Michael Parnell – Founder & Principal, MP Consulting Services, LLC

Michael has over fifteen years of experience in the construction management industry, serving as Senior Project Manager for several of the nation’s largest builders, including Skanska and Hunter Roberts Construction Group. He has been responsible for the overall success of projects in excess of $162 million in contract value, most notably Red Bull Arena in Harrison, New Jersey ($162 million) and the Conrad Hotel in Battery Park, Manhattan ($120 million). Throughout his career, Michael has successfully completed over $564 million of residential and commercial projects to date.

Since founding MP Consulting Services, LLC in April 2012, Michael has led the company through tremendous growth and was honored to be ranked #57 on the 2016 “Inc. 5000” list of “America’s Fastest Growing Private Companies”. Michael is a graduate of East Carolina University with a B.S. in Construction Management and has served as an adjunct professor at NYU’s Schack Institute of Real Estate. He resides in Monmouth County, New Jersey with his wife Erin, son Nolan and daughter Ryan.

Tell me about your background.
I primarily grew up in a single-parent household, with my mother and younger sister. I lived in New Jersey from birth through second grade, New Hampshire from second through eighth grade, then back to New Jersey for all of high school. I never knew my biological father, and my stepfather was never around much. My mother and stepfather separated when I was eleven and divorced by thirteen.

What did your parents do?
After they divorced, my mother went back to school to become a nurse. After eighth grade, we moved from New Hampshire to Point Pleasant Beach, New Jersey, to be closer to my mother’s side of the family. My mother was in school part-time and working part-time, from when I was in ninth grade through senior year of high school. We lived with my grandmother in Brick, New Jersey during the summertime, and lived in “winter rentals” in Point Pleasant Beach from September to June each year during high school so we could go to school in the Point Beach school district. There was a lot of moving in my life, twice a year throughout high school alone. I played soccer and wrestled during all four years of high school, and was captain of our soccer team in junior and senior years. Sports was my outlet, growing up. Whenever I was on a team, I was focused. During the off-seasons, I would slack off and get into trouble.

Tell me about your early career.
I graduated from East Carolina University in Spring 2002 with a Bachelor of Science in Construction Management, moved back to New Jersey, and started working for The Henderson Corp. within weeks of graduation. My larger projects with Henderson Corp. were for GlaxoSmithKline, which was a new office building and research labs, and then a seven-story building dormitory complex at Princeton University. While at Princeton, I was recruited by Skanska, where I helped build the Frank Gehry-designed Lewis Library, also at Princeton University. After two years with Skanska, my boss had moved on to Hunter Roberts Construction Group, and recruited me to join his team. While at Hunter Roberts, I had the privilege of being chosen by the founder, chairman and CEO, Bob Fee, to be his mentee, which was a career and life-changing opportunity for me. Bob is a legend in the New York/New Jersey building market, having formerly been the president and CEO of Turner Construction before retiring and founding Hunter Roberts. Bob and I had a two-year, formal mentorship, meeting for breakfast once a month for a couple of hours each time. In those mentorship meetings, he exposed me to the full breadth of how a large-scale construction company operates, every inch of the business. He also enrolled me in a tremendous amount of offsite training programs run by FMI, an industry-leading management consulting firm where Bob himself had received executive coaching. But the most important outcome of our mentorship meetings was the confidence that Bob instilled in me, and a belief he built in me that I could achieve far more than I had thought I may achieve up to that point in my life. We set goals for the next several years of my career, and Bob believed that by 34-35 years old, I should be aiming to be the General Manager (GM) for one of the Hunter Roberts’ business units (the lead in one of our regional offices). At the time of setting this goal with me, I was a 28-year-old project manager, so to say this was a “stretch goal” at the time is an understatement. But Bob believed in me, and eventually I believed in myself that it was an attainable goal, and we set a plan in place to achieve it. I then moved on to be Senior Project Manager on the $162 million Red Bull Arena (MLS soccer stadium), and the $120 million Conrad NY Hotel in Battery Park, Manhattan. Managing these large scale projects was a lot like being GM of a business unit, with the amount of volume we were putting in place each month, which was preparing me just as we had planned. By 2012, although I was no longer working for Hunter Roberts, and Bob had since retired, I founded MP Consulting Services three weeks before my 34th birthday. My old mentor was right, all along.

