John Kane’s Office Movers business puts other enterprises in motion
By Thomas Heath,
Every week like clockwork, a 28-foot unmarked white truck quietly backs up to loading docks at nondescript buildings throughout the Washington region. The driver and assistant — both with top security clearances — roll open the vehicle’s back door.
Under tight security, the workers load bar-coded plastic bags full of shredded paper.
Inside are secrets.
Soon, the truck lumbers away and disappears into traffic, driving to a remote location where the bags are incinerated.
That’s the cool part of the Kane Co., which has carved a profitable if unglamorous niche serving the Mid-Atlantic’s white-collar workforce.
Most readers will know the Kane Co., based in Howard County, through its ubiquitous Office Movers trucks, loading and unloading everyone from U.S. senators to employees at the American Red Cross.
Moving may be the core of the operation, but owner John Kane has developed a series of businesses around Office Movers, hoping to be a one-stop shop for its customers’ needs.
“We deal with stuff nobody wants to deal with,” said the 50-year-old owner.
The Kane Co. will design your office, buy the furniture and install it. It will move you in. It will move you out. Kane outfits hotel rooms for places such as Marriott and Hyatt, right down to the soap in the soap dish. It dismembers personal computers. Carts away your paper. It even transports expensive pieces of equipment (some costing $1 million), such as the networking gear it carries down into Metro tunnels that will one day improve subway riders’ mobile connections deep underground.
Come January, Kane will launch a hospital business. He is also diving back into the archives business, which involves storing office documents instead of burning them.
Kane lives in Potomac and seems to know just about everybody in Washington. Last year his wife, Mary, ran unsuccessfully for Maryland lieutenant governor on the Republican ticket.
“I am comfortable,” he said.
Kane said his businesses will gross $80 million this year; about $3 million of that is profit. Office Movers is by far the biggest chunk of the Kane Co., accounting for $58 million in revenue and more than half the company’s employees.
The company’s biggest expense is its $46 million payroll, followed by rent on its 18 facilities across five states. The next cost is upkeep and fuel for the 250 trucks and other equipment it owns, followed by insurance that costs up to $3 million a year.
The company is recovering from the recession, which saw revenue drop from $76 million to $56 million between 2008 and 2009. To weather the downturn, Kane cut payroll by 6 percent and took a 20 percent haircut on his own salary. About 60 people were laid off, and the 401(k) match was suspended.
The pay for Kane Co. movers and drivers ranges from $9 to $24 an hour. Managers start at $28,000 and can earn as much as $180,000 a year, Kane said.
Kane, who grew up in Silver Spring as the third of nine children, said the ancillary businesses not only boost loyalty to his core Office Movers brand but also create economies of scale that add profit to the bottom line. Kane uses Office Movers to get the company’s foot in the customers’ doors, reducing the need for its sales staff to make cold calls.
“When one customer buys one service, namely office moving, before long we hope they also purchase shredding, furniture installation, recycling of computers and, now, archives,” Kane said.
Kane often gets ideas for new businesses while accompanying his movers on jobs. He was on an office move three years ago when he saw tons of paper being thrown into a dumpster. He immediately told his salespeople to offer companies and governments a service carting away their paper.
Kane loves the paper shredding business because it has been recession-proof, generating a recurring revenue stream that brings in a $300,000 profit on around $2.5 million a year in revenue. The beauty of the 10-person business is that Kane earns money when he takes the paper away and then when he resells it to overseas buyers such as China. A container of shredded paper measuring 8 by 8 by 40 feet might bring $2,000.
“One man’s trash is another man’s treasure,” said Kane, who has expanded the shredding company’s client list to 325 in three years with four trucks. “It also gives you four truck drivers, so when we are busy elsewhere we can ask them to help out. It gives you depth.”
When people didn’t want to throw out their old computers because of worries that the data could be discovered on the hard drives, Kane founded eCyclers. The highly profitable company, headquartered in Howard County and earning $1.5 million a year in sales, guts and shreds computers and sells the metal parts on commodity markets.
Kane has also added the delivery of high-value electronic goods through Kane Distribution. He is relaunching an office archives storage business after selling one five years ago for a huge profit. He used the cash to reinvest in the business, buying items such as plastic crates, truck trailers and a software system to build a competitive advantage.
“Our business is a low-margin business,” Kane said. “It doesn’t generate a lot of cash. So when we have cash, we put it to good use.”
Kane’s family has been in the trucking business since 1969, when his father bought a bankrupt Baltimore trucking company and restored it to a profitable carrier that hauled General Motors auto parts and Procter & Gamble finished goods throughout the Baltimore-Washington region.
His father, Eugene I. Kane, eventually went into the office moving business in 1972. The company grew to 40 trucks when John, who went to work full time for his father upon graduation from Mount St. Mary’s University in Frederick County, purchased E.I. Kane Co. in 1998. He changed the name the same week.
Since then, John Kane and his team has expanded the firm into one of the largest commercial movers in the United States, as measured by revenue. It will move any company anywhere it wants to go through its network of 26 agents. It has assets in New Jersey, Delaware, Maryland, Virginia, the District, North Carolina and South Carolina.
Nothing secretive about that operation.
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