You could say that a light bulb went on at Retrofit Electric. When the federal Universal Waste Rule was implemented in 1995, the owners of the Owatonna-based company didn’t anticipate that it would alter the focus of their young business.
Founded in the late 1980s, Retrofit began by doing lighting retrofits—designing and installing more energy-efficient lighting systems for businesses. But once the new law made the disposal of light bulbs more complicated and expensive, Retrofit founders Mike Noble and Steve Kath realized that their company was perfectly positioned to help clients manage the labyrinthine hazardous-waste disposal process. The Universal Waste Rule requires that certain types of hazardous waste (particularly materials containing mercury) be separated from the waste stream and disposed of at special sites.
“Steve and Mike saw from the beginning that there might be a need for this kind of service,” says Robert Marquardt, vice president of sales and marketing for the Owatonna firm, now called The Retrofit Companies. “The Universal Waste Rule legislation only confirmed that it would be a good area to get into.” So Noble and Kath (who’s now Retrofit’s sole owner) added a new division, Retrofit Recycling, to help clients properly dispose of or recycle old electrical supplies and fixtures. (The division has since added the disposal of other types of trash covered by the Universal Waste Rule, such as batteries and thermostats, to its service.)
Over the years, Retrofit added more new divisions as opportunities arose. The Retrofit Companies still include Retrofit Recycling, but also Retrofit Electric, a full-service electrical contractor; Retrofit Supply, which provides electrical parts such as lamps and ballasts; and the Lighting Retrofit division, which continues the work of energy-efficient lighting upgrades. The business segments are meshed together so that clients can utilize any or all divisions. When Retrofit does electrical or lighting work for a client, waste disposal is included in its fee.
“Let’s say we do some lighting retrofit at a hospital,” Marquardt says. “They might start with that, then they might ask us to dispose of some fluorescent lamps and medical hazardous waste. They’re happy to have us take care of that because we also track it for them from a regulatory standpoint.”
The company’s headquarters remain in Owatonna, with a pair of Retrofit Recycling locations in Little Canada and Indianapolis. Retrofit’s market stretches across 10 Midwestern states. Its clients include Target, Maplewood Mall, Medtronic, and the municipalities of Duluth, Faribault, and Lincoln, Nebraska. “We have customers with a nationwide presence who want us to do the work in their other locations,” Marquardt says. “Target might say, ‘We have a store in L.A. Can you help us there?’”
Retrofit posted $11.2 million in revenues in 2006, and is forecasting $13.6 million for this year. Part of that expected growth will be due to its newest expansion plan—franchising. As Retrofit’s client base extended farther and farther from Minnesota, the company felt its service capabilities were being stretched thin. “Franchising our business model leverages our brand, utilizes the processes we have developed and perfected, and provides consistency across the country,” says Marquardt, who directs the franchising program. In January, Retrofit opened its first franchise, which is run by a former sales associate, near Portland, Oregon. The company plans to open franchises in Dallas, Phoenix, Atlanta, Boston, and Philadelphia during the next two years.
“We want controlled growth, maybe a couple franchises at a time,” Marquardt says. “The franchisees will receive all the infrastructure, tools, and training so that they operate right away. Yet the business is complex enough that they have to fully understand the four elements they’ll be running. It’s not like opening up a Quizno’s.”
