This asphalt and paving company has been creating smooth surfaces across the area for more than 30 years. Find out how this business has maintained constant and strategic growth.
Many 14-year-old high school students stay busy by keeping up with their schoolwork and participating in an extracurricular activity, like football.
When Tim Kudlacik was 14, he did both while also working in the asphalt and paving industry.
The days of football and preparing for math tests are long gone for Kudlacik, a graduate of Durand High School, but he’s still heavily involved in the asphalt and paving industry as the owner of Norwest Construction, in South Beloit, Ill.
“I kept a very busy schedule as a young man,” Kudlacik says with a laugh. “Of the five paving contractors we had in Winnebago County, two were from Durand, so I sort of got thrown into the industry. After high school, I went into the field working full-time for other contractors and never looked back.”
After working in the asphalt industry for several years, Kudlacik decided to venture out on his own. He incorporated Norwest Construction in 1986, and in 2001, it became home to union employees.
The company specializes in concrete, commercial and residential asphalt paving, sealcoating and roto-milling. Twenty years ago, 90 percent of Kudlacik’s work was residential and 10 percent was commercial. Since then, things have changed.
“Today, we only do about 10 percent residential,” he says. “We switched from the residential market to the commercial market by volume over the years. There’s more money involved, it’s more efficient, and when we became a union contractor, things started switching over to commercial. A lot of commercial work is done by general contractors, so we’re doing a job for them.”
That’s just one of the ways the company has kept pace with changes in the industry. And they’re doing it quicker than other local companies.
“A business is doing what I was doing 20 years ago because they’re doing 90 percent driveways and the occasional parking lot,” he says. “They never adapted to the rules and the new standards that have to be met. The bureaucracy, paperwork and engineering has gotten more extensive and a lot of companies didn’t adapt to it like we did.”
Norwest Construction has also continued to stay successful because of its constant, yet strategic growth. Kudlacik took a calculated risk 10 years ago and added roto-milling to his fleet of services. It was a risky decision, because a roto-mill removes asphalt and Norwest Construction is an asphalt pavement company.
The risk has more than paid off. The result is roughly $2 million in additional projects each year, which has helped the company’s bottom line.
“I can remove asphalt from a parking lot at two times the speed than you can with a skid loader or a backhoe,” he says. “That piece of equipment has turned into a subcontracting job where we’re working for all of our competitors. Every competitor in our market has had us roto-mill for them.”
Kudlacik also decided to expand his business again by venturing into the concrete business.
“A lot of these replacement parking lots need replacement concrete, and before, we were waiting on other contractors to do concrete for us,” he says. “So, instead of waiting for them, we started our own concrete division, and now, we’re pouring concrete for every other contractor in town.
“Since we added the roto-milling and the concrete division, we’re able to complete the project from start to finish, instead of giving the work to other contractors.”
Norwest Construction has its stamp on plenty of parking lots in the area, including restaurants, gas stations, supermarkets and other commercial projects. Their clients are able to keep their businesses open while the parking lots get a much-needed update.
“There’s other companies that can’t do the work that we do because they work on their schedule, and we work on your schedule,” Kudlacik says. “If you have a parking lot to do, you can’t close the parking lot and tell customers they can’t park for two days. We’ll do half the lot and keep the other half open, so it only has a light effect on your business.”
Kudlacik has about 25 people in his company, and about 10 of them work in the office year-round. The union employees go through drug testing and a thorough background check before they can start working.
“Other companies will hire anyone who can work a skid loader,” he says. “They don’t care that they might have a drinking problem or they don’t have a license. They’d be uninsurable for me.”
Things might seem quiet in the wintertime, but Kudlacik says his team is landing jobs, meeting with contractors and strategizing for various upcoming projects.
One of those projects will happen this year on Illinois Route 251 from Loves Park to the stateline. The road will be reconstructed, and it comes with a $20 million pricetag. Norwest Construction will handle the roto-milling for the project.
“We’ll eat up the old asphalt on the road and get it ready to pave,” he says. “We’re a subcontractor on the project and it’s going to be a lot of work. We’re strategizing that project right now because there’s a specific amount of work that we have to complete each day in order for the project to be completed on time.”
The business will stay pretty busy in the coming years because there will be a lot of additional work in the area, Kudlacik adds.
“The state typically sends a lot of money toward the Chicago and Peoria areas for large projects and about a year ago, they let loose more money,” he says. “When the big city’s are busy working on the huge projects, the middle markets, like ours, are wide open. The next six years will be booming for us because the big guys will be busy working on larger projects.”
If you’re starting a business or intending to grow, Kudlacik says not to grow too fast, and be aware of the changing trends in your industry.
“This business has changed dramatically over the years and you wouldn’t believe it,” he says. “You need to keep up with the market and take intermediate-sized steps. If you take a big step and it doesn’t go the way you planned, you’ll be in big debt without any way to repay it without taxing your main income.”
Joel Helms, a sales representative, says once people start working at Norwest Construction, they stick around. He credits the work environment and Kudlacik’s leadership for the longevity of the company.
“We have some guys who are very experienced, and they’ve been here a long time,” he says. “[Kudlacik] is out there with us 90 percent of the time slaving away right along with us. He knows what it’s like because he’s gone through it with us. Everyone here is a unit, and we all like working together.”