Acquisitions Anonymous - #1 for business buying, selling and operating - Dumpster Roll-off Business in SE USA - Acquisitions Anonymous e13

Episode Date: December 29, 2020

Two special guests this week:Mikel Berger and Daryl Starr of LEV Capital join us to nerd out about a dumpster business for sale in the SE USA!Great episode. Enjoy!-----* Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel.* Do you enjoy our content? Rate our show!* Follow us on twitter @acquanon Learnings about small business acquisitions and operations.-----Past guests on Acquanon include Nick Huber, Brent Beshore, Aaron Rubin, Mike Botkin, Ari Ozick, Mitchell Baldridge, Xavier Helgelsen, Mike Loftus, Steve Divitkos, Dzmitry Miranovich, Morgan Tate and more.-----Additional episodes you might enjoy:#62 Two Landscaping Businesses for Sale - Mike Loftus CEO of Connor's Landscaping#66 Analyzing Software Businesses for Sale with Steve Divitkos, experienced industry CEO#42 $900k Moving and Storage Company / $500k Rural Mini-Storage#61 Two Manufacturing Businesses for Sale - Brent Beshore - Founder and CEO at Permanent Equity#24 $5mm pool services and lifeguard staffing co / $2mm septic services business -  featuring baller @WilsonCompanies as a special guest!#45 $800k/yr cleaning business in Midland, TX / a $565k/yr window cleaning business in San Antonio, TX #48 Two Landscaping Businesses for Sale - Mike Botkin of Benchmark Group--- Support this podcast: https://anchor.fm/dealtalk/supportSubscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

All right, everybody. Welcome to Acquisitions and Notas. We have a very special episode today. Besides my usual co-host, I'm Michael Grayley, besides my usual co-hosts with Mills and Bill, we have two special guests from the thriving Midwestern United States, Daryl and Michael Berger. So I love for you guys to introduce yourself a little bit. Not only have you come with your expertise today, but you've also brought some deals. So we're excited to talk with you guys on this podcast that is about small business, M&A, where we talk on deals and like a few of them and mostly poop on the rest of them. So guys love to hear a minute from each of you about your background and interest and that sort of thing. Hi, thanks for having us. This is Daryl Starr.

And glad to join one of these with Michael. We normally don't do these together. So it's a lot of fun to chat with some other business buyers out there and shake the trees on some ideas. So my background, I've been an entrepreneur since I was a teenager, starting businesses, started buying businesses in my 20s. have sold some successfully and some unsuccessfully in about 34 years of age and kind of my biggest exit and was retired thinking, oh, what am I going to do? I wound up starting a fund after a year and a half to go buy other businesses together with some partners.

So there's a group of 37 of us that have capital in Little Engine Ventures and the Evergreen Structure, which is really unique in the space, but it allows us to show up with the deal with cash and not have to go get the capital to go close deals. So we've done 12 deals since we started in 2016. So we're serious about it. And some of them have gone well and some of them have not. So I can share all those stories too. That's great. Michael. Yeah. Michael, Midwestern Farm Boy, went to Purdue University, studied software development and I've just been trying to not have a real job since I graduated. So started a software company named Delmar, which I think we'll talk about at some point a little bit there and failed software startup and decent software

contracting firm and then got to help Darrell along his journey. That's where we got to know each other. And after he sold and sold his boat, and was like, okay, buddy, let's get the band back together. That was a lot of fun. Let's do it again. And he invited me into joining Little Engine and so, yeah, so been buying businesses and stuff like that. But don't even really still consider myself an entrepreneur, just trying to build cool stuff and small, medium-sized businesses are the best way to do that. Yeah, that's awesome. Well, cool. Well, I know Mills, you have our first deal for today. I did want to give an update on the deal that we talked about last week. It was a listener-supported deal that was a small, well, I guess a small kind of flyer-based publication

that was out with realtors and real estate listings in a vacation town, which we still don't know which one it is because it was totally anonymized for us. But the seller had been asking $1.5 million for the business, which was pretty aggressive. And the person that submitted it to us told us that they negotiated it down to a million dollars in enterprise value EV for it, of which $400K is seller note. So basically it looks like he's buying it. They're moving forward. Yeah.

