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 Hello, welcome to Waste to Wealth. I'm Mike McCall, and I'm here to talk to you about your money, your future, and waste. So last week was the Waste Expo in Las Vegas. And if you don't know, that is the Super Bowl of waste events. There's a lot of companies there. I don't even know how many attendees, but it was the largest one they've had so far. I think 13,000 attendees is what I read. I'd have to fact check that number, but there was a lot of people there and they have it pretty much every year in Vegas. They're actually going to switch to it in every other year format. And it was, there was big companies. So the day number one was the investor summit and also health waste. Day number two, three, and four were, there was was classes, there were speakers you could listen to and ask specifically about what you're concerned about, whether it's in business, landfills, transfer stations, recycling, safety. And at the same time for those three days, there's the vendor event. So there's every vendor you could ever want to serve your industry is there. A lot of software companies, a lot of equipment companies, that's the biggest thing, lots of equipment, whether it's trucks or recycling equipment, and there was a lot of little solutions that you might need to deal with. So like Rollyskate was there if you're trying not to scratch driveways. Software is there in case you're tired of billing it by the old way and tracking all your dumpsters or your containers using pen and paper or a spreadsheet. Lots of solutions there. Now there's no accountants. I didn't see any accountants there. But there was insurance, there was bankers, if you need financing for your trucks. Western was a specific one I hadn't dealt with before. Comerica is another big one. There was a lot of other ones, which you can find all on their website. If you have any needs, Waste Expo probably had your vendors there. And there is people from all over the world. I hung out with a guy from Poland, met a guy from Norway, people from Europe, people from Asia, Indians. Chinese people, there's people from all over the world because the expo is that big. So if you're not really familiar with it, I do recommend you check it out. Consider it something, consider, see if it's something you need. But it was very corporate. It was for big companies. What I experienced was that you've got the big players, the presidents of the largest companies in the world for the waste industry were speaking to investors. That was the investor summit. So we heard from GFL, Waste Management, Republic, Casella, Waste Connections, Clean Harbors was there. There's another big company that I can't remember escapes me. They're not exactly in the waste industry. They're adjacent to the waste industry. But all those companies, they were talking about where they're going and what they're investing in. And that's a big deal because it trickles down to all the rest of us. Obviously, waste management has a lot more money and resources, and they're going to deploy that in ways they think is going to make them more return on their investors' money. It's a big deal for them. So what are the big companies spending money on? Well, the first thing that they are trying to do is they are trying to get workers. It is really hard for big companies to get workers. And you have a leg up on them if you are a small company, because you don't have to get thousands of employees. You just have to get maybe 10. You got to get a handful. And CDL training was huge for them. So each of the big companies has their own training program that they put their team through. They put new hires through because they're not able to get people off the street that have the right training. So they started their own training school and they do it really cheap. One of them does, let's see, who was it? It was Casella. For $600, they can send somebody through training to get their CDL so they can drive their straight trucks. Not their class A, it's their class B. $600 is really attractive. If I was trying to get my CDL, I'd probably go work there, get my CDL, and then evaluate my options. Of course, they've got to pay competitively, and turnover is a big deal for these large companies because they spend so much time investing in them to get them to know their system so that they can actually function. That was huge for them. They talked a lot about the second big thing, which is safety. Safety should be very important for everybody, especially when you're operating equipment and you are an operator, not just a driver. Safety should be the highest concern for everybody. When you have a large fleet of vehicles like these publicly traded companies have, they've got to do things that scale really well. So they have cameras all over the vehicles, sensors in every direction, including facing the cab. And you know, and I know that drivers don't like to have themselves on camera. That's a big deal. I think that it's still important to do because you want to make sure your drivers are being safe. But if you have a small team, probably very expensive for the return on having that driver on camera, because you've got to pay for that service, and you're going to have drivers that don't want to be on camera, so you're going to push away So if you can find a way to be safe without putting a camera facing in the cab, I would recommend you figure that out. And that comes with training, having check-ins, ride-alongs, ride along with your employees. Maybe