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Father-Son Team Guide JAK's Flooring Through Recession To Emerge Stronger, Smarter

HARTFORD — When Jeff King was laid off from a construction purchasing job in 2007 two years after he graduated college, it was just the beginning of a major recession for the construction industry.

His father, Allan, who was running both a hardware store in Hartford's North End and a flooring installation company, was suffering from the same market forces that led to his son's layoff.

"The recession hit our hardware business really hard," Jeff King said, to the point that his father had to close it after 22 years of operation.

Allen kept the flooring business, called JAK's Flooring, and Jeff joined him, but several of the contractors who were repeat customers shut their doors in 2007 and 2008, King said.

In 2009, the firm wasn't paid for work it did in Bridgeport, a five-figure hit.

"It took me about a year to dig my way out of that," King said. He went without a salary for a while, and in 2010, he said, he worked almost 80 hours a week for a year trying to get more work.

When he joined JAK's, King said, the company was doing between $200,000 and $300,000 a year in revenue. By 2011, the company's business grew to $500,000 a year.

He said going through those tough times forced him to tap into his reserves. He said in those early rough years, he sometimes thought: "I'm up against the wall. How am I going to figure this out?"

But now he says getting laid off and having to start over was the best thing that ever happened to him. "This is what capitalism in America is about, working for yourself."

Getting stiffed when a developer ran out of money changed two things for JAK's. One, it insists on terms where payments come throughout the project. And perhaps more significantly, the company concentrates more on public sector work. Those projects are bonded and the odds of the project failing are lower, he said.

Most of JAK's work is in apartment buildings, typically sites with 30 to 65 units. These days, 70 percent of the work is renovating public housing.

While King doesn't generally bid directly for minority set-asides, the general contractors on the job can use a contract with JAK's toward requirements that a certain percentage of work has to go to either minority-owned or women-owned firms. On federal public housing jobs, it's 15 percent.

Haynes Construction, a general contractor from Seymour, first hired JAK's Flooring in 2005, on the first phase of Dutch Point, new housing construction in Hartford just south of downtown. He said their numbers were competitive, and hiring them helped the company meet — and ultimately exceed — minority firm requirements.

Haynes continues to hire JAK's because of their performance.

"I just gave them a contract in Westport," said project manager Eric Facchini. "I'm very pleased with their work. They're honest, they're very accommodating. If I need them there for a job tomorrow, they're there tomorrow.

"They're one of our better flooring contractors, and that's why we keep working with them."

The Kings have three employees, who they keep employed year round, even though new construction doesn't lay flooring in the winter. Flooring can't cure if it's too cold, and when a building isn't finished, it's not cost-effective to run temporary heat to install flooring.

JAK's had seven workers on staff at one point, but King said they found it made overhead too expensive, because at that size, they couldn't keep everyone on the job year round, and when you do more layoffs, the cost of your unemployment insurance rises. So now, if things are busier, JAK's finds subcontractors that can supply more workers. On its biggest job, it needed 15 workers at once.

About 80 percent of JAK's jobs are renovations, and the majority of the work is in Fairfield County, with New Haven the second busiest region.

He has to build-in gas and vehicle wear costs to these bids, but King said he would never move the company to be closer to the stronger housing markets downstate.

"This is home. It's comfortable, it has the right feel," King said from the company's Albany Avenue headquarters. "I don't mind traveling. Jobs might start coming back to Hartford County."

Even when larger contractors are reliable payers, JAK's waits 60 to 90 days from the time it does the work to getting paid, so it relies on a line of credit to pay for supplies and cover payroll until it gets the receipts. King said major banks wouldn't provide one, so the Small Business Express program, which backs a $200,000 line of credit for JAK's, was great.

Without the state program, he said, "it would've been devastating. It would've made it practically impossible" to stay in business.

The introduction of Obamacare has also helped the business, because it used to provide health insurance, and now Jeff King and the three employees buy coverage on the health care exchanges. (Allan has coverage through his wife).

Going to work with his father has been great, though King allowed he has to thank his mother and sister for mediating some conflicts free of charge.

"My Dad's 64 years old, he still wakes up at five o'clock in the morning, ready to go," Jeff King said. "He's no longer allowed to do physical labor."

Jeff King said he is encouraging his father to take winter months off and other family members who are retired fill in on job sites.

Jeff mostly stays in Hartford, drumming up business and managing administrative tasks, but he said on every job, the last month, he's down at the site every weekend pitching in laying tile or installing trim.

"I do know how to do it. I'll do whatever needs to happen," he said.

He does try to keep his work week to 60 hours or less these days, to not burn out. The business grew to about $700,000 in annual revenues in 2012 and 2013, but he thinks this year will be a bit slower.

The flooring installation jobs pay prevailing wages, generally $19 to $22 an hour, he said, and the company has been successful in retaining workers. He said some men had been hired through the New Haven jobs funnel, a program that trains unemployed people for work in construction. About half of jobs funnel recruits have had felony convictions, and King said that's not a barrier to a job at his family's firm.

"People that are trying to get their lives back together, they need somebody who cares," he said. "We've been fortunate enough to have people make it."

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