Sealcoater Diversifies to Keep Growing Despite Tough Economy

Contractors respond to tough economic times in different ways. Some hunker down, pare back their workforce, and just try to survive until the market picks up.

Then there are companies like J&J Sealcoating Pavement Inc., Salem, WI. Started in 1996 by Jason Bader with a pickup truck and a homemade sealcoating unit, the 15-person pavement maintenance firm has been a growth-oriented business since day one. And the current economic conditions haven't changed that.

More than sealcoating
Originally a residential sealcoating contractor, J&J now splits its business between residential and commercial work. Bader says residential is his "fill in" work and commercial is his "weekend" work.

Even with a downturn in the economy and the residential construction market, Bader isn't giving up on where his business started. "I'm never going to shy away from what got me here, and residential got me here."

But Bader soon realized that to gain customers and grow his business he would have to expand his services, so while the primary business was always sealcoating, J&J quickly added crack filling, striping, overlays, and hot and cold patching. Recently he has expanded even more.

Expanding into new markets
One new service is concrete, which J&J offers but Bader says he is not yet looking to get into concrete full time. However, Bader sees the addition of concrete work as a benefit to his customers and his company because it provides customers with a packaged deal. "They don't have to go through two different contractors," he says. "If they need asphalt and concrete services, J&J can offer both."

In 2008, J&J also became a distributor for SealMaster. Bader's strategy here was two-fold. He saw the rising cost of raw materials affecting the cost of his materials, but he says he tried not to raise his prices to his customers. That only worked so long, and in 2007 he decided to raise his prices.

Even though customers may not have been happy about the increase, Bader stood his ground. He knew what he needed to do to make money as a business, and even though other contractors might not have done the same Bader stuck with his decision. Now, as a sealer distributor, J&J can save on the cost of its materials because it is buying in bulk, Bader says.

Selling sealer also provides Bader with another source of income as he sells sealer to area contractors.

But the newest service Bader is placing most of the focus on is grading and paving. J&J started offering paving three years ago, but this year Bader says he expects the paving aspect of his business to really take off.

When Bader first started paving he purchased a used, gravity-fed paver. But after only a few months he wasn't satisfied with the equipment and decided to look for something new. J&J currently runs a LeeBoy 7000 conveyor-track paver, and Bader says he is very happy with it.

Bader says his company has grown gradually, but he has seen a jump in growth over the last two years. He attributes this to adding paving to his list of services. And he doesn't want that to stop. He continues to add to his paving service with employees and equipment because he wants to see it continue to grow and bring in more revenue for his company.

Getting the word out
Having the services and being able to perform the work is only part of the reason J&J has grown. Bader says a concerted marketing effort keeps the company's name in front of prospects and generates new sales.

When he first started, Bader used flyers and newspaper ads to get his name out. Another strategy was placing company signs at every jobsite. The signs have helped Bader tremendously. "Once you get those signs out and get going it's a domino effect," he says.

Bader still uses jobsite signs as a way to advertise and generate business, but he has veered away from the flyers and newspaper ads in favor of phone book ads and direct mailings. He can also be found on the Internet through the yellow pages and J&J's website, jandjpavementinc.com.

Employee training and retention
Finding a solid core of employees has been a big concern for Bader. "I want perfection," he says. "It bothers me if I have to redo a job." Bader says he had workers that had the knowledge needed to do the work but they lacked a good work ethic, so in 2008 he decided to do something about it. In previous years, Bader spent a lot of time on the jobsites doing the work. But he sees himself as a businessman, preferring to spend more time in the business and sales aspects.

So his first step toward improving his crew was to hire a foreman who could look over the work in place of Bader. Then J&J also changed its hiring process so all employees must pass a drug screening. J&J also developed a list of rules and regulations he reviews with all new hires, ensuring workers understand the company practices and what is expected of them. Employees who break rules or don't perform the work expected of them are given two warnings, Bader says. A third warning means they're out.

When Bader hires new employees he doesn't just show them the rules and send them on their way. At the beginning of each season, Bader takes the new employees on each crew and works hands-on with them to show how J&J does things. If a process gets changed or new equipment is purchased Bader will work hands-on with all employees to make sure everyone is on the same page. His goal is to get quality employees who want to stick around for a long time.

And Bader thinks the changes he's made and the employees he has now have finally got him the core workers he's been striving for. But just to be sure, Bader says he has added bonuses as incentives for quality work, which is a central focus for Bader and J&J.

"I take a lot of pride in what I do," he says. "I want it to be the best."

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