you have a no cell phone policy. You don't talk on the cell phone when you're driving or you have to have a headset. There's certainly no video. It'd just be phone calls. So that was really important with safety. And they referenced some accidents that have happened in the industry where people have died. They had a vehicle that was doing a pet trash pickup, a rear loader, and car goes zooming past it and just kills, fatally kills. the collector. He was just doing his job and someone sped around the truck, didn't look closely, and they just ran into him because you're going from the curb to the truck, back and forth, back and forth. And a lot of these people don't know that when you're driving a trash truck, you've got two steering wheels. A typical collecting truck, especially a rear loader, where you drive on the left-hand side to get to your destination, then you switch to the right-hand side so you can get in and out very quick, because you want to be on the curb side. And people don't really pay attention to a garbage truck in the same way that they pay attention to something like a school bus. And that awareness is really important. So if you have a garbage truck, get lights on there that flash so people can see you, can see your drivers, because safety is very important. You don't want anybody to die. Oh, so that was really big. They talked about that a lot. The other thing that they... One of the buzzwords I did not expect was AI. I must've heard that word a hundred times, AI. How are big companies incorporating AI into their operations? They're doing routes. They're doing smart routes where AI customizes based on the fastest way to get every driver to and from their stops and destinations. That was huge. They want to know, is there a way to automate the maintenance? They just talked about it constantly. And the numbers were staggering. Let's see if I've got them here. I think I have them. Yeah. Republic, they're spending $1 billion with a B, $1 billion on AI software, AI solutions. That's insane. I can't even think about how they're deploying that much capital. And they're not just doing it by hiring programmers. They're buying whole companies and folding them into their operations because they want to have customized software that does the best job it can do. So you don't have to spend a billion dollars to get the benefit of this. You can get these benefits by just having good software like Docket. I'm not going to mention the other ones. Docket's my favorite. So I'll just say Docket. And They also talked about having AI handle incoming phone calls or customer communication with email. They want to use AI to solve those problems of talking to customers because it's very hard for them to get so many employees. So if you figured out you're recruiting, and you don't need to use AI, then your customers are going to appreciate that, especially at this stage when it's still being tried. How many people have called a big company like Waste Management and ended up talking to someone that's out of state, doesn't even know how to say your town's name? Nobody likes that. So AI is going to be the same kind of thing. It's not going to be able to relate to a human. So your customers, they call you, you answer, or you respond to that text promptly, you're going to beat them on that. What else is going on? So we talked about safety. PFAS, P-F-A-S, P-F-A-S. That is the emerging toxin in the world. And they told me what it stands for and I wrote it down, but I didn't write it down here. But it used to be PCBs, polycarbonate, I can't remember the whole acronym, but PCBs, that's still a problem. We're still pulling those out of the ground, but now we've got PFAS. That is the current thing that is being cleaned out of the environment. The best way to think about that is your non-stick pans. Your non-stick pans, you know how they have, they spray that on? Teflon. Teflon is the perfect example. put Teflon on things so stuff doesn't stick, that poison is starting to get rained down on us. And I talked to several people at the convention about this and that it's in our system, it's in our water, it's in our soil, and it's in your body. It's in your body. So we have these poisons. and we've got to get them out. So maybe we should start using more filtered water and have our own like water softener, but to the next level to keep this from getting inside our body. So that is what they're trying to figure out. How do we clean this up and how do we prevent it from seeping out? You know, when we landfill things, there's leachate that leaks and they have to contain the leachate. Well, they have more than that. There's all kinds of toxins and PFAS is the hot buzzword at the moment. Hmm. There was a lot of networking opportunities and lessons, people everywhere to talk to. That was very fun. Got a lot of cool swag too. So koozies, cup holders, little trucks. I have them in the next room. I should have brought them over here. Let me see if I can get one real quick, actually. So you know what this is. This is a trash cart. Beautiful. Perfect for a side loader. Side loader grabs it. Side loader grabs it, flips it up. you know, empties it out. And then you got all your trash inside your truck. So this these particular ones, there was a whole table of them and no one was at the table. So I was standing there saying, Huh, well, I would like to talk to somebody and also get one of these things. It's cool to just make friends. And this big, really big fat dude, he comes He comes kind of up to the table and