Fence-building firms finding rebound in new, repair jobs
Al Simpson, owner of Silver State Fence and Stain in Reno, started his business four years ago, using the bones of now-defunct fencing companies.
The bottom already had fallen out of the residential homebuilding market, and things worsened in 2008, forcing several longtime fencing companies out of business.
Simpson figured he had nowhere to go but up.
And that’s exactly where Silver State Fence and Stain has gone, recording several months of record revenues in the past few quarters. Now, Simpson says, laughing heartily, he can sleep at night when he looks at his balance sheet.
Simpson and other fencing contractors in Greater Reno-Tahoe adjusted their bidding practices and pursued much more commercial and industrial work to stay afloat through the protracted downturn in construction.
Revenues now have begun to increase as homebuilding finds its legs, and homeowners who’ve delayed repairs finally call a contractor.
Simpson founded his company with his wife, Anne Marie, as several other longtime fencing contractors were winding down operations. Simpson, who has worked in the fencing business in the Truckee Meadows for several decades, purchased the assets of Frontier Fence, High Desert Fence and R&D Fence for pennies on the dollar. His acquisitions included trucks, tools, equipment, hardware and entire yards full of fencing materials.
“Other companies were going out of business, and I was coming in their heels collecting everything I could to get into business and get myself going,” he says.
In addition to scaling up Silver State Fence with low-cost equipment, Simpson also picked up several crucial contracts from those former companies. His first solid avenue of revenue was providing fence installations for Lowe’s for residential homeowners who bought materials at the home improvement chain.
He also picked up some subdivision work that Frontier left behind, and he’s now wrapping yards in 11 different subdivisions in northern Nevada.
Over the past few years he included work for the Reno Housing Authority, and that diversification has helped generate enough revenue to keep 11 workers employed.
“The way things are today, you can’t be picky,” he says. “Fortunately with the staff and people I have working for me, I can attack any direction we need to go. Between me and my right hand man, we have over 60 years of experience knowing what to do in the field.”
Revenues also have spiked for Tahoe Fence of Mound House, says company executive Mark Mellow.
The company had a fair backlog of work to carry it through 2008, Mellow says, but 2009 and 2010 were extremely slow. Revenues began picking back up last year and have continued to trends upward throughout 2012, he says.
Tahoe Fence was forced to bid work with smaller profit margins in order to land jobs, Mellow adds. The company operates from a two-acre yard at the Mound House Industrial Park and serves much of the Lake Tahoe basin and selected northern Nevada counties.
Through the depths of the recession the company’s focus shifted to commercial projects. It also recorded black ink through the sale of reclaimed and recycled fencing material to cost-conscious homeowners seeking bargains for residential repairs.
“A lot of residential customers were interested in that because it offered savings over new product,” Mellow says. “Structurally it is as sound as a new product, and a lot of people were satisfied to save money where they could.”
Michael Sedillo, owner of Reno Fence Co. and Quality Fence Co., has gotten creative in helping customers shave costs from fence repair jobs, including allowing homeowners to purchase their own materials at local home improvement stores.
Much of his work comes from word of mouth, Sedillo says. Still, work has been hard to come by several years ago he employed 11; now, it’s just him and his two sons. Reno Fence typically pursues smaller residential repair and new installation jobs.
“It is rough out here,” Sedillo says. ‘But I don’t have overhead, so I can adjust my prices.”
Revenues are enough to keep the businesses afloat, Sedillo says, and sometimes the crew can hire an additional laborer. Sedillo, 64, plans on turning the business over to his sons in a few years.
“It pays my bills and my sons bills,” he says. “We don’t make much money, but we are OK with it.”
Simpson of Silver State Fence and Stain also is eyeing a full-fledged rebound in homebuilding so that he can draw more profit from the company. Much of his revenue, he says, is reinvested in the business and his staff.
“I really can’t wait for the economy to get better so I can make some real money,” he says. “We have great guys who know how to go out and sell this company. They have a lot of integrity my name is on this company, and that is a huge part of my company.”
Despite ongoing difficulties, Northern Nevada’s office real estate market will endure, experts predict
IGT’s decision to list its 1.2 million sq. ft. campus for lease this month and the recent $3.8 million sale of Harley Davidson’s 3-story financial services building in Carson City are the latest examples of companies no longer needing larger-scale office properties to maintain productivity levels and meet customer needs.