Most people in the paving and pavement maintenance business don't think of asphalt in waves, but Nick Howell, president of T&N Asphalt Services, does.
A full-service pavement maintenance company in Salt Lake City that celebrates its 10th anniversary this year, T&N Asphalt has gone through waves of changes on its way to becoming the successful contracting company it is today.
"It's been a continual fine-tuning process and I'm still learning," Howell says. "That's one of the great things about this industry."
Founded as a striping company in 1997, T&N Asphalt Services moved quickly into pavement maintenance "because the demand was huge." A small acquisition brought sealcoating equipment and a customer list, and T&N's first wave was cresting.
"We wanted to be the biggest and the baddest, and for a while things were going well," says Howell, who joined the Pavement Advisory Board this year. "At one point I think we had just about every piece of equipment you could own."
But Howell says that in their effort "to be the biggest and baddest" they lost sight of what they were trying to do, the business got out of control, and T&N grew too fast.
"We didn't monitor our overhead very well," he says. "We didn't realize that the money we had coming in was barely able to pay off our credit."
So they scaled back. Today T&N Asphalt Services employs 25% fewer people than it did over its average peak size, and Howell says the company is more efficient, more productive, and more profitable than it has ever been.
"We wanted to be a one-stop shop but we were too spread out," he says. "You can be real successful as a small or a big company, but it's a real struggle if you're a mid-size company."
So when the contractor reduced its overhead it bought newer, more productive equipment.
"We were able to become smaller, more efficient, and more productive all at the same time," Howell says.
Howell says that one of the most important decisions T&N Asphalt made was to subcontract out some of its work, such as paving.
"We realized that if we sub out some of the services and enlist the help of those subcontractors to use us for our other services, we can still be a multi-service contractor and still be very efficient," Howell says.
In 2006 T&N Asphalt generated 43% of sales from sealcoating, 15% from subcontracting paving, 15% from cracksealing, 10% from striping, and 17% from pavement repair and additional work such as sign and parking block installation. Almost 100% of sales are from almost 500 unique commercial clients, most of whom have multiple properties.
"At one point we were one of the biggest striping contractors in the state but striping work comes in waves. The biggest advantage to being a pavement maintenance contractor is being able to ride the wave. If striping is not going well one year we can switch our focus to sealcoating or patching," Howell says.
And the company's size makes switching markets even easier.
"It's easier to adapt to market conditions being this size than when we were a bigger company," he says. "It's also easier than if you're a single-service company."
One of the most important things Howell says he learned is the importance of developing relationships with property managers.
"When we started we really didn't have a good grasp of how valuable that really is," he says. "We've always had good relationships with our customers but we didn't work at it as well as we could have. We work hard at it now."