starts looking sideways. He looks to the right, looks to the left, and he doesn't say anything. He just goes up there, up to the table where there's no one standing, and he just grabs like six of these things in his arms and just picks them up and walks away. And I said, all right, well, I guess that's how this table is being handled. Nobody's paying attention to these things and no one wants to talk to us. So I'm just going to take one. So that's how I got this one. After that big man walked through and grabbed six, I figured I can take one, even though I'm not talking to anyone particular about their solutions. This is Cascade Cart Solutions. So if you need carts, they did a great job with their marketing. They got little cute ones here. And then we've also got some trucks. This is Basecamp. That's a software. They said that they do all kinds of things. I still recommend Docket. This is a rear loader though. You know what a rear loader is. Put the trash in the back. And then we had a front load can. These are squishy. Very cute. So I love getting toys to bring back to my kids. I didn't see any Legos at this one. I love Legos because the kids can put them together and they have a great time with that. So if you like swag, you gotta make sure you get some when you're at a convention. What people ask me about in the finance world is acquisitions. There's lots of people talking about how much is my company worth and how much can I sell it for if I decide to sell it. A company that is very valuable for selling is also a really good company to run. It's a lot more enjoyable because those two things, they might look the same, a fun company to run and a company that's very valuable. They're very systematized. So you can step away from the business and it doesn't die. It actually grows. How do you build a company that grows even if you're not pushing it forward every single day? You do that with systems, you do that with responsibilities. And that was a big part of the discussions from the seminars I went to and what people were talking about on the floor. They want to know, how do I get my company worth more? How do I put more systems in place? And then what is it worth? How much can I sell it for? And if you don't know, cashflow is very important in all businesses. And we'd like to talk about two different types of things depending on the size of a company. SDA, Seller Discretionary, I'm sorry, SDE, Seller Discretionary Earnings is one way. And the other way is EBITDA, Earnings Before Interest, Taxes, Depreciation, and Amortization. And depending on the size of your company, you'll pick one of those two things. So if you're very small, you'll use Seller Discretionary Earnings, which is how much money the owner has access to. It's a fancy word for profit. And same thing with EBITDA. That's another fancy word for profit. The nice thing about EBITDA is that it's your earnings before depreciation and interest and taxes. So interest and appreciation is going to matter more to you. Those are very, very big costs. Your interest on your debt and the depreciation of your equipment. So, in our world, equipment is very expensive. So, we have to get debt most times to buy equipment. And you get to add back that interest when you value it, which is great. So, you can borrow money, buy equipment, and then you can add back the interest. Now, the other part of that is depreciation. And you get to deduct the depreciation on your tax return. But for but for valuing your business, you get to add that back, which is really nice. So you wanna get as high EBITDA as you can. So let's say you get a business that's worth a million dollars of EBITDA, that's profit, then you take that number and you do a multiple on it. Sometimes it's gonna be a low multiple, like two, two times EBITDA. So in that case, your company, if you have a million dollars of EBITDA and you don't have a lot of recurring revenue, you can get like a two, a two times multiplier. So then your business is worth $2 million. If you have a really good multiplier, like let's say five, that's a really good multiplier. That means that you've got recurring revenue that's coming back to you. Either you have subscription-based customers or contract-based customers so that your revenue is more guaranteed. It's a lot stable over a company. And the more stable a company is, the higher multiple you get. So a five multiplier on a $1 million EBITDA, that's a $5 million valued company. You could sell that for $5 million to the right buyer. And those numbers, you're going to be talking to a larger company because they can afford to pay that. So that was a big part of the discussion. And those large companies I mentioned earlier, Waste Management, Republics, they're constantly acquiring. They have to, because it takes so long to organically grow. Smaller businesses have already grown to a size that they can capture. And they probably look more at the $5 million and higher. when they're making their acquisitions because a small acquisition takes a lot of effort for what it's worth. They'd rather do a big acquisition instead of a small acquisition because they take a lot of the same amount of energy. They're going to do due diligence. They're going to do quality of earnings. So why don't they put that into something that's going to give them a bigger deploying of capital? Yeah, and the numbers they talked about were huge. A hundred million dollars was not a big deal of them. They're talking about billions of dollars. 