Sweeping Away the Competition

The Katz Group, or TKG as they are more commonly known, is an excellent example of diversifying and growing your business based on current needs.

Richard Katz, his brother Daniel and cousin Brett started in real estate management in the north Chicago area. “We were having trouble with the guys maintaining our properties, so we decided to do it ourselves,” says Rich. So, they bought a sweeper truck and hired an experienced sweeper. That was almost five years ago.

Now, they’ve grown to 100 accounts with 11 sweepers. “Being in real estate has helped, but it has mostly been through word of mouth,” says Rich. “Almost all of our growth has been organic. We work with large real estate firms and construction companies—anyone that has a street or parking lot. We also work with industrial companies that need rock cleaned up. And, of course, we sweep the properties that we manage which include large apartment complexes and shopping centers. Basically, anyone who has something to sweep, we are happy to sweep it.”

Rich and his director of operations, Kyle Bergeron, run the sweeper company while Brett runs the real estate side and Daniel oversees the accounting and financial aspects of the group.

TKG recently acquired another sweeper company from a gentleman who was ready to retire, adding equipment, customers and service area while removing a competitor. “We had a friendly competition going and he was ready to retire,” says Rich. “We added a Johnston to our current fleet with the purchase. We’ve got a couple of Schwarze 348, a Schwarze 347, a Schwarze A4000, a Schwarze M5000, a Nite-Hawk 400dx, a Victory Mark II, two Tymco 210, a Tymco 435 and a Tymco 600. We really like the Schwarze 348. The Victory and Schwarze are a little stronger.”

Buying the other company also allowed them to obtain monthly sweeping contracts and construction customers.

Rich says that 80 percent of their business has been through word of mouth. “We provide great customer service and we maintain our vehicles,” says Rich. “Our goal is to exceed expectations every time. And, it may seem trivial, but if you call us, we will call you back. That doesn’t always happen. We want our vehicles to look clean and to allow people to see that they are well kept. We have a full-time mechanic on site. Our employees are well trained and do the same quality job each time. We aren’t the cheapest company out there, but we aren’t the most expensive either. We also have the advantage of being big enough to have back up trucks. So, if a truck breaks down, the property still gets cleaned, we just send out another truck, which makes the customer happy.”

Rich says that they treat their sweeper business as a business. “When the real estate market took a dive, it was great that we had the sweeper business as well. We want to be in business a long time, so we are looking at growing our business and making sure our customers are happy.”

And their customers are apparently happy. In their first three years of business, they grew by 150 percent, 250 percent and then 48 percent, respectively. “By our third year, we began to level out. In just four years, we’ve become the largest sweeping company in the southeast corridor of Wisconsin.”

As with any business, the importance of maintaing quality while growing can be tricky. “We follow up with customers through email and phone to make sure they are happy with our service,” says Rich. “We check on the properties that we sweep regularly and we have GPS in our trucks so we can watch what the guys are doing.”

TKG joined 1-800-Sweeper last November. Since then, their business has grown even more. “We get a lot of calls, probably 3 to 4 per week,” says Rich. “So far, we’ve been able to convert about 90 percent of those one time needs into regular clients. In the past couple of months, we’ve probably added 10 clients as a result of 1-800-Sweeper. We won’t be the biggest company in the world, but through making smart business decisions and maintaining quality, we hope to grow a bit more.”

In addition to new customers, TKG is finding that the savings with 1-800-Sweeper is great. “On brooms alone, we are saving 30 percent with United Rotary,” says Rich.

Rich likes that their company not only provides a service that is aesthetically pleasing, but also helps keep our water and air clean by removing debris from surfaces. “Sweeping is an important service,” says Rich. “It removes harmful chemicals before they run off and get into the water system. It’s cheaper to get pollutants before they enter the water supply than to remove them.”

“As regulations get tighter on water and air, I think that sweeping will play a bigger role,” says Rich. “Right now, we have cut throat guys that will bid up to 30 percent less than we do, but my pricing is based on doing quality work. The people that don’t maintain their vehicles will probably disappear as well.”

It just goes to show you that sometimes, if you take a chance, things pay off. “When we bought our first truck, we didn’t know if there was business out there or not,” says Rich. “We just knew that we could do a better job than what we were getting. From there, we’ve been able to grow our company through good customer service, word of mouth, and our great trucks, which are like moving billboards.”

Diversification can be a scary endeavor, but when approached in a thoughtful, deliberate manner, it can turn into big business as it has for TKG.

Resources
For more information:
■ The Katz Group (TKG), please visit www.tkgsweeping.com
■ Schwarze, please visit www.schwarze.com
■ Nite-Hawk, please visit www.nitehawksweepers.com
■ Tymco, please visit www.tymco.com
■ Victory, please visit www.victorysweepers.com

Story by Jennifer Taylor