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TRANSACTIONS GODSPEED CAPITAL BACKED HUCKABEE ARCHITECTS ACQUIRES RACHLIN PARTNERS Godspeed Capital Management LP, a private equity firm, announced the acquisition of Rachlin Partners, LLC, an architecture, planning, program management, and construction management company focused on education and government facilities in California. Founded in 1982 and headquartered in Culver City, California, Rachlin has built a reputation for providing an innovative and client-centered approach to planning, designing, and constructing public architecture across Southern California. Since inception, Rachlin has completed more than 500 education focused projects across Southern California, with 80 percent of its projects involving public funding.
With an emphasis on education, healthcare, and government facilities for public and private clients across Southern California, Rachlin joins Huckabee Architects, Inc., Godspeed Capital’s AEC services and solutions growth platform. Rachlin will enhance the platform’s value- added delivery, while furthering its ability to provide cutting-edge, technology- driven design and engineering solutions in high-growth education and government markets across the United States. Furthermore, the integration of Rachlin enables Huckabee to significantly expand the platform’s geographic reach beyond the foundational Texas market to the attractive California market, the second largest K-12 market in the U.S. Michael Rachlin, founding partner of Rachlin, said, “We’re thrilled to partner with Godspeed Capital and join the
Huckabee platform, whose expertise in the K-12 markets nationally are a powerful complement to Rachlin’s own public education and government architecture focus.” Following the transaction, Rachlin’s management team will continue to lead the company as a new California-focused vertical within Huckabee. Chris Huckabee, CEO of Huckabee, said, “Rachlin’s addition to our platform will not only grant us entry into one of the nation’s largest and fastest growing AEC markets, but will also strengthen the Huckabee platform through Rachlin’s expert team, longstanding relationships with key school district administrators, and expansive knowledge of California bonding requirements and municipal operations.”
seven figures in revenue, but if you think about it, that is a drop in the bucket compared to what kind of marketing efforts it will support. Everyone in the firm will be using the CRM and the result will be a company that can really get anything they want out to their client base quickly and efficiently, as well as help them with their proposal and qualification document efforts. 6. Internal ownership transition. Investing by making ownership affordable to key people is a big one. Again, most owners of AEC firms can bring themselves to do several of the things mentioned above but get stuck here. But the way I look at it is this: Tie your best and hardest- to-replace people down to the company, let them benefit from the growth, and then you will be rewarded later when you have a business that can survive – or even better, thrive – without you. This increases the value of the business dramatically. 7. Buying other businesses. Once you get “grandma’s recipe” down for growth and profitability, and demonstrate that you can run your firm so it produces consistent results year-after-year, you will find that other firm owners in this business need you. They have no viable transition plans. They didn’t invest enough in marketing. They didn’t create a brand. They can’t hire the people they need. They don’t have the working capital they need TO invest. These companies are great potential acquisitions. They need help and you could be the one that provides it. I could most certainly add to this list of ways to invest in your business, but these seven may be the most critical today. I hope readers realize that the long-term payoff is a more valuable company that is healthier and provides more opportunities for its employees. And that’s always a good thing! Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.
MARK ZWEIG, from page 11
2. Salaries and wages. Annual salary increase budgets for firms in our industry were historically stuck on 3-3.5 percent of total labor, but today have crept up to 5 percent or more. But when you consider that reported inflation rates are 8 percent or higher, these kinds of numbers just won’t do, especially considering the recruitment landscape. Raise increase budgets for investment- minded firms may need to be in the range of 8-10 percent annually. That’s a lot of money and it will reduce profitability in the short run. Many firm owners won’t see why they need to do this, but it will only sink in when they find out what they need to pay to get someone else hired for the job their longer-term employee just quit. 3. Training. Training for project management, training for leadership. Training for business. Training for software. Training for hiring. Training for selling. All of these types of training are necessary and will cost you significant amounts of money, not just for the training itself, but in terms of lost revenue for the people going through it. But it’s necessary. 4. Brand-building marketing. This means constant and continuous social media, good signage, shirts, giveaway promotional products, e-marketing, research on specific client types, continuous PR efforts in the form of press releases, blogging, trade show participation, sponsorships, and more. Brand-building is one of those off-balance sheet investments that takes time to see the fruits of, but done long enough and consistently enough can bring in huge dividends later. Most firms in this business won’t do it. 5. CRM. I just sent a smaller design firm owner to my daughter to talk to her about their choices in CRMs, as she (the owner) was considering investing $13K in a new system and wanted to be sure it was worth it. This seemed like a lot to her when her firm is barely breaking
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THE ZWEIG LETTER JULY 18, 2022, ISSUE 1449
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