One night back in 2004, Mike and Marty Hinrichs knew they had a decision to make. Mike was working in the paving industry for his father, but as with many family businesses things weren’t working out. Marty ran her own successful residential and commercial cleaning business.
But what was next? They headed to a local watering hole and wondered whether Mike could start a company on his own. They talked it through and made notes and sketched out ideas on a cocktail napkin, including the name of the new company, M & M Construction and Cleaning.
“I wish we’d kept that napkin,” Marty says today.
That’s because M & M, with 20 employees operating in a relatively short-season market in Rochester, MN, has become a thriving and steadily growing paving, pavement maintenance and snow removal business that cracked the $2 million mark in 2015.
Serving a territory Rochester, MN, and its surrounding areas, M & M Construction generates two-thirds of its sales from paving and the remainder from pavement maintenance and snow removal and its position as a Star Seal vendor. “Anything to do with asphalt we do it; paving, sealcoating, repair and stripe,” Mike says. “And we do it all in house.”
Commercial work accounts for 60% of sales and 40% is residential. Marty handles all sales for the company and supervises and runs two two-person sealcoating crews while Mike runs the paver and a 12-person crew on all paving projects. The paving team includes six installers and six haul drivers who drive the five dump trucks owned by M & M.
“We own and operate our own haul trucks because I don’t like to be waiting on other people,” Mike says. “If we have to hire them we have no control over their time and really end up working on their schedule.”
And that comment offers a hint at how M & M has been able to grow so steadily in what Mike terms “a small big town.” Mike and Marty believe in control: Control over their business, control over job quality, control over growth and productivity. That’s how they’ve positioned themselves in their market, it’s one reason they own so much equipment, and it’s how they’ve managed to be so productive for a small company in a region with a relatively short season.
Just What Was on that Napkin?
Mike had been working for his father’s company, first operating a roller at the age of 12. In 2004 he and Marty decided he should set out on his own and they drew up plans on the napkin. Because Marty had her own business, Marty’s Cleaning Service, doing residential and commercial cleaning, the new company was incorporated as M & M Construction & Cleaning Inc. because they didn’t want to carry two insurance policies.
M & M Construction and Cleaning started with a one-ton pickup, a dump truck and a rented roller. Mike borrowed a trailer and paved by hand for most of 2004 – and Marty kept her business. Mike realized he needed to become more productive and work easier, so late in 2004 he took out a second mortgage on the house he’d built in 2001 and he bought a Puckett Brothers BD6500D power box paver, a trailer to haul it, and the roller he’d been renting. By the end of the season in 2005 they’d made $70,000 between the two businesses “but we knew it was growing. We could tell because we were getting more and more calls,” Mike says.
The Second “M” Joins the Business
But at the time M & M Construction did only paving and patching. They kept getting calls asking for sealcoating work but Mike resisted. “I didn’t want to add anything until I knew we could make it work, so I told Marty I wouldn’t start sealcoating until we got 70 calls, though where the number 70 came from I can’t tell you. I just said it,” he says. “On the 71st call I said ‘Yes, I do sealcoating’.”
And as soon as he started sealcoating he worked 60 days straight, alternating a week of sealcoating with a week of paving. He was out on every job. “I pride myself on the quality work I do and that caught up with me pretty quickly,” he says.
Realizing he couldn’t do both he hired a person to do the sealcoating, but it was soon clear that wouldn’t work out.
Marty at the time was still doing her cleaning. “I begged him to let me come on board and help and he resisted for a while. He liked the idea of two different businesses so if one struggled the other was there,” she says.
But in late 2005 Mike gave in, Marty joined to handle the sealcoating side, and has run with it ever since. “He needed help,” she says. “It was a blessing to have her come work with me,” says Mike.
At first Marty cleaned in the morning and sealcoated in the afternoon, but by the end of 2006 she’d stopped her cleaning and was devoting fulltime-plus to M & M’s sealcoating business. “I didn’t even know how to back up a trailer when I started sealcoating,” Marty says. “But I just love it.”
