Building Blocks

California cleaning contractor starts with a focus on residential customers, and along the way finds other avenues to profitability.
Building Blocks
Express Sewer & Drain hydro operator William Blake, left, and owner/operator Bill Heinselman use the Perma-Liner Top Gun inversion unit to install a liner. (Photo by Sang Heinselman)

Four years after establishing his company in the Northern California suburb of Rancho Cordova, Bill Heinselman was stunned when he was offered $1.5 million for the operation. The deal also included a lucrative salary and benefits package for Heinselman and his wife, Sang, a civil engineer who runs the office and handles project management and bid proposals.

“I was flattered,” Heinselman says. “But we had doubled our revenue from 2010 to 2011. At the time of the offer – it was May – we had done $800,000 in revenue, which was what we had seen the entire year before. I expected we would surpass the $1.5 million for that year, which we eventually did. I thanked them, but had to decline. I didn’t want to sell my business.”

Heinselman says in 2013, the company cleaned more than 3 million linear feet of sewer main and grossed $4 million in revenue. He estimates they replace 400 to 500 Orangeburg and vitrified clay sewer laterals every year in Northern California, and they recently traveled some 450 miles to Beverly Hills to work as a subcontractor on a one-day relining project on a 12-inch mainline storm drain.  

Before opening Express Sewer & Drain, Heinselman worked for 14 years at a sewer district in Northern California, where he handled equipment as a supervisor – running the Vac-Cons and CCTV trucks, managing a backhoe crew, installing sewers and dealing with manholes and water mains. But Heinselman wasn’t satisfied. He wanted to run his own company, and he had specific ideas regarding customer service and pricing. He didn’t, however, envision the turn of events as the operation took off, nor did he expect the exponential growth he would enjoy.

“When I first started, I envisioned working for and helping a residential and commercial customer base, but the business just exploded,” he says. “I found that as I did a good job for one customer, they would tell somebody else. I initially hired my brother Jerry [Heinselman] who had a similar background as mine, and then I added more technicians and plumbers.”

Heinselman found there was a much greater demand for his services in the contractor and municipal communities.

“Initially I had not factored in the possibilities with municipalities,” he says. “But we bid on a small municipal job, and when we completed that job I realized that as a contractor I saw a big difference as opposed to when I worked in the field. Plus this work is entirely different than residential, where there is the emotional involvement – the homeowner trying to decide which problem to solve. I realized there was a ton of work out there with the municipalities as well as other contractors, including plumbing companies. I simply had not realized the potential. I really went after that work. When I was employed in the field for the sanitation district I was not seeing what was contracted out and did not know all those jobs were out there. I began to see the possibilities of growing the company by serving the sewer agencies in Northern California alone. There is that much work.

“The larger municipalities have their own equipment, and they use it all the time,” he says. “But they also need to bring in outside contractors to keep up with all of the various agencies and mandates for cleaning, repair and rehab called for yearly in the state, as well as the water-quality board calling for mainline cleaning, TV inspection, pipe bursting and more. When I saw all this work on the bid boards, I knew I was going to be doing this work.”

He says small municipalities also need to meet requirements, but they don’t always have big pieces of equipment, which means more opportunity for outside contractors.

Stepping out in the market place

Heinselman added pipe bursting to the menu in 2009. It was a major step for the young entrepreneur, and it set the pattern for his future endeavors and company culture.

Pipe bursting has been around in the Sacramento area for about 16 years. Residential customers are aware of it, and will generally call to get a quote on a “trenchless line replacement.” So offering this service seemed the right thing to do.

“We had a job lined up, but the subcontractor we engaged would not show up as scheduled,” Heinselman says. “We complained, and he more or less told us to go out and buy our own equipment, not in the kindest terms. That’s just what I did. We purchased the system by TRIC Tools Inc. and that was the smartest thing I did in the beginning. It was a lot of money for a small company – $35,000 – but it paid for itself in two months.”

