Roll Off Dumpster Business

Discussion in 'Heavy Equipment & Pavement' started by sloppyjoe, Apr 15, 2008.

  1. sloppyjoe

    sloppyjoe LawnSite Member
    Posts: 8

    Hi Everyone,
    Do you think the economy is in the tank too bad to buy a roll off dumpster business? I am located in NorthWest Florida. The deal is a 2006 Sterling roll off truck & 33 30 yd cans for 200K. I am still researching things but I thought I would get a pros opinion.

    Thanks
     
  2. RockSet N' Grade

    RockSet N' Grade LawnSite Silver Member
    Posts: 2,454

    The truck and cans is one component. Does that come with a yard ie: a piece of real estate? Or a lease for a certain amount of time to store your containers and base out of? More importantly, to me, what are the numbers? Meaning, what kind of regular accounts does this company have, is it a new construction based business, what type of repeat clients are there, last 3 years gross receipts, what kind of competition is there in that area, and yada yada yada........in my mind, the truck and cans are a small component......crunch the numbers to find the real answers and if the numbers are good or there is potential there in growth or better management you will be better able to come to an answer......
     
  3. sloppyjoe

    sloppyjoe LawnSite Member
    Posts: 8

    No yard for storage. They only seem to have been in this business ventiure sense 2006. The guys that own this have seperate businesses in land clearing & construction. (...as the story goes). Aparently they are in a disagreement. I am still trying to figure out the details. Their is 60K still financed on the truck & the cans are paid off. More details as the arrive....thanks for the input.
     
  4. stuvecorp

    stuvecorp LawnSite Fanatic
    Posts: 5,216

    RockSet covered most everything, Is this something that helps you or your business right now or is it a stand alone venture? If you have good clients/contracts and the truck is good maybe, just run the numbers real good.
     
  5. RockSet N' Grade

    RockSet N' Grade LawnSite Silver Member
    Posts: 2,454

    As I suspected, this is not a long standing venture.....Anything and everything "flew" in the last 2-3 years and now that a bit of tightening is occuring, you will be seeing more and more "off loading" of these new start-ups, which for the most part, are on their way to becoming non-existent from their own lack of momentum. What you want to look for, besides hard assets and the books is an intangible called " good will ". That is basically the personality of the company, their reputation, and peoples willingness to use them again as repeat customers......if there is no good will and solid business base other than their supplementing their own jobs with a sideline business, that company is worth very little as a package.
     
  6. Gravel Rat

    Gravel Rat LawnSite Fanatic
    Posts: 9,544

    I think that price is a little high.

    One of the local contractors last year bought a brandnew Sterling tandem axle rolloff the truck is spec'ed heavy with a heavy rolloff hoist. I think they paid 150,000 CND.

    I wouldn't go for that deal unless they drop the price 10-15 grand and even then your paying alot.
     
  7. AWJ Services

    AWJ Services LawnSite Platinum Member
    from Ga
    Posts: 4,276

    The cans are about 3K to 5k a piece new and the truck is over 100k new.
    Is it a hook lift or cable?
    I would only do a hook lift so if it is a cable setup then that would be a problem for me.
    Also have you looked into dump costs and also do you have any inert land fills close buy?
    The dump fees really get you here in Atlanta and there are huge differences from dump too dump which affects driving time.
    Once the buisness gets built up the cans will stay out so the storage yard does not need too be too big.
    If you are going too do dirt and concrete then you will need some 20 yard cans as well.

    The price is not great but it will be cheaper than new.
    I would look at getting at least a 30 to 40% discount over a new purchase of like items.
     
  8. sloppyjoe

    sloppyjoe LawnSite Member
    Posts: 8

    Thanks for the input everyone. This would be a new venture for me & I suspect with the slowing of the economy these guys are just trying to unload while they can. They claim to keep the cans rented most of the time but I have yet to see any numbers form their busniess. Given that the housing market & the economy is down this would probably be a big risk to take on now.
    I'll keep you posted.

    Thanks again.
     
  9. SLSNursery

    SLSNursery LawnSite Senior Member
    Posts: 442

    It sounds like you are holding off, but here is some information anyway -

    We have 3 roll-offs, used primarily for landscaping, deliveries, etc. 2 Small Hooks and 1 large cable roll off with a stinger tail. They are part of our business, not a separate division. The function of the trucks is to provide options for less trailers and more versatility. Some of the bodies are flatbeds, some are cans. I also had a container company as a tenant and will share observations on that as well.

