Off The Wall: Story of a SLU Contractor
A journey through time with this SLU business.
At the ripe age of 15, my first job was feeding a Tommy Gun in the warm Arizona summer sun. In 1986, I received my plastering contractor’s license in New Mexico. Two years later, I received my general contractor’s license, allowing us to perform multiple trades. As our volume of business grew, so did our reputation of professionally pumping large projects in a timely manner. Basically, if we couldn’t pump it, we let it go to the other guys.
Circa the late ’90s, when we were approached by USG Levelrock to become its area applicator of gypsum flooring underlayment, USG was asking contractors in our area who the production “pumpers” were, and our company was mentioned several times. USG indicated they would help us bid and pour our first job; however, we’d have to purchase a $55,000 pump from a third party to perform the work.
They gave us a lead on an upcoming project. We conservatively prepared the bid based on your typical parameters, anticipated labor and materials plus normal markup. I then added the cost of the pump to the bid. We didn’t expect to be awarded the project given the fact that we put the entire cost of the pump on top of the bid price. Typically, equipment costs of this magnitude are amortized over much longer periods. It was somewhat intimidating as large stucco pumps—our typical purchase—were half the cost of gypsum pumps.
We were surprisingly awarded the contract. The project consisted of pouring the second and third floors of a steel stud constructed hotel over metal pan decks. As promised, USG sent a handful of industry professionals and engineers to assist on our project. Reputable material and equipment manufacturers will assist first-time applicators.
The First Gig
Our first job went extremely well with USG’s expertise. They afforded us the confidence needed as we delved into a new trade. When the job was complete we made more than our anticipated profit and covered the cost of the pump in two days. We had just created a new source of revenue while utilizing our previously honed knowledge of equipment.
Exterior stucco projects—our expertise—had many hurdles to clear to complete a project, scaffolding investment being one that is significant. Weather concerns are ever present. Also, there was a learning curve tackling an entirely new trade. All in, we found getting “off the wall” a very lucrative and seamless addition to our business.
When bidding plastering projects, our rule-of-thumb is 50 percent labor plus 50 percent material plus overhead and profit. With trades like fireproofing and self-level underlayment, the numbers play out to a significantly lower labor percentage, combined with a higher material percentage (FP-30 percent labor and 70 percent material, SLU-10 percent labor and 90 percent material). We would combine labor and materials and then put a mark-up on the combined total. This all equates to making a much higher profit/man-hour, due to the disproportionate costs of labor and materials.
Through the next 15 years, the flooring pump didn’t run on a daily basis. However, when it did, significant profits were realized. Utilizing the same crews we had trained for pumping stucco had proven to be helpful; however, a company who has never pumped merely needs to find 1-2 employees with pump experience. Material manufacturers also have industry professionals with real-world experience to help, until you feel comfortable on your own.
Expanding Your Business
Maybe it’s time for your subcontracting firm to consider expanding your business to include complementary trades. Performing alternate trades increases sales volumes, while allowing one to dictate the flow of the job schedule to their advantage. This is a much better situation than being at the mercy of other trades.
Let’s take the scenario of a drywall contractor working on a large project where the floors are poured with an underlayment product. If the floors are poured first, the drywaller must wait for the SLU contractor to pour prior to stocking and commencing work. If the floors are poured secondarily, the drywaller must complete an entire floor prior to the SLU contractor starting their work (SLU crews pour 20,000 to 30,000 square feet per day). Both scenarios create logistic nightmares.
What if the drywall contractor performed both trades? One could not only control the schedule of the project but create a significant new source of revenue in the process.
An SLU contractor can easily transition into SL topping products over existing concrete slabs. The topping over concrete is performed on renovation projects and in most commercial/residential hi-rise projects.
Profits of $1 per square feet are commonly realized, while pumping 3,000 to 9,000 square feet an hour, with a six-person crew. A newer trend is occurring where initially placed concrete slabs are simply rough screeded and then flattened or leveled with SLU. Anytime “leveling” enters the equation, two to three times the amount of material needs to be pumped, thus significantly increasing the scope of work.
The Self-Leveling Industry
In my 30-plus year construction career, I’ve yet to see a trade with higher margins than SLU. This industry is growing significantly in the United States. As flooring components grow larger in dimension, flatter underlying floors must be installed. Flattening and leveling floors are the bread-and-butter of the self-leveling industry.
On a side note, shoveling sand and lifting 94 lb. bags of cement all day in the Arizona summers, as the Tommy Gun takes the mud away, makes any hurdles in life mere speed bumps.