Yeah, he's buying it for about two times EBITDA up front. And then he says also the 400K seller note can decrease if revenue decrease. if goals aren't hit. So it went from a deal that I think we hated just because of price to one that the price got fixed in the past week. So kudos to you, anonymous listener-submitter. But I just think it goes to show that, you know, the prices on these can swing pretty far when you start to try to actually make a deal.

So very cool. Yeah, I like that. I like that episode. That was great. Solid stuff. Well, you know, we were on it. So it turned out just as you would expect. You know, that's what we do.

That's good. On Twitter people are like, you're so good on that, Gurdley. Like, thanks for putting those out. I was like, you know, 90% of the smarts is coming from the two other guys. So like, it's all, it is what it is. So cool. On that note, let's hear from Mills, what you got today. I heard it's a real dumpster fire.

Yeah, yeah. It's actually, it was good timing because we got, I got a teaser on a business here the southeast that's a roll-off container, I think kind of construction dumpster business. And then somebody on Twitter had suggested that we link up with Michael and with Daryl. And when I was looking at Little Engine Ventures, it turns out that these guys own container businesses. And I thought this is perfect time. It happened in the same week.

So we thought we could get the real experts in to beat this one up and give us their input. So the business is here in the southeast. We're kind of in my neck of the woods. It's one owner. He started it in 2014. They're asking seven to eight times EBITDA kind of right out of the gate. They make that very clear. And a little bit of kind of an EBITA adjustment to account for hire.

I love how that was the very first sentence in the teaser. It's like, if you're not willing to pay up, don't keep reading. Keep walking. Yeah. You go on. Sorry. I mean, you guys are just done me then this one now. Yeah, yeah, exactly.

But hang on. Revenue is pretty steady at about a million and a half. So top line. And then adjusted EBITDA, which I don't have all the detail on the adjustments, but they are at least adding back about $75,000 to hire a general manager. But adjusted EBITDA of around 650,000. And it fluctuates with a pretty high correlation to revenue, but revenue has been overall pretty steady.

The SDE, when you account. for the owner's salary is in 2020 it was 733,000 on 1.56 in revenue so incredibly high margins but that doesn't take into account any CAPEX both on the truck or the container side. We don't have any detail on that. They do have some customer concentration 25% with their top customer. It's mostly residential construction, you know, home builders here, here, in the area. Customer number two is 8%. So it trails off pretty quickly from there, but at least their first customer is about a fourth of their revenue. The site that they're on is about two and a half acres. They're willing to sell it for an additional $450,000 a year, or they'll do a

$36,000 a year triple net lease. In terms of the employees, there's the one owner, two office staff, and four drivers with CDLs. All the drivers are making between $32,000 and $40,000 a year. In terms of their equipment, they've got 350, 16-yard dumpsters, and about 60-30-yard dumpsters, seven large transport trucks and one dump truck. One thing that I don't know if it was in the teaser, it was in the little bit more detail that I got from the broker,

but they are very strongly positioning it, to sell with no working capital. So no cash, no receivables, no payables. And they're saying we could account for some working capital, but the price will change. So they're already at seven to eight times and no working capital. So I may be able to answer some questions. I don't have a ton more information, but yeah, we'd love to hear everybody's input. So I'm really excited about this deal. And I'm really excited to hear from the little Andrew Ventures guys about this, because I have had an obsession with dumpster businesses for probably nearly 10 years now. Nearly bought one in a different life, I'm a dumpster magnet rather than an e-commerce roll-up magnet.

