The Conception of Merrell Bros., Inc.
Ted and Terry Merrell were each given one female pig when they were young teenagers by their father. They can still remember watching that first litter being born and wiping off each baby pig as it gasped for its first breath of life. From that day, their first 50/50 business partnership venture was started, and capitalism in its simplest form began as “Merrell Bros.”. From there, they had the thirst for growth. One pig turned into two, then twenty, and by the time they graduated from high school, they had rented hog barns and feeder pig lots in four counties and were driving almost 100 miles every day to do chores. Early in their careers, they realized that dealing with hog manure waste was a continual challenge. As the age of confinement hog barns began, barns where hog manure was beneath the barn in hog pits popped up across the state, and area farmers developed a need to have the hog pits pumped out and land applied. This meant long hours of driving a tractor and spreader, pumping the waste out of the barns, and land applying it onto nearby farm ground. Realizing this, they took a gamble and leveraged everything they had. With the help of their father, they bought their first high flotation spreader truck. Their original capitalistic ideas were now alive in the young Merrell brothers as they realized that by using a high flotation truck, they could spread the waste quicker and at a lesser cost. By running the truck themselves, they could be more efficient than the competition. With their entire assets pledged and everything on the line, they were “all in” and decided to open up a side business of pumping manure for other farmers. Having been raised by a Christian mother and father, integrity, reputation, and honesty were instilled into Ted and Terry. In order to make sure that they were more than fair to each customer, they only charged each customer for 1,550 gallons even though their truck held 1,600 gallons. Once in a while, they would pump a pit that contained manure that foamed and therefore might not reach the full 1,600 gallons. Even though the customer would never know the difference, it just didn’t feel right, so they took the approach that they would rather pump a little more and get paid less, than to risk ever taking advantage of a customer. This same philosophy is apparent on the website’s home page portrayed within the company intro: “We make every effort to build a reputation based on honesty and professionalism.”
Their First Ad
The first form of advertising for Merrell Bros., Inc. was a hand drawn flyer which is still displayed today in their corporate office waiting room. “When you don’t have any money for excess expenses like marketing, you have to do the best with what you have,” states Terry Merrell when asked about the early days. At that point in their career, they were heavily leveraged with a lot of debt, but they had a pencil and paper, so they did the best that they could. In order to get work without having any reputation or reference history, they hit the pavement going door to door trying to get farmers to hire them. They slashed their prices below any competitors and tried to keep the truck running 24 hours per day in order to be as efficient as possible.
Company Motto: Trying Harder
Terry Merrell is known for often commenting, “Try harder,” as challenges arise. He remembers late one night, around 2:00 AM in the morning, operating the spreader truck when the tool bar broke a necessary part on the back of the truck. The only spare part available at that hour was forty miles away, stocked at the make-shift shop, next to Terry’s house. He phoned his wife just after 2:00 AM and she, without questioning the details, immediately got up and drove down to meet him at the job site with the needed part. The part was replaced and Terry was back up and running by day break. “It’s the little things you do over a long period of time that define success,” states Terry. As an example, would waiting until morning to fix the truck have made a difference in the outcome of their entire career? “Probably not,” admits Terry. “However, doing these types of things on a regular basis over many years does change a person’s career. It really comes down to one thing: that is, how bad do you want it?”
Keys to Success
Ted and Terry owe their success first and foremost to God. There have been so many circumstances that have occurred over the years that were simply not due to chance but happened by the direction of God.
The second key to their success is the twenty-five years that their wives have been by their side offering support. Whether it is delivering parts at 2:00 AM, as in the example above, or washing manure soaked clothes, both of their wives do whatever it takes to help their husbands achieve their goals. Without spouses that are willing to stand by each other’s sides through the tough times, success in this line of work is not possible. When money was tight, Ted’s wife grew a lot of food in the garden, and leftovers were never thrown away. Lunchtime meals at the office were home-made to save money, and every penny was budgeted. In the early days, Terry’s wife was the office secretary, and Ted’s wife helped with the financial books. Terry recalls a project when his wife even helped him carry the last five hundred gallons of sludge in five gallon buckets up three flights of stairs in order to finish cleaning a digester tank. Both of them were drenched with sweat by the time they reached the hotel that evening, but it was an experience that strengthened their relationship.
The Cost of Money and Risk
Money was expensive during this time, and early in their career they were borrowing money at an interest rate of 15%. President Jimmy Carter was in office at this point, “It was hard to get ahead,” states Ted, so the only option they had was to work longer and harder to make it. With time and persistence, the one original truck led to two trucks, and by 1984 the brothers were ready to hire their first employee.
They decided that $3.85 was the highest rate per hour they could afford to pay, but it felt like a gamble. “We weren’t sure if we could actually stretch our finances to cover his new expense per hour,” states Ted. “When you’re all in, you have no choice but to be all in. We knew we would miss 100% of the shots we didn’t take, so we took the shot and tried it,” says Terry. Fortunately, it worked out.
