Business for Sale, Would I Buy It? | Mobile Waste Compaction

In today’s version of “Would I Buy This Business for Sale”, we’re looking at a mobile waste compaction business in Las Vegas. 87% recurring revenue, 88% growth, 608,000 sellers discretionary earnings. Okay, those are all good for a start. I definitely like recurring revenue. It’s a great thing to be able to know predictably what your cash flow is going to be every month. Mobile waste compaction is not a business I have any prior experience with. Or why I guess the trash companies wouldn’t be doing that themselves. Or really even what this business is about. Maybe they come by and compact the stuff in your dumpster so you can get more in the dumpster before you have to pay to have it hauled out, and that makes it more efficient and offsets the cost of the dumpster. Honestly, I’m not really sure what mobile waste compaction is but let’s look at some more of the numbers. 

So 608,000 cash flow on 1.7 million gross revenue. So pretty good margin and I’m always a fan of higher profit margin businesses. They’re asking 2.9 Million, which is over 4x which sounds a little high for a business this size. It does have recurring revenue. It does have a decent profit margin. And there in the picture, there’s a big truck with what looks like I guess a mobile trash masher on the back. So they might have some you know good amount of fixed assets that they’re using to sort of justify the higher price. But right off the bat that sounds high to me. And of course, they don’t list a fixtures and equipment value. So it says about the business mobile waste and dumpster compaction company saves businesses money and cut greenhouse emissions. So I guess it’s sort of what I was thinking, they smash down what’s in your dumpster so you can get more into it. 

Says only 2% of customers are aware of this industry. Well, that’s a pro and a con. The pro is there’s a lot of people not paying for it currently, but the con is they’re not even aware of it. You first gotta start an education program. Your marketing can’t just be, “Hey we can do a better job at what you’re already paying for”. It’s “Here’s the thing you didn’t even know you could pay for. That’s us. This is what we do. And now here’s why you pay for it.” So you got a more complex sales process cause first, you gotta explain why they even should care. And then how it can save them money. And then if they decide to go with somebody to do it they have to pick you. So it’s an interesting business. I would be interested in knowing more about it. How long it’s been around, how effective it is, how much money it saves people. It seems to me the biggest pitch you’d have in selling this kind of business is you’d say, “Okay, you as a business are paying $50,000 a year for your trash removal or your dumpster drop off and hauling. And if you use our service we could cut that in half because, with our trash compaction, you can get your dumpsters twice as full. So you only need them hauled half as often. So it saves you $25,000 and our service costs $5,000 so you’re still saving 20 something like that.” If you can use simple math to explain it, it makes it an easier sale. If it’s the cost savings aren’t as clear you can’t do the math easily, it makes it a harder sale. Especially when people haven’t even heard of this service before. So I’d be interested in knowing more about the industry in general before checking this out. But on the face of it good margins and other than a high price it might be a good investment opportunity. So I’d be interested in finding out more.

Here’s more about this video. In this series, CapForge’s owner and founder gives us a little behind-the-scenes on what a good or bad business would be. CapForge helps tons of clients either buy or sell business and Matt was a business broker before starting CapForge. Let’s look at some of these businesses up for sale and see if Matt would be interested in buying them.