Instead of, I never buying the econ business instead, but looked really hard at a container business here in North Carolina way back when. Love the economics of it. I've been looking at dumpster businesses kind of longingly for years, and it's just not something. It's in my current wheelhouse, but I love to own one one day. So I love this deal. I love to hear from the Little Adventure guys a little bit just to start about this industry. You know, what makes these businesses good businesses or bad businesses? And this is the great thing about having guests on the podcast.

Like you guys have deep expertise about this industry. Can you just tell folks a little bit about the dumpster industry? Yeah, danger on the deep expertise thing. I think we're like, we got confident enough to move on the deal. But we're accumulating expertise as we go. So, yeah, I mean, the economics of this. So, like, Michael and I both own service businesses, so, like, really light, tangible asset kind of stuff. And then, like, jobs per day is a huge thing on this.

So you've got to have systems and discipline to really turn the containers because it's all about, and most of these, and this looks like a roll-off would be my guess. But it might be a mixture or two if they've got, sounded like it was mostly just roll-off on residential construction. Cool. Yeah, yeah. Yeah, it's all roll-off. So no like commercial waste or, you know, just regular trash. Yeah, yeah. So that's, we have roll-offs only right now too.

And yeah, I think density is the big thing because if you have geographic density, then you can get the turns per day. If you can get the turns per day, you're really arbitraging the rental of like a 10-day rental that you actually turn in five days. So when you start building out that model, it's all about how many loads per day. And what we've found in our business in COVID and construction and the geographic density. So we have two yards. One of them is very rural, tipped in Indiana, which is population 4,000 people. The other ones in Indianapolis, which is

population roughly a million. And the turns per day in the Indian market can be a lot greater. There's obviously price pressure on that. If you go rural, then you have less competition, better pricing and so forth. But lots of things kind of factor into load balancing that. But the difference in profitability comes to that because if you hit, kind of a fewer turns per day, your profitability can go to flatline. And if you hit more, you know, you're really in the money on that loads per day sort of thing. So some things to watch out for. I mean, you can obviously, a lot of management involved in that. Daryl, how does pricing work? So when I texted Bill this, he said, when I texted Bill and Michael, Bill said,

this is my white whale. So he wasn't exaggerating. He's been looking for it. How do I slate this? When we went back and forth about it, we were saying, hey, look, you know, you buy a container, and you guys know this more than we do, but you buy a container for $3,000, $5,000, and you rent it for maybe $100 a week, and you have a big expensive piece of equipment that moves it around. So tell us how pricing works. Yeah, so it's, I like to think of it and talk about it, like we're renting a landfill that moves around.

And if you think about it like that, it really drives all the way down to, your tonnage and how much, you know, weight you're putting into that dumpster. And in the most ideal, you want the biggest that you can. So you're looking at a 30-yard or 40-yarder. And you're charging $300, probably $400 for a 10-day rental. And then there's overage if you go overweight. So you want somebody that's going to put, you know, kind of a little in it and then turn it really fast so that you can pick up, you know, a bunch of insulation would be ideal

on the construction side. If you get insulation that's filled in a day, they go away, you pick it up, it's really lightweight, because you're not a trucking company, you're actually renting the dumpster itself. So that $300 or $400,000, there's probably 20, 25% of that revenue that goes to the landfill and dump fees. So, I mean, waste management, Republic are the behemous in this industry. And a landfill is, you know, like lots of upfront pain and then just crazy cash flow after that. So these businesses, if you get good density, you wind up one. money in a landfill because then you've got like the full stack of your pricing power.

So something to bear in mind that the turns on the truck is really what it comes down to. The trucks themselves can range from 50 grand to $500,000 on the trucks. So there's a huge like swing in the market in terms of what you can pick up and move and how fast. So if you spend three grand on a dumpster, you're clearing 200 bucks probably or more on the rental, which means you rent it 10 to 15 times and it's paid for it. And that's the core economics that really attracted me to this. Yeah.

