This is Waste to Wealth, a podcast about turning your waste hauling business into a profitable, scalable, cash flowing machine. And now, here's your host, Michael McCall.

Welcome to Waste to Wealth, the podcast that helps waste haulers like you turn dumpsters into dollars and build high profit, well-structured businesses. Are you working long hours but not seeing the profits that you want? What if you could increase cash flow, scale smarter, and build a business that works for you and not the other way around? That is exactly what we're diving into today. And what you can expect from this? We're going to talk about three simple strategies to make more money without working harder. You know, you start a business and you think, hey, this is going to free me. This is going to make it so that I can actually dream. And those dreams that I have, I can fulfill. But what most of us go through, I went through this, I see people going through it right now, their business actually owns them instead of the other way around. Your business, it like needs you, it needs you to do things. And if you don't, it's just gonna die. You don't wanna have a business that's gonna die. You want a business that is a living, breathing organism that creates abundance and prosperity and that you get to be a part of and direct. You don't want it to constantly be on the verge of collapsing and dying. That's a nightmare business, not a dream business. So we want to have businesses that thrive and grow on their, not on their own, that's the wrong way to say it, but that they naturally just continue to help people and are systematized instead of having to get pushed forward all the time every day, getting pushed forward by the owner and the people in the business that care about it. That's what most of the small businesses have become is they're really, they're worse than jobs. They're They're like slaves. They're like slave owners. They own you. Probably shouldn't use that word. Probably shouldn't use that word. But the businesses, they own the people that run them instead of the other way around. And we don't want it to be that way. We don't want businesses to constantly feel like they're about to die. And how do we avoid that? How do you get out of that cycle? How do you prevent that from being the case? So many waste haulers think that working harder is the only solution. So you gotta add more hours, you gotta start earlier, stay later, nights and weekends, working, working, working. And that isn't a bad place to start because you need to get the reps in, get the practice to be good, but it's not sustainable. You're going to burn out and you can't grow. You only have so much time in the week. So 40 hours is what most people think of as a work week. When you're a business owner, it's 80 hours a week to start. You got to work 80 hours a week to get things going. to do all the hauls, to fix the trucks, to do all the paperwork, make sure customers are paying you, you're talking to them. So you're working double time. And you can't add more than that. I mean, you can't work 120 hours a week. That's not possible. Even if you don't sleep at all, it's just not possible. So there's other ways to solve this problem. And building a team is the best way to do it. and also structuring your whole business model in a smart way is the way to do it. So let's talk about easy things to do right now and mistakes that eat into profits. So what are some common things to eat into profits? One, you underprice your services. And you do that so that you can get orders because you're competing on price. That's the number one mistake, is you call up your competitors, you find out what they charge, and you charge a little bit less than them. And that is how you figure out how much you should charge and how much, and you use that as a selling point. You go to customers and say, hey, I can do it for less than the guy you're currently working with. Come work with me. And then you just, yeah, you stole a client and now you don't make that much money. You make less money than the guy that was currently doing it. So congratulations, you are on a race to the bottom. Second thing, ignoring cashflow. Just wait too long to get paid. I told a story last episode about how I was doing that. It was taking me, you know, three months to get paid for work that I completed. That's crazy, three months, so how do I grow? If I grew that business, if it takes me three months to get paid on anything, like if I drop the dumpster off, wait till the rental period's over, let's say it's 30 days, and then pick it up, I guess it's not, well, drop the dumpster off, pick it up, empty it, and then invoice the client. Like it could take me two to three months to get paid. And I did all the work. I exposed myself to all the costs. Why would I do that? If I doubled in size, I would die overnight from cashflow. I wouldn't have enough cash to even pay my guys, put fuel in the truck. I couldn't even do that. I would go out of business in a heartbeat. So to fix that, we got to do something different. We can't wait to get paid. And then buying equipment too soon, having equipment that's idle or making a decision on buying a truck