How to Reach $1 Billion in Sales

This is probably the first time you’ll read an article about a pavement maintenance contractor who projects to reach $1 billion in sales in 10 years. That’s right, billion. Rabine Group, an umbrella organization for nine companies – six directly related to paving and pavement maintenance – has set $1 billion as its 2021 target, and based on recent growth and plans already underway, CEO Gary Rabine says it’s a very reachable goal.

“But reaching the goal is not as important as shooting for it,” says Rabine, who started the company as a driveway paving business in 1981. “Over the years we’ve refined our approach to this industry and as our recent growth has demonstrated, we think we’re on to something.”

Hard to argue with that. A small company that was almost broke in 2002 – Rabine and his wife were forced to sell some property to keep it going – the company generated $30 million in sales in 2005 and $140 million in sales in 2010, exceeding its previously established five-year goal by $80 million. But that’s getting a little ahead of the story.

“Undoubtedly we are a nice-sized organization and have high-level growth expectations, but many of the things that have enabled us to grow are initiatives that contractors of just about any size can take on,” Rabine says.

From internal restructuring to external efforts to target the appropriate customers and extend its reach, Rabine Group, Schaumburg, IL, has learned how to make an impact in its Northern Illinois market – and beyond.

Starting in 1981 at the age of 18 using an old drag-box paver and one-ton roller, Gary Rabine was up and running. Within two years, Rabine was completing upwards of seven driveways per day with help from his father, Gary Sr., and some neighborhood friends as his labor force. Sealcoating was subcontracted out at the time. That was the genesis of Rabine Residential, one of six pavement maintenance-related businesses beneath the Rabine Group umbrella. Soon to follow were Rabine Paving (commercial paving), Pavement Solutions (pavement maintenance), UltraLot (full-depth, pervious, and concrete white-topping), Rabine Paving America (national accounts), SnowPros by Rabine, and three companies that dovetail nicely with the pavement maintenance focus: Roofing Solutions, Palatine Oil Company (fuel delivery), and Pipe View (underground pipe evaluation).

But Rabine Residential started it all. Shortly after Rabine brought sealcoating in house he decided he needed a self-propelled paver if he was going to grow. Unable to afford it on his own he partnered with his father to buy a Leeboy 700. By the early 1990s Rabine Paving was generating $2 million in sales annually, but because he and his father didn’t see eye to eye on company direction and growth, Rabine bought his father’s share of the company after the 1993 paving season.

“And that’s when I really started to learn some lessons,” Rabine says. “I had to grow fast and grow a lot to be able to buy him out and I had no room for error. I learned how to bid to realize a profit, I learned how to produce to realize a profit, and I learned how to job cost to realize a profit on every job. I learned lessons well worth what it cost me to buy my Dad out because today we know our profit every day and on every job.”

In 1996 the company built a 600 ton-per-hour hot mix asphalt plant “because I thought that was the direction I wanted the company to go. Road paving is where everyone wants to go, you know,” Rabine says, but he soon learned that the size of the plant was too large for the market and sold it to a competing HMA producer.

Eventually he bought a smaller HMA plant in Byron, IL, and a second plant in Belvidere. Today the Rabine Group’s six pavement-related companies generate 90% of sales from parking lot maintenance and reconstruction with the remaining 10% coming from new construction and snow removal. Rabine Group employs 340 people among all companies including a centralized operations hub that handles accounting, sales, marketing, payroll, and other general administrative functions for all the companies under the Group umbrella in addition to the operating labor crews for paving, roofing, and fuel distribution.