Contractor of the Year Update: Class of 2002
| June 12, 2007 |
Editor’s Note: Equipment World’s Contractor of the Year program has honored a variety of contractors during its five years. Now that the program has a few years under its belt, we wanted to go back and check in with our past finalists. We’ll be revisiting these former finalists through April, and then announcing our 2006 Contractor of the Year in May.
More than just hurricane winds have buffeted Phyllis Adams’ firm in the past few years, but first let’s talk about the hurricanes. Located in southern Louisiana, Phylway Construction felt the impact of both Katrina from the east and Rita from the west. Adams hunkered down with others in a vault in company offices during Katrina, an experience she now puts under “lessons learned.” Still, she says, “We definitely came through the storm well, and none of my people lost their homes.”
Phylway, our 2002 Contractor of the Year winner, has also survived after weathering a couple of difficult jobs that prompted it to convert from a general contractor to a subcontractor. “We had that old contractor mentality and owned a lot of machines,” Adams says. Now the firm is slow to buy, and puts everything first on a rental purchase option.
And now, following the wrath of Mother Nature, Adams reports the firm has a good backlog. “There will be a lot of work here for many years to come,” she says. “What the storms taught us is how uncertain every day is, and to balance the good with the bad.”
Advice: “Join a contractor association. The Associated General Contractors of America chapters I belong to here have been awesome, especially after the storms when they gave us the information we needed. The dues are well worth it.”
Deran DeLong and Dana Keith
DeLong-Keith Construction has doubled in size since Deran Delong’s wife saw an entry form for the 2002 Contractor of the Year contest in Equipment World and decided to enter. In the past, DeLong and his partner and sister Dana Keith did a lot of work for the Iowa Department of Transportation. “We still do some,” DeLong reports, “but the biggest percentage of our work now is site prep work for private developers.”
Delong attributes this shift in work to the company’s growing reputation in and around Iowa City. “We’ve gotten a lot of private work thanks to word of mouth. Once you get your name well established, you start getting phone calls. And all of a sudden you’re bidding against one or two other contractors, versus 10 or 15 firms on a publicly bid job. So that’s been a real blessing for our business, and we’re doing $10 million in revenue now. As a result, I’m more optimistic about our business than when we were named a finalist.”
Advice: “The days of simply passing the word to one another on jobsites are over,” Delong says. “Communication now has to be much more organized than it was in the past. We now have weekly management meetings to communicate what’s going on between management, foremen, down to our operators and workers.”
Colomba Bobcat & Trucking
Four years ago John Colomba was a specialty excavating contractor who had just started a heavy equipment training company on the side.
Columba’s hunch he could fill the need for skilled operators turned out to be a good one. His 2002 startup of the Windsor Equipment Training Facility has blossomed into the main focus of his business efforts with facilities in Windsor and Calgary employing 20 people. He offers custom-designed, short-term courses for a variety of clients – including contractors, municipalities and rental companies.
Colomba also created a company called START (Safety Training and Awareness Response Tactics) that trains organizations with heavy equipment assets how to respond to emergencies and natural disasters. START has worked with the Federal Emergency Management Agency and the Red Cross and conducted eight programs with the state of Florida. Colomba still does the occasional excavating job, but training, as he says, is his pride and joy.
Advice: “You don’t want to do what everybody else is doing. You have to find your own thing. I always got something out of the excavating business, but this is helping thousands of people and doing something nobody else has done before.”
Don Crane called himself a perfectionist back when we first published his story in January 2002. To him, that meant keeping the company at the right size so he could maintain the quality of his excavating work. That attitude continues to guide his business practices and in fact he’s scaled back a bit more, keeping a crew of eight to 10 union employees at work, down from 10 to 15 operators in 2002.
What has changed in Crane’s business practices is that he’s moving away from having a mixed fleet toward running just one brand of machine – Caterpillar. The simplicity of having one source of service and maintenance appealed to Crane as did the company’s financing. “We had equipment leased from other companies and when we got ready to convert the lease and turn the machine back in we found there were a lot of loopholes and fine print, whereas with Cat we found they were relatively easy to work with,” he says.
