Crown’s & Curbs, Competing in the St. Louis Power Sweeping Market

Ken Hohlt, Sr. is co-owner of Crown’s & Curbs, Inc. , one of the St. Louis’s area’s three major power sweeping service providers. Ken recently shared with NAS Magazine his experience in growing the Crown’s & Curbs business over time, engaged in the interesting competitive dynamics of the power sweeping market in the St. Louis metro region.
A brief discussion with Ken reveals that successful St. Louis power sweeping service providers deal with and a range of challenges. Ken also talks about some of the comparative benefits of working in the St. Louis region, in terms of market stability and a certain competitive atmosphere that makes the metro area’s power sweeping industry an attractive career locale.
Meeting unique, region-specific practical business and logistical challenges, sustainability, cyclical and seasonal issues, objectives of municipal, county and state contracting authorities are among the ongoing management pursuits for power sweeping business owners in the St. Louis market. It becomes clear, in talking with Ken, that power sweeping companies like Crown’s & Curbs are successfully maintaining their business leverage against these persistent local industry impactors, and all while reliably providing competitive but realistic rate quotes, high service quality, strong customer relations, and quality of work life for employees and owners of the business.

Q: Can you start by sharing some information about how you came to be in the power sweeping business? Can you say a little about the your training and education and applicable work experience that interested you in this business? What were you doing at the time you decided to turn your attention to starting your own power sweeping business?
I graduated from Washington University in St. louis with degrees in architecture and structural engineering. We started with our core business, Eco systems Inc. as a regional distributor for the Athey Mobile manufacturing company of Raleigh, North Carolina, selling the Athey four-wheel sweeper truck primarily to private customers and large municipalities throughout Missouri, Illinois.
Occasionally, we got requests from municipalities and contractors who wanted a power sweeper, but who would back away from a very expensive single-use piece of equipment that they weren’t familiar with. And, we sometimes got calls from people just asking, “Where can I get somebody to come and sweep this up?”
There wasn’t a big need, but it was ongoing. So, while we continued selling the Athey sweeper, we thought, “Why don’t we start sweeping for these other non-buyer clients. So, we started accepting requests for power sweeping services using our demonstrator units, and then we incorporated Crown’s & Curbs in 1989.

Q: Can you explain your business model? How is Crown’s & Curbs set up to operate, in terms of the way that its various resources of equipment, established processes and personnel generate revenues and produce profits?
The sweeping services we provide are mostly to general contractors on large construction sites, cleaning up track out from trucks used on the sites. Virtually all of our work is done here in the metro area, within about a 40-mile radius of downtown St. Louis. Going farther out becomes less cost effective.
It can be a difficult business. We have to do a great amount of maintenance on the equipment. And, it’s a union labor business. To be on construction sites, our employees need to be in the trades, so labor is substantially higher than for parking lot operator drivers. We require our driver-operators to be licensed as Commercial Driver’s with a “Class B Minimum” with endorsements. With labor, maintenance, and the cost of assets, this is an expensive business to be in.
So, we added additional businesses, related to one another, to make the overall enterprise much more robust. In addition to Crown’s and Curbs power sweeping, we operate three other business from our St. Louis facility. About 10 years ago we branched out into water transporting and flushing, which is now a significant part of our business. We provide water for all kinds of companies and needs on construction sites as well as flushing track out. And, Match Box Hauling Company, our temporary roll-off container business, allows us to supply 4,000-gallon containers to special-need projects that don’t have on-site access to water.
Our core business, Eco Systems Inc., gives us OEM access to all the major sweeper and equipment manufactures. Having all three businesses combined protects us from unforeseen business down-turns, enhances our banking relations, and helps generate new customer business cross-over.
Our temporary container business is a larger net revenue generator than the sweeping company, because of equipment capitalization rates on the containers. For every roll-off/sweeping customer, you must have a container. Contrast that to the sweeping business, which is mobile and billed as an hourly charge.
The equipment is on the move, providing a timed service and then moving on to the next customer’s location, whereas a roll-off container is stationed on the customer’s site. It’s left there until the client calls and the date arrives to go back and take it away from their site and to the disposal site.
During the time that the container remains on the site, the customer has effectively captured an asset, for a few days, or a few weeks, or longer. That’s a $6k to $7k asset for the client’s use at their location. So, the capitalization rate is high enough that it contributes well to a sustainable business model. We currently have about 400 containers. A new truck to haul the roll-off truck costs over $200k. A new sweeper truck is around $250k, which is another significant contrast in costs of operation between the two business divisions.
All of our businesses are stand alone, with separate operating costs and profit requirements, and could be divested individually without significantly harming the others. Altogether, it’s easy enough to see how important stratification has been to make the business substantially economically healthier.