before you're actually ready to put that truck into service. That is a huge mistake that I see because now I've got, if I buy a truck, I don't have capacity that I'm not ready to plug in and use, utilize fully. Then I have to, that burden of either a debt payment or extra insurance, or just the hassle of making sure that it's maintained. So buying, or dumpsters that sit, if I buy dumpsters, I get dumpsters that sit in the yard that I'm not using. That cashflow that I used to buy it, it could have been directed to something else that's actually the constraint on my business. So those are three common things that I see. I've done them all, so it's not like I'm saying, I'm special. I know these are our mistakes because I did them and I suffered. I said, man, I don't have enough cash. Oh man, I really should increase my prices. So let's talk about why that happens. Why do we do those things? And it's because we think that this is how we have to operate. We have to have low prices. We've got to give our clients forever to pay. Otherwise it won't work with us. And then we got to have equipment ready to go so that when someone calls us for that magical opportunity, we are ready to go. We're ready to go. And I understand that mentality for a bigger company that is in growth mode and their sales people are hammering doors and they're trying to grow and they got to have the equipment ready so that when they're going to make a phone call, they get a phone call from a customer, they can go. And I came from an emergency response service. So, we literally had to have equipment ready on standby. Otherwise, we wouldn't get the work. And we had contract to support that required that we have equipment on standby. But that's not you. That's not you. And that's not how you want to build your business. That's a different type of business. You're not in the emergency response business. You're not getting paid for your equipment to sit there and do nothing. So, let's go back to number one, the price. So, if it's too low of a price, do we do? Do we just raise our prices and say, screw you, we're going to raise our prices? Well, kind of. There's nothing wrong with doing that. And the reason why you raise your prices is for several reasons. But the first reason is if you raise your prices, your lowest value customers, the customers that say, hey, I'm only hiring you because of price, they go away. And that's good because they're your worst customers. The ones that beat you up over a hundred bucks, like that is not worth your energy, your emotional energy. If you have a team, it's not worth their energy. If your staff is getting beat up over a hundred bucks on the phone and they're getting argued, arguing with a client, a customer over a dumpster because they feel like they got charged a hundred dollars too much, Your employees are not going to want to deal with that on a regular basis. It's going to be hard to have good employees because you've got bad customers. So raising your prices, if nothing else, it gets rid of those horrible customers that just suck your energy and your time. If it's not valuable to them, they're not going to pay you. And you know what? That's fine. They can go work with my competitors who have rock bottom prices that are holding their trucks together with duct tape and shoestring. And that they don't, they're the ones that don't have a thriving life. And there, there, there's a place for them. They're happy to operate that way, but don't compete on price. Don't be the lowest in the market. If you're the lowest in the market, you're definitely raise your prices, just do it. And another thing it'll do, you're not gonna lose every customer, you're gonna lose the worst customers. But let's say you increase your price by 20%, let's just use that number, and you lose 20% of your customers, like 20% of your physical orders go away, you're going to make the same amount of money by doing less work because you lost work, but you replaced it with the value added. So if I want to be really extreme, let's be really extreme. Let's say I doubled my prices. Let's say I doubled my prices and I lost half of my customers because they're not going to pay that much. They're going to go to the guy down the road. Well, let's say that was the scenario. In that scenario, let's use easy numbers, I was doing half a million dollars in revenue and now I've doubled my prices. So I would be doing a million, but I lost half my customers. So I'm not doing a million revenue, I'm doing half a million, which is what I was doing before. But now I do half a million dollars for less customers, for less hauls, for less work. That means that I got my revenue, I got my costs, and I got my profit, my profit grows. My costs shrunk, my profit grew. So raising your prices, unless you're at the top of the market, And unless you're not gonna add more value, like that's the thing to do. If you're competing on price, just raise your prices. And my barometer for where I can raise my prices to is based on my level of service, what markets I'm trying to be in. If I'm established, then I go right up to what the big boys are charging. Waste management, Republic, GFL. I do call them. I