In Dunn, NC, a family business follows the rules

Jimmy Tyndall knows two things for certain: Pouring concrete is what he loves doing for a living, but if doing it means he’s got to rob the dozen men who sweat beside him each day, he would rather fold his business.

Tyndall and his son, also Jimmy, are among owners of the thousands of companies in the state that despite the recession, despite the undercutting by competitors, insist on running their businesses by the book. As the Tyndalls attest, the rewards are elusive, and the drawbacks nearly constant.

“This system is not designed for us to get ahead.” said the older Tyndall, 58. “It’s designed for us to produce. We stick with it because of pride or something. Maybe we’re stupid.”

America’s economy depends on small businesses such as Tyn-Co Services. In North Carolina’s construction industry, practically all companies have fewer than 50 employees; according to census data, two-thirds have fewer than five employees.

Tyndall, the senior, isn’t an accounting wizard. He’s had no legal training, either. But, he says the laws about who must be an employee aren’t that complicated.

He tells his crew where to go each day. He corrects them if they aren’t meeting his standards. It’s not fair, he says, to pretend these workers, paid by the hour, have the same potential to make a profit as the owner of a company.

His workers are employees, and each pay period, he deducts the proper taxes from their checks and pays the portion he owes in unemployment and federal payroll taxes. Doing it, though, puts Tyn-Co Services at a disadvantage; the company absorbs 20 percent more in labor costs than competitors who cheat.

Wages, prices go down

For years, the Tyndalls could do well and do right. Private jobs pouring driveways and pool decking earned them a good reputation. Eventually, as Eastern North Carolina’s farms began to fade to tract developments, contractors started calling the Tyndalls. A driveway here and there turned into dozens of driveways and sidewalks through planned communities.

2008 threw the Tyndalls a curve. Spec builders couldn’t move inventory. Homeowners no longer splurged on patios and pools.

Tyndall started bidding jobs at big-box shopping centers. The Tyndalls bid jobs at Fort Bragg in Fayetteville, too. When the local housing authority redeveloped public housing in Fayetteville, the Tyndalls bid on work there.

All the while, the unit price for turn-key concrete work plummeted. Within a year, the going rate for bids in their business fell 20 percent, in part because some of their competitors were misclassifying workers. Materials, meanwhile, didn’t drop a penny.

The younger Tyndall realized the economic impossibility first: That entire 20 percent had to come out of the half of their budget dedicated to operations; most all of it was labor costs.

“It drug the wages down,” said the younger Tyndall, 28. “These companies were coming in for six months, then gone. Their trail was these unrealistic prices.”

Getting smaller

The Tyndalls refused to fold, though the margins were tight, sometimes less than 5 percent. Tyndall and his son figured they would do more volume to make up for dwindling profit. They dispatched more crews to more remote jobs than ever before.

Then the company began to lose money on jobs.

“It had gotten to where every time we left the garage, we were losing money,” said the younger Tyndall. “If I was willing to cheat, I could have stayed afloat that way.”

By the fall of 2013, the Tyndalls swallowed a harsh reality: This was no way to live.

The older Tyndall didn’t feel proud of the quality of work they were doing. The younger Tyndall was run ragged.

They made a tough decision: To survive, they must shrink.

In late 2013, they laid off 29 workers and stripped down to a crew of 10. These days, their saving grace is their reputation, built yard by yard over 27 years. Homeowners began to call again, ready to build pools and pave driveways.

Earlier this summer, the older Tyndall and a half-dozen employees hustled around a driveway addition. The near-constant scrape and slide was the only noise as the men pushed and pulled rakes against a thick liquid of concrete. Tyndall, the senior, was on his knees, working in perfect rhythm with his employees.

The older Tyndall refuses to dwell on the tactics his competitors use to get ahead. His son frets about it more, hoping he can keep the company in good standing long after his father retires. He can’t get over companies able to break the law to get ahead.

“If this is happening on government projects, imagine what’s happening in other places. They ought to be blacklisting companies that do it wrong,” the younger Tyndall said. “Good guys like me are getting screwed.”

This story was originally published September 4, 2014 at 12:17 PM with the headline "In Dunn, NC, a family business follows the rules."