Good morning everybody; hope everybody’s doing great today. Extremely hot here in North Carolina, extremely hot! I don’t know if it’s hot where you’re listening, but days like today and like this week is shaping up, we’re looking at highs in the upper 90s in North Carolina. It makes me glad I’m not on the truck anymore. I certainly did it for a while. For those of you who are on the truck, I hope you get nice, hot, sweaty, and worn out today – because that means you are busy and making money. I am not going to tell everybody to keep cool; you need to be out there getting hot. If you’re out there on the trucks still right now, you ought to be burning your ass off because you ought to be out working and kicking ass and getting as much done as you possibly can. Try to position yourself where you no longer have to be on the truck so you can start working on your business, on getting more customers, and not having a sweat your ass off out there in the heat.
One of the things that really separates the professional Junk Removal business owner from the owner-operator – I don’t really want to call them amateur – but somebody who basically owns their job, is that the professional business owner is going to look at averages rather than just the situation job by job. Where I’m going with this is; one of the issues with being an owner-operator – so, an owner who’s on the truck – is sometimes you quote jobs a bit higher than you probably should. Sometimes, you will pass up smaller jobs that are far away because you’re looking at the cost from a job by job standpoint and not by averages. For example, sometimes we do pick-ups – Bagster pickups – for Waste Management. We do their overflow pickups, or the pickups where if the crane can’t get to it, we’ll go and remove the stuff. Our guys empty those Bagsters out by hand and load everything up. I can’t say the price – there’s an NDA on the price and we can’t talk about what Waste Management pays us. So I can’t give you the exact price. However, I can tell you that it’s not a tremendous amount and that we lose money on about 20% of the bags we do.
That’s because they might have some concrete in them, very small stuff, it’s very time consuming, could be tile, heavy stuff that raises our disposal fees up. This means that on 20% of the jobs we do for Waste Management, we lose money. But we make enough on the other 80% to be profitable. A lot of people will make the mistake – like, Waste Management is not going to allow you to charge extra for concrete. They have a limit of tonnage for that Bagster; if it doesn’t exceed that tonnage limit, you’re not going to charge them extra. So, if you are steadfast on having to make money on every single job, then you’re going to miss out on 80% of profitable work. If you lose money on 20% of the jobs, and you’re stubborn that you’re going to make money on that bag, then you’re going to miss out a lot of profitable work. You’ve got to look at it as far as averages.
On advertising, if it costs you $80, $100 – I’ve seen our cost per job be as high as about $120 or $125 before. They’re at times when our AdWords have gotten kind of more expensive, we had a lot more competition, and we weren’t doing everything exactly right. That’s when we hired somebody to come in and clean our AdWords Campaign. We’re still profitable at $120. We go into a $95 job and we’d probably lose 60 or 70 dollars but then we get a thousand, two, or three-thousand-dollar job and that would more than make up for it. It’s all about averages.
Now going back to the owner/operator being on the truck, it would be a lot harder if I was on the truck to know that I was going to some of these – let’s use Waste Management Bagsters as an example – if I was going to these Bagsters and I was losing money to work. But I’ll be honest with you, it is a lot easier when you have employees who you send there to do it. You’re not having to bust your ass, you’re staying productive, and it’s a lot easier to think about the averages when you have employees doing it rather than when you’re doing it. When you’re doing it, it is a lot harder to work for free or to go and do work and lose money. So, those of you on the truck, you have to be very disciplined and take those jobs, figure the averages, advertise, get your name out there, and get business. Before you know it, you’ll be off the truck and it’ll be a lot easier to do that advertising.
Again guys, business is about averages. You don’t look at it on a job by job basis; you need to look at a P&L statement over the course of not just 1 month or a quarter, but the entire year. Look at it as an entire year, as a quarter, then by month, and then you can break down the smaller increments but you can’t look at it job by job or day by day. There are days that we have a truck that runs that loses money. There’s a reason we’ve got 10 trucks in operation, but others who have been in business just as long that only have 1 or 2 in the same exact area. That’s one of the things we always looked at – averages. We would go and do a job and lose money just so we had that contact with that person. Just so we got a potential referral for that person. Just so we could get a review online to help us get more business. It’ll help somebody choose us and it’s a potential repeat customer later on down the line.
Look at your business in terms of averages, guys; the law of averages in business always wins. If you will no longer look at it on a job by job basis, but on an averages basis, your business is going to take off and you’ll be off the truck, and you’ll be making more money that you’ve ever made in your whole entire life.
Thanks guys, we’ll talk to everybody soon.