In a sink-or-swim move, Jeff McGill took a deep breath in 1995, borrowed $500,000, and plunged headfirst into the industrial cleaning market. Since then, his business, McGill’s Industrial Services in Saskatoon, Sask., has flourished, with a focus on membership in professional organizations, new equipment and technology, attracting and retaining top employees and business diversity.
“I was scared out of my mind, owing that much money,” McGill recalls. “I kept thinking, ‘How am I ever going to pay back that big a loan?’ But I had a business plan and thought I could do it. It wasn’t an elaborate plan by any stretch of the imagination. It basically showed things like what I thought I could make, and expected cash flow and profit. I gave it to the bank, and they ran with it.”
As things turned out, the bank took a safe gamble. Today, McGill’s employs 15 people and owns five vacuum trucks, five waterjetting trucks and three hydroexcavating trucks. It serves three niches: Industrial cleaning, water and sewer maintenance, and dust control. And the company’s finances are sound enough that McGill is developing a succession plan for his three children to take over the business after he retires.
Building on a name
McGill was fortunate because technically, he didn’t start from scratch. The roots of his company date back to 1963, when his father, Jack McGill, established a residential drain-cleaning franchise. After his death, McGill and his two brothers, Bob and Jim, bought the company from their mother in 1978.
Jeff and Jim McGill bought out their brother in 1979, then parted amicably in 1995 to start separate businesses. “He was interested in plumbing and heating, and I had no interest in that,” McGill says. “I wanted to get into vacuum trucks, and he had no interest in that. We both wanted to drive our own bus.” So, drive they did, bolstered by strong name recognition in the Saskatoon area in central Saskatchewan.
McGill used all the money he borrowed to buy three vacuum trucks, all on a Freightliner chassis outfitted by Westech Vac Systems Ltd. in Edmonton, Alberta. Out of the $500,000 he borrowed, half was a government loan, of which he was personally responsible for $62,500. That was a powerful motivator.
“We already had our name out there in a community of about 180,000 people,” he says. “After that, I just started knocking on doors. We were local, and the businesses we dealt with before were local, so it wasn’t tough to get our foot in the door. It all comes down to good old-fashioned networking.
“We got busy right away and needed another truck. Then we had enough work to justify a third truck.” At the time, McGill also joined professional groups such as the Young Entrepreneurs Organization (now known as the Entrepreneurs Organization, or EO). He also sponsors golf outings and other events held by clients.
“One of the best things I ever did was join the EO, because I was mixing with entrepreneurs who were encountering the same challenges I was,” he says. “It was like having my own board of directors. At meetings, you present any ideas or issues to the group, and the members provide feedback about how they handled a similar problem.”
Happy employees
McGill credits the EO with helping him figure out many business problems, including ways to attract and retain top-notch employees. “I didn’t want to risk losing good workers and good people,” he says. “So I worked out a bonus system for top employees. They also get some benefits that other employees don’t receive, such as use of a service vehicle and retirement account contributions.”
Another perk is a two-week vacation, awarded to employees when they reach 10 years of service. “We send the employee and their spouse to a resort anywhere in North America,” McGill says. “We pay for the wives, too, because they’re an important part of the mix, with late-night calls and long hours.
“Two employees have been with me since before I started the company in 1995, so I continued their start dates and extended the paid-vacations benefit to include 20 and 25 years of service. It’s absolutely worth it. I can truly rely on them, and they make my life a lot easier because of that. They’re the go-to guys who are always willing to work, even late at night. I know they always have the best interests of the company at heart.”
McGill hopes some of his younger employees will also become go-to guys after his top performers retire. To ensure that, he treats employees with respect. “One of our younger guys says he likes working here because it’s like family,” McGill says. “If a guy has a family event, like a child in a Christmas concert, I jump in the truck and take over for them. Here, we emphasize family first, work second. It sounds corny, but it’s true.”
Steady work
The business is split roughly in thirds between pipe cleaning at chemical plants and potash and uranium mines, high-pressure jetting of municipal lines, and seasonal dust control. McGill had no master plan for the company’s evolution. “It’s like having a child,” he says. “You don’t know what it’s going to be like. Things just keep evolving, and you learn as you go. Running a business is very similar to being a parent.”
