Families Fighting for Their Industry

Families Fighting for Their Industry
By Jim vonMeier
Remember when plaster was used to finished interior walls? Art Beierle does.  In the 1950s, Art believed he had a lifetime of work ahead of him—until the early 1960s, when drywall was developed. 
Although plastering covered all the sins of the job and made for a beautiful finish, it was time consuming and labor intensive. Drywall wasn’t necessarily better; it was just faster, maximized profits for the developers and saved the homeowners a few dollars.  In the space of a few years, almost an entire trade evaporated. 
With a growing family, Art needed to find something to put food on the table, so he started working with his brother-in-law, who had started a business of pumping septic tanks for new homes.  It wasn’t long before he started his own pumping business, but he added a little something extra to it—while most of his competitors did the pump and run, he tried taking the extra time to educate his customers.  They didn’t always listen, but there were those who did (and appreciated it), and with those individuals, Art built a lifelong relationship.  
Art’s son Brad was born into the business.  He was riding in the truck with his dad while still in diapers, and when his dad hurt his back, Brad—at the ripe old age of eight—pumped his first tank (Art drove while Brad pulled hose). 
When he was right out of high school Brad, like many of us, wasn’t sure what he wanted to do, so he went to technical college to learn diesel repair.  After that, he floated from one job to another until landing at a bank.  But one day, Brad grew tired of “working for the man,” so he took what was (and probably still is) the longest lunch break in history. It wasn’t long after that Brad went back and asked his dad for job (for the fourth time). This time, however, he stayed, bringing with him new ideas and the enthusiasm that every business needs from time to time.  They got bigger and better trucks, and, with Brad’s college knowledge, he was able to modify them to perform even better.    
By the time Brad was in his thirties, computers were becoming necessary. Art didn’t feel like learning these “new-fangled gadgets,” so Brad began to lead the company. 
In 2003, Brad and Art got into portables with Brad’s wife Dawn running it.  They have actually taken big contract jobs (Colorado International Speedway, the numerous spring/summer/fall festivals) away from the large portable players—not because they under-bid them but because they offer better service.  And all three of Brad’s daughters are involved in the family business (his first helped him pump a tank at nine years old).     
Brad has also taken it upon himself to get NAWT certified, something most only do if they have to, but Brad wants to do the job right. 
Now, however, Brad’s family business is being threatened by progress and ignorance. Colorado, like most of the country, had a huge housing boom in the 1990s, with developments going up all around the Denver area. At that time, however, the Colorado septic regulations were outdated, and the required skill levels for being a contractor were minimal. Many of the systems going in were doomed to fail, and they have. 
According to one report, 66 developments have significant failure rates. As a result, many homeowners are now hoping to become hooked up to a treatment facility.  Brad is smart enough to know that if the big-pipe goes in, a plant will not just be built for those developments. They will start running those mains from one development to the next and picking off every home along the way.  As a result, Brad will lose his local customers forever and his cost of doing business will dramatically increase because he will be forced to drive further out to find more customers. 
But Brad and his family do not just see the process as losing out on business, to them, it is an environmental cause as well.  They have seen the pollution damage these plants do, and they realize Colorado water supplies are already in jeopardy. With more plants going online (and discharging Colorado water down river to the oceans), they will seriously damage the future for all Colorado residents. 
Brad and his family are getting ready to fight back.  He is volunteering his time/expertise by working with the regulatory people to update their septic codes and will be attempting to organize the contractors in his area to work together to solve the current problems.    
He is also helping to organize educational programs for the communities so they can make the right choices; he hopes to have the programs up and running this summer. 
Unlike Brad, Don McAllister was not born into this business; he initially owned the Livestock Feed and Supply Company. In the 1980s, the Iowa farming industry began to slowing down, and by 1989, he needed part-time work to augment his income, so he began working with an elderly gentleman who did septic pumping.  A year later, the boss retired, and Don bought the truck. As a bonus, the boss threw in his customer list.  Eventually, in 1991, he branched out into the portable industry as well.
Much of his pumping work was turning into repairs, and he knew why: installers were giving their work away and weren’t doing the job right in the first place.  As such, Don added repairs and tank replacements to his list of services.  
As his business (and revenues) grew, he elected to hit the Pumper Show, and the effects were predictable—when he saw all the toys, he was amazed at how vast, advanced, and far reaching this industry was.  Not only did he see the value in proper equipment, but it encouraged him to join the Iowa Onsite Wastewater Association to get trained and certified in system design/install—he even got certifications from NEHA. 
With the number of repairs he did, he knew right away he wasn’t going to be the cheapest, but he was going to do it right.  And although certification is not required in every area, he still gets certified and requires his crew do the same. 
Today, they do it all: Don’s son Jeremy, like Brad, started out in the truck in grade school.  Now, at 35, he runs the install portion of the business.  Daughter Tera handles the phones and scheduling.  Wife Karen deals with the books and red-tape that goes with running a business. 
They also employ Kristy, who handles the portables, and two others—one for installs and another who handles pumping and fills in wherever needed. 
Although the economy is down, they still manage to do well. However, Don and his competition are now facing an enemy that is far more dangerous than a down economy or a sewage treatment plant.
Not long ago, Don got a call from Andrew Johnson, a contractor who worked a few counties away.  Andrew’s father had started RJ’s Plumbing and Heating in 1982.  The septic side of their company does installs, pumping and repairs (the county sanitarians do the designs per their county regs).  This is a family business as well.  
Andrew learned about something that may affect both his and Don’s businesses. In this part of Iowa, they have to go deep, approximately 7,000 feet, to hit water, and it is not the best quality. As a result, several years ago, a nonprofit company was formed to harvest surface water and deliver it to those homes and businesses that chose to tap into it.  Today, they have 3,600 miles of pipeline supplying water to over a dozen counties.  They have also built and currently operate several municipal treatment plants—and now they want to get into the septic industry. 
The plan is that when the homeowner needs a system, the organization will have the county sanitarian design the system, and then they (the organization) hire the contractor to do the installation.  After completion, the organization will own the system, and the homeowner will pay a monthly fee to cover service, operation, maintenance and future replacement.   
There are several potential problems with this plan:

