Sweeping Is the Foundation

Eventually profit margins dropped into the low single digits. And every quarter Michael would look at the quarterly reports, get in his car, and drive up from the Harrisburg office, where he was based, to talk with his father.

"When people saw me pull in they'd all pull out," he says. "They'd just leave because they knew it wasn't going to be a pleasant meeting and because they knew it would get very loud."

To further complicate matters, Nawa attended a 1998 National Pavement Expo seminar that encouraged contractors to broaden the services they offer to clients.

"The idea was contractors can improve their profit margin and grow their business by broadening their services and narrowing their customer base. That seminar made sense to me," he says. "I was intrigued by the notion of not being just one thing. I wanted to offer more to the customer."

But again his father put up road blocks.

"I'm a sales guy," Nawa says. "I pulled the company into its growth through its sales value. My father was able to slow the growth based on his vision of profit and margin. He would say we don't want to expand into this area, we don't want to offer that service."

Working to regain control

Starting in 1995 Nawa and his father sought professional consulting help. Eventually IGM put in place a three-year fully funded succession plan that would give control of the company back to Michael in 1998 and ownership of the company by the time his father was 70.

"None of it ever got done," Nawa says. "He let the three-year plan pass without any action whatsoever. He never changed a thing."

Michael Nawa endured another bombshell in March 2000 when his father told him he intended to sell the business to the employees instead of Michael and that he was going to take even greater control until that happened. "Ten seconds after I heard that I felt my mouth open and I said 'I quit'."

Following three months of legal wrangling Michael received debt free the IGM Harrisburg, PA, office, its contracts, equipment, and employees. Nawa says his relationship with his father steadily improved to the point where it was back to normal.

"It was not a father-son problem but it was a problem complicated by the fact that we were father and son," Nawa says.

Nawa makes it clear that the problem was two different people trying to run a business with two different philosophies.

"Sometimes that can work but sometimes it can't," Nawa says. "I think it depends on the philosophies and how different they are.

"I am and remain a margin-oriented guy. My father at his core was not a margin-oriented guy. He wasn't concerned with making a profit, and it's very hard to reconcile those conflicting approaches to business."

Nawa's father eventually did sell Industrial Grounds Maintenance to its employees (see sidebar page 17); the sale was activated upon his death.

A strong foundation

But with Custom Maintenance Services, Michael Nawa now has the broad-based, sales-driven sweeping company he always envisioned.

"I went after everything I could find. I offered to do it all," he says. "We started out by saying 'Whatever you need done, we'll do it.'

"Of all the pavement maintenance services, sweeping provides a very strong foundation for what comes next. If you're sweeping a property three, five, or seven times a week, which is fairly common for a sweeping contractor, you're the company that sees that property every day or almost every day. Your sweeper driver is in the position to say, 'There's a light out' or 'A stop sign has been knocked down.' And if you see it first there's no reason you shouldn't be first in line to fix it.

"When I call the property manager and let him know and he manages seven, eight, 10 properties or more, his first question is going to be 'Can you take care of it for me or do I have to hang up and call someone else to take care of it?' We say, 'We'll handle it for you,' and then it's off his mind — and we have a little extra work."

And it's working. Nawa says his customers have told him they like the one-stop-shop approach Custom Maintenance Services now offers.

"Almost all of them are absolutely ecstatic to have a single source of work," he says. "I'm much more profitable with this company than I ever was with IGM, and my margins are great."