More Equipment Means More Production
M & M’s first sealcoating truck was an old oil tank bolted to a pickup bed that relied on a trash pump to spray material. Since then M & M uses two Equipt sealcoating rigs, two Mauldin 1750 pavers, six dump trucks, Bomag rollers and four skid steers and a road grader. The only equipment they rent is an asphalt reclaimer which they use on about six jobs a year.
“We bring a lot of equipment to the jobsite because it’s amazing how fast you can get things done when you have more equipment and the right equipment,” Mike says. He says possibly his most important piece of equipment is his skid steers, which is why he now runs four of them. “I bought one skid steer and as soon as I could afford a second one we bought a second one. And when we could afford a third skid steer we bought that, too, as the first one was wearing out. And then I bought another one. They are very flexible and can work no matter what the ground is like. We rely on them a lot.”
He says he knows equipment is always available by renting or even borrowing, but that approach doesn’t work for him.
“I hate having to borrow or rent because when I do that I am giving up some control over our business,” Mike says. “I hate having to rely on others because I have no control over their time, and that can affect our schedule, our productivity and even our job quality. That’s why we invest in equipment and own and operate our own haul trucks.”
When working with his father paving peaked at 800 tons of hot mix asphalt placed in a single year. “Now the company can easily pave 1370 tons in a week,” Mike says. “We can do something in three hours that would take three days before.”
Mike says that business is so good that he could send out more crews than he does – and he tried that in 2015 with unsatisfactory results.
“I knew we had enough work to run two crews each on sealcoating and paving,” he says. “So I broke up a great crew to make two crews and ended up with two mediocre crews instead of the one great crew we had. Quality suffered a little so we went back to one great crew.”
Surviving Seasonal Work in a Short Season
Both Mike and Marty emphasize job quality and customer service, generally working from 7: 00 a.m. to often past 7:00 at night. “We spend many of those hours on sales because we need to have the jobs going forward,” she says. “We have a short enough season where we can’t afford to have any gaps in the pipeline.”
She says the season runs from mid-April to mid-November, “but it really starts to fire up in May and start to slow in October.”
Marty says they work aggressively on sales all year long, and like most northern markets sales really pick up once the snow starts to creep back. “That’s when the phone starts to ring, when people can see what the winter has done to their pavement,” she says.
To help generate sales M & M relies on what Marty terms their “big file system,” which includes the details of every job the company has done. Using their files they send a reminder post card starting in February to every client one, three and five years after a job has been completed, letting them know it’s time to consider additional pavement maintenance.
“We start well in advance to get work in the pipeline so we’re ready to go as soon as the weather breaks,” Mike says. “In 2015-2016 we sold at least one asphalt job every week all winter long.” And as of November 2016, M & M Construction has a month of work in the pipeline for 2017.
“We let our customers know that once they sign a contract with M & M it doesn’t stop there,” Marty says. “We tell them, ‘Now you’ve become part of our family and we’ll try to help you as much as possible to get the most out of your asphalt pavement’. She says this has helped them maintain a high rate of repeat customers, including 10 banks for whom they’ve provided annual maintenance for seven years.
Core Employees Play Key Role
Mike says part of their success – and their ability to be so productive – is that M & M returns a core group of workers each spring. “That’s unusual for a seasonal business,” he says. “We’ve talked with a lot of contractors where that just doesn’t happen.”
He says six people have been with M & M for between three and five years, and two people have been with the company more than 10 years. “Being able to rely on experienced employees has helped keep us efficient and has helped maintain our quality,” Mike says. “That’s really helped us grow.”
Marty says having an experienced team really helps when communicating with customers and prospects.
“We’ve all had experiences where we call a business and either we can’t get a person or the person we get acts like we’re interrupting their day. No one has that experience when they call or talk with anyone from M & M,” Marty says. “Everyone they talk with in our office makes sure they are welcome and not an inconvenience and the same is true when they talk with any of our crew on site. We get a lot of compliments on how we communicate with our customers.”
“That’s because we’re good people and ‘Minnesota nice’,” Mike says.
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“Rochester is a small big town and people are willing to wait and pay for quality,” Mike says.
