The Trap

It was Chuck Howard's nature--his brash self-confidence, his willingness to take a risk--that allowed him to build one of the fastest-growing companies in America. As he's now telling anyone who will listen, those traits also helped him destroy it.

Timothy Devine

FOR RICHER , FOR POORER Through it all, Penny stood by Chuck. “She’s an angel,” he says.

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Timothy Devine

DO AS I SAY, NOT... Howard often speaks to entrepreneurs, hoping to help them avoid the mistakes he made.

Timothy Devine

WELCOME HOME Howard’s constant need to risk it all cost him his home—but he managed to get it back.

It's rainy and hot when Chuck Howard strides to the podium at Wake Tech Community College in Cary, North Carolina, and takes off his black sport jacket. He's been pacing the hallways and his energy is palpable. His blue eyes flash. Some 30 people have braved the driving summer rain and the heavy postwork traffic to hear him speak about what makes small businesses succeed and what makes them fail.

Howard knows both topics. A decade ago, his business, Howard Roofing Systems, was No. 60 on the Inc. 500 list of the fastest-growing private companies. At its peak, with $8.5 million in revenue and 120 people on staff, it was, by Howard's estimation, the largest metal roofing contractor in the United States. Three years later, Howard Roofing was in bankruptcy, mired in litigation over hundreds of thousands of dollars of unpaid payroll taxes. Chuck and his wife, Penny, had filed for personal bankruptcy as well.

Over the past few years, Howard--now 55, refashioned as a consultant--has begun telling his story publicly in an effort to heal himself and to help others avoid his mistakes. He says he was surprised at first that anyone would want to listen to him, but when he speaks on this rainy evening, ad-libbing for two hours and feeding off the laughs and knowing nods, he looks like a man who's found his calling. As he exhorts his audience to find significance in whatever they do, he sounds more like a preacher than a businessman. "I'll talk to you as long as you want me to," Howard tells them. "You may not like what I say, but I'm extremely passionate about what I'm talking about. That's one reason to start a business. If you're not passionate, you're not going to be successful."

That overdose of entrepreneurial spirit helped him sell millions of dollars of pitched metal roofs during his company's heyday, roofs that survived far longer than the business itself. He thrives on adrenaline--and having everything on the line. He personally signed off on the company's bank loans and mortgaged his house multiple times to make a go of it. But he never was as good at operations as he was at starting the business or closing the deal.

As I got to know Howard, I came to understand that his strengths and weaknesses as an entrepreneur were almost stereotypical, and that the rise and fall of Howard Roofing Systems was as classic a cautionary tale as one could find. For it was precisely the traits that helped Howard build his business--optimism, salesmanship, and an unflagging belief in himself and his product--that also blinded him to the company's failings as things turned sour. Howard Roofing didn't tiptoe toward success, and when it failed, it didn't fail quietly: It went spectacularly bust.

The reality hit Howard, he tells the rapt audience at Wake Tech, after he'd begun looking for outside investors in early 1999. "We'd gotten back on track," he says. "My in-house controller says, 'Don't worry, Chuck, we're going to be okay.' He was keeping the books, and I was getting monthly statements. We had suitors looking at us, and at the 11th hour, they said, 'Something doesn't look right."

It was only then, Howard tells the audience, that he confronted his controller in an emotional closed-door meeting and learned that the company--his company--owed hundreds of thousands of dollars to the Internal Revenue Service. "I was devastated," Howard says. "The business was worth $4 million to $5 million. That was my retirement, my kids' education, everything."

Chuck Howard calls himself "a southern Ohio farm boy." He grew up in Sabina, Ohio, a town of 2,800 people in the industrial heartland where there was one manufacturing plant, Mac Tools, and a lot of hog farms. Howard's father was a tool and die maker, his mother a stay-at-home mom. Growing up, Howard worked on the neighboring farms, and at age 12 he started raising and selling pigs. By buying piglets for $20 and fattening them up for sale at $140, he soon accumulated what was for a kid a small fortune of $3,000. He went to Ohio State, where he studied civil engineering because he wanted to build buildings, and he jokes that he was the type of student who made the top half of the class possible, graduating two below the middle.

After college, in 1973, Howard went to work for Modern Sales and Construction in southwestern Ohio. By the late 1970s, the construction industry was in the tank with double-digit interest rates and no one buying or building. In 1979, a friend of his father's called and asked if he could turn a flat metal roof on his warehouse into a pitched one. Pitched roofs leak less and need fewer repairs, which is why, his father's friend told Howard, he'd gotten into the habit of moving materials for his tool and die business from a building with a flat roof into one with a pitched roof whenever it rained. He was tired of that and wanted to convert the flat roof. "I said, 'It's never been done," Howard recalls. "But we didn't have any business and I didn't have any money, so I said, 'I'm going to see if we can do it.' And I started an industry."

Well, not really an industry, but it was a darn good niche for someone like Howard, who knew engineering but liked marketing too. In April 1981, after a few more retrofits, Howard mailed off 100 typed fliers. "I got 26 responses," he says. "Nobody gets a 26 percent response rate!" Six projects followed, and the nascent metal retrofit roof business was on a roll.

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