Yeah. Minus your fuel, minus your driver. Yeah. I mean, there's lots of other minuses coming off of that. The trucks are the dumpsters are fine. They're going to last a really long time and you're going to get a lot of use out of them and stuff. But for us, it's been the trucks.

We probably overvalued the trucks when we bought it. And, you know, you have issues. Because then you have downtime. And then your drivers, you know, aren't getting out. You got to reshuffle jobs. And so you've got more overhead staff. I mean, that's what, two office staff plus an owner for four drivers, that seems, that seems kind of heavy, like things that kind of stand out, kind of weird.

They're mostly residential construction. I'm actually surprised that they have so many 16-yarders and how few 30-yarders, because at least around here, the construction guys want 30 or 40-yarders. They want the bigger stuff, which takes a bigger truck, but because they don't want it moving that much and they're going to, they're going to fill it up. So maybe they have more residential than realize or maybe just, I don't know, maybe something different about their market, what people want. But those things stood out to me is a little bit unusual.

Yeah. They might handle roofing and concrete too. So like really heavy stuff where you have a small one. We definitely have a niche and some of the concrete. Yeah. You can't move it. So it gets too heavy. So that could be a good angle for them too because roof,

following around a roofing contract, you're going to wind up, you know, turning dumpsters fast, which is good. So maybe a novice question for me that these are really high margins. So when I see really high margins like that, I'm like, okay, what are the barriers to entry for some Joe and his truck to show up with four or five hauloffs and come in and undercut me by 30% on everything? So what is going to protect this, you know, high profit margin for this roll off company or any other one? And I think the data point I have is I, you know, in my town in San Antonio, like I'm right near the office of what was a startup, a roll-off company.

Like they were two dudes in a truck. And they set up right down the street from waste management and the other one and undercut them by 30 percent. And like now they have 800 trucks. So like what is what are the barriers entries for a little guy like this if I'm going to be, you know, having to underwrite it pretty tight to make eight times EBITA underwrite, you know? Totally. Totally. I think different than an HVAC business, there is capital. Like you've got to go, you know, you can't hardly start this thing for less than 250 to 300,000 in capital outlay. So that's not a lot, but you do, it will require that. So you got to have somebody, a truck driver, basically,

that's able to go get that loan and go after it and run on thin margins and run it himself. And questions I would ask this seller would be like, how much time does he spend in the truck? Did he start in the truck? Is he a driver, which he probably is? And he's that guy that hustles. and got it to a place where then he starts going up with his prices and he's got fat margins now. So that's good for him. So I think the barriers to entry are really that and just the work ethic of going out there. If they go at price first rather than, you know, advertising or whatever, they're going to get the business because the customer's like, I don't care. It's a dumpster.

Like, give me a good price. It's trash. Quality is, yeah, quality and timing. And there's nothing better than having a dude that owns the business driving the truck. like he's going to slay, slay in the market. So it's definitely a threat for sure. How does this work with kind of major national players? Like this guy, you know, this business seems to own whenever city they're in the southeast, they do 1.5 million in sales. Has somebody rolled these up? I mean, I know there's these big kind of Republic and everybody.

Do they come into markets and just eat you? Does that happen? Or do they acquire markets? Or are they happy where they are? Yeah. No, I mean, Waste Management and Republic definitely buy these kinds of businesses, you know, at that, that size and bigger. I mean, they'd prefer the bigger, the bigger ones. Like a, in our area, there's a raised trash management, which has got roll-offs and front loader, you know, recurring stuff and residential. I mean, they own landfills and those kinds of deals would be a lot more attractive to the big, big guys. But a business like this could be attractive to a regional player that's got hundreds of trucks or whatever instead of, you know, a handful. But they also are super patient because they kind of, you know, can wait on

it and they know that that market isn't as good as the market that they're in. So, you know, like us, I mean, we kind of live in the fringe around the big boy. So we make margin, but we don't get real big sort of problem. My question when we were emailing about this before is almost the idea of what, you know, why would somebody pay, you know, seven times EBITDA? They're kind of saying, hey, the book value of our assets is around 1.7 million. But they're asking, you know, at least 4.2 million. And given that there's no, you know, there's no long-term contracts, if these guys, you know, we're slow to pick up dumpsters and the GCs saying, hey, look, we can't do our work because you guys aren't hauling these things.