say, hey, what's the biggest person in my market charging? I want to charge that because I know I can beat them on service. Every day I can beat waste management on service. And instead of competing on price, I'm actually competing on value. I'm saying, what does the biggest person, biggest company in my market charge? And I'm going to charge that number too. Not going to charge lower. I'm going to charge the same number and I'm going to beat them on service. Now, they do have a bigger infrastructure and so their brand can bring a bigger number. But if I consistently deliver faster than waste management, which I always do, I'm always faster, I'm next day. Waste management might be next week. And they're going to focus on their top customers. And so I can grab those unhappy customers that don't really care about the price. They don't care about the price. That's not their number one factor. Their number one factor is, did you get here when I needed it here? And if they're calling you for a dumpster, they already have a need. Like it already happened. So focus on other things besides price. Focus on speed, make sure that you have a low hassle for the customer. Like they call you, you answer, or you make it clear in your voicemail how you're going to serve them right away and build that trust. And then they're very happy to pay it because they don't want to make 20 calls to get ahold of someone. They're going to call and call and call until they get their problem solved. And once you built that trust that they can leave a message and you'll respond, then you're golden. That's what you really want to get to. So stop competing on price, start competing on value. Do you actually meet the customer's needs in the way they want to meet them? People don't want to call waste management and talk to somebody in India, or it's actually more likely somebody that's out of state. Like we're in North Carolina. If people called waste management, in North Carolina, they're getting someone in Virginia, at least our service area was, and that pissed them off because the person in Virginia doesn't know the name of their town. They say, hey, I need a dumpster in Corolla. They say, Corolla? Where's Corolla? No, no, it's not Corolla, it's Corolla. You can't even say my town, right? So if you can say the name of the town that the customer wants to deliver a dumpster to, that's going to go way better than if they call some no-name person out of state who doesn't even know where they are, you know? So compete on value, not on price. That is definitely the way to do it. And then once you get your price figured out and you've positioned yourself as a premium service, you might actually want to charge more than the waste management to the world. But let's start as a, like know what they charge and get to that point. How do you get to that point where you're charging as much as they are? Because if you can charge as much as them, you can give better service at a much lower cost to you. So your profit margins will be great. So figure that out. And if you're not hauling 30s, I guess that's where this comes in as well, is those companies can charge more because they're also, they have bigger dumpsters. Do you have dumpsters that are big enough? So I was just using that as an example, but yeah, price shop with them. Figure out what the big boys charge. Don't figure out the bottom charges, figure out what the top charges and figure out how can I charge that much? Next thing, improve your cashflow. Don't wait to get paid. If a service is valuable enough, people will pay right away. So we shifted from our customers paying us whenever they want, because we were desperate to make sure we had clients, to changing it where The invoice is due within 15 days and if you don't pay it, we're gonna charge your credit card automatically because we have your credit card on file. And that's if we trust you. If we don't trust you and you're a new client and you're a residential person, you don't have a business, we're just charging your card right up front. Like we're just charging you up front, which is the way, if I was gonna start all over, that's exactly what I'd do. I would say everything is up front. And if I know my average haul is, like I know my average, price of a dumpster is going to be with disposal, charge that whole thing up front. And then if it's too much, you can always refund them. It's really easy to do refunds. Now the customer has to trust you that you're going to do that and that your pricing is going to be solid, but that goes with communication. I can refund somebody way easier than I can undo the work. If I do the work, it's done. I can't go back in time and rewind it. But if you pay me too much money, I can absolutely give you a refund. But you shouldn't say it like that because then they'll be looking for a refund. But that's how I want to think is, I'm going to get my money up front because they have a problem that they want me to solve. And it's really hard for me to get paid after I've solved that problem. So get paid before the problem is solved. In the emergency services industry, we always made sure we knew how we're getting paid before we responded to an