We are one of the nation’s largest buyers of fence materials. Because of our purchasing power, we have the ability and means to purchase direct from mills and manufacturers unlike our largest Midwest competitors. Our ability to purchase direct not only earns us the opportunity to purchase from these exclusive vendors but it provides the negotiating power to purchase at a much lower price due to our considerable volume. We have established long-term relationships with vendors such as Deacero, one of the world’s largest steel manufacturers, who does not sell to any other fence contractor in the United States. Sierra Pacific, our nation’s largest wood mill, sells exclusively to us specific to Midwest fence contractors.
American Fence Company has consistently and successfully opened one to two new operations each year in a new geographical area or in a more targeted existing area. Within three years, these new operations will add approximately ten percent growth to our overall revenue. Our most recent market growth includes Rapid City, SD, Fargo ND, Cedar Rapids IA, Madison WI, and Sioux City, IA.
We are constantly exploring related but different revenue opportunities. We have a long history of entering into related industries from decking, landscaping, playgrounds, etc. We have developed an understanding of what must flow the same way and what variances we can overcome through our successes and set-backs. In the last three years, we have entered into the commercial playground industry with over $7M is sales slated for 2024, opening two branches in the Midwest.
Over the last 20 years, we have been establishing standard operating procedures, work flows and tools to assist us in more consistently operating our business. We appreciate the process must be bigger than the people so that people regardless of their experience can quickly plug and play into the system. Over the last five years, we have been developing a top-notch CRM, WorkSpace, that has revolutionized our business. Our first launch was the project management foundational program that manages projects from point of sale through billing. This program has not only allowed us to standardize our processes and assure successes through a series of forcing functions; it has also allowed us to quickly expand into other markets. Following our project management launch, we have launched BidSpace a residential and commercial estimating CRM, and TempSpace, a rental fence management CRM.
Our fence certification program is one of the most comprehensive training programs in the industry. It has been sought after by the national fence association as a model for building their own training program. Every year, we conduct an on-going fence materials education via teleconference and on our own YouTube channel. Throughout the year, we are offering weekly and monthly project management education training. American Fence Company has a large written SOP library for just about every internal operation we perform. Our guiding tenet is our project management SOP. The project management process takes a project from initial receipt, estimating, sales, project management, scheduling, and billing. It is in a digital form that includes links to multiple related projects. We are training on this process year-around and as it expands. Our Youtube channel has over 100 educational 20 minute training programs on day to day processes to complicated problem solving issues. Every year, we bring our sales staff into our corporate facility for three separate programs to train on the latest in access controls and access control estimating and processes. Once a year, we conduct our access control certification program for new and existing access control techs. On our divisional websites, we contain multiple how to guides and design guides for our staff and end users. We have a robust “How To” library on our e-commerce store for everyone to utilize. Training and education are paramount for us.
We are proud to say we have always worked from a cash position, having not borrowed a dime in over twenty years. This is through a well disciplined and conservative approach to both spending and growth. We are an organization who understands what it means to be fiscally responsible in both generating revenue and controlling spending. We collect over 98% of our receivables with the vast majority of this income in the first 30 days. What does this financial prowess do for us? It provides us with a unique ability to make “big buys” with our vendors. American Fence Company has a reputation of placing big buys in the fall of the year, purchasing over 90% of our estimated inventory for the upcoming year. These big buys are rewarded with huge savings from vendors as we allow them to ship goods on their schedules and not during periods of high demand.
Beyond just the size and breadth of our operation, American Fence Company is unique in the industry in that the vast majority of our work is still performed by “house” crews. Though challenging to maintain such a large workforce, our success in maintaining tenured professional installation crews allows us the opportunity to perform complicated and large industrial and high security projects. These projects, data centers, military installations, fuel storage, etc., require installers who meet a very high level of security, safety and professionalism that simply cannot be assured with subcontracted labor. It is for this reason that we are often the only Midwest bidder on these type of Midwest projects.