At chemical plants, McGill’s cleans product lines, pumps product slurry, and cleans tubes in reactors. Each plant has its own government-regulated disposal/treatment facility, so McGill doesn’t have to deal with waste disposal. A high percentage of the work centers on emergency jobs.
“When things stop, they need us right away,” McGill says. “When they call, we run.” The bulk of the company’s jetting work centers on cleaning and opening sanitary and storm sewer lines, and performing routine line maintenance, such as flushing. McGill uses annual contracts as much as possible, although he’s open to longer contracts if a client is willing.
“With contracts, there’s a certain amount of comfort that you’ll always have,” he explains. “After you have some time and history with a client, you can plan your work accordingly. For example, many plants shut down two to four times a year, usually for a week at a time. So we can plan on doing routine maintenance and staff accordingly.”
What happens when emergencies hit while many employees are deployed to perform plant maintenance? “We work longer and stick-handle it,” he says, using a hockey term. “We find a way to get it looked after.”
More work, more trucks
As McGill’s business expanded, so did its equipment fleet. For industrial cleaning, the company owns five vacuum trucks:
• Two 2007 Freightliner FLD120s, built by Smith Industries Ltd.
• A 2005 Kenworth built by Smith Industries.
• A 2000 Freightliner 112 built by Westech.
• A 1998 Freightliner 120 built by Westech.
All carry 3,000-gallon debris tanks and HIBON blowers rated at 1,400 cfm. McGill also keeps three or four older vacuum trucks on hand as back-ups.
For line cleaning, McGill’s relies on five water jetters, truck-mounted to protect them from Saskatchewan weather. The vehicles include:
• A 2008 Freightliner ML with a 750-gallon water tank and a jetter made by Harben Inc. rated at 4,000 psi/20 gpm.
• 2004 and 2006 International 4500 series trucks, each with a 1,100-gallon water tank and jetters that produce 2,000 psi/65 gpm and 2,000 psi/80 gpm.
• A 2001 GMC 4500 series truck with a 750-gallon water tank and a Harben jetter rated at 4,000 psi/16 gpm.
• A 1999 Ford F-550 with a 500-gallon water tank and a Harben jetter, rated at 4,000 psi/16 gpm.
For hydroexcavating, McGill’s owns three trucks, all built by Smith Industries:
• A 2008 Freightliner FLD120 with a 2,500-gallon wastewater/1,100-gallon freshwater steel tank and a HIBON blower rated at 2,600 cfm.
• A 2008 Freightliner ML with a 2,300-gallon wastewater/800-gallon freshwater steel tank and a HIBON blower rated at 1,400 cfm.
• A 2006 International 7500 with a 2,300-gallon wastewater/800-gallon freshwater steel tank and a HIBON blower rated at 1,400 cfm.
Keeping it new
To keep repair costs in check and maximize productivity, McGill prefers to invest in newer vehicles. “I want the best and newest equipment available,” he says. “Newer trucks don’t break down as much as older trucks, and that makes us more productive.”
McGill also believes new technology equipment helps retain customers and attract new ones. “If you look like you’re successful, people will want to deal with you,” he says. “Image is an important factor. If you want to run a successful business, you can’t run tired equipment. If you have a newer truck and it breaks down, the customer at least sees you’re making capital investments.
“I ran a lot of years with tired equipment, and when it breaks down, you have to bring someone else in to finish the job. Then you have plant employees standing around, waiting for you to finish. It just doesn’t look good, and it costs your customer a lot of money. You want to get in, get the job done and get out.”
McGill’s employees are cross-trained so they know how to operate every piece of equipment. That’s because every couple of months, each employee is on call for one week and must be able to handle whatever emergencies come up. Or as McGill puts it: “We train them on everything so they can do everything.”
The best policy
The most valuable lesson McGill has learned in more than 30 years of business is that it pays to be honest. “We’ve been around a long time, and that’s because we’ve been honest with customers, honest with our employees, honest with everyone,” he says. “Your business is based on your integrity.
“For my company and myself, we tell the truth. We always give customers the option of fixing something themselves in order to save a little money by not having us come out for a service call. We want to earn our money. We treat customers the way we’d like them to treat us.”
