Pavement Contractor is Anchored in Indiana

Straight Lines Inc., Lafayette, IN, began life just as many small contracting firms in the pavement maintenance market do—almost by accident. But little has been accidental since then. In fact, the 3-person,16-year-old pavement marking firm now has itself firmly established in the west-central Indiana market. And in addition to be the striping contractor many clients turn to for striping work, they have expanded to become a traditional pavement maintenance firm, offering sealcoating, crack repair and pavement repair in addition to pavement marking.

But that wasn't the initial plan. In 1989 Jim Minniear was working as superintendent of maintenance for Fairfield Manufacturing Co. A contractor who performed maintenance work for Fairfield had reconditioned an old Kelly-Creswell striper and tried to sell it to Fairfield so the manufacturing operation could do its own striping. Fairfield wasn't interested in performing that service itself, so declined to buy the machine.

But the offer did start Minniear to thinking. Minniear's son, Alan, was a junior in high school and on the lookout for a summer job. So Minniear bought the machine for Alan "to see what he could do with it as a part-time and summer business," Jim says.

Alan started by repainting warehouse and parking lot lines at Fairfield. He also did some basic market research, calling businesses and sealcoating contractors to see how they got their pavement marking done and who was doing it. He learned that many -- if not most -- of the properties and contractors were striping pavement on their own. That summer Alan Minniear grossed $12,000 in three months.

"When I realized that I thought, 'maybe there's something here," Jim Minniear says.

After high school father and son decided to pursue a pavement marking business. Jim provided necessary guidance until 1994 when he left Fairfield and joined Alan.

"It took a couple of years and we built the business up to where it's pretty lucrative," he says. Today Minniear and his son are co-owners of Straight Lines Inc.

Jim Minniear's wife, Carolyn, retired from State Farm Insurance and now runs the Straight Lines office. She began working part time "and before I know it she's promoted herself to office manager," Jim says.

Straight Lines Inc. currently has six full-time employees (Jim, Alan, Carolyn, and three lead men). Because of insurance costs the company hires additional laborers through workforce agencies (the agency provides the insurance).

"The good thing about temporary workers is if it doesn't work out we just call and tell them it's not working out and they send us another person," Jim says. He says that all temporary employees are cross-trained as soon as they begin working with the company on each service the company offers.

"That way if we need to we can break them up into three crews doing three different things at the same time, and we can work at three different locations if we need to."

Strategic planning

Alan's early market research paid off in more ways than one. First, he learned that most properties weren't already hiring a pavement marking contractor, which showed him that there was a market.

Second, he realized he could probably break into the pavement marking business relatively easily because the barrier to entry was low (he already had his own truck and a used and very inexpensive striping machine) and because there were few competitors.

Third, during the research Jim and Alan met a contractor in his early 60s who had three striping machines and who was doing striping for a number of properties. Because he was older and not interested in developing his business he was willing to talk with them about pavement marking in general. Plus, after they got to know him better, they asked him how much longer he was going to stripe. He said he planned to get out of the business when he turned 65.

"So we made a Gentleman's Agreement with him," Minniear says. "We said 'We'll stay out of your way if you give us your garbage work.' He was amenable to that because he often needed someone to do work he couldn't handle."

The Minniears had a definite game plan when they started to pursue business years ago and it's a plan they have remained faithful to. First, they didn't want to compete on the low-bid level. Second, they wanted to have a business that, for the most part, operates during normal business hours. Third, they wanted to select their clients, identifying and pursuing what they term "anchor customers" that they want to base their business on.

"We pursue what we consider to be anchor businesses and let other jobs fill in the gap," Minniear says.

Minniear says he and Alan established a number of criteria for prospects and the first one was they wanted clients who were not going to move out of town or close their doors. One of the early anchor customers Straight Lines pursued was Fairfield Mfg., which employs 1,000 people. "We knew not only that they weren't going anywhere, but every one of their employees has a driveway," he says.