emergency. Because as soon as the emergency is over, They are onto the next thing. They might not want to pay you because they were like, oh, it wasn't that big a deal. The pain's gone. But even if they're a good person, they just have other stuff going on. It's not a priority. Like, yeah, I'll get to it. Our check's in the mail. Don't put yourself in that scenario because then your business survival depends on their discipline. Just set it up so you can't fail. Set it up so you have their credit card on file or you just get a deposit up front. And it's not a big deal. Most people will understand that. And just have that be the place to go. We have talked about doing a subscription-based pricing, but I don't really love that. What I love more is volume-based pricing. So you have different pricing or different scenarios depending on your customers. I always have three levels. I have my VIPs that I really want to take good care of, that I give them the best service in my area. And so I give them the best service, I give them the best pricing, and I let them take longer to pay because they consistently send me checks. They also have the more complicated billing. And then I have my most common section where my customers will come and go, they will churn. and I want to be competitive in the marketplace for the service I offer. And then I have my people that they hire me because they want a dumpster, but I really don't care if they work with me. Those get my really high price. I don't have time to count every nickel and dime. You're just getting the highest price that I think I should charge you. And because you're not in my industry, like you're a residential homeowner, we're just going to charge you a lot. And it's not like we're charging you like an insane amount, but it's still worth your while. We're just, we're not gonna count every little dollar. We're not gonna measure every, like we're, let me just tell you a scenario. For a dumpster rental for a homeowner, I assume you need it for a junk clean out. So we're gonna give you it for three days. And then it's whatever the highest price rental per day was, which for us, I think was 10, commonly $10 per day. Probably not a lot in your world. I've seen 50 bucks a day. And then we're not going to mess around with the disposal. We're just going to charge you a lot of disposal as part of the dumpster up front. And we're going to try to charge everything up front in the first invoice. We're not going to expect to invoice you twice. We will, but we expect to invoice you once. And we're going to get that money up front. So do all those things for that level of customer. All right, so those are the pricing and how to get paid. I think most companies don't do this right, and then they pay for it eventually in their business, or they just can't grow. Just position yourself as someone that knows what they're doing. Now, if you don't know what you're doing, you got to get better, good enough to charge these things. The next part that I'll talk about here is growing at the right pace. If you're just getting into the business and you don't have a website or a location or social media or contracts or pricing figured out, but you already have a vehicle or you've already had dumpsters, then you bought too soon. You bought too soon. You need to know how you're gonna do your operations, have a real plan that you've bounced off other people and said, this is what I'm gonna do before you spend money, like talk out what's gonna happen. You can't just say, hey, I'm going to figure it out as I go. I'm going to spend money on a truck. I'm going to spend $20,000, $30,000, $100,000 on equipment, and it'll just all line up. That is irresponsible. You're not the first one to go in this business. So rather than figure it out as you go, just talk to other people that are doing it right now. What kind of truck should you buy? That's a big deal. If I just went and bought a truck based on some advice I got, a little bit of thoughts, and I don't even have all the steps in place, then I'm screwed. Should I buy a cable truck? Do I get a hook lip truck? Do I just have trailers to begin with? Those things alone are going to have impacts for years down the road. And so slow down on buying equipment. Don't be in a rush to go into debt or to future you up for financial heartbreak by committing cash to an asset till you're ready. And you know you're ready when you've got everything lined up and you make your first sale. So It's hard to make a sale without equipment. That's true. But if you don't know how to get customers, then you are, and you're trying to figure that out after you have the equipment, that's a stressful spot to be in. I wouldn't put myself in that scenario at all. I would know how I'm going to get customers to start. And there's lots of ways to do it. We're not going to talk about that in depth here, but just know who your target customer is and how you can interact with them. For myself, I love contractors. And I figure out exactly what they're doing because I can see on my county website, the permits that they've pulled for projects they have coming up. And every project needs a dumpster. I know exactly what addresses