“An entrepreneur typically needs to be a manager first and everything else second.”

Richard Kulhawe, president and CEO of the TerraPro Group, explains what it takes to succeed

When the most recent recession ground many companies to a screeching halt, Richard Kulhawe’s took his fledgling natural-resources business into survival mode, ensuring that it stayed well positioned to come back as the industry recaptured momentum.

And it did: In 2011, Profit magazine ranked the TerraPro Group Inc. 15th on its Profit Hot 50 list, which measures growth over a two-year period. And in 2012, the same magazine ranked the company ninth on its list of the country’s 200 fastest-growing companies. Below, Kulhawe explains his strategy for success.

Advantage: I understand you started your career as an engineer.
Richard Kulhawe: I studied engineering at the University of Alberta in Edmonton, then spent two years working as a junior engineer at a northern Alberta pulp mill owned by Proctor & Gamble. After that, I worked at a family construction business operating in that part of the country. Very quickly I became a managing owner, and engineering became less of what I did.

Was it hard to transition from engineering to business?
My DNA was such that it wasn’t a hard transition. Even within Proctor & Gamble, I moved fairly quickly from an engineering role into a department-managing role.

What makes someone good as an engineer versus a businessperson?
Engineering is mathematical but involves some creativity. Expanding that creativity beyond the paper and the computer to understanding the dynamics of human beings is a critical step in terms of moving from engineering into a management role.

At some point, you became an entrepreneur. How did that happen?
I spent a number of years in the construction business—then created a business in the IT world. In 2005, my son-in-law, Colin Schmidt, made me aware of an opportunity that existed in the energy industry. In a lot of areas that demand low ground disturbance or aren’t very accessible without major improvements, resource industries need temporary work platforms and roadways.

CAREER MILESTONES

1970
Begins working toward bachelor’s degree in engineering

1974
Graduates and begins working for a pulp mill

1979
Joins a family construction business

1990
Founds an IT business

2005
Completes an executive MBA

2006
Launches TerraPro

2011
Ranks 15th on the Profit Hot 50 list

2012
Ranks 9th on the Profit 200 list

So that’s how you founded TerraPro?
Yes. Initially we intended to develop our own product using plastic or fibreglass panels, but through the process of development, we also established a business that used a conventional product that consists of 8-by-14-foot structural wood platforms, constructed from two-by-eight oak timbers in such a way that they interconnect, allowing a roadway or work platform to be built on soft ground. We rent those temporary platforms to the natural resources industry in Western Canada.

What challenges did you face when starting the business?
The industry is capital-intensive. We used some of our own capital to start the business. Then, as demand began to grow, we took an unconventional capitalization route and structured, in cooperation with a small boutique investment house, a limited partnership model that allows us to share our top-line revenue with investors. Thus, we were able to bring capital to bear that neither gave up equity in our business nor put us in the conventional debt-financing mode with banks.

What has driven your success?
We are a people-oriented business in a world that sometimes doesn’t pay enough attention to that aspect. Obviously, the bottom line in the business is very important, but beyond that, I have a keen desire to ensure that our people are well looked after. I’m more interested in the success of the people around me than necessarily my own success.

Somewhere along the way you received an MBA, correct?
I did. In 2005, I completed an executive MBA program with Queen’s University, out of Kingston, which used a videoconferencing platform. I wanted to close the loop a bit and capture the theory of all of the practical management experiences I’d gathered over the years.

Any tips for aspiring entrepreneurs?
I’ve been a serial entrepreneur my whole life. It’s in my DNA. An entrepreneur typically needs to be a manager first and everything else second, because he’s relying on other people to do the work.

What’s next for you?
We currently have 30 employees and $25 million in annual revenues. The business consists of a close-knit group of people, and we don’t have a significant need to change our lifestyles, so we’re looking to make more funds available to various causes in which we have an interest. As a stepping stone, we donate a percentage of revenue we share with our limited partnership to the Pink Ribbon Breast Cancer Campaign.