To say “we have done it all.” would be an understatement. Our collective shared wisdom from having completed some of the most complicated fence projects in the nation has provided us with a level of expertise unmatched by our competition. Our practice to share our wisdom across all branches is typical as we often match experienced sales and supervisory staff from one branch with another to assist them in performing this work for the first time. If experience was measured in years, we would say we have hundreds of years of expertise out lasting most of our competitors’ tenure in the industry.
By centralizing all of our back-office activities, complicated fabrication processes, and broad overlapping operations, we have created enormous efficiencies and levels of expertise. Branches were intentionally designed to be lean and mean, focusing only on selling and installing fence. Not having to build a work force to perform accounting activities that may be performed by a smaller group of individuals who have become subject matter experts having performed the same task for all fifteen branches. Complicated fabrication processes such as the fabrication of vinyl fencing and prefabricated ornamental performed at a branch level would result in an expensive outlay of cash for CNC equipment and wages. By centralizing these processes under one roof for all branches, we are to capitalize on these efficiencies and build a team of professionals, improving production and quality of work. All of our branches require transportation of goods from one location to the another. It would be a costly endeavor for each branch to maintain a transportation operation or to have to outsource this activity. By establishing one centralized transportation division we are able to provide support to all the organizations, overlapping savings while moving materials from one location to another where needed.
Decades ago, custom metals was synonymous with fencing as all ornamental fencing was stick built in small shops or field erected. Over the years, the fence industry has exited the custom metals industry relying on prefabricated ornamental materials and outsourcing these materials to large national manufacturers or local specialized custom metals shops. The vast majority of fence contractors have simply stop selling any type of custom metals fabrication as they not only do not have the ability to fabricate; they do not have the ability to manage or install these projects. Coincidentally, the construction industry did not forsake custom metals fabrication. We are seeing a vastly growing market for custom metals manufacturing across residential, commercial and industrial applications. Community designers are now embracing “appearance standards” that exclude the use of fencing on mixed use, commercial, professional and even industrial. They are specifying screening that “compliments the building exteriors.” Civil projects are substituting fencing with architectural products to avoid the feeling of being enclosed and looking for an appealing look of artistry. The residential housing industry is building larger and more appealing homes year after year. These homes are not being complimented with the look of chain link or wood fencing but with decorative custom entry gates, deck railings and screening. There is also a vastly growing demand for custom metals fabrication outside the fence industry that is not being met by local custom metals shops. Custom metals is a lost art. It requires both sophisticated CAD operations to more grass roots artistry of fabrication. American Fence Company has one of the largest custom metals operations in the Midwest. We design, engineer and fabricate products to be installed all across the United States. In 30,000 square foot facility and a team of over 40 fabricators, engineers, designers, project managers and leadership, we are estimated to sell over $12M in custom metals fabrications in 2022.
We are one of the nation’s largest buyers of fence materials. Because of our purchasing power, we have the ability and means to purchase direct from mills and manufacturers unlike our largest Midwest competitors. Our ability to purchase direct not only earns us the opportunity to purchase from these exclusive vendors but it provides the negotiating power to purchase at a much lower price due to our considerable volume. We have established long-term relationships with vendors such as Deacero, one of the world’s largest steel manufacturers, who does not sell to any other fence contractor in the United States. Sierra Pacific, our nation’s largest wood mill, sells exclusively to us specific to Midwest fence contractors.