Advice: “You don’t want to grow too fast. I’ve seen guys who made that mistake. As long as the work’s there, they are fine, but if the work drops off, they don’t have deep pockets like the more mature contractors.”
Infrastructure Systems Inc.
Greg Noble’s water and sewer system installation company has grown steadily during the past four years. Infrastructure Systems recorded just under $15 million in gross sales in 2005, its best year since Noble started the company in 1999.
“More importantly, the bottom line has grown well,” says Noble, pictured here with wife Rita and son Hayden. “We’ve just matured. That probably means as much or more to me than the bottom-line dollars.”
The firm now has 45 employees, and Noble has toned down its equipment acquisition strategy after developing a base fleet by spending more than $1 million per year during the company’s first four years. Now he spends $500,000 to $1 million each year to update rather than expand his equipment lineup.
The company is sticking with the same types of jobs it was doing in 2002 – water and sewer line installation and water/sewer plant expansions. “What’s changed more than anything is the size of jobs,” Noble says. Infrastructure Systems is tackling bigger and more difficult projects that involve deeper digging, increased dirt work or more rock.
Advice: “The biggest kick I’ve been on lately is ‘Don’t complicate it,'” Noble says. “Pay attention to the base hits and don’t worry about the home runs. The world is getting increasingly high tech and you have to keep up with the times, he adds, but if you forget to do the work you won’t be successful no matter how many seminars you’ve been to or what kind of software you’re using.
Barry & Hedy Valdez
San Bernadino, California
For Barry Valdez and his wife Hedy, business has been steady since their 2002 appearance in Equipment World. Work has been constant, and Barry says he’s doing more contract work these days. But instead of focusing on growth, Barry says he’s learned the importance of fine-tuning his operations and taking more time for himself. “I finally figured out the optimum size crew for our business,” he explains. “Now I can handle the volume of work I want my company to do, and still have time to tackle the paperwork, meet with customers and – most importantly – have time off with my family.”
Advice: Looking back over the past four years, Barry says he’s learned to pick and choose his customers carefully. In a related vein, he says the most important thing for any contractor to learn is not to spend money until you’ve got it in the bank. “That’s a good practice for a guy starting out,” he says. “But it holds true for those of us who’ve been in business awhile, too.”
Dripping Springs, Texas
The youngest entrepreneur in the Contractor of the Year program’s history, Landon Jones, is still doing the same types of jobs he did in 2002 – site preparation, excavation, land clearing and road work – but he has scaled back the size of his operation to one employee and two machines, a skid steer and a backhoe.
“That’s kind of the way I like to keep it,” says Jones, now 24. “To tell you the truth, I’m making just as much.” Jones cites less overhead as a result of fewer employees and lower equipment costs.
Jones’ father Bruce, a land developer who helped him get a job operating construction equipment at age 12, died in 2003. Jones said the personal loss has affected his business a little as his father directed some work his way.
Advice: “Get everything on paper,” Jones says. “Anytime you start a job, make sure you have enough coverage for yourself and your company.” Jones says he has run into a few older guys who thought they could take advantage of him because of his age. And with agreements made on a verbal basis, he had no evidence to back him up. “It was their word against mine,” he says. Write down everything you’re agreeing to do, Jones cautions, and having a witness as well wouldn’t hurt.
Bidding sewer and paving work in the Omaha-Council Bluffs area has been good to Leazenby Construction. “We’ve seen about 30 percent growth since 2002,” says Ed Leazenby. “This area has been in a building boom.”
Leazenby points to another reason he’s been able to grow: finding quality help. “We do it with pay and benefits, especially benefits like health insurance,” he says, “which is becoming a big issue.”
The company has started doing its own soil stabilization, and now owns a reclaimer. It’s also graduated to larger excavators because of their ability to dig deeper and be more productive. “With equipment, it’s still all about maintenance, maintenance, maintenance,” Leazenby says. He has also branched out into land development, beginning a 98-lot housing site last year and planning other developments for this year.
Advice: “Watch your overhead and make sure your bidding and estimating is correct because you can get upside down in a hurry if it isn’t. And since you’re only getting paid to move it once, never move the same earth twice.”
