The Equipment Edge

In an era when most construction business owners face shrinking margins, increased competition and fewer jobs, Interstate Sawing, West Bend, Wis., is on an upward trend. Its fastest growing segment is confined space demolition and excavation, supported with a seven-model line-up of remote-controlled demolition robots and electric excavators. Crews use the equipment to perform concrete demolition and removal in hard-to-reach places eight to 12 times faster than traditional methods.

Owner Duke Long bought his first robot five years ago. By 2011, 15 percent of his annual sales was in confined space demolition. In 2012 it was 25 percent. Long says this equipment allows his company to perform work its competitors can’t do, so much so, in fact, he has found himself working as a sub for some of those competitors and performing their removal because his equipment allows his crews to do it faster.

This positive change in Long’s company was fueled by his understanding of the importance of equipment. Long describes himself as a true owner-operator, spending the majority of his workdays in the field rather than back at the office. “Any tradesman will tell you, you’ve got to have the right tools,” Long says. He strives to ensure his employees have the right tools in the field, and it has paid off.

Owner-operator

Long started his career in concrete sawing and drilling, running out-of-town jobs for a cutter for 10 years. Long dreamed about owning his own business but was terrified of losing what he considered “the best job I ever had.” In 1996, he quit fantasizing — he sold everything he owned, prepaid his mortgage and family’s health insurance for two years, and took the remaining cash to start Interstate Sawing with one pickup truck and two saws. By the end of his first year he pulled in more than $1 million in revenue on road sawing projects alone. He kept making money, and kept pumping money back into the business. The business grew, and within two years he had 12 trucks, 10 employees, a secretary and sales people, and he bought the building he was renting.

Early on, Long realized road sawing projects alone wouldn’t allow for the level of company expansion he wanted. “I identified this kind of work as a lowball market that was saturated and offered low margins. As a business owner, I knew I had to move away from it to succeed,” he explains.

Long diversified. He added a full range of concrete cutting services while maintaining a strong percentage of work in the road sawing arena. These new services increased his potential client list tenfold. “We do things other concrete cutters don’t do. It’s all about diversity within your industry,” he says.

Today, Long’s business is set up with 17 production trucks. Interstate Sawing’s operators have Class A CDLs so they can drive 33,000-pound trucks with trailers over 10,000 pounds and avoid overloading a smaller truck, a safety issue Long saw important for his operators and anyone who shares the road with them. Each truck has a 4,000-pound lift gate and is stocked with all the equipment an operator could need for a concrete cutting or drilling project — concrete chain saws, pavement saws, wire saws, wall saws, core drilling units and more. The wide range of equipment gives his operators the ability to choose the best tool for the job when they arrive at the jobsite. “We only see about 20 percent of our jobs before we agree to take them,” Long says. “With our trucks stocked with all this equipment, I know our guys are ready for anything.”

Not only does Long give his employees the tools they need to tackle just about any project, he gives them back-up equipment to ensure the job will get done even if the first piece of equipment breaks down. “Since day one, I doubled up on equipment. It doubles overhead, but I have never had to pull off a job,” he says.

Robots on the job

Interstate Sawing’s addition of the robots and the entrance into the confined space demolition and excavation market was a positive change for the company. Interstate Sawing’s client list is growing and the equipment is even helping Long diversify the types of jobs his company gets. Interstate Sawing typically completes 20 to 25 small jobs a day, with some employees handling up to three jobs a day. The robots help Interstate Sawing land jobs they stay on up to four months at a time. “That kind of work is good for your bottom line. You get settled in on a job and your margins start going up.” About 10 percent of Interstate Sawing’s work is a month or longer.

A recent job demolition and removal project is a good example of how Interstate Sawing’s diversification helped them get a job and impress a customer. Another concrete cutter from the area was originally hired to take out several hundred feet of drain trench at the Kikkoman Foods manufacturing facility in Walworth, Wis., where the company manufacturers and packages its soy sauces and other food products. The job required the contractor to use all electric equipment because it was a food service job.

“The concrete cutter who originally got the job expected the concrete to be 6 to 8 inches thick. It was actually 36 inches thick,” Long says. “They told the customer that Interstate Sawing was the only company that could get this done, and they subcontracted us to do the work.”

Interstate Sawing cut 2 feet deep electrically. Then they used million-ton splitters and robots to break out and pick-up the concrete and load it into dumpsters for removal. Finally, Interstate Sawing crew members used the company’s electric equipment to excavate up to 6 feet deep in clay.

“We completed the job within the time frame needed to remove 6- to 8-inch-thick concrete. We kept our customer happy, which meant they were able to keep their most important customer happy. The moral of the story is that if traditional methods were used, this job would have never been completed on time. It is our specialty equipment, such as the robots, mini-excavators and hydraulic splitters, that help us get the job done efficiently every time.”

Business Tips in Practice

Trucks as rolling billboards. Interstate Sawing employs four full-time mechanics and a part-time detailer. They wash and towel dry every truck each day. Trucks act as rolling billboards for the company — clean, a large company logo, list of services, and easy-to-read contact info. New truck designs also feature large photos of the truck’s prime operator in action.

‘Support cast’ offers efficiency. Operators can “punch in and go” thanks to Interstate Sawing’s “support cast” — employees who review job specs for the day and stock operators’ trucks with working equipment, back-up equipment, and any specialty tools necessary for the day’s work.

Safety bonus. Interstate Sawing employs a third-party safety company to run its safety program and perform surprise jobsite safety evaluations. Employees are rewarded for their safety efforts with twice-a-year safety bonuses when the company goes six months without a lost-time injury.

Fuel station savings. Interstate Sawing made an investment in an on-site fueling station. Long says it cost $30,000 to install a fueling station on site, but those costs were recuperated in the first year. Not only can he purchase fuel at bulk for a discounted rate, but he no longer has to pay labor costs for fuel-ups off site. He says his labor costs decreased 2.5 percent in the first year because of the on-site fuel tank, a hefty savings when you’re looking at $1 million in annual labor costs.

Surround yourself with experts. “I’m very good at my trade, but I don’t have a business background,” Long says. “I got a banker, lawyer and accountant — they were like my board of directors. Since then, I’ve become a student of the income sheet and the cash flow statement.”

Company Snapshot

Interstate Sawing Company, Inc.

West Bend, Wis.

www.InterstateSawing.com

President: Duke Long

Established: 1996

Employees: 25

Services Offered: Confined space demolition, road and slab sawing, core drilling, wall sawing, wire sawing, curb cutting, concrete splitting, electric sawing, and concrete breaking, crushing, and removal.

Key Products & Equipment: Husqvarna and Brokk demolition robots; ICS/Blount concrete chainsaws; IHI electric excavation equipment; Ford and International trucks; Husqvarna and Dimas wall saws, hydraulic drills, road saws, wire saws and electric saws; Diamond Products hydro gens, hand-held saws, core drills and core bits, and electric saws.

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