The Koerner Office - Business Ideas and Deep Dives with Chris Koerner - 002: This Guy Makes $10M+ Hauling Gravel for the Government

Episode Date: September 7, 2023

In today’s episode of Startup Gems we share the story of Daniel Crowley, a self-described serial entrepreneur. We share his journey of building and managing three diverse businesses under the Crowley brand. We introduce Crowley Holdings, a government contracting company specializing in sand, gravel, and civil projects, inspired by a movie and a desire to supply government contracts. We also discuss Crowley Hauling, where he operates dump trucks for profit and tax advantages, and Crowley Properties, his venture into short-term rentals. We reflect on Daniel’s  beginnings, his strategy for attracting and retaining customers, and the lessons he's learned about entrepreneurship, emphasizing the importance of taking action, seeking advice, and delegating as keys to success in business. We found today's story from a blog post on joinhampton.com

Welcome to startup gems. We find undiscovered startup growth hacks, stories and case studies from every random nook and cranny of the internet. Whether you're a seasoned entrepreneur, an aspiring startup enthusiast, or simply someone seeking inspiration, startup gems is your source for the stories that ignite the flames of innovation. Let's dive in. Episode two, this guy makes over 10 million a year with six employees hauling gravel for the government. In today's episode of startup gems, we share the story of Daniel Crowley, a self-described serial entrepreneur, we share his journey of building and managing three diverse businesses under the Crowley brand. We introduce Crowley Holdings, a government contracting company specializing in sand, gravel, and civil projects, inspired by a movie and a desire

to supply government contracts. We also discuss Crowley hauling, where he operates dump trucks for profit and tax advantages, and Crowley properties his venture into short-term rentals. We reflect on Daniel's beginnings, his strategy for attracting and retaining customers, and the lessons he's learned about entrepreneurship, emphasizing the importance of taking action, seeking advice, and delegating as keys to success in business. Let's get started with his story. My name is Daniel Crowley, and I guess I would describe myself as a serial entrepreneur. I'm originally from Massachusetts. I went to college in New Orleans and have stayed ever since. I now live here with my fiancé and dog. I have three main businesses. Crowley Holdings for government contracting. Crowley hauling where I own and operate six

dump trucks. Crowley properties where I co-own and operate 24 short-term rental properties. I couldn't think of a good brand name, so I just went with my last name Crowley. I spend the majority of my time with Crowley Holdings, which I started in 2017. We do $10 to $15 million in annual revenue. It's a government contracting business. We supply sand and gravel as well as perform civil projects for the government. I got the idea from the movie War Dogs and thought, man, I can do that. But I didn't want to supply arms and munitions.

So we started with sand and gravel, and eventually we won a contract and built the business up from there. In 2019, we won the largest rock delivery contract in Missouri state history, roughly $23 million to deliver 550,000 tons of shot rock, which comes to about 30,000 dump truck loads. We had 100 or so dump trucks running all day, every day for about six months to repair three levy breaches. My backstory and how I came up with these ideas.

For Crowley Holdings, the idea started after listening to this podcast on NPR, probably when it aired back in 2015. It was the story of two 20-somethings who ended up winning a ton of federal contracts. The story eventually became the movie War Dogs in 2016. One part of the story stuck out to me specifically. one of the first contracts they won was supplying 50,000 gallons of propane just by playing middleman and brokering the contract. They famously went on to win tens and ultimately hundreds of millions of dollars in contracts.

They also did some illegal things that wound up getting them both in trouble with the law. I wasn't drawn to the arms and munitions aspect or, of course, doing anything illegal, but I remember thinking I could do what they are doing. Why can't I supply propane to the Air Force? Eventually, I started poking around the sam.gov website, which is where the government posts requests for quotes. Anything you can think of is on this website. RFQs for 100,000 rolls of toilet paper, 5,000 cardboard boxes, 20,000 slices of American cheese, bazookas, tanks, gravel, everything. I submitted bids for a number of random items from cardboard boxes to leather jackets for the Air Force before zeroing in on gravel.

Eventually, we won our first contract. Since then, we've grown to bring in roughly $10 to $15 million a year in revenue with a team of six. For Crowley hauling, a lot of what we do involves dump trucks, so I had a good sense of how things worked. Founding the company felt like a natural way to diversify over time we've slowly built up to six dump trucks. I suspect we will get to more than 10 over the next year or so. If you're smart about how you finance them, trucks like these can be used to offset taxes on other income. More on that to come. How I built the first versions of my products. For Crowley Holdings, the initial goal was to get our first sale. To start, I randomly submitted bids for government

RFQs. I think I first submitted a contract for 10,000 cardboard boxes, and then a contract for 500 leather jackets for the Air Force. I basically called around to get prices for whatever product the RFQ called for, then marked it up and submitted it to the government. Eventually, I zeroed in on aggregate. I submitted a bid for a contract for roughly 700 tons of limestone for an Air Force Base in Belchast, Louisiana. We didn't win that one, but we started submitting more and more aggregate bids. Eventually, we won our first one in 2017. That's when I had my oh shit moment. I realized I actually had to deliver 2,500 tons of graded aggregate base for the U.S. National Park Service in the Carolina Sandhills. I thought, damn, do I need to fly out there? What if something

goes wrong. Should I be on site to manage the deliveries? These were just a few of the immediate thoughts that came to my mind. The project went smoothly and a business was born. Since then, we've slowly built up to seven employees. Our next venture is trying to break into heavy civil construction work. We will do work for the U.S. Army Corps of Engineers to rebuild levees and other earthwork, definitely moving up to the big leagues. To start, these will be $5 to $10 million per project, but ultimately I think we can get to $50 to $100 million revenue per year. For Crowley Hollings, the idea formed after I spoke with someone who owned dump trucks. He connected me with a sales rep, and I eventually negotiated and bought my first truck in mid-2020.