dumpsters are gonna be at, either someone else's or mine. And I just need mine to go to some of those addresses. So I figured that ahead of time, maybe I talk to those dumpster companies and say, hey, what do you like about your dumpster company? What would you like better? They'll probably say, I always love it to be cheaper. Your customers would love for you to operate at a loss as fast as possible. So you can't expect your customer to tell you everything that you can use, but at least you can find out their problems and then you can provide them the solution with that problem. But don't just go buy an equipment. When it comes to getting more containers, whether it's trailers, dumpsters, trash cans, you definitely need to make sure your capacity is growing. So I always try to have, I'd say 80 to 90%. I want to be 80 or 90% capacity before I buy more stuff. So if I'm at 50% capacity, there's no way I'm buying new stuff. There's no way. You might have to buy a new truck because they die and you have to have backups, but I know what my expectations are. And so know how you get more customers. And when, when that capacity is expected to get filled up before you go by the trigger, pull the trigger on getting more equipment. So just don't buy too much too soon. And don't try to trip it all out and make it don't focus so much on the equipment because the equipment is what I care about as the owner operator. I want to make sure it's in good, good order, but the customer they care more about is their problem getting solved. And I want to be talking to my customer more than I want to be talking to my, my vendors that sell trucks. Of course, they want to sell you a truck. Of course, they want to sell you dumpsters and trash cans. All right, well, let's get towards the end here. We're getting into this a little bit. I love talking about pricing. I don't know why. You gotta charge the right amount here. So what's one simple thing you could do today? What's one simple thing you could do today? So your pricing should fit on one sheet. You should have a sheet that's got all your prices, whether you have zones, if you charge for delivery, disposal, extras, add-ons. protection, protecting your driveway protection. insurance, disposal, what are all your costs? What are all your prices that you charge your clients? And find out if you're making a profit, you should have an, absolutely should have a financial statement that says, this is my revenue, this is my cost, this is my profit, and you should do it at a cash basis, because that's what matters to you. There's a lot of ways to do it. I think you should know where your cash comes from, where your cash goes, and you should know that every day. I look at that every day. If you can't do it every day, at least weekly, at least weekly. And if you're not looking at every week, you're just flying blind, you're just doing it with your gut. And your gut is gonna steer you wrong because with your gut, I found this with myself, I'll think my expenses are lower than they are and that my revenue is higher than it is. And so I want reality, I wanna know the truth. And so you take your profit, figure your profit and divide it by the number of hauls you have. So let's just say you have Let's say you have 100 halls, you take your profit divided by 100, and there's your profit per hall. Are you making 20% to 30% profit on each hall? If you're not, how do you get it higher? That's a good way to say, hey, I should increase my prices. Or I should look at my costs, but let's start with increasing our prices, because that's the easiest thing to do. How can I increase my prices so that my clients are still getting the value that they need? All right? So takeaways, takeaways. Stop competing on price, focus on value. And that means, am I getting there fast enough for my client? Are they happy with my service? Because if they're happy with your service, they're going to understand you have to raise prices. That is part of the market. Just increase them by 10%. You know, inflation has been crazy the last few years. So 10% is, has just been, been to keep up with inflation. But if you haven't raised prices in the last six months, just do that. Just increase your prices. And if you don't have it broken out in a way that, that you protect yourself from getting burned on disposal or rental period, add those to your pricing structure and charge more for your rental per day. Just do that. Charge more for your rent per day and charge more for your disposal. Okay. Those are gonna be very, very important for you to be successful. Get paid upfront. When someone puts an order in, new customers, start with new customers, get a credit card and file. And if they say, why do we need a credit card and file? Say something like, this is just how we do it. We just get a credit card and file. It's very simple, and no credit card, no order. I know that's scary if you're not doing it right now, but it's very normal. I pull my credit card out every time I go shopping, don't you? Same thing when they order a dumpster from you. Just get that credit card on file. And then grow smarter. Don't just go shopping because you see something cool on an auction