500 million, a billion, they're throwing around numbers like that. And so they're acquiring constantly. And if you build a company that is acquirable, can be sold, you're also gonna love that company because it's very systematized. You know, these large companies are system-based. They're not individual-based because individuals, a lot of risk there. Like an individual that is the heart of a company, Yes, it can have a great culture. Yes, it can be a wonderful company to be part of. But if the leader gets sick, leader decides they don't want to do this anymore. They have some kind of personal problem that comes up. Maybe they have a family member they have to take care of. Maybe they got to move to another location. Well, that company is going to decline very quickly. So build your company in a way that's systematized and it'll be worth more and you can always exit if you need to, or you will enjoy running it and be less stressed about it. Don't build a company that you grow to hate. Why would you do that? Build a company you're going to grow to love. That was a big part of the discussion there. And so next year, they're not going to have the Waste Expo. They're going to have the Waste Summit, which is going to be a smaller event. It's not going to be four days long like this one was. And it's going to be in DC. They're still going to have, they're definitely going to have the Investor Summit. I'm not sure how many days they'll have the rest of the event, but it's going to be the Waste Summit. It's going to be in Washington, D.C. So if you have a chance to go to that, I recommend it. I'll probably be going there. It's actually a lot closer. I can drive there instead of having to fly because I'm in North Carolina. Flying takes a lot of energy. especially when you fly across the country. Lots of energy. And Vegas is not really my city. I went around and I hung out with people in the city, but I did not spend any time in the nightlife because I'm not the Vegas kind of nightlife person. I like my sleep and I like to get up early. I did find a workout group. So I'm part of a workout group that is, it's called F3 Fitness Fellowship and Faith. And we, we have exercise groups across the country. It's a men's workout group for the invigoration of male community leadership. And I actually found a group in Vegas and I'm going to Nashville for the, for the docket, docket convention. And there's going to be an F3 group there. So if you're not part of, if you're looking for something like a group to hang out with, a support, a male support group where we actually get to do manly things like exercise and grunt and yell, then I recommend you check out F3. Go to F3 Nation to find a workout group near you. But I hung out with James. He was the guy I worked out with. And actually, we ran into a few cool guys after we finished up on Friday. We were just talking in the parking lot and three guys ran by and shout out to them in case they ever hear this. So thank you guys for inviting us to go for a little run and enjoy some coffee and talking about faith. They do a Bible study every Friday morning, which is awesome. I think everyone should have a Bible study they do every week with their peers because it's just a great way to share what you're going through and get sharper and get some wisdom. So this has been Michael with Waste to Wealth. I hope you're having a great day. If you've ever considered the Waste Expo and you were thinking about doing it, you know, hit me up with questions. I'd be happy to answer whether it's a good move or not for you. I will, I guess I will also say this. It was very corporate. Most of the people I met were not business owners. There were business owners there, but there was a lot of employees that did not know how to run a business. So you wanna network properly to find the people that you will drive with. But there's also a lot of vendors that can solve some of your problems you're dealing with. Like if you're looking for the latest and greatest truck. Oh, and I have tons of pictures. I definitely got to show more pictures of what we did, what I looked at. For example, the pickup truck that has a six yard, waste bin in it, where you can actually put the trash cart into the six yard container. That was pretty cool. I was very impressed by that. I hadn't seen one at that caliber before. The one that I was very interested in, there was a few of them. And then there was also a Smash My Trash, there was a Smash My Trash machine. So it's a big truck and it's got the hammer, looks like a hammer. but the cylinder and it spins and it crushes the waste in your dumpster, I don't like those because I don't want them damaging my equipment. But these guys assured me, they said, hey, the way this unit works, and it's not Smash My Trash, they didn't like that I said that name, it was a different company. The way this one works, it's gentle on the dumpster. It doesn't destroy the dumpster according to them. So I'm really curious if anyone has any feedback about that. And you think the unit was like $125,000 to get that unit, which is not crazy, especially if you're using that to do a whole business, but it might be a good add-on to a dumpster rental business. as long as it doesn't damage the dumpsters, which is what my concern with that smashing my trash is, is that I don't want it to damage equipment. I know it's getting more popular, so it's something that you can't ignore. You can't just put your head in the sand and ignore that. All right, you have a great day. 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.