I paid roughly $180,000. I financed 100% of the truck over a five-year payback period at a five-and-a-half percent interest rate. One huge benefit to buying dump trucks is that you can finance 100% of the truck and also depreciate 100% of the truck in the first year. Check with your tax person to see if this is still true. Some of these rules change over time. As long as you have a good infrastructure and can keep the trucks busy and profitable, you can just match each year with how well you are doing in your other businesses to offset income taxes. This is a good case study on how depreciation for tax purposes helps spur job growth. If you're looking at 200,000, you're looking at 200,000 to a million dollars in income, then you can just buy one to five dump trucks that year

and depreciate them 100%. There is definitely risk here, of course, but in theory it could work that way. How I attract and retain customers. Business is good. Crowley Holdings and Crowley properties are both profitable and growing. They more or less were always profitable from the jump. Crowley Holdings will continue to grow organically. Currently, we operate around the country and have found a niche in sand and gravel supply contracts. In the few, future, I imagine we will grow to have a real presence in New Orleans and Louisiana at large as a legitimate construction company. We are able to shake things up a bit by bringing in tricks, techniques, and technology that aren't common in the construction industry. In five years,

I anticipate we can be a $50 to $100 million revenue business. Crowley Properties continues to grow and be profitable. I am currently adding five to 10 units per year. We just started expanding into Tampa, Florida. We have two properties there, with a third in the works. I'm currently deciding if I should keep growing organically or whether I should go out and raise some cash and add 20 to 30 units per year. Crowley hauling is a solid business. It will never be a hockey stick type of company, but it is a good way to diversify. I also could see pairing Crowley hauling with Crowley Holdings. Ultimately, I believe we'll be able to win big levy or construction projects in New Orleans and run our dump trucks on the job. This way we can double

dip. I can see us getting to 10 dump trucks in the next year or two. Beyond these goals, I'm not sure if I want to take it to the next level. 20, 30, 40 dump trucks, it's doable, but we will see. Did I ever think it wouldn't work? Honestly, not with my three core businesses. However, I have launched products or businesses that did not work, including a Playboy alarm clock app. My first product that I successfully launched to the app store. I spent around five grand on it and made maybe $500 on it. The next was Down River Design. I took what I learned from the Playboy alarm clock app and launched a web and app development company. I built the alarm clock with a software development firm in India, so I did the same thing for clients.

I made some money, but I could never turn the corner of getting enough business to hire or grow. Lead buddy, this lead generation business sort of worked but never turned the corner, in addition to a few other ideas that never made it. What I've learned that's been helpful and advantageous. Your business will never be perfect. Often you see people trying to make everything perfect before launching their business or product. Most businesses fail before they start because they never make it to market. I don't have any stats to back this up, but I would be willing to wager it is correct.

You need to get it out to market as soon as possible. As soon as possible and you can always tweak it. What platform and tools I use for my business? Trello, what we use to organize thoughts and projects. ClickUp. Similar to Trello, but with more automation features, I might move the Crowley Holdings team from Trello to ClickUp, I've been pretty impressed with it. Slack. A must-have tool to communicate with the team efficiently. Max, I was a longtime PC guy, but Apple finally won. Most of what I do

is communicate with people. Being able to text and call from my computer helps out in a big way. Virtual champions? I think I finally found a good virtual assistant. I've only used it for a short time, but I'm already getting a lot of tasks out of backlog. Next, my most influential resources. over the years. The four-hour work week. I read this book a few months ago, but I wish I had years ago. It all aligns well with my thinking.

Work smarter, not harder. Become efficient with your time. Use the free time this creates however you choose. My advice for other entrepreneurs who want to get started or are just starting out. I'll come back to my mottoes. Screw it, just do it. Let it rip.

You need to get out there and do it. If the business fails, well, you can apply. apply what you learn to the next business. Ask for advice. It took me too long to do this. Business is not that complicated. There are plenty of people out there who have done it before who have made those same mistakes. Also, most entrepreneurs and business owners actually like talking about their business and giving advice, myself included. So never be afraid to network and ask questions. You don't need to work as hard as people like Gary Vee say. You don't need to grind 20 hours a day for your business to work.

Yes, it might take longer for it to be successful if you don't, but that doesn't mean it's going to fail. Lastly, Delegate, you need to delegate to grow. Your business will never scale if you can't learn to do this. Thanks for joining us on this journey through the world of startups and innovation. We hope you've uncovered some valuable gems to fuel your entrepreneurial spirit. Don't forget to tune in next time for another inspiring story that will keep your entrepreneurial fire burning. Until then, keep exploring, keep innovating. and keep shining bright with startup gems.