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Has your company been approached by a marketing firm that promises to increase your residential subscription customer base and profitability? Their starting point is that they will be able to increase your customer count, improve your density (while lowering your expense for each new customer) and of course, generate more profits for your company.  Some might entice you with their sophisticated analytics on their understanding the marketing dynamics within your market area footprint.   Once again, beware. There are a number of companies that propose to bring these benefits to independent haulers. Many will be able to add to your customer base; however, their other promises could be questionable.  Their projection of new customers and revenue is enticing; however, their results might be less than what is expected by an independent hauler.  Let me share an experience that one of my clients had with one such marketing company.  The company approached my client with a plan to analyze the targeted area and...

There is a predator in our industry preying on the uninformed but well-meaning service provider that could evolve into a controlling force and in the meantime is taking advantage of haulers with promises of financial success but leading them into financial ruin. Some of these predators even have plans to dominate markets outside of governmental control. Who are these predators - the publicly-traded waste companies, the large regional independents, a coalition of cities, counties or waste authorities, SWANA? No, none of these entities.  All of the heretofore named groups are subject to the python-like squeeze, as is “One-Truck Tommy.”  The predator is not an outsider.  In fact many of our service-side industry participants are involved as enablers or codependents of this profiteer.  Who is this vile sort that wants to control our business and our industry and take advantage of the weak?  It is “Brokers,” the waste industry’s equivalent to Payday Lenders. Before I delve into the parasitic activities of this pandemic,...

How many times have I heard this or a derivation of that line from an independent? I have yet to meet an owner that said “we have lousy service and our customers hate us”, but there are companies out there that deliver poor service and little or no follow up and yes their customers hate them.  Most independents have a hard time defining quality service and how to measure it.  Most use the telephone as an indicator of their service delivery and some use the number of cancellations as a barometer of customer satisfaction.  There is nothing wrong with either, but the question requires deeper analysis.  While the majority of independents honestly believe that they give good service, it is all subjective with no objective measurement to back their thoughts. Despite our best efforts to argue to the contrary, the waste collection, landfill and recycling business is a commodity business. Think about it - your trucks look pretty much like your...

Most independent haulers and landfill operators do not use a floating fuel recovery fee-and that is a problem for them.  Fuel expense can constitute 5%-15% of their expenses.  When fuel costs start to rise and there is no meaningful mechanism to recover the increased cost, one sure result is erosion of the bottom line.  The loss of profit impacts the business in a number of ways: equipment replacement, pay increases for employees, skipping preventive maintenance and lowering your leverage with your lenders, all of which can impact growth.  Raging fuel increases have caused more than one company to leave the industry. All of my clients have heard about the Floating Fuel Recovery Fee (FFRF) and why they should be using it in their business. The FFRF is a tool to adjust the charge to the customer based on where average price per gallon of fuel is each month.  Most if not all of the publically traded waste companies and the large...

No matter how difficult your business is at times to manage, fundamentally, the waste business is really very simple. When you compare it to other businesses, our variables for success and failure are a relative small universe.  Consider a company like Apple Computer.  Not only do they have to market a superior product that works as expected, they also have to be on the leading edge of technological improvement.  Then there are the service issues and the army of customer and technical service representatives.  Don’t forget the ever-changing customer tastes.  There is a myriad of other factors that management must consider: foreign governments, currency exchange rates, security, activist groups and their investors, to name a few. In a waste hauling business, when you look at our revenues and expenses, we have fewer factors to manage: labor, trucks, containers and overhead. If your keep an eye on the major expense areas and use meaningful metrics, you should move from the larger crowd...

Over the years I have heard many thoughts on how much profit an independent waste company owner should put into a bid, or a customer’s quote. Some say “I determine my cost and mark it up 10%, 15% or 20%.” I have heard some owners who said they take their operating cost and double it to get to the profit level they want to see in their business. The worst case is by default: an owner prices at or below Local Larry’s Lowball Hauling Service, with no regard for their profitability, just to get or keep the business. With few exceptions a waste company owner’s largest asset is in their company. While they might have retirement accounts and investment accounts, their company could have an investment of debt, equity or both ranging from $2MM to perhaps $100MM, depending on the size of the company. When I look at some waste companies’ financial statements I see...