Q: Can you talk about the way your business has grown? Has it been by a series of cyclical or seasonal patterns, or by sporadic surges in regional needs (perhaps disaster or weather related), or from a gradually developing customer base? How has that worked to make your business the regional market presence that it is today?
The business grew slowly over time. It generated a little income back in the beginning months. Over time, we got a little more business. Then, eventually, we needed to hire a full-time employee, and then another. In those days, the State of Missouri owned equipment, but for various reasons, they didn’t really want to be in the power sweeping business. So, they let out contracts. Those were mostly for night work. For a number of years, we had our equipment working for the state. Then, we started looking around and reaching out to municipalities to offer service, and that grew the business.
Then, the contractor work became more significant for us. This was as the state and municipal work was becoming marginally profitable. At some point, a number of competitors from the parking lot business began to move into the municipal sweeping market. As even more companies got into the business, it became competitive to an extent that it was necessary to underbid to such extremes that it wasn’t profitable enough to continue.
Focusing on serving construction contractors, our growth has been steady, and our client retention rate has been excellent. We’ve had some ups and downs with construction surges and slowdowns. And, we have seasonal slowdowns. Naturally, when it’s below freezing and snow covered, people don’t need sweeping services.
But, those are common obstacles that effect all of us in the region. They’re not critical factors in the calculation of a well-diversified business model. Our inter-related businesses all serve the same customers and are all integral to providing a bundle of necessary services. That arrangement has worked very well for us.

Q: How do you go about acquiring new customers? What sorts of strategic approaches do you use for successfully competing for contracts in the St. Louis market? For what kinds and sizes of contracts do you primarily compete?
We do some cold calling. But, we mostly operate on repeat and referral business. Our customers don’t call us because they have a pressing desire to spend money. They contact us because they have a pressing need for sweeping services. They need us, and we need them. So, we know we’d better respond reliably and provide quality service. You could say that we passively market our business by simply keeping an eye to our future business well-being, and letting ourselves be motivated by our need to have satisfied customers who will continue doing business with us and refer their associates to us too.
Realistically, I would say that we have two major competitors in St. Louis. We all three appear to have our fair share of the business. So, there really isn’t a situation of highly aggressive attempts to steal away business from one another. At least, that hasn’t been the case as far as I can see.
They have their core customers, and we have ours. We all keep our customers, as long as they’re happy. Occasionally, a customer will come over from another sweeping company, but that doesn’t necessarily mean there’s anything bad about the other company. Sometimes, there can be some bit of confusion or misunderstanding, but that’s not a very frequent occurrence.

Q: Have you added any new services or service features recently?
Not per se, but we’re always open to customer challenges and new needs. The goal is to either solve customers’ problems or refer them to someone who can. We’ve continued making the kinds of service changes that make the business more efficient for the customers we do provide services, which has made operating more profitable for us. These changes, for example, sometimes take the form of more carefully culling work on many municipal contracts, where competition is really tight and winning a contract isn’t necessarily good for the business.

Q: Do you actively market your services? If so, what kinds of advertising or other marketing efforts do you employ to attract new business to Crown’s & Curbs?
We provide a website, to help our customers and potential customers find us. We maintain and upgrade the site as necessary to keep it up to date with information for site visitors. We also publish the standard ad in the telephone book. Otherwise, we rely on word of mouth from current customers. We’ve always found that satisfied customers have been our most effective advertising.

Q: Can you offer some insight into the day-to-day efforts to provide good service, and project a winning brand image in your business your market area?

Sure, we pride ourselves in the fact that when the phone rings, a person answers it. We don’t go to automated services, except on off hours. The first thing that is done in the morning is that all the phones are checked and all the calls are returned. I personally get aggravated when I call a company, and I know someone is there, but I get a voicemail system that gives a five-minute dissertation on what buttons I can push. When somebody calls, out of respect, we need to talk to them. That’s the first principle of good customer service for us.

Q: How do you maintain efficiency and morale in your team? How are training standards maintained?
My role in the company has always been in sales and administration, but I maintain a Class A CDL license with all the endorsements. Other partners fill other roles. If nobody else can service the customer, I will.
I conduct training, and work together with the other partners to ensure that up-to-date training is maintained for all employees. Drivers require customer service training. Employees working on equipment require specialized training that must be kept current to ensure that they know exactly what they’re doing and can safely do quality work.
Management’s job is to stay closely involved in monitoring training and proficiencies to make sure that employees are empowered with the tools they need to succeed and to provide quality of workmanship and services. We’ve found that employees’ personal success, and working for a company that invests in helping them achieve that success, are very effective motivators for people.
Also, we treat our staff and each other the same way we treat our customers—with the respect that people deserve. We have found that that basic natural approach goes a long way in maintaining a cohesive team and creating a workplace environment that people feel good about being in.

Q: What issue does your business face in maintaining steady revenue flow?
All the responsibilities of running the business must be met in order to sustain the business. Of course, employees must be continuously provided with updated equipment information and training. There must be someone, a live person, here to answer every phone call during office hours. We also have a team that can provide urgent maintenance in the field, and we’re prepared at any time to provide promptly responsive customer service and customer relations help on-site. Generally, the business requires a great deal of hands on management, and we’re committed to providing the very best of it every day.

http://crownsandcurbs.com/

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