Change is Good

Tweaking the business plan helps a veteran North Carolina septic service company cope with the challenges of a stumbling economy

When the economy soured beginning with the collapse of the financial industry in 2008, Williamston, N.C.-based Bennie A. Moore Septic Tank Service Inc. had a plan in place to counter a grim outlook for small business service providers.

Russ Ayers, president and grandson of company founder Bennie Moore, laid the foundation for a recovery program while preparing a marketing plan for the family business 15 years ago. Studying at North Carolina State University in the 1990s, Ayers used construction research data to determine which counties would get government assistance for septic systems at existing homes. That data proved instrumental to business-building efforts that continue today.

“I did a demographic study on septic tanks and the industry, and developed a plan that would grow our company. At the time we were pumping, installing and repairing septic systems, many of the things we now do,’’ Ayers explains. Based on the research gathered from university and state sources, he approached his grandfather and mother, Jo Ayers, who serves as secretary-treasurer and office manager, suggesting a new concept for the business.

“We implemented the strategy, which was to continue to grow the business in the wastewater industry, but with the idea that we would be prepared for exactly what has happened with the economy,” Ayers says.

DIVERSIFY FOR SUCCESS

Ayers had found that one of the counties they serve had more homes still utilizing outhouses than any other county in the state. “As money flowed from Congress to rehabilitate low-income housing, we were in a prime market. At that time the mobile home market started a 10-year boom, and with stick-built custom homes on the rise, it was easy to see our customer base.”

While they needed to provide a wide variety of wastewater services to thrive, the spike in septic system installations during that period showed Ayers and Moore that septic pumping and grease collection would be most sustainable in an economic downturn. That premise has proven to be the basis for the endurance the company has shown in 2010.

“We knew the construction boom wouldn’t last forever, so we set forth a plan to grow our pumping and repair work within the residential, commercial and industrial business,” says Ayers, “and moving toward investing in construction equipment, but continuing to promote pumping and land application.’’

But Ayers concluded that the diversification would only help if the company created a profitable pricing structure for its services.

“I took a lot of time to understand the true cost of operating our business. Then we did a complete restructure of pricing in preparation for expansions into the new market areas, and this made us a more profitable business.”

Because of the high cost of sewer system expansion, septic systems are frequently used for both residential and commercial development along the coastal region of North Carolina, Ayers says. “In some areas, growth has exceeded planning for sewer, which leaves onsite the only alternative for developers,” he explains.

In 2004, the company started the Moore On-Site Service distributorship, which sells products by E-Z Set Tank Co. and American On-Site Services. This year, they added the subsidiary Moore On-Site Utilities Inc., licensed in Virginia and North Carolina as a general contracting company.

CONTROLLING DISPOSAL

In addition to the revenues you can predict through new development or repairs and maintenance of existing systems, sometimes unpredictable weather generates business, according to Ayers.

“We can have 13 inches of rain in some places and we will pump and pump for a week, everything from residential to commercial properties. We have pumped 150,000 gallons in seven days. We have to be able to do that and store it. You can’t land-apply when the ground is too wet.”

On the company’s 160-acre property, 55 acres are set aside for land application and to locate storage tanks. They have multiple steel tanks ranging from 6,000 to 15,000 gallons, with a total capacity of 320,000 gallons. Many of the tanks are recycled fuel tanks that were cleaned at their original location, and often the shipping charges were the only cost to the company. The company has controlled its own disposal and storage since 1978.

“We can handle 4 million gallons in land application a year,” Ayers says. “We can handle 90 percent of what we pump on our own site. Our site is approved for domestic septic waste, portable (restroom) waste, grease trap waste. No towns in our area could handle the volume of wastewater we pump during storms.”

For land application, the company mixes septic and grease at a 50/50 ratio. During collection, they track how much grease or waste is in each tank so they can maintain the proper mix. The process calls for adding hydrated lime to the mix until the pH rises to 12, then hold it for two hours. They use a 1995 International vacuum truck with a spreader bar to broadcast the waste.

FUNCTIONAL FLEET

Important to their plan is getting the Moore name out with their lettering and logos and by always having clean equipment on the road. “We get the attention of people with our moving billboards.’’ Their fleet of vacuum trucks includes a 1992 International 4900 built by Lely Manufacturing Inc. with a 2,100-gallon waste/300-gallon freshwater steel tank and Harben jetter; a 1995 International 4900 with a 2,500-gallon steel tank; a 2004 International 7500 with a 3,700-gallon steel tank; a 2006 International 7500 built by Engine & Accessory Inc. with a 4,300-gallon waste/300-gallon freshwater aluminum tank and Harben jetter. Trucks have pumps from Fruitland and Wittig. They also have an assortment of other vehicles for construction projects.

REAL ESTATE INSPECTIONS

With changes in the economy, Ayers and Moore confirmed the importance of developing the service end of the business. Ayers began spending more time networking with engineers and developers where projects involved onsite systems that require future pumping and maintenance.

With the housing crisis, the company also networks with real estate agents and mortgage brokers handling short sales that require septic system inspections. Their real estate service involves locating the septic tank and all system components, taking field measurements and providing a map, excavating to the septic tank inlet and outlet, as well as the distribution box or other system components for inspection.

They pump and clean the septic tank and inspect the tank and the collections system, document the condition of all system components with photos and write an inspection summary. Ayers is certified for this work by the North Carolina Wastewater Contractors & Inspectors Certification Board.

“Because of our varied efforts, our business has been sustainable. Our pumping business and related services represents about 40 percent, and the balance would be in other areas such as installations, repairs, selling the systems,’’ Ayers says. Of the 40 percent pumping and related services, 35 percent of the work is residential pumping, 20 percent is commercial pumping and 45 percent is in cleaning grease traps.

“Over the last ten years we had septic installations and repairs at about 200 a year, but with the downturn this is way off, by as much as 75 percent,” Ayers reports. While installations have decreased, maintenance of existing systems remains a more consistent revenue stream.

GETTING TO WORK

For example, one project was for Topsail Sound RV Park in Holly Ridge, N.C., to install a 21,000-gpd system, with components amounting to five precast tanks ranging from 9,000 to 14,000 gallons with an E-Z Treat system from E-Z Set Tank Co.

Using the system reduced the size of the disposal field by 50 percent. The low-pressure pipe system was installed over 18 months in two phases. Setting the tanks on this project was challenging, as well points were required to dewater the site before excavation could start. This took two weeks as the water table was within one foot of the surface.

Another project was the Betsy-Jeff Penn 4-H Educational Center in Reidsville, N.C. “This was a repair of an existing sand filter system that discharges into a creek. We added three new 8,000-gallon tanks and a 13,000-gpd E-Z Treat Treatment Center. We were on a strict timeline, with the old system failing. The total project was done in under 30 days.’’

By subcontracting with others to take on larger installation projects, Ayers says the company minimizes overhead and risk, and increases profitability.

“When business was booming, instead of expanding our workforce we would subcontract projects we couldn’t otherwise get, and this allowed us to still be the prime contractor, and make a profit without the long-term commitment of employees and equipment. This part of the business plan has worked well, especially where we serve all of the state in installation of larger systems.’’

UNTIL BRIGHTER TOMORROWS

Whether it’s employing subcontractors, long-range goal-setting or grabbing the reins when it comes to septage and grease-trap waste disposal, these are all critical strategies Bennie A. Moore Septic Tank Service has used to weather the storm of economic uncertainty.



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