Domaleski, founder and builder of World Energy Solutions, embraces broad approach in latest venture
Richard Domaleski: "We're not (positioned) to get in and out of something. We look at return and risk."
Find a need and fill it. Find a product and improve it. Add value and make money doing it.
That’s Richard Domaleski’s strategy for the company he founded in 2012, Worcester-based Mansfield Holdings Group LLC.
But the business has stakes in far-flung projects. Its eclectic mix includes a gold-mining enterprise in Ghana, used-car financing and franchise outlets in Massachusetts (and some soon to open in New Hampshire), real estate in Tennessee and a recently acquired dry-cleaning facility and four satellite retail outlets from Lapels Dry Cleaning, a privately-held franchise company based in Hanover that uses an environmentally-friendly process in its approximately 60 locations nationwide.
Domaleski owned a chain of video stores early on, as he told the Worcester Business Journal in 2009. His business trajectory changed dramatically when he met an energy engineer working with ski associations in New Hampshire as that state was going through deregulation, which swept across the country state by state, creating a fragmented — and lucrative — market for electricity brokers who match buyers with sellers.
In 1996, Domaleski founded Ocean Side Energy, which later became World Energy Solutions. It conducted virtual auctions as an online exchange, serving the commercial, industrial and government sectors and picking up multimillion-dollar contracts. It had Amazon-style volume, but without the need for warehouse or inventory.
Soon after, the company found itself with more than 40 well-funded competitors, particularly after 2000 when capital became cheap and easy to raise. Not all who got funding survived, though. World Energy outlasted most of the competition and went public in 2006. Six years later, Domaleski stepped down as CEO in search of a better work-life balance, and founded Mansfield. (World Energy Solutions was subsequently sold to Boston-based EnerNOC in January of this year).
“The Lapels approach to dry cleaning met my objective,” Domaleski says, indicating both the environmental value-added and the chain’s management style. “The busier I get, the more I outsource parts of my life.” He cites Lapels’ sustainability model and the silicone-based cleaning agent it uses: decamethylcyclopentasiloxane (D5 for short). It breaks down to silicone and water and has been ruled environmentally safe by the California Air Resources Board and other state agencies. It has no disposal cost. Lapels also offers pickup and drop-off services, and delivery to hospitals, hotels and homes. “They understand the evolution of the market. You may go out of your way to grab a mocha latte, but you don’t look forward to going out of the way to pick up your dry cleaning," Domaleski said.
In sync on management
He shares Lapels CEO Kevin Dubois’ approach to management. Dubois co-authored a book for franchise business owners, Entrepreneurial Insanity in the Dry Cleaning Business, spelling out how to run a dry-cleaning business successfully from afar, which is important to franchisees who own multiple outlets. “When the right systems are in place, the owner can essentially manage the business from an iPhone,” Dubois told Amazon, which sells the book.
Dubois characterizes Domaleski as an intelligent entrepreneur with an ability to scale many different types of businesses. “He understands HR; financing is easy for him,” Dubois says. “It’s not often you find someone with the ability to roll up [their] sleeves and operate and be well-financed. He sees not only the present but sees next year and 10 years later.”
Domaleski confirms that. “We’re not [positioned] to get in and out of something. We look at return and risk. … We’re not necessarily looking to flip something in five years, long or short,” he says. Objectives: an ROI of 25 percent over five years. The underlying risk is factored in, as well as how it fits into the portfolio of overall risk diversification. Then, there’s geography, and whether the company can find partners to manage it.
Mansfield sometimes chooses to partner with traditional banks for debt/equity financing, buying a company for cash and then putting debt into the business to free up capital for other things — while still getting a 25 percent internal rate of return.
Mansfield also owns several franchise outlets in Massachusetts and New Hampshire from J. D. Byrider, a “buy here, pay here” used car dealer with 167 locations nationwide. It’s a tough business, complete with caustic Yelp reviews. But J. D. Byrider’s own website contains positive testimonials, particularly from customers who say the company has helped them build or rebuild their credit history when they were denied everywhere else. J. D. Byrider passed its standard audit with the federal Consumer Financial Protection Bureau, “one of the reasons we went with them,” says Domaleski.
The Ghana gold-mining operation, run by subsidiary Mansfield Mining, is a partnership with California-based Minatura. In 2013, Mansfield Mining leased 55,000 acres in which to conduct environmentally-responsible mining of precious metals, without using mercury or drilling. The mined gold is then sold to wholesalers in Ghana at a discount, according to Mansfield’s website.
“We believe that [if an environmentally-oriented business] makes financial sense, if we can offer a better product or a better environmental service, we think it’s a huge benefit,” Domaleski says.
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