Pavey Excavating Case Study

Mr. Dallas Eugene Pavey (my grandfather) started Pavey Excavating in the early sixties. I asked him how he achieved the experience he needed in order to start an excavation company. He proceeded to tell me that after he got out of the Army in 1953 he had some money to invest. With his fathers help he opened a gas station and sold gasoline. He also began working on automobiles and various mechanical things. He had a partner in the gas station as well named Lloyd. At this time there was no such thing as a hydraulic backhoe. So everyone at the time dug trenches with cable cranes. In the mid 1950’s someone invented hydraulics to hook to the back of a jeep and called it backhoe. Eugene was one of the first people in La Porte County to own a backhoe

One thing lead to another of more people asking him to dig more ditches so instead of making different company money he thought why not start his own business. He also realized instead of digging for a plumber he could get his own plumbers license and lay the sewer himself. Eventually he needed more stuff hauled so he needed a bigger dump truck. I also asked Eugene what the main services of Pavey Excavating were. There is a huge list of things that Pavey offers. Such as: Septic Installation, septic supplies, demolition, trucking, metal/ corrugated/plastic piping, Septic systems, water and sewer lines, subdivisions, site development, sand, gravel, black dirt. At one time Pavey was the biggest septic installation provider in La Porte County with a yearly count of 250 septics in a

He then told me that he almost went broke because he was doing a lot of jobs but was not keeping track of if he was making money or not. At one time the supplier that supplied the septic tanks wouldn’t allow him to buy on credit anymore. He was about 20,000 dollars behind and a septic tank was about 500 dollars. They wouldn’t bring anymore unless he paid 1000 dollars for one septic tank until he was caught up. Eugene was always embarrassed and didn’t want to overcharge. So Tom his son helped with the business. Tom showed his dad how to make a profit depending on the job. Eugene now was making 20-50% profit off a job. There were times before Tom came to the business and helped that he would break even or only make 50 dollars off a job. This was never enough to cover expenses of the company. If Tom had not come in to help with the finances of the company Pavey Excavating would not be the multi-million dollar a year business that they are