Below are some excerpts from our conversation with Phil Coupe, co-founder of ReVision Energy, a full-service renewable energy contracting company in Maine that is ranked #1 in New England for rooftop solar. Started in 2003 by two guys in a garage, Phil and his partners have grown ReVision to a 250-employee company spanning five locations in three states. In 2017, Revision sold itself to its employees via an Employee Stock Ownership Plan (ESOP) so we dive deep into this program, the founders’ reasons for pursuing it, and why they think it will set the company up for the next 100 years.
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We are taking a short break for the holidays, so look out for our next episode on January 11th!
I never could have done this had I not seen another entrepreneur do it myself when I was younger learning my way in the business world. I hooked up with a guy who had three young kids and was launching what turned out to be a very successful business. And I watched him pull that off and that’s what made me realize it would be possible to do it myself. Without that real-world example, I’m not sure I would have had the motivation or the guts to do it.
We’ve worked really hard to try and be what we call responsible managers of the business. We’re not looking for huge growth for growth’s sake. We’re looking to advance the mission of the company and that mission is to transition northern New England from a fossil fuel based economy to a sustainable renewable energy based economy. We have added people and infrastructure strictly in response to the demand that we’re experiencing and not with some fantasy about some anticipated demand that might come over the horizon.
We think that type of more organic growth has helped us stay resilient in the face of lots of policy ups and downs. They call this industry the solar-coaster because every year you could get a different state or federal incentive or lack thereof that can significantly impact the economics of a solar investment. So, you learn how to be very careful with the resources that you have and be careful not to over-spend, not to over-invest. [We] try to have a Goldilocks approach to growth. It’s been a pretty exciting and wild ride–sometimes a little bit scary.
We think we have a pretty effective marketing and public relations machine that we’ve built in-house. We have a newsletter with 30,000 readers that goes out in northern New England. We’re often looked to by the traditional press as subject matter experts, so we get called on quite often to give comments about the renewable energy industry. We have a continual output of real, factual information that people trust about the solar industry and the cost-effectiveness of the technology.
We’ve earned that credibility over the course of more than eight thousand solar installations to date. They all work, and as people see that the technology works, that [what] you’re doing is actually as cost effective as you said it would be, people become believers and then they become your repeaters out in the marketplace. They tell all of their friends and that six degrees of separation effect starts to take hold and you get a reputation as an honest broker.
When we started out, it felt like I was wearing 100 hats in the company and just doing a little bit of everything including climbing up on the roof to turn wrenches. I learned from the other entrepreneur that I worked with before the start-up of ReVision that you really have to empower young people to go out and make their mark in the world.
I had a good background of watching myself be empowered to succeed and watching other young people be empowered to succeed that I want to just give [them] as much leeway as possible to let [them] go out and make a mark in the world. Sometimes, when you do that with the right people, they set the world on fire in a positive way.
We have hundreds of other examples at ReVision at this point because our hiring philosophy is [to] bring in exceptional people and empower them to be the most successful people in [our] industry. They have to make that happen–you can’t do all of it for them. You have to give them a lot of leash, and for the right people, that can produce phenomenal results.
We decided that we wanted to bet on ourselves and not hitch our wagon to two other solar companies in the northeast, and so we cut loose from the idea of a merger and we pivoted to the idea of an ESOP as a way to give the company 50 or 100 years of long-term sustainability by sharing the success of the business with the people who are actually making it happen and also as a way to enable the founders of the company to take some of the chips off the table that had accrued since the startup. We figured we could do both of those things in the form of an ESOP and that drove the decision.
So the Employee Stock Ownership Plan is actually an incarnation of the Internal Revenue Service and it was an effort by the US government as a way to share the benefits of the business with all of the employees. The transaction is really interesting in that when you sell the company to the employee trust, your company becomes tax exempt at the time of the transaction so that the employees can use the tax savings that they would have paid to the federal government to pay back the founders for the business.
It’s really a remarkable kind of way to transfer ownership from the original founders into the hands of all of the employees and the future employees of the business in a way that gives them a path to pay back the founders without spending any of their own personal money. It also incentivizes everyone to run the business in the best possible way because the employees are becoming the owners, [and] it’s in their best interest to have the company succeed because that’s gonna be their retirement vehicle. It’s also the only way for the founders to get paid back, so the founders have this great incentive to keep managing the business correctly throughout the duration of the ESOP.
We’ve heard mostly positive feedback. [Our employees are] excited about it, they appreciate it, [they] feel like ReVision Energy has good intentions and that we want to take the best care of [our] people as possible. By the same token there’s a little doubt and confusion. How much this is really gonna benefit them over the long haul has yet to be determined because the account balances that the individuals have today are puny. You start with almost nothing and you build value over time as the company accrues value and as the founders get paid off. So right now, people are taking a leap of faith. That’s why we point to bigger, more successful companies like Cianbro to say, “Look here’s a 70-year institution in Maine that’s been an ESOP for 30 years and they’re going gangbusters.” And that helps give people confidence.
Have a great week,
Your Chenmark Team