How did the concept for MP Consulting Services come about?
The majority of the projects I worked on throughout my career have been “GMP” contracts (guaranteed maximum price), where the GC and client have an open book contract arrangement. The clients see the full details of the project estimate, and the result is a team-like atmosphere, where everyone works together to build a successful project with each partner’s best interest in mind. In contrast, there is the “lump sum” contract arrangement, where a client has a set of plans and sends them out to bid to several general contractors. Each GC submits a bid to the client, and in most cases, the lowest bidder wins the contract to build the project. In this arrangement, the GC keeps his information close to his chest, and the client guards his internal budget from the GC, and the result is a more oppositional atmosphere where little trust has been built between the team members. The most successful and enjoyable projects I’ve built were in the “open book, GMP” manner, so I had the vision for MPC to operate on all projects in this open book manner. The initial goal was to build that level of trust between MPC and our client, and if we’re successful there, then the construction process would be successful and enjoyable for all parties involved.

How was the first year in business?
The first year in business was as challenging as it was rewarding. When I made the decision to start the company, my son was eleven months old, and without the support and confidence of my wife, Erin, I probably would not be speaking with you right now.

I landed my first project three weeks after I founded the company, as a pure construction manager: a “project manager” for hire, essentially. It was a consulting contract that would pay my bills for the next four months of the business, and gave me the opportunity to keep the lights on while I searched for more work. My first year in business, which I count as April to December 2012 (8 months), MPC generated a total of $100,000 of consulting revenue while putting in place around $1.5 million in construction.

Did you initially have to raise capital to fund the business?
I have never raised capital for the business. I started MPC with a $15,000 personal loan from the social lending site, Prosper.com.

What were some of the challenges you initially faced?
For the first eight months, the biggest challenge was finding new opportunities. I would take on anything, any contract size, just to keep the business going while I got my name out there and waited for some of my former clients to have new projects ready to build. Another challenge would be the lack of history that my new company had. Michael Parnell had a tremendous resume, but MP Consulting Services had nothing! Getting over that hurdle with some people was difficult, while others who had prior experience with me looked beyond that and saw what I brought to their project as a whole. And obviously, cash flow was the largest challenge. Keeping the income flowing to pay the bills, with a small number of projects going on at that time. There were plenty of times where I was on the clock, nearing the bottom of our bank account, wondering if this was it. But every time that happened, I figured out a way to keep things moving along. A new project would pop up and I’d be safe for another month or two.

Did you have a lot of competition?
There are countless construction companies out there, in both the residential and commercial building markets. We differentiate ourselves by the manner in which we operate, and run our business. And to that, I believe we have very few true competitors out there, if any at all.

What was your marketing strategy?
I reached out to former clients, and sold myself as being able to bring a high level of construction expertise to their projects in a low overhead package. This wasn’t too hard a sell, because at the time, it was just me!

Who was your first client?
My first client was Jon Liedersdorff, who was building Lakehouse Music Center, a music-themed complex in Asbury Park, New Jersey. It included two recording studios, designed by the world-renowned Walters Storyk Design Group (they designed Jimi Hendrix’s Electric Ladyland studios, among more recent artists such as Bruce Springsteen, Alicia Keys, Jay Z, and many others). The project also consisted of rehearsal and lesson rooms, office and retail, and a small cafe.

What was an average workweek like for you back then?
I would say I averaged around 50 hours a week that first year.

Is that around the same for you today?
On average, today, I’d say it’s about the same. But they’re different hours than they were back then. I spend more of my time on big picture forecasting and planning, business development and estimating work. It honestly feels like I work 20 hours a week, because I put in the hours when I need to, and spend time out of the office when my son has a practice or game to attend. I finally have the work/life integration that I always wished for.

Were you profitable by the end of year one?
The first year (8 months) I was working as a consultant/project manager, so I had no overhead except minimal operating expenses, and it’s hard to count that as profitable. It was pure income. But that first year, and every year since, we’ve been profitable.