• The new company would pick which contractor would do the work, not the homeowner.  
• The company would also control the price.  That means the contractor would have to agree the job was only worth a certain amount, but what happens if none of the contractors on that chosen list agree that the price they are given is fair? 
• And what if you don’t make it on that chosen list, or do not get along with someone who makes the picks?   

I actually talked to one of the people with this organization, and he seemed like a sincere and honest man who did not want to hurt the independent contractors, but that is one individual who will not always be there. What if the next person has no regard for the local contractors?  Growth and taking advantage of opportunities is a natural progression of any business. 
Not many individuals will turn away work. The same idea applies here.  A few years down the road, a new director may come in with the attitude that growth for them is more important than protecting a handful of independents, and work will be lost.    
Brad’s fight in Colorado will be fairly easy because all he has to do is tell the homeowners the truth about price: $5,000 to $15,000 for a septic system or $30,000 to $60,000 for the pipe.  He can also use public perceptions of how government-run projects are routinely mismanaged, suffering major delays and escalating costs.  It doesn’t hurt that people already feel they are overtaxed and over assessed.     
However, Don and Andrew are going up against a non-profit, and that is a different story.  To many, the term non-profit means two things: the company is dedicated to a cause, and if no one is making a profit, it means individuals are receiving services at rock bottom prices.  Of course, if you have ever seen a study on non-profits, you know that is not the case.  With the big charities, the workers may be doing it for free, but the operators are not; they get paid and some of them get paid very well.   
Remember that even a non-profit has to make a profit if they are going to keep operating. They can often undercut the independents because they don’t have to pay any federal taxes.  And, a non-profit has easier access to grant money. 
While many non-profit companies can secure grants, family businesses, like Don’s, Andrew’s, or Brad’s must pay for improvement or repairs from their own profits. These individuals cannot afford to provide services for customer’s who cannot pay—they do not have the option of using grant money.  Additionally, family businesses have to pay taxes on the money they make. It is no longer a level playing field for the independents; in fact, it is an uphill battle for them if they don’t fight back. 
About the only defense independent contractors have is to point out to the homeowners if this is allowed, the independents will be forced out of business and that means no competition—and competition is what keeps pricing fair and encourages higher levels of service.  They can also explain that the organization will make them pay a monthly fee and will own that piece of their property.  And if they get to the point where they own it all, they could easily change from a non-profit to a for-profit.     
Clearly, this industry is very often a family-business enterprise.  But it is also clear that more and more of these family businesses are facing difficulties with the influx of larger enterprises and non-profits into the industry.  This trend is forcing these families to fight to remain solvent; in order to continue serving their loyal customers and in order to avoid losing their livelihood, these families are “fighting back” and becoming more proactive.

Jim vonMeier performs educational programs directed at homeowners teaching them the health and environmental need for proper septic systems and how to find a certified septic professional to inspect/design/install/maintain their systems.  He has also represented homeowners in their fight against public sewer projects and speaks at contractor certification courses around the country on the subject of customer service.  1-763-856-3800  jvonmeier@septicprotector.com          

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