It seems like your moat to go pretty quickly. So I'm just, I'm just wrestling with, you know, nestification on the seller and brokers part for 4.2. How does that square with what you guys see, you know, I'll just say, in your corner of the market. Yeah, I mean, it's aggressive for sure. I mean, compared to alternatives, it's definitely aggressive. I think we paid an aggressive price for the stuff that we bought to.

I mean, I love bragging about our pricing discipline. And these two businesses are two that I just, you know, screwed up because I fell in love with the idea of it long term. And I think the reason why this price starts to maybe get justified is because of those adjacent buyers. because if you have a customer support rep already like we do and you don't need another owner or whatever with the tails of the guys or whatever,

then those two CSRs might become one CSR in the FTE side and it's a geographic expansion kind of play where you're like, I could put these things together and use my system to go after it. And what winds up happening in that scenario is most of the regional players that we run into they play a very patient game and they just let these businesses kind of die and then they pick up their customers. If they want and they're like ticked for whatever reason, they've got the cash to just do it

and they'll just go and say, well, screw you, I'm taking your customers and all your dumpsters and nobody's going to get this thing from me because it's really they're mad about the other guy that could buy the business if it goes out or scrap over it. So it does become a competitive process at times because of that. And this business is pretty well run. I'd be looking at, you know, what's the longevity of the current owner. And if he's got a long time ahead of them, then he'll just sit on this thing for sale until somebody gets mad and buys it. How much has software and kind of modern buying styles penetrated this far down into this market?

Right. Like, I got my windshield replaced the other day. And like, I didn't even talk to a person. Like I just went on the website, press the button. And they're like, we'll be there and, you know, tomorrow at four. It's like, okay, well, come on out. And I gave a credit card and he gave me to a windshield. Like, is this still, are most of these little businesses like this still very old school?

Like you're calling up and Pearl is answering the phone and Jimmy's doing the dispatching. Yep, yep, absolutely. That's how it works. And, you know, we got into this step. Michael also obviously got a computer science background. And, you know, I was the guy financing the software in a very kind of traditional blue-collar service business to, you know, expand it nationwide or whatever. And I think that we got into a lot of these thinking, man, there's a sweet spot in here.

we go develop the software to scale this thing, customer experience improves, you roll that software thing, kind of homegrown, spin-out sort of concept of the business is something that I think we still get interested in. I think the issue that we find is a lot of these businesses they live on this local reputation and local service. And the software, while it's super cheap and convenient for guys like you, the home constructor construction, outfit that's like, I got four of your dumpsters here, get them out of here. I'm moving on to my jobs. Like, I'm pissed. I want to yell at somebody. You be the whipping boy. Like, they pay a margin for that. So you got to put yourself in that position to kind of handle that

and help them through it. So I think there's a, it's almost like the stuff that we've done has automated a lot of the paper processes and digitized some things in the back end, but kept the customer experience really personable, but there's like tracking and handoff sort of stuff that we can do with the reps that, you know, the founder of the business did themselves. So that helps. Yeah. At this price, would you do this deal or even, would you read past sentence number two? No, no, no. No, I wouldn't. So this is basically the Zillow of Make Me Move. That's basically what we've determined this price is. Okay. Yeah, it is. And it's not a bad move on the seller's part. I think you can, these businesses can, you drop that job per day, you drop the manager.