They also targeted school systems, hospitals, insurance companies (Lafayette Life, State Farm and others have large properties in or near Lafayette), then banks (because they offer weekend work) and churches (because they offer weekday work). Once they had a number of anchor customers they began pursuing homeowner associations and upscale housing areas, which Minniear says "are lucrative because they have broader spray areas and require little hand work." Only then did they begin pursuing local industries.

"But the local industries are difficult to break into, partly because they already have relationships established with other contractors," he says. "So it's hard to get in but once we get a $100 or $200 job that gives us a chance for the next job which often is a bigger one. The important thing is to get on their vendor list."

He says that Straight Lines has considered expanding in any of a number of ways but is content with the size and structure and profitability of the business as it stands today.

"This is where we want to keep it," he says. "The middle-sized jobs are where the money is at, and that's our specialty.

Contractors have to realize that big doesn't necessarily mean good. If you have to go back to jobs to fix something that's just going to eat any profit up. So it's quality and not size that determines success."

Diversification for success

Despite the fact that Straight Lines started life as a striping company, it has become a basic pavement maintenance contractor, largely because, Minniear says, customers liked the work they did and wanted them to offer additional services. In 2005 Straight Lines generated 40% of sales from sealcoating, 33% from cracksealing, and 25% from striping. Roughly 30% of their work is subcontracted from paving contractors, another 20% is by referrals, and the rest the company generates itself.

Minniear says striping, the key to the initial success of the company, is still an integral part of its service package and sales.

Despite the fact striping generates a smaller percentage of sales than the other work, Straight Lines is the striper paving contractors, local municipalities, and businesses turn to.

A recent highly successful, yet extremely complicated job the contractor completed was sealcoating, layout, and striping of a Subaru Isuzu auto storage yard parking lot in Lafayette. Not only does the 180-acre lot hold 30,000 vehicles, but the cars are parked in coded parking stalls for inventory purposes and so they can be located quickly for shipping to dealers. So in addition to layout out the parking lot, Straight Lines had to use stencils to number and letter each designated space.

Soon after the striping business was established, Straight Lines added sealcoating, a natural extension. Minniear says they started out offering driveway sealcoating but they no longer pursue that work. "If people call us we'll do it, but we don't pursue driveway sealcoating," he says. The company also does not pursue fast-food restaurants, though as with driveways it will do that work if called upon.

"We'll do it but that work is too competitive and too bottom-line oriented, and that's not the type of business we want to run," he says. Another reason they don't pursue fast food properties is that work often has to be done at night and Straight Line works hard to have hours as close to "normal" business hours as possible.

Minniear says crack repair is an integral part on almost every parking lot sealcoating job they do. But they get more cracksealing work from other contractors too.

"There's only one other crack melter in the whole area," he says. "The concrete contractors have found us too. It's not a market we pursued but word got out about our crack repair operation and now when big jobs come up that the concrete contractors don't want or don't have time for, they call us. Often we do jobs that exceed 50,000 linear feet of joints."

Where work comes from

Minniear says that the company does very little marketing, restricting its marketing efforts almost exclusively to a small ad in the Yellow Pages. He says he and Alan have always networked with area contractors including Milestone, Reith Reilly, American Paving, and Fairfield Construction, and get a large amount of work through them and others.

"We make very few cold calls," Minniear says. "In fact 70% of our business is return business or referrals." And being the low bidder is not a goal or even a concern of the company.

"Three of every four jobs we bid, we get, and we're not necessarily the low bid, though sometimes we are," he says. "It's hard to be low bid all the time because we're competing with people in this market who don't always apply material the way it is specified by the customer. We can't compete with that on a price level. We know our costs and the profit margin required."

"We're in business to make money but making money is a result of the product you use, how you put it on the ground, and how you service your clients," he says. "Quality remains long after price is forgotten."

 

 

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