During the first five years after Luis Fanlo established Arrow Sewer & Drain in Middlesex, New Jersey, the company purchased equipment worth millions of dollars, primarily ranging from pipe lining, pipe bursting and pipe coating technology to a hydroexcavating truck and a combination vacuum truck.
Moreover, the purchases were made without going into debt, notes Fanlo.
How did he accomplish that? By relentlessly searching for jobs that could help pay for the equipment as quickly as possible. In addition, the technologically advanced equipment enabled him to charge premium rates and generate higher profit margins.
Case in point, Fanlo cites the time he bought a LightRay LR1 pipe lining system. Made by Waterline Renewal Technologies, it uses UV light to quickly cure the liner. While Fanlo was in Florida getting training from Perma-Liner along with his right-hand man, Dennis Tromsky, he was also on the phone, telling customers about the new technology.
“I was locking up deals,” Fanlo says. “I’ve developed a good business network of people I can call and tell them about a new service we have.”
Fanlo also sent out a mass email to members of the New Jersey State League of Master Plumbers, telling them that Arrow Sewer & Drain now had pipe lining capability.
“Within 30 minutes, I had five jobs lined up,” Fanlo says. “That’s how we do it: Buy the equipment, find work, do the jobs and pay off the equipment. Rinse and repeat.”
To save money during the company’s early days, Fanlo also bought used equipment, then used it to establish a relationship with a new customer. Doing good work led to repeat business, which allowed him to eventually sell the used machine and buy a new one.
Furthermore, hiring a full-time mechanic, Victor Cleary Jr., kept the used equipment in tip-top shape. That allowed Fanlo to sell used machines for nearly what he originally paid.
“We also don’t pull a lot of money out of the business,” Fanlo says. “We’re constantly reinvesting in the business to keep it growing. And if cash flow is good, you can scale up and buy new equipment quickly.”
Investing in expensive equipment also requires a fearless ability to take calculated risks, he adds.
“You can’t be scared,” Fanlo says. “And since I grew up poor, that comes easier for me. When you come from nothing, you figure you have nothing to lose.”
Read more about Arrow Sewer & Drain in the November 2024 issue of Cleaner magazine.
