BUSINESS: PRODUCER / SUPPLIER - ProAll Inc.

BUSINESS: PRODUCER / SUPPLIER

For owner/operators that only charge customers for the actual concrete delivered, there is never a problem with ordering too much or too little material. Metered delivery means you have an accurate record of volume produced. When low volumes and small loads are needed, deliveries can be made to several small projects, each with different mix requirements, in the same day without wasting time recharging.

CASE STUDY:

HOW TO MAKE MONEY OWNING A REIMER

Tom Baker is a UK businessman who has built a very successful business utilizing Reimer Mobile Mixers. Tom’s success is based on four cornerstones:

  1. Sound Business Knowledge
  2. Conservative Financial Approach
  3. Commitment to Customer
  4. Vision For Efficiency

SOUND BUSINESS KNOWLEDGE

Tom Baker grew up wanting to be a farmer. His family encouraged him to attend Harper Adams Agricultural College where he received a degree in Agricultural Engineering. His first job was fixing forklifts on a farm in Norfolk. Later, Tom went to work for an agricultural land drainage contractor who also had a business in highway trenching machinery, specializing in utility work. Tom was good at what he did and eventually was lured away by one of his customers where there was more potential for his burgeoning career. It was there that Tom gained experience in construction and utilities, working his way through the commercial side of the business. The owner of the business had sound financial principals which allowed Tom to gain perspective on how to run a successful and profitable business.

Looking for an opportunity to make some extra money to put his children through school, Tom spotted an opportunity to provide better service supplying small loads of concrete to local contractors. The Ready-Mixed suppliers in his area dictated delivery to the customer based on size of the load. Small loads didn’t get prioritized or the delivery price could be steep. Tom had seen mobile mixers working in other regions and thought that this might be a great solution to the concrete supply problem small contractors were having. Tom set about to research mobile, mixed-on-site mixers and set up a side business to fortify his nest egg.

In 2001, Tom met Reimer’s UK Representative —Reg Gorman and visited his operation. Reg convinced Tom that continuous mixing technology had a lot of potential – it was cleaner, easier and more user-friendly. Tom bought in, both to the friendship with Reg and to the best Reimer he could afford to buy. Eastern Concrete was born.

CONSERVATIVE FINANCIAL APPROACH

Tom will tell you that the first results of his foray into the business ‘were not good’; he had ‘no clue’ about mix designs or admixtures – he thought ‘concrete was concrete’. The first part of the learning curve was steep. Eastern Concrete’s first 6 months in business were relatively slow, but enough to keep his newly-hired driver employed. Use of the Reimer mixer was not being optimized. Then, a contractor who was familiar with continuous mixing technology contacted Eastern Concrete to do some road barrier work, at night; this could solve the under-utilization problem. Tom would work nights when the road barrier work had to be done and have the mixer back for the driver’s deliveries in the morning. Tom would then work his day job. At the end of his first 12 months in business, Tom bought another Reimer and added another operator.

Eastern Concrete bought another Reimer after the 2nd year – after the third year, Tom bought a mixed-on-site business in the next town. During this time when he had a spike in business, he would rent Reimers from Reg so that he could satisfy his obligations and not have to keep a mixer that wouldn’t be fully utilized. Using this philosophy of only buying when the mixer could be fully utilized and renting to meet the markets needs, Tom ended up buying a Reimer every year for the next 9 years.

COMMITMENT TO CUSTOMER

Above all, Tom’s business focuses on the customer. He knew if he could help small builders solve all their concrete delivery problems, they would pay a premium for his services and Eastern Concrete could provide the exact amount of concrete required for the jobs when it was needed. In essence, if he helped a contractor to make a good name for himself and grow his business then Eastern Concrete’s business would grow as well. “It’s an organic process based on results and relationships” remarked Tom. “I don’t think like a ready-mixed producer” says Tom “more like a concrete salesman – how do you want your concrete? Where and when?”

VISION FOR EFFICIENCY

In 2005, Tom found the ideal piece of land to build his vision for a highly-efficient operation. The location was perfect: ‘easy on / easy off’, 5 minutes from a major thoroughfare. He wanted to build an operation that designed out the risks and optimized loading. Specially-designed platforms were built where the trucks back in so the drivers don’t have to use ladders to gain access to the top of the machines. The loader uses its own platform above the mixer so recharging is more efficient with less strain on the machinery. The whole yard is paved which not only cuts down on dirt and dust, it also allows for the collection of rainwater and run-off from cleaning, into an underground cistern. This in turn is reused in the process. When docked at the platform, the Reimer’s water tank is filled from the underground cistern and cement dispensed directly into the Reimer from purpose-built loading bellows. There is also a maintenance area which has 3 bays where the Reimers get serviced at night. Tom has hired 2 mechanics – one who works on chassis’ and one who works on the Reimer Mixers.

Tom also has a vision of a paperless company – “this has taken time but now I couldn’t manage without it, we are embracing technology and will eventually have no need for pen and paper” commented Baker. The process of receiving, scheduling and deployment of an order is all done through networked software. Essentially, when a customer calls in, the delivery is scheduled in BOBware. In time the delivery details will be sent to the driver’s GPS unit and when the order is completed the customer will electronically sign for it. This signed document will then be sent electronically to the accounting software. Tom has been working with Dan Unrein (the developer of BOBware) to completely automate Eastern Concrete’s business processes. With automation comes the ability to quickly see and analyze profitability – all costs can be factored in through the extensive reporting features.

With the economic downturn in the past few years, Tom has focused on building his business by extending his geographic reach. He now has two reloading stations located 25 and 50 km from Eastern Concrete’s main yard in Stowmarket, Suffolk. With fewer kilometers to drive for recharging, more time is spent making and delivering concrete. All the Reimers head back to Stowmarket at the end of the work day.

The backbone of Tom’s business is his 11 Reimer Mixers, but there are a lot of factors/assets contributing to his success:

  • Truck Utilization is key
  • Easy load facility (can reload 2-3 times faster)
  • On-Board GPS (always know where & status of mixers)
  • Trucks/Mixers maintained in-house
  • Pump Truck purchased in 2010 to help to sell more concrete and provide a more comprehensive service to the customer
  • 2 reload stations helps to stretch the geography of the business
  • Automated Processing
  • Minimized back-office– 1 to 2 less people required
  • Minimized errors
  • Insightful reporting
  • Customer Satisfaction – which spawns repeat business and referrals

Tom has found that his marketing effort has been minimal, even entering new geographic territory. About 80% of his business is repeat (happy customer) business and new business is almost exclusively word of mouth.

“Reliability and performance of the Reimers is integral to our performance in servicing our customers. We are seen as one of the biggest and most professional mixed-on-site concrete suppliers in the UK.”

“As a concrete contractor who has to deliver on 3 or 4 different jobs in one day, I needed additional cement capacity and options like admixture injection and color systems so that my customers get what they want and I can deliver without delay.”

“The first Reimer Mixer I purchased paid for itself within its first year of operation. The savings I made on crew wait times when we didn’t have quite enough concrete, or the cost of disposal when I had too much quickly and easily justified the acquisition.”

Reimer Case Study Tom Baker