Most of Illini Hi-Reach's customers drive pickup trucks. Small contractors, they own small businesses. They are concerned about getting that next job, paying off that bank note and covering payroll every month. They need to worry about OSHA regulations, employee benefits and turnover, and all the other problems owners face in the day-to-day grind. They are usually not hard to find, at their offices or in their vehicles, cellular phones at the ready.
In short, they are just like Larry Workman and Don Davies, owners of Illini Hi-Reach. And because they are so much like those contractors, they have a solid stable of loyal repeat customers.
When Workman and Davies founded their Lemont, Ind.-based rental company in January of 1993, they each knew, after working in the sales end of the equipment business for about 15 years, that there were available niches in the highly competitive aerial work platform rental business in the Chicago area. Although the area was flooded with machines - there are now more than 5,000 aerial work platforms in rental fleets serving the greater Chicago metropolitan area, participants say - they felt they had enough relationships to establish a foothold.
They also sensed - although the consolidation that would begin a few years later had not yet begun - that the industry was already moving toward larger rental companies, where the ownership was more removed from the line of fire where relationships with customers took place. Workman and Davies found that contractors liked to do business with people who, in effect, were just like them, with the same day-to-day problems and concerns, and with the ability to make instant decisions.
"Those customers like talking to the owner of a company who is in the same situation they are," says Workman. "Pressed by budgets and time constraints and bank payments, they're in the same sort of world. And although we also do very well with large companies, including some Fortune 500 firms, the vast majority of our customers are guys running around in pickups, running their own jobs. We understand each other."
Workman, whose last name reflects the hands-on approach he brings to his job, and Davies believe their strength comes from the fact that they, as Workman says, "handle everything from making sure the offices are clean to buying new equipment."
"You need something quick, or you need something fixed quick; that's what we're good at," adds Davies. "Larry and I come to the phone right away. If we get a customer who is unhappy or needs a quick solution, we jump right in the middle and get it done. We don't have to go through a series of levels of managers."
Workman and Davies believe Illini has to operate with a "sense of urgency," the essence of which is a willingness to drop everything when necessary to focus on the immediate needs of a customer.
"That attitude has always been vital to the rental industry, from the top of the organization through every employee," Workman says. "If you don't 'get it' at Illini, you will not stay long."
Local boys Workman and Davies say their local history is an advantage, especially when dealing with the industrial market, which makes up about 45 percent of Illini Hi-Reach's business. Workman grew up in northwest Indiana, where, he says, people generally prefer to do business with local people, and Davies has 15 years as a salesman in the area.
"Historically, people from Joliet don't even go to [nearby] Chicago to do business," he says. "People in Rockford don't want you to be from Chicago or Evanston [much less from another part of the country]."
Workman grew up around the steel mills, and after graduating from Purdue University, he returned to the mills selling construction equipment for Bridgeview, Ill.-based Crane & Machinery, as did Davies. The experience gave Workman a working knowledge of the local steel mills and refineries.
"When they say, 'I need an 80-foot lift to work on the coke battery,' I can say 'Eighty feet is too short, you need 100 feet," Workman says. "I know from experience, and you can only get that by time; there's no substitute. And if you go in to a steel mill to try to rent something and you don't know how a steel mill functions, or if they talk about a blast furnace or a coke battery and you don't know what they're talking about, they immediately turn you off."
It was their knowledge of the local businesses and the longtime relationships they developed with local contractors and industrial plants that convinced Workman and Davies they could start their own business and be successful.
"We knew bridge builders, steel mill people, steel erectors, and that let us get rolling right away, without really pounding on doors to get it started," Davies says.
They also began at a time when the economy was about to spurt. "There was bridge work all around the country," says Workman. "The highway system was basically condemned by almost everybody in Washington, and all of a sudden there was road work, steel mill work, bridge work, and we were off and running."
Workman and Davies got started the old-fashioned way that many say is no longer possible - with six used machines. They had been planning to start a business together since becoming friends in 1980 when they both worked for Crane and Machinery. In the mid-'80s, when Workman was a district marketing manager for Grove, they decided the rental business presented the best business opportunities at a lower start-up cost. It would have required an investment of at least $10 million to begin a dealership, and as young men still in their 20s, they couldn't obtain sufficient credit and didn't want to leverage a new company so heavily.
They bought six used scissorlifts and then concentrated on buying Grove boomlifts through equipment brokers, hoping they would become Grove dealers for western Chicago. Although the deal with Grove fell through, remaining independent turned out to be a big break for the fledgling firm.
"We were able to buy whatever we wanted from whomever we wanted, so we bought the best from everybody's product line," says Workman. "And we didn't have the pressure of somebody telling us our market share was down."
Another advantage the novice partners had was knowledge of and contacts in the entire Chicago metropolitan area. Davies had primarily worked Chicago's north and west sides and downtown, while Workman had mostly worked the south side and northwest Indiana.
"We didn't overlap," says Workman. "And we didn't have an area that we were completely dumb about. We kind of knew who to rent to and who would pay us on time." In fact, Illini has made consistently good decisions in its choice of targeted customers. With about $15 million billed in total revenue since beginning the company seven years ago, they've had only about $25,000 in bad debts.
