Why It's Important to Know Your Market

how a paving contractor adapts to its market “When you take your time and do things the way they should be done, the finished product just looks better and lasts longer,” says Dane Huffman, vice president of Carolina Paving of Hickory. “It’s pretty easy to do a good job if you know what you’re doing and you take your time doing it.” Understanding...

how a paving contractor adapts to its market

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“When you take your time and do things the way they should be done, the finished product just looks better and lasts longer,” says Dane Huffman, vice president of Carolina Paving of Hickory. “It’s pretty easy to do a good job if you know what you’re doing and you take your time doing it.”

Understanding your market and where your company fits into it can be the difference between a struggling company that might not last very long and a successful business that lasts decades.

In the case of Carolina Paving of Hickory, started with one truck and one tractor as Carolina Landscaping in 1964, ownership has paid close attention to the market and adapted its focus and services as the market changed.

Today the 10-person company, headquartered in Hickory, NC, is a paving-only operation, with such a great reputation that the only advertising it needs is word of mouth.

“We’ve been around long enough to have a lot of repeat customers, too. We like to think that speaks to the kind of work we do,” says Dane Huffman, vice-president, whose father, Eddie, started the landscaping business.

Today 70% of Carolina Paving’s work is commercial paving, 20% is municipal and 10% is residential driveways. The company also chips seals on roads, primarily as an interlayer to reduce reflective cracking before an overlay is placed.

“Anything asphalt related we can do,” Huffman says.

Quality Workmanship

Carolina Paving works in what Huffman terms ‘a pretty competitive market” so the company hangs its hat and its reputation on its workmanship.

“We don’t do hardly any marketing at all,” Huffman says. It’s pretty much all word of mouth.”

“Having been around since 1964 our owners are well-known and well liked and all that goes hand-in-hand with the quality work we do,” Taylor says. “We stand behind our work and we do it to the best of our ability the first time.

“We’re all about quality not quantity and we always have been. That’s why the company has been so successful all these years. It’s what gives us the word-of-mouth marketing that we get.”

Both Huffman and Taylor credit the men that work for the company with the company’s job quality and overall success. Huffman says that every member of their crew is skilled in multiple tasks and has worked in the paving industry for another contractor.

“All our guys are professionals and have been around paving for years. We don’t have to train them or stand over them. They know what to do, and they strive to do a good job every time they’re out there,” Taylor says.

“Basically the guys all take pride in their work. That’s what we push for,” Taylor says. “We tell them the work they’re doing here should be like the work they’d want done at their house. And they know that and they understand it.”

Taylor says he reinforces that philosophy every morning when he meets with the crew either in the yard or at the jobsite.

“I talk with them every morning and when they go to a new job I’ll go out there with them and we’ll talk about what they’re going to do, how it needs to be, and make them aware of any special requirements on the job,’ Taylor says.

He says he talks with the foreman each morning and is in touch with him throughout the day.

“We do communicate. You cannot have a good job if you don’t communicate,” Taylor says. “That’s the key. I talk with the foreman in the morning and throughout the day and any of the crew know how to reach me if they need to.

“The end result of the job is ultimately on me, too, because I’m the one that bid it and priced it and have to deal with the customers after the job’s done,” Taylor says.

And Carolina Paving’s reputation has spread as an employer, too. Huffman says the average length of time current field employees have been with the company is 10 years – and that’s after three people retired the last couple of years, one of whom had more than 40 years with the company and two of whom had more than 30 years with the company. Both still work part-time for Carolina Paving when the company needs some help.

And when word gets out that Carolina Paving has an opening, the calls start coming in.

“We have good long-term employees,” Huffman says. “I don’t know what our secret is except that we treat them good and try to have a family atmosphere in the company.” He says the company pays above the going market rate and offers benefits such as providing uniforms, insurance, and a year-end bonus that’s tied to annual profits and length of time with the company.”

Adapting to Market Shifts

Huffman says the company progressed gradually from focusing on residential lawns as Carolina Landscaping into light grading. The company performed its first paving job in 1972 and in 1977 Carolina Landscaping was incorporated and was renamed Carolina Landscaping and Paving Company. By the early 1970s they had abandoned landscaping altogether to focus exclusively on grading and paving.

“Into the early 1990s the company was a turnkey operation offering site grading and development, storm sewer installation, drainage and more in addition to paving,” says Jim Taylor, an estimator who has been with the company for 24 years.

At the time the company employed more than 40 people, but they saw market changes coming. In the mid-1990s Carolina Paving got out of the grading business and cut their workforce more than in half.

“We got out of grading because there were so many other companies doing it that it became difficult for us to compete,” Taylor says. “Plus, there were so many companies out there doing a good job of it that we could find people who could do it well for less money.

“But mainly there was just too much competition. It was easier and more cost-effective for us to sub it out. It was a good thing for many years but as more and more people got into it, it just didn’t make sense anymore for us.”

In 1998, the company changed its name to Carolina Paving of Hickory Inc., placing the focus on the work they did and would pursue into the future. That’s because paving, while competitive, hadn’t seen the influx of new large paving companies entering the local market as had happened with grading.

“It’s not like other companies have popped up doing asphalt,” Taylor says. “There are some big companies we compete with but our competition there has pretty much stayed the same. There are smaller paving companies around but we don’t compete with them too much.”

In 1986 Carolina Paving was doing a good amount of DOT work and paving was plentiful so they built their own asphalt plant for themselves and to sell mix. But there were still more market changes to come.

“We used to do a lot of DOT work but we don’t do too much anymore -- partly it’s a manpower issue and partly because it’s so competitive. The margins just got too tight on it with the bigger companies involved,” Taylor says.

Then the increased use in the market of recycled asphalt pavement (RAP) ultimately resulted in Carolina Paving closing their plant in 2014. Taylor says they closed it because the plant didn’t have the capability to incorporate RAP into the mix they produced.

“The plant was old but it still put out a good product,” Taylor says. “We looked into making the changes we’d need to incorporate RAP into the mix but it would have cost us quite a bit of money and it would have taken us a long time to recoup that investment. Because we couldn’t incorporate RAP into our mix we couldn’t compete with the producers who were adding RAP to their mix. So we decided it wasn’t worth the investment – especially when we could just buy good mix from other local quality producers.”

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Source: www.forconstructionpros.com