In 1990 I was working for a contractor, but work became slow. So I went to the bank and borrowed $75,000 and bought a set of aluminum forms, a couple of old trucks and went into business. I guess I was sort of pushed into it, but I had always wanted to do it and saw an opportunity. We had something that was not expected in the construction industry in those days: a strong desire to provide our customers with not only the quality they expect, but also with a relationship they can depend on.
Currently we have two boom trucks, two conveyors, six sets of aluminum forms, and a decorative wall-forming system. I feel that in residential work, aluminum forms are the only way to go. They're a little more expensive, but I've been in business for 15 years, and we still have the set we started with.
In the residential market I prefer conveyors over pumps because we can place both rock and concrete. They cost about the same, but I can do more with the conveyor. Just about everything we pour we try to rock for the contractor, so that gives us another way to generate income and provides rocked holes versus muddy holes.
We try to partner with some suppliers for ready mix, ties, and rebar. I prefer to spend most of our money with one supplier because then we are more important to them, which usually leads to better pricing on what we are buying.
In 2000 we did 190 basements and then hit a plateau. I talked it over with my wife and told her I had two ideas: I could sell everything and go to work for someone else, or I could buy my first conveyor and look to expand and grow. I'd done my homework, and I approached her like I would the banker. I showed her how much the conveyor would cost, what we could do with it, and the return we could expect off the investment. We agreed, and purchased our first conveyor.
Over the past five years we've grown about 100 percent, completely doubling, averaging over 500 basements in the past two years. This has been too fast, and maintaining margins has been tough. For years we worked out of an oversized garage behind my house. But about a year and a half ago we built a building with an office and a 10,000-square-foot shop; we now have a full-time mechanic and a full-time welder who repairs our forms and builds new baskets. So at the moment we've got a size problem. We needed this building to continue growing to 600 or 700 basements, which is our goal in the next five or ten years, but right now we're caught in the middle. We need to do more work to cover our overhead. With residential work you have to get in and get out; the margins are pretty small. We used to make six to seven percent, but as we've grown, I see the margins getting smaller.
Fifteen years ago I went into business and said I'm a foundation contractor. I knew how to set forms and pour concrete, but then things evolved into a business. Now I very seldom get out of the office. I haven't poured concrete or set forms in a long time.
This year we looked hard at our insurance. Among our workers' compensation, liability, automotive, and health insurance, we are able to save $95,000. These are things we didn't even think about five years ago. Now every day we look at ways to save because those savings go straight to our bottom line.
For a long time we had trouble finding good workers, but we got lucky with a couple of good hires, and now I think we have a great management system setup, along with a good training program. We try to have a revolving work force so that when someone gets promoted, we always have someone to take their place. We continually educate our employees through the World of Concrete seminars. A more educated employee helps us produce a higher quality job.