He purchased TRIC’s 20-ton X20 system, and transports it in an unmarked pipe bursting trailer so it can be on the job for other plumbing companies.

Pipe bursting is more popular in Northern California, particularly in earthquake-prone areas, because HDPE pipe is so strong. However, lining has also found an important niche.

In 2009, Express took on a job for a homeowners’ association that needed 700 feet of 6-inch pipe relined. Heinselman subbed out the relining work.

“I thought it was the coolest thing I ever saw,” he says. “They did that pipe in one day. It was amazing. I said ‘I’m going to start doing this.’”

He added Perma-Liner Industries’ lateral lining system with a 26-foot lateral lining trailer and began relining in 2010.

One piece of the puzzle always leads to another for this owner.

“We were doing the lateral CIPP lines, but had a lot of mainline jobs. We added Perma-Liner’s Perma-Main Top Gun F-10 main lining system, and Perma-Liner’s point repair system, sending us further into municipal work,” Heinselman says.

Another segment they were not bidding was CCTV, but in 2012 they added a 2012 Ford F-550 CUES TV truck with two CUES OZIII cameras and transporters. The truck is also equipped with Bowman 430 Dominator lateral reinstatement cutters and controllers and the K2 operating system, which is used in relining mainlines.

The Express fleet also includes three Vac-Cons – a Hot Shot, V230 and V309 – and two US Jetting trailer jetters, which produce 4,000 psi/18 gpm with Enz and StoneAge nozzles on the business end. Additional cameras and locators are from RIDGID.

Heinselman runs his enterprise from a state-of-the-art complex situated on a 1.5-acre property in an industrial area. The yard is cement, with a 6,000-square-foot warehouse and 2,000-square-foot office. The extensive and expensive equipment is secured behind an 8-foot fence with barbed wire and razor wire at the top and infrared beams around the yard – plus a camera system monitored around the clock by a security company. Automatic gates open and close with a card lock system. Employees scan in and out, and this movement is tracked. Entry into the office is also scanned.  

First class ticket

Heinselman credits much of his success to the high priority he places on quality equipment. He says he’s willing to pay for the best equipment and then go out and pound the pavement to make the sale.

The equipment list got another boost when he added a PipeHunter Sidekick Articulating Easement Hydro Jetter, which lets workers maneuver into tight places such as easements and backyards. A recent job for a local sanitation district involved cleaning a 12-inch mainline running through a canyon. The machine works with their Vac-Con Hot Shot truck. They can run hose up to 1,000 feet from the truck, and then clean 600 feet of pipe.

“It is another service that keeps the phone ringing,” he says.

Heinselman describes himself as a guy who gets things done for customers.

“I like to think I can do anything, and do it for less money than my competitors,” he says. “We want to make money, but if we go out and have an 85-year-old woman who has a problem, but clearly has limited finances, we will get the job done and not charge if that is what it takes.

“We offer free video inspection on every residential/commercial job we do. We are a 24/7 operation, but we do not charge overtime. Our rates remain the same whatever time of day or night we go out. These customers appreciate our service and our perks and they are impressed with our outstanding equipment. Ninety percent of the time in the residential lateral there is not a problem, but the customer can check it out and they are amazed with the equipment.”

Although Heinselman appreciates new technology, he understands there is a place for tried and true practices. He recently purchased a 2013 Peterbilt 337 5-yard dump truck, a 2014 Caterpillar 420 F backhoe and a 2013 Caterpillar 301.7D mini-excavator.

“There is definitely a need for the older applications,” he says. “There are contracts that we cannot perform unless we have that equipment, and we want to be the company that does it all.

“In the market today, you have to make your decisions, and you have to figure out what jobs are out there, who your customers are, and determine their needs and the best products to utilize.”

Heinselman keeps his eye on all activities in his area of service. “We are learning, and we are watching, and we believe we will continue to see lucrative growth in our company as we move forward.”



Discussion

Comments on this site are submitted by users and are not endorsed by nor do they reflect the views or opinions of COLE Publishing, Inc. Comments are moderated before being posted.