If he's the guy that jumps in the truck or goes out and, you know, yells at the drivers every day and, you know, drinks beer with him on the weekend and like this really inspires him to crank, there's no moat in it. If he, if he's got systems and there are businesses like this that do have systems and you'd have to dig deeper. But if he's got systems where you can turn the jobs and incentive programs for the drivers and different things, like, it might be a decent business, but not at that price, though. I would never pay that price. Yeah. And this dude is probably a hustler, right? Like, he didn't get here without being a hustler.

And if he's not legitimately done, like, he will compete with you. It doesn't matter what a non-compete or whatever. Like, from experience, he will compete with you. They had it here that the non-compete, they're very specific, three years and 50 miles. Like, I guarantee what's happening. Oh, he'll be 51 miles away then, yeah. 51 miles. He's like, he's joking about that.

He's like, come get, take it from. me you punk yeah yeah he might yeah that's true he might do 49 miles just to you know upset you yeah do you guys think he's trying to price it i mean obviously you know it's the make me move price is he trying to get to there's an asset base here it's going to last forever it's a little bit more of just an annuity so he's trying to price it up price it up like that you know if it's a passive ownership i mean i see businesses like this they're like it's so passive like it's you know price it more like a financial investment than a real business you know 10 dumps businesses be that way, where it's just yield on the containers, or is it always going to be pretty

active? I think it can, actually. I mean, I've looked at some that are almost the exact same profile. That's 1.5 in revenue, 500 of cash. The guy's taken out. He lives in Florida, and it's up in Indiana, and he's just killing it, slaying it all the time. And he's like, I don't go into that particular market. I don't go into that market. I might add something here, but, you know, and there are definitely businesses like that in this space that just live forever and just eat. eat every year. So it's why I'm sucked into it, right? Because they do exist. I don't think we own that one yet. This one might be that. I think if I had to theorize, I would look for something that's got a more rounded offering, like the ones that I know of that are really solid are they've got

roll loss, but they've also got front loaders and they've got residential. And they're just in some rural market that's not in the city or some small town or whatever. There's a place in Lafayette I love this business and the guy's not going to sell it to me. But he's got a rounded suite and it's a good thing. He's probably cranking $6 million or so now. And it's like, come on, dude, you know, when are we going to talk? But he thinks I'm a punk kid. So it's not going to happen.

One thing, just really quick before we wrap up, it's interesting that you say, you know, for you as the service provider, the weight of what you're moving and specifically what you're moving matters so much. I was visiting a roofing contractor in Florida over the past few months, and they ended up bringing all of their own containers in house. Maybe wait was a big factor of that, but the other thing for them was logistics that they don't want their crews standing around doing a tear off, and the dumpster got full, and they're like, we're all standing around waiting because we don't have anywhere to put

this stuff. But they had like 30 or 40 of their own, you know, I don't even know what size they were, but they decided to take it in-house. So it's interesting to me to think about where, you know, that whole your margin is my opportunity and bringing it in versus, you know, versus using a third party. But I didn't think about the weight being such a critical factor. Yeah, it's one of them that we bought, it was started by a guy that runs a concrete company. And he's like, this thing started started. It just took off. He ran his pricing really low. So it wound up just kind of accumulating customers. And he's like, I don't really like it. So I just started going up the prices. And then pretty

soon it's a decent little segment of his business. And it's like, dang, you know, I'll take care of that. He had a stroke, so he was ready to move it, you know. And, but it is definitely, we've, we've, we've had competitors with that business specifically that have gone and bought trucks from the seller, you know, after we bought the business, there was, he kept a truck and then he bought that guy's truck. And now we have a competitor that kind of daisy chain from that. And it's like, you know, there's weeds popping up all over in the market, you know. You just got to go out there and hustle and crank. One other thing that I noticed guys that seemed a little bit weird to me is this business has 400

dumpsters and about $1.5 million of revenue, which means it's about $3,700 a revenue per year per dumpster. If they rent for $300 a week, that's like 10 to 12 weeks and the rest of the time it's idle. Does that seem like a terrible asset utilization rate to you? Or no. Is that pretty good? Yeah. it seems like a lot to me just on the on the surface and and seven seven trucks so they probably

