From Crumbs to a Nice Slice
CAROLINA MANAGEMENT TEAM LLC Headquarters: Enka Co-Owners: Wendy Banks and David Van Zee Employees: 20 Founded: 2003 Projected 2010 revenue: $2.2 million Business: Concrete repair and painting
In 2008, Wendy Banks won the Small Business Administration’s N.C. Small Business Person of the Year. With her younger brother, David Van Zee, she owns and operates Carolina Management Team, which specializes in painting and repairing water- and sewage-treatment plants. “I said jokingly, ‘If we’re not careful, we’ll have won the award this year and be out of business the next.’” Her words proved prophetic. After CMT paid $10,000 in bonuses to its workers for a great ’08, “February hit and we literally didn’t have anything to do,” Van Zee says. The business almost went down the drain. How does a company go from roses to the toilet overnight? “We kind of had all our eggs in the municipal basket,” Banks says.
Their dad had a similar business in Florida, and when Van Zee, after 15 years in manufacturing engineering, decided to go out on his own, he phoned his sister, an event planner. He knew she wasn’t happy in her new job at Universal Orlando Resort. “I went from my ivory tower in Orlando, wining and dining in New York on expense account, to painting sewers,” says Banks, whose 51% ownership qualifies CMT for SBA set-asides for minority- and women-owned businesses.
Because most companies shun the red tape that municipal work requires, CMT targeted water and sewage plants. Clark Fields, a counselor with the N.C. Small Business and Technology Development Center in Asheville, says Van Zee’s expertise in concrete corrosion gave it an edge. Plus, he adds, “they really are a good match because one has the technical background and the other has fantastic customer-service and people skills.” The jobs came in, and revenue went from about $200,000 in each of the first two years to $600,000 the third year. “For each of the past three years, we have completed just under $1 million in revenue,” Banks says.
After CMT’s best January ever in 2009, water-conservation efforts resulting from the drought that plagued North Carolina and surrounding states in 2007 and 2008 closed the tap on revenue from water and sewer plants, around 90% of CMT’s revenue. “Maintenance projects were put on the back burner,” Banks recalls. With zero work, CMT laid off its staff. Banks, Van Zee, Operations Manager Will Mayfield and Office Manager Marsha Lunsford went on unemployment, drawing no pay from February through December. With a little girl and a big mortgage, Van Zee, 39, suggested closing things down so he could look for work. “I woke up the next day,” Banks, 42, says “and thought, ‘Where’s David going to work?’ There are not any engineering jobs for him.” By December, she had to borrow $100,000 against her home to keep things going.
While small-town utilities were deferring maintenance, multimillion-dollar projects, such as mandated water- and sewer-plant expansions that had been funded, continued apace, handled by large general contractors. “We realized we had to get a piece of other people’s bigger work,” Banks says. In March, CMT started bidding for subcontracts. “Some of them were crumbs,” Van Zee says. In August, it landed a million-dollar job at a treatment plant near Kernersville. “That wasn’t a crumb.” Other jobs followed, especially after he got his limited general contractor license. “Finally we were back in full swing,” Banks says. “In November, we learned we were low bid on a $1 million project in Goldsboro. We completed 61% of the revenue in 2009 in the last four months of the year.”
Crucial, they say, was following their dad’s advice to be conservative — prepaying, for instance, rent for the year and workers’ comp and general liability insurance. “What felt good is in that lowest moment, we could still pay our debt,” Banks says.