One Dream Business I Would Love to Own

I'm constantly on the lookout for promising ventures, and recently came across a business model that caught my eye: a waste hauling business.

I've always loved waste hauling business. I think John would actually agree with me on this one because it is a heavy asset business, much like septic with a subscription model, and extremely low churn.

Let me share why this business model is great and something I would love to own.

Why To Buy a Waste Hauling Business

Waste hauling business generates almost $6 million in gross revenue with about $1.2 million in EBITDA. That’s a profit margin of 20-30%, which is crazy good. A business that can maintain such healthy margins is always attractive, no matter your location.

The profitability shows a operation with solid cash flow, making it a stable investment.

Significant Assets

The business boasts $2.5 million in fixtures, furniture, and equipment, predominantly trucks. These trucks, ranging from $100,000 used to $500,000 new, are crucial for operations.

It also has $5 million in real estate, likely due to its construction and demolition (C&D) transfer station. These transfer stations are valuable assets because they are difficult to get permits for, adding a significant barrier to entry for potential competitors.

Minimal Inventory Costs

Interestingly, the inventory cost is almost negligible, possibly consisting of the waste bins themselves. This means the business operates with low inventory costs, focusing expenses mainly on labor.

I don't even know what a thousand dollars in inventory in a waste hauling business would look like. Yeah, as I said, the bins themselves, but there's no inventory and that means a savings over other potential business acquisitions.

Operational Insights

Let's say you operated 17 trucks and 400 containers. To break this down:

• Trucks: Each truck is valued at approximately $147,000, indicating they are likely on the used side but still in good condition.
• Containers: With 400 containers generating $6 million in revenue, each container is pulling in roughly $1,000 per month. This suggests a mix of large 40-yard containers and smaller residential ones. That's a highly diverse revenue stream.

Low Churn and High Retention

Waste hauling is a service with super low churn. Once customers sign up for regular waste removal, they are unlikely to switch providers frequently, provided the service remains reliable. This ensures a stable customer base and predictable revenue, which are key for long-term business success.

The Simplicity of the Business

The beauty of a waste hauling business lies in its simplicity. The primary operations involve collecting waste and transporting it to disposal sites. As long as the vehicles are maintained and the service is consistent, there are few complications.

The nature of the business is straightforward, making it a quintessential "boring" business that consistently delivers results.

Future Prospects

Given its high asset base, substantial revenue, and profitability, I see tremendous potential in the waste hauling industry. It’s a sector that provides vital services with minimal risk of obsolescence. Boring? Sure. But sometimes boring is better.

The Dream

It's a simple business. And I love that. I absolutely love it. The true definition of a boring, disgusting business. I wouldn't have it any other way. I also wouldn't be surprised if I own one of these in 10 years.

At least, I hope so.

Jack Carr, CEO of Rapid HVAC
‍‍https://rapidhvactn.com

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