Business Monday

Homestead man goes from AC repair guy to CEO: No wonder he’s ‘small business person of the year’

Paul Morrow, president of SDAC (formerly South Dade Air Conditioning), at the company offices in Homestead.
Paul Morrow, president of SDAC (formerly South Dade Air Conditioning), at the company offices in Homestead.

Through hard work, smart business decisions and a desire to learn new skills, Paul Morrow, one of 19 children born to a rural family near Selma, Alabama, converted a small air-conditioning business in Homestead into a multimillion dollar enterprise operating in Florida and throughout the East Coast.

Morrow, president and owner of Homestead-based SDAC (originally called South Dade Air Conditioning and Refrigeration), joined the U.S. Army after finishing high school in Plantersville, Alabama. Seriously injured while working on equipment in Germany, Morrow was honorably discharged and decided to move to Homestead in 1981 to visit his sister.

“I learned about air conditioning repair working at a small business in Homestead, and decided to stay because I saw a lot of opportunities with people moving to Florida,” Morrow said. “I could have earned $8 an hour working in construction, but I took $4-an-hour to learn about air conditioning and refrigeration.”

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From left: LaShanda Morrow, office manager and niece, with uncle Paul Morrow, president of SDAC (formerly South Dade Air Conditioning. Roberto Koltun

In 1985, Morrow launched his own company, SDAC, working with residential and commercial customers who knew him and valued his expertise.

Morrow worked during the day and went to technical school at night to learn new skills. He obtained a state license as an air conditioning contractor, then went on to be certified as a mechanical contractor and later a general contractor. “I became a test taker,” to earn new state licenses in specialized areas, he said.

“I moved up a notch to mechanical contractor, then another notch as a general contractor,” Morrow said. He was accepted into the Small Business Administration’s (SBA) Business Development Program, which helps small, disadvantaged businesses compete in the marketplace, and obtained a $250,000 loan from the SBA to expand. SDAC is also a certified, service-disabled veteran-owned business.

Morrow competed for and won contracts in A/C and refrigeration with the Miami-Dade government and with the federal government, then expanded into maintenance and repair work in a range of other areas, including electrical systems, elevators, plumbing and boilers, hiring new technical staff and contract employees as the business grew.

SDAC now has contracts with a wide range of federal government facilities. The work includes building remediation at Homestead Air Reserve Base in Miami-Dade, repairs and maintenance at a U.S. Army Engineer center in Vicksburg, Mississippi, and maintenance of government buildings in Washington, D.C.

SDAC also renovates buildings; designs and builds facilities; does civil engineering work and provides janitorial services, groundskeeping and landscaping, waste management and recycling, mostly under contract to federal government entities such as the General Services Administration. It manages and supports federal agencies and is responsible for government buildings.

In 2014, Morrow expanded his business to Selma. His company bought an asphalt plant there for $1.3 million and a mobile concrete plant for $1.8 million to work on road construction and repair. “They were surplus, so we paid pennies on the dollar,” Morrow said.

Thanks to new government contracts in Florida and other states, and especially new market opportunities in Alabama, SDAC won $4.5 million in additional federal contracts in 2015. Revenues are rising spectacularly this year, moving from $7.3 million in 2016 to about $2 million a month in 2017. Irma spared the company’s South Dade facilities.

“We were one of the fastest growing small businesses in the nation in 2016,” Morrow said. “I’m going to blow it out of the water this year.”

Morrow was named the SBA’s 2017 Small Business Person of the Year for Florida.

Company name: SDAC (originally South Dade Air Conditioning and Refrigeration).

Founded: 1985 in Homestead.

Founder, owner and president: Paul Morrow.

Financials: 2016 sales were $7.3 million. Outlook for 2017 is $20 million or more, Morrow said.

The difference: SDAC has a long record of performing high-quality work for government clients and complying fully with its contracts. As a general contractor, SDAC can offer a full range of services to government and private sector customers.

Clients: Government agencies in Florida and other states, including the GSA, U.S. Army Southern Command, the Naval Air Station in Key West, Homestead Air Reserve Base, the National Park Service, Department of the Interior and the U.S. Coast Guard.

Competitors: Large and small contractors that are minority owned or owned by a disabled service veteran, plus others.

Offices: Florida headquarters is at 13495 SW 260th St., Homestead. Corporate administrative office in Selma, Alabama, plus regional offices.

Employees: Full-time total 69, with six in Homestead, plus contract workers in Florida and other states.

Client view: “We’ve had SDAC as contractors since the late 1980s, starting out in air conditioning services,” said Henry Burgains, chief of contracting at the Homestead Air Reserve Base and a small business specialist who works with the SBA.

Since then, SDAC has expanded its skills and services to include mold remediation, groundskeeping, landscaping and other areas, he said. “We have contracts ranging from $3,000 to $30 million. Some are direct contracts and some are awarded through competitive bidding. As keepers of taxpayer money, we need to ensure that federal and Air Force regulations are followed.”

SDAC has all the correct certifications and experience for jobs in different disciplines, performs according to contract, meets strict quality control requirements and knows how to handle the complex government paperwork. “Past performance is very important in government contracting, and some contractors don’t make it after the first time,” Burgains said. “We’ve never had a problem with SDAC. It’s a partner relationship.”

Business lesson: Some years ago, Morrow delegated management duties to people who didn’t have the skills. No more. “We lost money, but I learned from that,” Morrow said.

Best decisions: Expanding to Alabama, which gave the company easier access to the Southeast.

Also, Morrow’s commitment to acquiring new professional skills, certifications and expertise, which moved the company from a small air conditioning service provider in Homestead to its current status as a full-service government contractor working in several states.

Strategy: Expand SDAC’s range of services to government entities throughout the Southeast and find new clients in the private sector.

Challenges and opportunities: Continue adding services, including building and repairing federal, state and city highways and roads in Alabama. The company already is one of the country’s fastest growing minority-owned contractors and is projecting continued strong growth in Florida, Alabama and other states.