I Found A Business That MIGHT Never Fail

Summary

Spencer Scott, a former software worker, pivoted to the trash business, capitalizing on a community's discontent with a local service change. He leveraged social media to pre-sell services, quickly amassing $155,000 and establishing a monthly revenue stream. The narrative details his rapid business setup, equipment acquisition, and operational hurdles. Scott highlights the business's recurring revenue potential, the satisfaction of tangible service delivery, and the challenges of a physically demanding industry, offering insights into an unconventional entrepreneurial journey.

Takeaways

• 🚚 Spencer Scott transitioned from a software job to starting a trash business, capitalizing on a gap in service when a company changed its bulk pickup policy.
• 💰 He leveraged social media to gauge interest and secure pre-orders, raising $155,000 and establishing a monthly recurring revenue stream before officially starting the business.
• 📈 Scott calculated the potential of the business by estimating the number of households in his area and the service fee they were already paying, leading to a quick business plan.
• 🔧 The business was operational within 45 days from the initial idea, showcasing the efficiency of the setup process.
• 🚛 Scott purchased a used trash truck with a side loader, which allowed for faster service as it didn't require getting out of the vehicle.
• 📦 He sourced used trash bins from a third-party company, overcoming the challenge of long lead times from new bin suppliers.
• 💸 In the first year, the business aimed to make between $150,000 to $500,000 with a profit margin of around 20%, depending on scale.
• 🏦 Financing the business was done without external investment, using personal loans and pre-sales revenue.
• 🔎 The business model relies on monthly recurring revenue, similar to a software subscription, which Scott found attractive.
• 👕 The community response was positive, with customers showing appreciation and even buying themed t-shirts, highlighting the personal touch and local support for the business.

Q & A

How did Spencer Scott decide to start a trash business?

Spencer Scott decided to start a trash business after seeing complaints in a Facebook group about a company called Barnes that was sold to a company called Waste Connections. They were upset about additional charges for bulk pickup, which prompted Spencer to propose starting a trash company if he could get 200 people to commit to three months of service.

How much money did Spencer Scott raise before starting the business?

Spencer Scott raised $155,000 before starting the business by pre-selling his services to 150 people who signed up for three months of service at $33 per month.

What was the initial monthly revenue Spencer Scott generated?

The initial monthly revenue generated was $5,000, calculated from the 150 people who signed up at $33 per month.

How long did it take for Spencer Scott to start the business after receiving the funds?

It took Spencer Scott approximately 45 days to start the business after the funds hit his bank account.

What type of truck did Spencer Scott buy for his trash business?

Spencer Scott bought a used 2006 Condor with an automatic side load arm, high packer, and a CAT engine with an Allison Transmission for his trash business.

How much did Spencer Scott pay for the trash truck?

Spencer Scott paid $35,000 for the trash truck, which he financed with a personal loan at 7%.

What was the estimated revenue for the trash business in a bad year?

In a bad year, the estimated revenue for the trash business was around $150,000.

What is the potential annual revenue in a good year according to Spencer Scott?

In a good year, Spencer Scott estimated the potential annual revenue to be around $500,000.

What are the profit margins like in the trash business according to Spencer Scott?

Spencer Scott estimated the profit margins to be around 20% at scale, considering he paid cash for a lot of the initial investments.

How does Spencer Scott feel about the possibility of his kids taking over the business?

Spencer Scott does not have a specific expectation for his kids to take over the business. He encourages them to pursue their own happiness and interests, adhering to the family rule of not using the word 'can't.'

What are some of the challenges Spencer Scott faces in running a trash business?

Some challenges Spencer Scott faces include the dirty nature of the business, liability concerns with operating large trucks, hiring part-time workers due to the current size of the business, a cap on customer revenue potential, facing big competitors, and the need for significant equipment investment.