website, RB Auctions or something like that. Do you actually need the equipment? Or are you just making up a scenario where you can make that work in your business? Let your business tell you what it needs and then go find the equipment. Don't do the opposite. where you see something cool and you say, huh, how do I get this to work? I made that huge mistake once. I saw a compactor, a really cool looking compactor. It was on sale on this Oxford website. It looked great in the picture. And I said, oh, I bet, you know, we service compactors. Why don't I get one? And then I can lease it out. actually have my own compactor. I've worked for companies where I did that before, so I know how to do it. So I ordered it. I put a bid in and I won the bid. And it was great. It was a fantastic deal. I forget the price, but maybe it was $2,000 or something really low, $2,000 or $5,000 for a compactor that's great. They could sell for 40 grand, like brand new. So this one was used. So I figured, okay, well, That's, it probably needs a lot of work. So I have to put money into it. So we drove up to go get it. And what I didn't realize was there was this huge funnel, this huge funnel that was attached to this compactor to feed the compactor. I guess they were using it at a facility where they would take a big loader and they would load it into the funnel and that would go into the compactor and the compactor would do its job and push the material together. Well, they were attached and this thing was a monster. We actually had to regroup, we had to like leave and come back. And we brought in a torch, oxy-acetylene torch, a skid steer. We brought a dumpster truck and we brought a flatbed. And what we decided was like, this was a bust. Like the compactor was going to need a lot of work. There's no way we're going to use this funnel thing. After I ordered it, I had not figured out what customer was going to need this thing. And I talked to a lot of grocery stores and other facilities that had compactors thinking one of them would want it, but they don't care about their trash. They had already solved their problem. They're happy with their service provider. And there was no reason to switch to someone that was just trying to figure it out, who didn't even have a unit that was in place. And I called other people to talk to them about how I could get this to work. And they couldn't even articulate to me how they would fix this thing. So I hemmed and hawed and I decided, I'm just going to scrap this. this unit, like I bought it, and it was a mistake. And I went on an adventure. And it took us, it took us a whole day to cut that thing apart. We cut that thing apart. And we brought it to the scrapyard. That's what we did. We cut the funnel apart, brought to the scrapyard, we took the the the compacting part of the unit, and we took in the scrapyard, but we did keep the container We kept the actual receiving unit. We kept that and we used it for storage, which turned out to be pretty awesome. Very happy about that. It was like a storage unit. We could have just bought a storage unit, but we had a makeshift one. It was a compactor, a receiving unit from a compactor. And that was kind of cool. But we went through all this headache and I learned I shouldn't just buy stuff. That's when I stopped just buying things because they looked cool. I actually had a need first. Then I went and I bought the equipment. So don't make that mistake. I made that mistake. And I have lots of pictures. My dad and I had a great time cutting that thing apart. And I'll never forget that experience. It was pretty crazy. We actually ended up having to sleep because it was out of town. We actually just drove our trucks to a truck stop and slept there for the night. And then we took two scrap loads. So the first scrap load we did the first day and the second, we did it after we spent the night in a truck stop. So that's what I did. Don't do that. Don't buy equipment that you don't need. And did I answer the question from earlier? I was asking if you're working long hours, but not seeing the profits. So that's what we were talking about today is how do you make more money? And it's scary, but just increase your prices first, figure that out. And then you, That should directly lead to having more profits and you can use that profit to solve more problems instead of using sweat, which you should use sweat, but you can also use money to hire people, to buy the right equipment. when you need it to actually solve customer problems. All right, so if you have a question or a topic that you want covered, please send me a message. I'd love to answer that question for you. Let's talk about it. We're gonna get going here. So I will see you next time on Waste to Wealth. Remember, this is your business, your future, your wealth. I'm Michael, and I will see you in the future.

Michael McCall 

Thanks so much for tuning into this episode of Waste to Wealth. We sure do appreciate it. If you haven't done so already, make sure you connect with us on social media and subscribe to the show wherever you consume podcasts. If you feel so inclined, please leave us a review and tell a friend about the show. Until next time.