Steve Fusaro - The Story of Building K&S Towing

Welcome to this week’s issue of SMB Community, where we interview Small Business owners about their most challenging problems and how they’ve dealt with them.

Today, we’re talking with Steve Fusaro, and how he built his company K&S Towing.

Reading this article will teach you a 3 things:

1. How to prioritize sustainable operations: Steve grew his company to 59 employees, but decided to scale it back to it’s most durable operation and prioritize serving long-term, recurring customers

2. 3 tactics for amazing customer satisfaction and follow up: Steve has some old-school marketing and sales tactics that create some radical customer retention - only losing a handful of customers in 17 years

3. How to overcome adversity: In the early days, Steve was told by many competitors that he was going to fail… Eventually Steve acquired the business of one of those competitors

Last thing… If someone forwarded you this email you can Subscribe For Free Here to get more stories like this delivered to you weekly!

Okay, Let’s dive into the discussion:

Hello! Could you provide an overview of yourself and your business?

Hey! My name is Steve, I own and operate K&S Towing in Havertown, Pennsylvania. I started the company 18 years ago with a $50,000 loan from my mother.

Right now we have 17 trucks and 16 employees, we do about 20% of our revenue with AAA, 20% luxury car transportation, maybe 30% police rotations, and 30% private account work — which involves companies like little corner repair shops, body shops, car dealerships, etc.

What are some tactical things you do in your business that makes you a better towing company than other operators?

I have thank you cards that my wife and I send out. We mail out ~30 thank you cards a day and spend ~$10,000 a year just on them. Customers LOVE them and they build a ton of good will and surprisingly - word of mouth. They occasionally call in to tell us how delighted they were to receive them.

We also give our technicians Google review cards to hand out. That’s probably how we got over 700 reviews. The Google cards have the driver’s name on them and there the customers can leave us a review. For every 5 star review that the driver receives from the customers, the driver gets $20.

And for a long time, we had this amazing salesperson, Lou. He would buy maybe 20 bags of pretzels a day from our local pretzel factory and drop them off at all of our accounts whether it was a small auto shop or a chain of 60.

He did this just to check in, build some good will, make everyone happy, and solve any potential issues they’ve had with us before they escalate.

Some people might consider these activities a waste of time, but losing customers is very expensive, getting new customers is very expensive, and pretzels and thank you cards are cheap.

I can count on one hand the number of accounts we’ve lost in 17 years because we do simple things like this.

No one fires the pretzel man.

What is the story behind acquiring or starting your towing business? How did you step into this industry?

I started driving a truck for my cousin when I was 16. My father owned a taxicab company and every time the cabs broke down, he could never find a tow truck to go out and tow the cabs. When they did break down, I would ask my cousin if I could go take one of his tow trucks and tow the taxicabs. 

So I figured, why not just do this myself?

I had a little bit of cash in the bank, my mom lent me $50,000 which I paid back at 6% interest over 2 years, and I bought a flatbed tow truck for ~$25,000.

Oh, something else to mention here… I was working 10-16 hours a day. 8 for the fire department during daylight. Another 2-8 doing towing during the night.

As much as I like to think it was work ethic, I really just wanted to make sure I could pay my mother back every month!

Can you walk us through the initial stages of building your business? What were the first few years like?

It was a lot of just knocking on doors, dropping off business cards, talking to shop owners, anything I could do to get customers.

Pretty quickly we ramped up to 3 trucks and 4 employees - I was answering phones during the day and towing more during the night.

And how did things progress from there?

Something that helped us grow really quickly was a ton of demand from AAA. They came to us and offered us more territories and service lines like battery service for cars that have batteries die in a parking lot or on the side of the road.

Additionally we acquired a couple other businesses - an auto shop and a repair shop - and ramped up to do over 6,000 calls a month with AAA and won Provider of the Year back in 2017.

At our height, we had 36 trucks and 59 employees. However, the business just was not sustainable at that size. I was run ragged, new team members weren’t taking proper safety precautions, and our accident rate increased.

One day in 2018, we had a driver killed on the side of the road which caused us to step back, reevaluate what our goals were, and eventually decide to ramp down to a more sustainable operation.

Which is where we are today.

Where is your business heading in the future? 

My biggest goal is to keep the business running strong for another 10 or 12 years until my youngest son takes over the business.

One of the things we thought about before we decided to downsize was how to transition the business to the next generation.

As I said earlier, we just couldn’t continue to operate the way we were because of sustainability and our goal to transition the business.

We have over 300 private accounts - long term recurring customers - and making sure they are happy with our service is top priority.

In terms of operations, what platforms or tools are crucial for you?

We used pen, paper, and phones in our dispatch for the longest time. But eventually we started using Towbook and it’s phenomenal. Towbook has made our operations a thousand times easier. 

I also have a great IT gentleman that works on our website who is great at optimizing our business’ search ranking.

What are some strong opinions you have about leadership? How do these principles manifest in your approach to leading your company?

I lead by example. All of my drivers and employees know that when it’s busy, I’m out there with them in the middle of the night.

If I'm sending one of them out in the middle of the night to change a tire on a Chevy Suburban, they all know that I can and will go out and do it myself. I’m not going to go home at 05:00 and let them sink.

Reflecting on your journey, what has been the most significant challenge you've faced in business? How did you deal with it?

One of my largest challenges when I started my towing company was everybody telling me that I was going to fail.

There were some companies that told me they were going to put me out of business. 

All that negative talk and negative feedback just made me want to prove them wrong. I worked harder until I was successful.

Eventually, I was able to purchase one of those companies who told me I’d fail. Which was a great feeling.

Where can we learn more about your business?

You can learn more about our business through our website https://www.kandstowinginc.com/.