In 1985, desperate for more business and the growth it would bring, they agreed to help a local contractor who had a contract with a municipality to pump out a city lagoon. “Previously to this, our only customers had been agricultural operations,” states Ted. The municipal (city) market provided some great opportunities for Merrell Bros., Inc. to expand, but both brothers were young “kids” fresh out of school. They needed a competitive advantage, and consequently slashed their bid prices, and were willing to haul and land apply for about $10.00 per load. They did this hoping to get their foot in the door with new municipal customers. Today, that would not even cover the cost of fuel nor would it begin to cover labor and equipment expenses.
Merrell Bros., Inc.’s First Big Break
After assisting a contractor on their first municipal project, they quickly realized that there was a great need for this type of work, especially if you were willing to work hard. So, in 1986 they bid on their very first municipal contract with the City of West Lafayette, Indiana. Ted Merrell states that they had one truck, two very old 1955 Butler tankers, and a whole lot of energy when they bid on that contract. When they were the apparent low bidder, the mayor of West Lafayette was a little skeptical of this new, young startup company, so she wanted to come out for a site visit. At that time, they had a hog barn that was built in the shape of a horseshoe. Inside that horseshoe, they had built a very small, two room, make-shift office. The mayor of West Lafayette came out with her staff (dressed up nicely) to their office in the middle of the hog barns. For the duration of the mayor’s visit, the classic saying “You never get a second chance to make a first impression” was playing in the backs of Ted’s and Terry’s minds. Here they were trying to impress the mayor of West Lafayette in the middle of a bunch of smelly hog barns. They had to sell the mayor on their ambition and not the lingering smell of hog barns and flies in the background as they stepped out of their vehicle.
The mayor must have seen something in Ted and Terry that day because after the meeting, she stated that she was impressed, and they were going to recommend to the board to award Merrell Bros., Inc. the contract. From there, they were off and running and still proudly hold that contract 30 years later.
The Power of Prayer in Business
Two years later, the City of Lafayette Indiana came up for bid. The day before the bid, Ted and Terry had two bid prices and could not decide which number to use. They decided to pray together and asked God to help them decide by flipping a coin. If it landed on heads, they would go with the lower price, and if it was tails, they would go with the higher price. The difference in these two prices was only a few pennies. After they prayed, they flipped the coin and it was heads, so they used the lower price. The next day at the bid opening, they opened the bids up, and yes, you guessed it, they were the low bidder only by pennies. If they had gone with the higher price they would have lost the bid. From that day on, they knew that they must “trust in the Lord with all their hearts and lean not on their own understanding” (Proverbs 3:5). They have made it a practice to this day to pray over tough bids when it is out of their hands. By being awarded that second contract, they were catapulted into a premier respected Indiana Biosolids Management company. An even more interesting fact is that they still hold both of those contracts today over 30 years later. If they had not prayed over that bid, it could have easily changed the landscape of the company forever.
More Growth, More Risk
From that point on, Ted and Terry merely drove the company vehicle and God told them when and where to turn. Ever since that day, the company has averaged an annual growth rate of 15%. In 1997, the pace of growth was more than they could handle themselves so they made a major decision to hire someone in the office that was the first non-labor office staff member that was to be involved in bidding on projects. Terry remembers that it was risky. They were going to hire a young college kid whom they would pay a huge salary of $27,000 per year. That was a whole lot of money to pay someone who was not going to be driving something. That decision was another God-led decision, and Ryan Zeck joined the team. Today, Ryan is second in command and is the Chief Operating Officer. He is responsible for all daily operations of the company, as well as participating in the hiring and firing. Ted Merrell (jokingly) comments, “He is the only guy that knows what is going on around here.”
Expanding Beyond State Lines
At this point in the company’s history, they were only operating within Indiana. With their footprint growing and the thirst for continued growth, a decision was made to expand beyond the state lines. “This would not have been possible,” states Terry, “without good people.” Anyone can buy a truck and field applicator, but having someone in them that does not operate them correctly can ruin a company’s reputation. The expansion plans were to go to the surrounding states around Indiana. Slowly over time, divisions were opened up in various states as contracts and opportunities became available. The scope of services were widened to include many different types of disposal options. In the early years, land application of hog manure represented over 90% of the companies revenue. Today it represents less than 5%.
Today we are actively bidding in all 50 states and have completed projects from Alaska to Florida. Although we are a long ways away from that first truck that hauled 1,600 gallons, the business and ethics model have not changed.
“The ability and willingness to adapt to the changing demands and needs of the industry has allowed us to survive,” states Terry Merrell. “This would not be possible without good people that are willing to put in long hours.”
Going forward, our industry will undoubtedly continue to see more change. Regulations will get tougher and the demand for more efficient means and methods of handling biosolids will increase. Merrell Bros., Inc. is continually investing heavily into new methods and technologies and, God willing, hopes to continue pushing forward in the years ahead.