have too much again uh not just in dumpsters but any of these kind of businesses you get the the kind of you know industry technical founder like they just they they like buying dumpsters they like buying trucks like swapping out trucks you know it's the same it's the same thing in a lot of businesses our tool and dye shop and so like that like they just they like their tools so if i'm mills and i see a p and l like this and mills i'm just pick it on you because you happen to live near this guy. But if I'm Mills and I see this, why don't I just go find, raise a half million bucks, scrape it together, and just go drive around and call all this guy's customers and start from scratch. Like, that seems like a great way

to compete with this because you're going to have to hustle if you buy this thing. If you're going to hustle, if you start from scratch, like, what do I need this guy for if he's crazy? Or is that just the entrepreneur and me talking? So I'm sorry. I'll go back to allocator mode, guy, sorry, alligator mode. Even just anecdotally, I mean, I know of three or four folks in this space here locally, and I have never heard of this guy. I've never seen any of their trucks, any of their containers, which I don't know if I thought, okay, that's a really good thing or that's a terrible thing about this business. But I do know several other folks who were doing it, but, but I agree. I thought the same thing. Why not just compete, right? You could, you could spend less than, you know,

the book value of the assets and definitely less than the purchase price and you could probably grow into the market share if this is what you wanted to do, right? For sure. Yeah, it's, that's totally true. The not noticing it is also one of those things like, I don't know, now I noticed dumpsters like like a year, six months after we bought the business. We had this Disney cruise plan and I'm like taking pictures of the rolloffs that are outside the cruise ship. That's a good contract. We could get this one, you know. But you start, so you're, you're going to. So, you're You start seeing, like, this kind of stuff is everywhere.

So I think in a way, it's a good thing. But there are. There are a ton of competitors and there's not a lot of differentiation. But I think it's back to there's a lot of the guys that would hustle at this. You know, the numbers you said, like, for you guys, for us, we're like, that's not a big deal. I'd take that amount of risk. But the mentality of a lot of those kind of folks aren't.

And so there is value in, you know, in what they've created because, like, you know, you just get that email every day from the builder with like, here's where I need, you know, a dozen dumpsters. Like, and it takes a while to get to that point. Like, you'll pick up the one off. She'll pick up cleaning out grandma's house kind of a thing. And, you know, residential and some of that stuff is good. But to have the base where you know you can, you know, make your loan payment and feed your,

if you're trying to feed your kids. So that keeps a lot of those guys away. Or they, the ones that get into it, they're where they don't last. And most of them probably give up just before they get that point, that inflection point of being able to really sustain. Yeah. Well, and then probably a lot of these guys, if you've grown up in a truck, like the prospect of sitting in front of a desk, maybe sounds terrible to you. Yeah, exactly. They want to be out. No, no, that's how you, that's how you send your kids to a really nice college. Like, that's the

what you want to do. And yeah, I totally, I totally take it. But, you know, the thing I love about this space is it's one of the few ones where operational excellence can be your strategic advantage and your way to compete. For sure. That's turns per day. Yeah, that's, they're all saying turns per day. That's so rare, right? Like, I think of the business. as we've looked at so far, how many of them are just like, the way to win here is to execute better than the other guy? Like super cool. Every time the dumpster's on our lot, we're not making money. So whether it's on the road or like, why is this on the lot? It should never, we would have the perfect dumps at roll-off business if we didn't own a lot. Like, it just goes from a customer

site to the dump, to a different customer site and just keeps moving. We just move dumpsters around. But so we had failure because we have a lot. We had two. Dream in reality. I think one thing that also, something we've talked a lot about in the dumpster business here, but as something I think might be worth discussing also is the deal structure that you might be able to pursue on something like this. As an e-commerce guy, debt can be hard to come by because there are all these asset light, cash flowing businesses. This, I look at this and go, oh, man, like this is what my bankers want.

