margins in our space, and so there’s been a lot of consolidation through M&A activity and various other drivers, but we have benefited from that and have been able to parlay it into significant growth.
Temple: Talk about your footprint.
Melugin: East St. Louis, which is west Illinois essentially, all the way to central Kansas. So, Illinois, Missouri and Kansas
Temple: Your industry is benefiting from obviously the baby boomer generation, huge amount of people and people that are turning 65 every single day. We’re also seeing people live longer, too. What is your unique story to capture that customer?
Melugin: I think branding is extremely important, and I think that there has been a metamorphosis, if you will, with in generally the perception of a consumer out there who used to think whenever I can’t care for myself, I go to a nursing home. I think with the wide range of services and the education that now has been in place for probably very much in earnest for the last 20 years, there’s a lot of people that now have a perception and even more so an individual say, 65, 70 that’s making decisions now for their parents. They’re making that decision of, “Hey, if I get services started early, I could help avoid what happened, for instance, during COVID.” COVID really rewired a ton of thinking that was already in the process of rewiring. Just the perception that hey, there’s a lot of services at very small amounts that can begin to make a difference. For instance, just simply a healthy meal a day can make a huge difference to keeping somebody in their home. But let alone you have a unique societal just stick of dynamite with COVID and parents were in a facility and they couldn’t be seen, they couldn’t be visited, they couldn’t see their family, and it just really rocked a lot of people’s world and they said, “Hey, wait a minute, I really want to get hypereducated to how to make sure that I never put my parent in that situation again.”
Temple: Where do you think you’ll end 2024 with revenue?
Melugin: We’re going to be over $200 million, and that’s going to be just somewhere south of 20% growth.