Automation, digital security and access controls growth is out-pacing the fence industry growth by over 100%. Automated gate access control is the fastest growing sector in the fence industry. It is also the most complicated sector of the industry requiring fence contractors to have a high level of proficiency in designing, selling and installing high voltage equipment with low voltage controls. These access control systems have grown to be very complicated and sophisticated to meet safety standards for pedestrian protection. Unfortunately, the fence industry’s fence contractors are simply not keeping-up with these changes. Most have exited the access control industry, leaving it to other industries to provide and install. Five years ago, we too recognized that we were not growing with the industry and not meeting customer’s needs as we failed to maintain the level of expertise necessary to sell and install these systems. We met this challenge head-on! American Fence Company formed a steering committee of branch leadership and begin hammering-out what needed to be done to reclaim the access control industry and respective sales. We created an initiative under one name, American Access Company, with the intent of marketing under this name to attract customers who are disenchanted with using fence contractors for access controls. With no task too large, our leadership committed to being certified by the American Fence Association as access control professionals. We then took the course outline from this certification course and created our only access tech certification course. We created a marketing campaign that placed us #1 in all Google search results in all markets for relevant search terms. We have an on-going marketing campaign to all relevant customers. We created an on-going annual sales, supervisory and management training program, having our staff attend three training sessions at our corporate training facility for new product orientation. We created a wholistic sales approach using unique CRM based sales tools that provide not only complete proposals but sequence of operations for access, product layouts and electrical wiring layout. We established dealer relationships with major access control manufacturers such as Hy-Security, Nice, Liftmaster Chamberlain, etc. Bottom line, our access control sales have tripled in the last three years. We have recaptured and industry that most fence contractors have forsaken. We are now the leading automated gate access control contractor in the Midwest.
Temporary fencing is the most profitable revenue stream within the fence industry. However, it requires a considerable investment in inventories and project management. The temporary fence industry is unlike any other revenue stream in the fence industry. It is a rental business that requires recording and managing revenue for rentals month by monht and not just a “one and done” mentality. Because of the investment in materials and the management of assets and revenue, fence contractors are simply not interested in this growing industry. The temporary fence industry has been left to a small group of national rental contractors making inroads into all markets. Several years ago, American Fence Company recognized this growing trend in rental fencing but also the revenue opportunities for extended rental periods and additional quantities. We embraced this opportunity by investing millions of dollars in rental fence inventories, purchasing thousands of rental panels every year for the last five years. Now, American Fence Company manufactures these panels internally in our Kansas City operation where they are averaging almost 300 panels per week. To date, we cannot keep these on the shelf due to growth. In addition, we built a sophisticated rental asset management CRM called TempSpace. Aligned with our overall CRM management system, TempSpace manages installation quantities and rental periods with forcing functions to bill both additional quantities and extended rental periods. We also established an extensive marketing campaign, resulting in being #1 or #2 in all relevant Google search results in all markets. We are now clearly the largest temporary fence provider in the Midwest, having kept the national firms at bay.
We recognize that in the near future all business will happen digitally over the internet. We are preparing for this on-going significant change in how business gets done. America’s Fence Store is our eCommerce online platform that consist of one national store with free shipping across the United States to 11 branch online stores that focus on local pick-up. We also maintain an active campaign on Amazon and eBay. We launched our first online store in 2017 with a reported $13K in sales. In 2021, this same store, our national store, recorded over $3M in sales. American Fence Company has been actively growing our online sales through an aggressive campaign to improve not only SEO but conversions. In 2019, we created our first online fence selection tool and fence calculator. Our selection tool uses a series of thumbnail pictures that walks you through the selection process from a more generalized selection of fence types down to very specific product designs. Once you have selected your fence design, you can then calculate your fence by inputting your fence measurements. When finished, our online store will populate your cart with everything you need to build your fence. Swipe your credit card and your order will be on its way. Through a well-developed system of palleting and packaging, we successfully ship full yards across the United States. In 2021, American Fence Company developed our own proprietary fence drawing tool. This drawing tool allows customers to draw their fence on a blank canvas with standardized user-friendly drawing tools, symbols and graphics. When finished, they can simply click and fill their cart with everything they need. Our next step in deploying our drawing tool is to include it on all of our local branch websites so that install customers may both select their fence style and draw their fence for our sales staff to quickly provide a firm quote. We recognize that the new generation of home owners do not want strangers in their backyard and in their homes. This new digital means of sales aligns with the direction the industry in going.