How fast did the company grow during the first few years?
2012 = $100,000 in revenue
2013 = $1,546,165 (1,546% year-over-year growth)
2014 = $3,100,624 (200%)
2015 = $4,767,838 (153%)
2016 = $6,606,978 (138%)

So our four-year growth has been 6,606%, and rising. We’ve already put in place $2,000,000 in revenue as of 4/30/17, and we’ve got $4,000,000 under contract right now, so we’re nearly surpassing last years’ revenue and it’s only the beginning of May. I would conservatively project we put in place $8,000,000 in 2017.

What do you think caused that high spike in growth?
Referrals from our clients and repeat business. We’ve created, as Tony Robbins likes to call it, “raving fans.” And they’re the #1 reason why we’ve experienced the growth that we have. And that boils down to doing what we say we will do: being accountable, trustworthy, and living up to the expectations that we’ve now set for ourselves and our clients.

Did you ever feel like giving up?
There were certainly times when the bank account was low, and I thought to myself how easy it would be to put in a phone call or two and go work with one of my former co-workers who are now spread-out across every major construction firm and developer in the tri-state area. But I know that the freedom to do things my way, the way MPC operates, would be gone, and I’d be playing by another company’s set of rules. And that’s not acceptable to me anymore. I’d also lose the freedom to designate my time how I see fit, to be able to prioritize being involved with my family as much as I am, to bring my kids to all of their practices and games, coach their teams, and have dinner with them at a reasonable hour every night. Those things are non-negotiable now, so to make that happen, I have to succeed in this business, and that’s what drives me.

Did you ever feel you had to sacrifice a lot of personal time for the business?
I have never felt that I had to sacrifice personal time for this business, not once. The business and my personal time are one and the same. MPC is like a third child to me. I balance my time with MPC just like I do with my two children and my wife. Sometimes, one of the four needs to be the priority, and other times it changes. There is true balance, and if anything, my family gets more of my time than the business.

Why did you choose not to take on outside financing?
I knew that once I took outside financing, from investors, that I’d have to answer to them and could potentially lose control of the company, from an operational and cultural standpoint. I’d have to take on projects to hit revenue and profit goals, even if I didn’t think they’d be a good fit for our company. I don’t want to have those external drivers as a factor for how I make decisions for this company.

How do you organize your day?
At all times, I look at what I have to accomplish over the next several days, and several weeks, and organize my work accordingly. What will give me the most return for my time on that particular day, what makes the biggest impact, and that’s what I choose to work on. I’m neurotic about it. And I have to be, because I wear so many hats.

What has been your primary source for new clients?
Referrals from clients, and repeat business. In the residential business, I have great relationships with several realtors in our area of the Jersey Shore, and they’re a great source of referrals. I’ve also built their homes, so getting a referral from them carries a lot of weight with their clients. On the commercial side, repeat business from core clients (higher education clients, healthcare clients, private developers), and referrals to others from those clients, are the main source of our business development.

How did the recession affect your business?
I started the company in 2012, as the economy was on the upswing. So fortunately I missed the past recession. But we’re preparing for the next recession, by diversifying our business and focusing on market sectors that are the most insulated from downturns: healthcare and higher education markets. Those are markets that perform well in recessions, and they are now our strongest sectors of commercial work. Whenever the next residential market swing happens, we’ll be prepared.

What are some of your daily habits that have contributed to your success?
For the past nine months, I’ve been working out four days a week, at 6:30am before everyone in my house wakes up. That’s been great, as I’ve lost weight and feel great, and am very awake for the work day. It also allows me to get my workout in without impacting my work hours or time with the family after work, and I don’t feel stressed about trying to find the time to fit it in. I feel great, and I’m the lightest I’ve been since high school.

What are some quotes that you live by?
“If you’re afraid to fail, you’ll never succeed.” – Dan Gable
“Once you’ve wrestled, everything in life is easy.” – Dan Gable

What are some of your favorite books?
Emotional Intelligence: Why It Can Matter More Than IQ by Daniel Goleman. My entire business philosophy is based around this book. Also, MONEY Master the Game: 7 Simple Steps to Financial Freedom by Tony Robbins. This was a real eye-opener for me, and I’ve reorganized my entire financial life around the information I learned in this book.