While Illini found customers immediately, survival was touch and go in its first year of operation. Workman and Davies started off with a $250,000 investment, working long hours and paying themselves almost nothing. As they neared the end of their first 90 days, when the $250,000 was about to run out, the ability to continue looked questionable. "We ran to the 89th day or the 91st day and were about to write the last check before that $250,000 would run out, and then we finally got some checks in," Workman says.
Worker's haven While the management of national chains touts the advantages of large size - an advantage Workman and Davies don't deny - the two co-owners of Illini Hi-Reach believe their small size is an advantage too. They encourage a close-knit family atmosphere at Illini and say their accessibility leads to employee loyalty and working together for a common goal.
Workman and Davies' hands-on style has strengthened their ability to keep quality employees, a growing source of difficulty for many companies in the current environment of low unemployment. The 11-person company has had little turnover.
Service manager Jamie Gray worked for Workman at Selby's Aero Squad (now part of Hertz) and was parts and service manager there before becoming service manager at Illini. The rest of the service crew seems to appreciate being part of a small close-knit group that works closely with the management team.
"They see us here all the time," says Workman. "We're very much involved with everything that goes on here. If they need to talk about something, we're around and we're available. And we don't ask anybody to do anything that we wouldn't do ourselves."
"Rather than feeling like a big company, it's like a family here," adds Davies. "We all know what each other is doing on the weekends. The people who work here look out for you; they're not just putting in their time and going home."
In addition to a friendly, relatively low-pressure atmosphere, Workman and Davies credit a generous benefits package for keeping people.
Specialty marketers Illini Hi-Reach is a specialist rental company, one whose name defines what the company does, which Workman, a marketing major in college, believes the name of a company should make clear. Workman and Davies are committed to the aerial market and have no interest in getting involved in general rentals.
"I'm not convinced that being a general rental house allows your mechanics to be well-versed on everything they need to fix, or us to be well-versed on everything a customer would need," Workman says. "We know what we do well, and we try to stay there."
The bulk of Illini Hi-Reach's fleet is 60-foot booms although Illini carries everything from 40-foot booms to 120-foot units. It also carries scissorlifts, industrial cranes and reach forklifts. Its service department is a major factor in its reputation as a lift specialist, and, in fact, the company has been recently approached by several aerial manufacturers to serve as a factory service center for warranty, parts and repair.
Workman also learned from his marketing courses that the name of a company should also tell customers where the company does business - hence the name Illini. The company has about a 60-mile radius from the city of Chicago, an area that also extends into northwest Indiana, and Workman and Davies did consider a variation of the name that would include Indiana, but decided to stick with the simpler Illini.
"We took the colors of the [Chicago] Bears and the University of Illinois and called the company Illini," says Workman. "When we first started out, we painted machines Bulls colors, Bears colors, White Sox colors and Cubs colors, so we had somewhat of a novel machine to rent now and then. But we stuck with orange and blue and plastered those colors on the stationery, the machine decals and our promotional items. Even if people couldn't read the decals or say the name, the color scheme and logo image would be in their heads." The company logo shows arrows extending up and down much like aerial equipment.
The marketing of the company is straightforward but effective. Illini sends out mass mailers to subcontractors and general contractors, with a particular emphasis on aerial information to subcontractors and reach forklift information to general contractors. They send a couple of hundred pieces per month and will typically get several rentals from the mailings, including major jobs such as the Trump Casino in East Chicago, which yielded about $50,000 a month in rental revenue for nearly half a year.
Illini also has a simple, but straight-forward Web site (www.hi-reach.com). With logo-based graphics, the site provides basic information such as its location, describes the inventory and specifications of the fleet, and gives contact information.
"The site is more for information at this point, and we have had out-of-town contractors find out who we are through it," Davies says. "We've gotten some large rentals, but it's sporadic. Typically, they look at the site, call us and say they've got a job starting in 60 days, and can they start an account with us? A lot of contractors use the Internet now. The typical contractor is not just a guy with a hard hat in a pickup like it used to be."
Illini emphasizes through its web site, its mailers and direct personal contact by its outreach team - primarily Workman and recently hired sales rep Jerry Lodovisi - that the company is independently and locally owned. "We tell them the owners of the company are answering their phone calls and living their problems," Workman says. "Because like it or not, we are living their problems until we can fix them."
Location, location Illini is based outside Lemont, a small town south of Chicago. One might think a more central urban location would suit a company that specializes in the gritty world of industry, rather than a small rural road next door to an asphalt plant. But Workman and Davies say their location is, in fact, perfect for their needs.
"From here we can get on any of four interstates quickly," Workman says. "And they're going to build an extension of [Highway] 355 through here, and then we'll have a whole other corridor of growth coming. And it's hard to find these kinds of buildings, with high ceilings, multiple bay doors, along with outdoor storage. In urban areas, there would be height restrictions and limitations on having certain kinds of engines. To have a building like this in the city, we'd be in a rough neighborhood, probably completely logjammed by traffic."
And located where they are in the country, there is room to grow. Illini just added an additional building on an acre of land, with loading docks, storage space and service bays.
As much as Workman and Davies want to keep their company at a manageable size so that they can continue their hands-on approach, growth is inevitable. They are considering opening a branch in the middle of northwest Indiana's industrial area, where about 40 percent of its revenue is coming from, but that step is probably a year or so down the road. And they don't want growth to interfere with their relationships with customers, most of whom, after all, are owner-operators, running their own businesses, in a hands-on style.
