How I discovered a great opportunity researching construction quotes

How I discovered a great opportunity researching construction quotes

Kuldip Panchal arrived at Indiana University-Purdue University Indianapolis in 2012, ready to study construction management. He had immigrated with his family from India to Indiana and grew up working in reception, doing night shifts, and building in the motels that his family had purchased. He watched his parents sweat and struggle and decided that one day he would help his father execute his renovation projects. But on his first day on campus, Panchal received the worst kind of phone call: His father had fallen three stories off a hotel roof and suffered serious injuries; Mahesh Panchal died eight days later. Devastated, Kuldip took time off before returning to school, earned his MBA, and looked for construction-related opportunities on which to build a business. In 2018, he launched US Hydrovac in Indianapolis in the rapidly growing field of hydraulic excavation. I never heard? Panchal neither. –As told to Peter Keating

After college, I got married and lived in Chicago for about a year, working for a large general contractor. My father’s thing was to renovate hotels, but he promised too much, delivered too much and then he was paid poorly. He also wanted to dedicate myself to construction, but he wanted to find a niche in the industry even in his innovative stage. A couple of my college buddies, Tyler Vuurman and Dwight Cliff, and I noticed line items for something called hydraulic excavation in project quotes. It was an emerging trend. Tyler said, “Let’s start a hydrovac company.” And that was it; the idea stuck.

Hydraulic digging basically involves a pressure washer on steroids, sitting on the chassis of a truck. A long hose extends into the ground, spraying air and water onto the ground and creating a liquid suspension that is sucked into a waste tank. Exposes power, sewer, or water lines without the risk of hitting them with a mechanical device like a backhoe. I’m sure you’ve heard of contractors hitting gas lines and houses exploding.

It is not an easy business to develop, because the equipment is expensive: a truck costs about half a million dollars. In 2017 I learned that before he died, my dad had a small partnership in a motel; when it was sold, I inherited about $125,000. That was my mom’s and dad’s life’s work and, in my opinion, the money had to be invested in the family.

I quit my job and my wife and I moved back to Indianapolis where my partners and I knew something about the construction market.

We did our due diligence for six months. We read everything we could about hydraulic excavation, there wasn’t much. And we started US Hydrovac with two truck operators and my inheritance, which lasted about three months. I had to ask my wife’s parents for more money and luckily they were able to lend it to us.

In the beginning, I was the sales guy, the head of business development, and if we needed additional manpower, I’d jump in the hole. People were saying, “Is this the owner of the company?” And I’d be like, “So what?” Over time, Tyler, who got our first five accounts, took on a less day-to-day role in the business, and Dwight sold his share.

The company that dominates hydrovac is Badger Daylighting, which basically created this industry 30 years ago in the oil fields of western Canada. It is a public company with more than $500 million in annual revenue, serving the entire continent. There were really no regional players until we came along. We rush. We chase work, we chase customers. We had to.

As our company grew, I looked for people in construction who were very dedicated. My number two man is a guy three years older than me who had been overworked and underestimated in his last company. This guy is amazing, and he cares about me and the company more than anyone else. About two years later, we added complementary services like pipe assessment, essentially sending a robotic camera down the water and sewer lines to inspect and clean them. We now have 35 employees and 12 crews, and had $6.3 million in revenue in 2021.

When Covid hit, some transportation departments sped up projects because there was less traffic on the road. That kept us afloat during that first critical part of the pandemic. Then we got some massive projects. In Louisville, a 100-year-old, eight-foot-diameter brick culvert runs down Broadway, and in 2020 it began to collapse — they had sinkholes in the street. We were there for 10 months.

That’s us. When your toilet isn’t working, when your power isn’t working, that’s when we’re on call. It’s not really glorious, but we have a niche. It’s interesting. And the industry is booming.

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From the September 2022 issue of Inc. Magazine

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