Iranian Immigrant Creates A $30 Million U.S. Company

Combining Two Good Ideas Creates A $30 Million Company 2

Immigrant Business Statistics: Name: Eric Roudi | Country of Origin: Iran | Immigrated: 1978 | Launched Openworks: 1983 | Jobs created: 350 | Annual Revenue: $30 million

Iranian refugee discovers wealth in America’s urban landscape and then multiplies it by sharing his good fortune with other entrepreneurs.

Eric-jacket
Eric Roudi

When Eric Roudi came to America, it wasn’t to start over, but to study engineering.  Then  a revolution in his home country forced him to rebuild his life almost before it had even begun. Teaming up with a college friend, Roudi headed west to Phoenix to make his fortune and built Openworks, an  innovative facilities services and franchise company that became the envy of the industry.

Here is his story:

Marooned in America

Eric Roudi was a fortunate young man. His parents had the wherewithal to send him to a British boarding school for three years and then financed a first-class college education at Boston’s Tufts University. Everything seemed to be falling into place, but then suddenly, the Islamic Revolution of 1979 overtook his home country of Iran. His parents were stripped of their assets and had to flee to France and Roudi’s prospects were no longer certain.  After college, returning home to Iran was out of the question, and now there would be no money for graduate school.  Roudi was marooned in America, and would have to find a way to support himself as an immigrant.

“Europe still relies on nobility and what your last name is, whereas the United States has an entrepreneurial environment. If you have the wherewithal to work hard and have the smarts to make things happen, this is the best place.”

Finding a Business

Seen through the eyes of an immigrant, the American landscape was very different from Iran’s, especially in the late 1970s. The tall buildings in American cities were especially impressive, and as he cast about for ideas, Roudi kept coming back to these buildings, wondering whether there was anything he could sell to them. Then he thought, “I’m sure that these buildings have to be cleaned.”  Through doing a little homework, Roudi discovered two important facts: building maintenance was a $70 billion business, and perhaps more importantly, it was highly fragmented. “There was quite a bit of turnover in the industry — a good 33% a year, which made for a dynamic environment,” says Roudi.



Immpreneur Statistics
Name: Eric Roudi
Country of Origin: Iran
Immigrated: 1978
Launched Openworks: 1983
Jobs created: 350
Annual Revenue: $30 million

Stroke of Genius: Combining Two Big Ideas

Working with a friend from college, Roudi began to plan for the future.  They wanted something more than a two-man operation mopping floors at night; they wanted to build a business that could grow dynamically, replicating itself over and over again. According to Roudi, “At the time I was intrigued by the whole concept of franchises like McDonalds which are the same wherever you go, whether you’re in Boston or Atlanta. I wondered, Is there anyway we can match the two ideas together?”  Whether it was  a stroke of genius or the unbridled optimism of youth, Roudi combined the ideas of cleaning buildings and franchising the service into his business plan from the start. But grand ambitions such as these inevitably require financing.

Roudi combined the ideas of cleaning buildings and franchising the service into his business plan from the start

Networking to Find Investors

Their personal networks took the two young men out to Phoenix, Arizona for a visit to see a friend who said he could get them financing. He assembled a group of four investors who put down $8,000 each in return for 10% of the company. Roudi and his friend each got 30% of the company.

When they looked for office space, the novice entrepreneurs were savvy enough to negotiate a lease with a building that agreed to give them a cleaning contract as part of the deal. So with a cash infusion of $32,000 and a cleaning contract in hand, Openworks was launched.

Roudi firmly believes that Openworks could never have been created anywhere else. “This is the only country in the world that provides these opportunities,” he said, adding, “Europe still relies on nobility and what your last name is, whereas the United States has an entrepreneurial environment. If you have the wherewithal to work hard and have the smarts to make things happen, this is the best place.”

Bumps in the Road

Starting a business is never easy of course. According to Roudi, it’s a matter of perseverance and hard work. There were months when they couldn’t meet payroll, and their financing — that $32,000 they raised — only lasted then 60 days, and to complicate things, their investors started calling them regularly, looking for dividend checks! Even though they were struggling, they were able to grow the business, by focusing on “statistics, budgets, and operations.” Within a year and half, this attention to fundamentals allowed them to buy out the investors.  Several years later, Roudi bought out his partner, which set the stage for expanding into other cities.

Today Openworks provides services to management companies that handle multiple facilities, and offers them  plumbing, electrical repairs, landscaping, and any other additional services they might require.

Keeping Up With Market Trends to Fuel Growth

In the thirty years Openworks has been around, the marketplace has changed, according to Roudi. “A lot of larger customers with multiple properties around the country have taken decision-making away from the individual facility and now handle contracts at the corporate level.”  After losing some long-term customers to this trend in recent years, Roudi decided to become a player at this new level, gradually transforming Openworks’ business model to become more of multi-service, multi-site provider.  Now instead of simply providing cleaning services to individual buildings, Openworks provides services to management companies that handle multiple facilities, and offer them plumbing, electrical repairs, pest control, landscaping, and any other additional services they might require. “What we’ve learned through this experience is that a lot of these customers would rather deal with just one person or one entity to manage all their other related facility services,” said Roudi.

This integrated facilities management approach has strengthened Openworks visibility in the marketplace. Over the past two years, 120 new franchisees were brought on board, and now the company services over 1,100 facilities in 23 states.  Although the industry is still marked by churn, because of Openwork’s philosophy of focusing on larger customers which traditionally have a lower turnover rate, Openwork’s retention rate is three times better than the industry average which bodes well for future growth.


 

Eric Roudi’s Advice for Immigrant Entrepreneurs

1. Work hard and persevere.

2. Don’t take no for an answer.

3. Truly believe in your abilities.

4. Have goals and set milestones.

5. If you reach your goals, celebrate, but if not, figure out why you failed, and come up with a different approach.

6. Never underestimate the other person’s dream. If you don’t move fast, your competitors will eat you.

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