Mississippi's 40 Fastest Growing Companies: On-Site Fuel Service in a class by itself

JACKSON - In 1996, Greg Nethery had an excellent idea for a side venture: provide turnkey fuel management services for vehicle fleets.

With a check for $10,772 he borrowed for his primary business, Nethery bought a truck, developed brochures and started making sales calls for OnSite Fuel Service.

Today, On-Site is one of the largest independent motor fuel distributors in the Southeastern U.S., providing direct fueling, customized fuel usage, tax reporting and fuel management services every month to more than 40,000 fleet vehicles in eight states. The company operates 27 tanker trucks that service approximately 170 accounts from its seven facilities in Jackson, Atlanta, New Orleans, Charlotte, N.C., Greensboro, N.C., Spartanburg, S.C., and in Alabama.

On-Site's clients include the U.S. Postal Service in Alabama, Florida, Georgia, Louisiana and Mississippi, Brinks Armored in Alabama and Louisiana and Yellow Freight in several southeastern states.

"One of our biggest challenges was having enough startup cash for rapid growth," said Nethery, president of OnSite. "We had cash flow challenges related to paying for goods and services in 30 to 45 days. Most banks were not interested in our business because receivables were in multiple states as were collateral assets, such as equipment. Early on, we received funding from the SBA, which allowed our company to triple its revenue. A Business & Industrial Development Company administered this funding. A detailed business plan was the key component for acquiring this and follow-up funding. This plan was adjusted as needed due to changes in the business."

Nethery streamlined On-Site's administrative procedures. Initially, purchases and sales were tracked manually by paper invoice. Today, each driver uses a handheld computer to scan bar codes on customer vehicles networked to the company's corporate headquarters in Jackson. The company's 40 employees receive incentive-based pay in line with On-Site's team-oriented corporate philosophy. As a result of his plan, the company's annual compounded growth rate has averaged 78% for each of the last five years.

"A high-water mark was getting contracts with Duke Energy in the Carolinas, probably the most well-respected utility company in the world, and with the U.S. Postal Service in several Southeastern states," said Nethery. "That was a secure feeling."

Few companies provide similar services. "No one really realized the cost of labor and lost productivity of traveling to and from gas pumps to refuel vehicles," he said. "Going to a fuel island usually takes 30 minutes. That's lost productivity. In that time, a mailman in New Orleans could have delivered to 30 homes."

After the federal government, telephone and electric utility companies completed studies on total quality management and productivity, they began to better appreciate the economics of refueling, said Nethery.

"It costs an average utility truck about $600 an hour to operate, so when it gets to large numbers like that, folks become very attuned," he said. "Traditionally, businesses and other entities that operate large vehicle fleets have met their fueling requirements by either maintaining their own supply of fuel in on-site storage tanks or by fueling vehicles with credit card purchases or other credit arrangements at local retail gas stations. On-site storage tanks and fueling facilities can be expensive to construct and maintain, and exposes the property owner and operator to potential liability associated with fuel leaks or spills."

Increasingly stringent federal and state environmental regulations of underground storage tanks (USTs) require businesses that maintain their own fuel supplies to spend significant amounts to remove and/or retrofit USTs to meet regulatory standards, said Nethery.

"Our company has enabled customers in many locations to remove leaking USTs," he said.

A focused vision of market share in the existing footprint is the company's next step in its business plan, said Nethery.

"A business plan is a road map to success," he said. "It changes depending on which route is taken, in the life of the business."