    When we rent cans to people, I find it hard to be competitively priced. There is money to be made, but if a person calls up and is shopping price we rarely get the job. I charge 80/hour for trucking and Dump fees plus a small markup. Most companies flat rate the can and put a per ton limit on it. My tenant would deliver cans all day long and be busy, but seemed to run tight on the funds more often than not. His philosophy was great customer service and a cheap price. He does a lot of work for 1 builder, which provides for great cash flow, but when the builder says jump, he says how high. It is like having all your eggs in one basket. Who does this prospective company work for? General public? Builders? Where is there more money to be made?

    I don't like to let the can sit for more than a few days during the landscape season, or maybe 1 or 2 weeks during the winter. Regular dumpster customers often need the can for a long while. If you let the can sit at a job for 2 weeks, under the best circumstances you can get 26 turns per year. What kind of policies does the current owner's contract provide for? I think my previous tenant was way too flexible, as folks would keep cans for months with no dump and no surcharge that I ever heard about.

    Storage is a problem. Customers don't usually want to see the containers during holidays, while contractors often don't care. This creates a situation where you need to provide for removal and short term storage. There were times when containers would be everywhere. This didn't work for me or the tenant, so he moved on, amicably to his own site (more money). I agree that when you get going they are all out, but you need to have a drop site.

    Costs - some costs are pretty high, and some businesses are slow to react. Even if you did this venture, as others pointed out, do the numbers work? While on the trip I ordered a heavy duty 30 yard can with 12" o.c. crossmembers, 1/4" floor, and gusseted sides (small flat stock 4" from front to rear at a 45 degree angle along each bottom and side) to prevent dirt build up when dumping. Cost - +/- $5500. Steel has been on a steady rise in price for a while now. I bet by 2009, add 12%-15%. A couple of my bigger cans are double picks in case we use our previous tenant's truck, or get into a bigger hook lift. Some of the small cans are also double pick, in case someone puts more than 4 or 5 tons into a 10 yard hook lift can. This adds cost too.


    I just left Ocala, FL visiting my in-laws - there are some pretty long drive distances down there at 6-8 mpg. But, there are some other opportunities I saw, such as hauling mulch, compost, machines, etc. Our roll-off has a stinger so the bodies can be 19.5' long and dump like a dump truck rather than have that long tail which prohibits a full dump. The other advantage of the stinger is that you can extend it to pick something up, like a flatbed, without having the steep angle of a hook-lift or a regular roll-off. We move tractors, mini-excavators, etc. on the flatbed. Versatility is key here, but your deal sounds like a basic truck and 33 basic cans.


    Maybe getting into the business yourself is better than jumping in to someone's failure.

    Good luck.
     
  10. Gravel Rat

    Gravel Rat LawnSite Fanatic
    Posts: 9,544

    The price of steel is going up I bought some steel for a dumping flatdeck the material to get the deck to 3/4s finished cost me 1800 dollars I figure I will have to spend another 200 dollars for some more steel plate. This is for a 8'x 11.5 foot flatdeck using structural steel. I seen a add for rolloff bins manufactured in B.C. designed for hooklift I think they were 20 yard bins for 6500 each. I can't imagine what a 40 yard bin would be worth I guess they would be atleast 12 grand each.

    The biggest factor why I never went further with my idea of buying a rolloff truck is the disposal regs at the landfills is too strict. You can't take a bin load of mixed debris into the landfills. Say you do a house demo or reno a house you can't mix the materials. Wood has to be separated the drywall has to be separated etc. Even the duroids on a roof have to be stripped off any of the wood. If you have a cedar shake/shingle roof with tar paper inbettween the rows the tar paper has to be separated from the wood.

    It is cheaper for contractors to pay a labourer to burn the debris on the site 8 hours a day and haul way what ever doesn't burn.

    People cleaning up their basements can't throw everything into one bin it has to be separated. Only things that can't be ground up or recycled is buried. Wood debris is ground up for hog fuel the drywall is recycled the scrap steel is recycled. Cardboard is recycled any clean paper has to be separated out.

    On a construction site you can get a good hot fire going you can burn all the wood scraps etc. It can save the homeowner atleast 500 dollars.

    For me the rolloff would be more for convienience so I could have a bush box for hauling branches and debris. One for hauling dirt and a rolloff flatbed that would be used most of the time.

    Tandem axle rolloff trucks in this area now are mainly hauling scrap metal.
     

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