New York company diversifies by investing in state-of-the-art technology to tap into underserved markets.
Andy Prestigiacomo is a believer of taking risks, of seizing opportunity when it presents itself.
Look no further than the successful growth and diversification of his 30-year-old company, AP Plumbing, for testimony to that: Over the last decade, it has expanded into septic and grease tank pumping, hydroexcavating, and sewer cleaning and inspection, which has pushed annual net income to $6 million.
“I’d love to tell you how brilliant I was, but I didn’t have any set goals 30 years ago,” Prestigiacomo says. “I was too busy working.”
Prestigiacomo steered his Rochester, New York-based company in this starkly different direction after recognizing the area’s aging infrastructure as a golden opportunity to add lucrative services. This expansion into sewer cleaning and pipe lining stands as a good example of AP Plumbing’s high-risk, high-reward strategy — and its success boldly underscores the importance of taking calculated financial risks to enter underserved markets.
“As crazy as it sounds, we kind of put the cart before the horse,” he explains. “We took an ‘if you build it, they will come’ approach and started to invest in specialized equipment. We wanted to offer more than just the typical service provided in the Rochester area.”
Though it’s what propelled the company forward, investing in expensive equipment such as vacuum trucks, water jetters and a hydroexcavating truck was unnerving at times. But as Prestigiacomo notes, it takes money to make money. “I always felt that there was no better way to invest in our company and our employees than by investing in new technology.”
Educating and establishing expertise
Being the first company in the region to buy equipment such as vacuum and hydroexcavating trucks and pipe lining technology gave AP Plumbing significant competitive advantages: establishing expertise in unconventional technologies and developing key business relationships, Prestigiacomo says.
“Our first Vactor truck brought us into the spotlight and helped us gain many new contracts with municipalities and utility contractors,” he notes.
About three years later, the company bought a Vactor 2112 vacuum/hydroexcavating truck, a purchase that coincided with burgeoning industrywide demands for a safer way to expose utility lines than traditional excavation methods.
But being the first company in the region with such cutting-edge technology also meant customer education played a critical role. AP Plumbing used the internet, sales calls, and radio and television ads to educate customers. The company also leveraged one of its most valuable resources: an extensive customer base cultivated over the 30 years serving the Rochester area.
AP Plumbing’s education outreach includes highlighting the value of preventive maintenance contracts, which not only builds customer loyalty by decreasing expensive emergency calls, it also secures consistent, recurring revenue. Moreover, the contracts make it easier to schedule work, rather than relying on the unpredictable demands of emergency service work, Prestigiacomo explains.
“We tell our customers it’s like going to a doctor for regular checkups so you don’t have a catastrophic problem down the road,” he says. “It’s much better to monitor and maintain lines because it helps our customers save money over time, which strengthens their belief in our company and its representatives. That’s what keeps our business model strong.”
In the next three to five years, Prestigiacomo expects to maintain the company’s consistent double-digit annual growth, and he plans to place even more emphasis on customer and employee relations. As he puts it, “Growth will happen for our company … but I want to focus more on how AP Plumbing and my employees get there. The engagement of our staff is vital to our current growth and gaining market share.”
Looking back, Prestigiacomo says he’s amazed at how AP Plumbing grew into such a large, diversified company. But he gives total credit to his employees and his management team. “We wouldn’t be where we are today without all our employees that contribute on a daily basis. They truly are a driving force in our success.”