It's asset heavy, right? Like, it seems to me that you could come in and lever this up because you've got hard assets, in theory, with some resale value, with long. long lives, and it seems like you would have way more chance to get some leverage on this. I mean, and you'll also buy new dumpsters. I wonder if you could probably put 20% down and get an asset-backed finance guy in to lever up your new dumpsters if you were going to grow. So I wonder about that aspect of this. You know, you might be able to make your juicy returns by using a significant amount of leverage here. Yeah. And if you paired this, I mean,

this was also one of my crazy things was if you pair a business like this with some really strong cash flowing businesses. The tax scenario starts to play out really favorably because you're like, let's go buy some more dumpsters and go kill our competitors with this or trucks or whatever. You can accelerate your depreciation on that stuff. And the dumpsters last way longer than your depreciation schedule. So there's definitely benefit in that. But when the trucks are depreciable too. Oh, yeah. Maybe that's maybe I've just stated the obvious, but it's like, oh my God, like you're depreciating all of your capital. And it's not like 30 year depreciation schedule. This is like, instant bonus stuff in some of these cases.

Absolutely. The problem with the trucks is they do wear out a lot faster. So, I mean, you've got a brace for the truck replacement in your cash flow. So that will definitely eat your lunch. But those are financeable too, right? I mean, you can get a truck loan. Easy. Oh, yeah. Yeah, yeah. Yeah, but you make payments on a truck, just like making payments on a car. When the truck's worn out and the car's worn out and you're like,

my loan's paid off and what do I got? I got a shitty truck. Yeah, yeah. But in growth mode, though, I imagine you could engineer the cash flows pretty well as stretch them out. So if you wanted to buy this and grow, now it probably crowded industry with Republic and everybody else. But with the tax advantages, the financeable assets, like it seems like you could structure this in a way where your monthly nut was pretty low if you wanted to have free cash flow. Yeah, it does seem that way with the emphasis on seeing. Well, that's interesting.

Yeah, I think the growth, I mean, I bought these, like, here's a little starter business, you know, and let's put a sales guy in here and just go out here and crush it, you know, and it's like, people don't care about the freaking sales guy. I just want a cheap dumpster. Like, you just cut your prices and you, you know, get on the lot or whatever. And then no loyalty. I mean, it's a dumpster, you know. So I think you've got to balance that and it comes back to that jobs per day at the end of it. like if you can crank two more jobs than that, that geography on that truck, like that's a better deal for you than the other guy.

And he won't compete at that deal because he's too far away to get that. He'll only get one load and you'll get two loads sort of thing. So that market share is real geographically bounded. This has been really, really good. I think we've ran long on this, but hopefully you guys can come back in the future. And we can talk about some of the other deals that we had. But the combination of your expertise in this space,

our curiosity and Bill's kind of love for this, like a Taylor Swift fan girl kind of love for the dumpster roll-off space has made this magical. So I'm so excited. Bill hasn't made us an offer for ours yet, though. That's what I was doing. Well, you just told me, you know, it's an okay business, right? We've got to get the utilization up, and then call me. Okay. It's harder. It's harder than it looks. Yeah. Me and Mills are having a call later. We're going to, we're going to scrape together, pull some coins out of the, out of the couch and buy us a truck and go from there. You come, come take my market. I just need you to move to Texas for that. I don't know interested in South Carolina.

I heard it's nice, though. I put Toro coffee ads on the site of dumpsters. That's what I want to see cross promotion. Now you're talking synergy. Synergy. It's all about the synergy. With Tipton, Indiana, people driving down to get coffee in San Antonio. Oh, man. Yeah, I'm addicted. That's just the side hustle, but I'm so addicted to talking about it now. It's fun. It's like a hobby. So I'm really loving it. Thanks, guys. Great. Well, you guys killed this day. Hopefully we can get you to come back soon. And we can do this again because this was amazing. So thank you a ton.