Tim and Todd Phillips
Daytona Beach, Florida
“We’ve been growing like crazy and we’re approaching the $65 million mark, all by doing the same work, just more of it,” reports Tim, who handles most of the office work while twin brother Todd handles the field. The company’s largest increase in volume has been its stake in Florida Department of Transportation paving and resurfacing work. “While we still do a few commercial projects, about 80 percent of our work is state work,” Tim says.
The two continue what Tim calls “a conservative show,” operating with little to no debt. “That way we can withstand the fluctuations of the economy,” he says. This doesn’t mean they haven’t made a sizeable investment in their $16 million equipment fleet, to which they’ve added about $3 million worth of machines a year during the past three years. The acquisitions include one of the few fractionating reclaimed asphalt pavement machines in the nation, put together for them by Astec’s aggregate and mining group. And the company still uses renting as a toe-in-the-water device. “We need to see if our equipment needs are going to pan out,” Tim comments. “We know what we need for a core base, and anything on top of that we’ll rent.”
Advice: “Be honest and work really hard. A lot of business is repeat business. In the long run, honesty is always a proven winner.”
Rich and Cindy Stichter
R&C Heavy Mechanical
“The changes in our firm since 2002 have all been for the good,” reports Rich. R&C has continued to grow and now has more than $4.2 million in sales. The growth also prompted an addition to the firm’s fabrication shop. The company bought two more cranes, and now has five cranes ranging from 15- to 65-ton capacity. “We hope a 100-ton crane is on the horizon,” Rich says.
And heading the company’s crane division is Rich and Cindy’s daughter, Janel Griffith, pictured with them here. (Janel, in fact, entered her parents into the Contractor of the Year contest without their knowledge.)
Advice: The Stichter’s advice has several parts: 1. Watch who you work for – take the time to do an in-depth credit check for new customers. There are a lot of good, talented contractors in bankruptcy court because they trusted people they shouldn’t have. 2. Take care of your employees; you can’t take care of your customers without them. 3. Attention to detail is priceless. 4. Emphasize quality and service. “We have found on tightly bid jobs, or jobs that were bid too low, some customers will help financially if they see top quality in your work,” Rich says. 5. If you see your pride will cost you more than it should, then swallow your pride, even though it’s really tough.
And here’s an update on two 2001 finalists:
Robb Brinkmann Construction
Robb Brinkmann chuckles when he thinks about how far his business has come since 2001. In south Wisconsin – not exactly a tropical paradise – Brinkmann’s pool installation business has taken off, leading him to start a new company that does nothing but pool and hot tub installations. And he’s still kept his hand in the landscaping and small concrete work he did when he started his company.
What served as the Brinkmann’s house back then has now been totally converted to company offices, with the Brinkmanns relocating to a new home about a mile away. “Our former bedrooms are now offices,” he says. The company fleet now includes four large trucks, a track loader, wheel loader, three skid steers, a backhoe and a landscape tractor. “There’s work out there,” he says. “Even after September 11th, we didn’t see any slow down.”
Advice: “You have to have guys who do things exactly the way you want them to do it. You don’t want your customers to be unhappy they’re stuck with one of your guys. If the customer would rather have you on the machine, then you’re not going to be able to grow.”
S. E. Cline Construction
Palm Coast, Florida
S.E. Cline Construction has grown about 25 percent from its $9 million volume in 2002, underlining the strength of Cline’s decision to start his business at the age of 52. The oceanfront community he’s based in has experienced exponential growth, a fact the company’s taken advantage of while continuing to do industrial, commercial and site development work. In addition, Cline’s commercial marine division now comprises 10 percent of his firm’s volume. “The outlook is still very good in this area,” he says, “particularly since home building continues to look strong.”
Advice: “Establish good credit and bank relationships as early as possible. Financing becomes extremely important since your production will increase by using new equipment rather than used. Although I’m a firm believer in owning equipment, renting equipment with the option to buy is a good choice in the beginning. You must also be skilled in estimating projects. While quickly getting out quotes and managing current projects at the same time requires many hours in the beginning, you need to remember that you have to keep that equipment working. You cannot be the estimator, manager and operator forever, however. To grow, you have to surround yourself with good people.”