How do you define success?
Success to me is having a stable, happy family life. Excelling with my business provides the financial means to make that family life stable and happy, so it’s an integral part of being a success to me, but it is not the defining factor in being successful.

What is the key to success?
The key to success, for me, is maintaining that work/life integration balance. Making the time to be a part of my kid’s lives, and never allowing the success of the business to pull my time away from what’s most important to me.

Did you always know you would be successful?
When I was younger, I had no clear direction. I got into trouble at times, and didn’t know what I really wanted to do with my life. Even when I first started working after college, I wasn’t performing to my potential. But one day, I was figuring out a design question one of my subcontractors came to me with, and after figuring out the answer, my project manager said to me, “Mike, you just figured out the answer to a question that a man who’s worked in his industry for 50 years came to you with. You’re smart, and if you apply yourself, you can really go somewhere in this business.” And from that day forward, I took that advice and focused my life on excelling in my industry. Good things have come my way ever since. That focus has put me in the right place at the right time, and when opportunities have presented themselves, I jumped on them to take those next steps in my career.

What is the greatest lesson you’ve ever learned?
Stick to what you’re good at, focus your efforts on areas you’re an expert in, and don’t try to be too many things for too many people.

Tell me about one of the toughest days you’ve had as an entrepreneur.
A few years ago, we took on a project for a large developer, where we were basically hired to perform one trade, and to bid and subcontract one company to perform the work for us. We were essentially a GC with one sub beneath us, or a broker would be another way to describe it. Just before we were about to start the project, it became apparent to us that this subcontractor was not capable of performing the contract. They weren’t large enough and didn’t have enough capital to be successful. We had to find a replacement sub within weeks, which fortunately we did, but within a month of the project, that company was asking for increased rates for the work being performed or they would decline to continue on the project. With the increased cost to this subcontract, we ended up completing the project but losing money on it. It was a large contract, with a lot of financial risk, and took nine months to complete. We learned from that experience two things:

  1. If an opportunity seems too good to be true, easy money, look long and hard at the potential risks involved and take them seriously.
  2. Remember who we are and what we are good at, and stick to that.

How did you overcome the challenges at hand?
We put our heads down, and muscled our way to completion on the project. There was no way we were going to allow the project or our company to fail, despite knowing early on that it wasn’t going to be a winner for the company. We were able to secure some additional work from that developer, which helped us come close to breaking even on the project instead of losing a lot of money on that initial contract.

What is your vision for the future of MP Consulting Services?
I want MPC to grow in a steady, organic way. We do not set arbitrary revenue goals for each year, because I believe it would cloud our judgement about what type of projects we go after and what kind of clients we work for. I want our growth to happen by our core clients referring larger volume contracts to us, not by trying to win every project we hear about. Fewer contracts, but larger contract values, and we are currently on that path.

As for the company culture, I want MPC to be a place that attracts top talent. Young, energetic, driven individuals who want to advance their careers quickly and take on more responsibility at a young age. Their growth and development should be in lock-step with the growth of our company, so we can stay lean and mean, and perform at a high level.

Finally, long term, I would love for one or both of my children to one day take over the company. They can go into any field they wish when they grow up, and it’s most important to me that they’re successful and happy in the field they choose. But I sure would love it if they took over the family business one day.

What advice would you give to young entrepreneurs?
Do not rush into starting your own company. Gain experience by working for other top companies within that industry, build your network and knowledge, and then take your shot. The contacts you make as an employee will be invaluable to you when you’re on your own, for potential clients as well as resources to reach out to when operating the company. When you’re working for those other firms, don’t just focus on the role which you’re hired to perform. Absorb knowledge from all operational sectors within the business, ask questions and gain an understanding of how the business works as a whole. And when you do take the leap, make sure it’s an industry that you’re an expert in. Your clients are going to be hiring you based on your expertise, don’t try to be something you’re not. And go all in, give it everything you’ve got.

This interview was conducted for research purposes by Jason Navallo for his upcoming book, Underdog.