I Found A Business That MIGHT Never Fail

Imagine starting a trash business and making $30,000 in 11 days out in the field. Spencer Scott, your mom's favorite garbage man did exactly that. From working in software behind the screen to running a garbage business, his life completely changed in a matter of weeks. How he got started, how to generate cash fast, and how to completely de risk any deal. That's what we're going to learn today. So you can steal his homework. Welcome to Main street millionaires. How did you figure out trash?

I don't think it was my idea. I was in Facebook group and everyone in here was complaining. So there was a company called Barnes. They sold to a company called Cards. When that happened, Cards basically said, we're not getting out of the truck to pick bulk pickup up. And so they said, if we have to get out of the truck, we're gonna push a button and bill you 30 extra bucks. And so everyone was mad immediately. And I basically posted on Facebook, if you're all is really as mad as you say you are, I'll start a trash company. That general post got like 150 comments of like just raging angry people. And so from that I was like, all right, I'll put up a stripe link. And I basically said, if we get 200 people to sign up and they commit to three months of service, so 99 bucks, 33 bucks a month, I'll start a trash company. We got like 150 people to sign up. In 10 days we raised $15,000 and basically had five grand in monthly reoccurring revenue. And in like 10, 15 days before the company started.

In order to figure out if you even want to do this business, you did really quick math. Napkin math.

One could say napkin math.

How many people in your neighborhood?

400.

Then you figured out how much to charge them.

They were already billing 33 bucks a month.

33 bucks a month. And then how do you service them or have customer service?

Yeah, there almost is no customer support. You pick up the trash and they're happy.

And how many days a week do you actually have to go out picking up trash?

One day a week.

So technically you've been in business for how many days now?

15 days in business.

Which means you get what with this business freedom.

A lot of freedom.

We're moving slow. We're moving slow. Balls. Ta da. What? I just nailed it. Oh my God. Look how smooth that is. This is way easier than I anticipated. That's actually really fun. You have 15 grand in your bank account from pre orders. Now you've realized, oh my God, I gotta start a trash business. From the second it hit to your bank account to the moment you're picking up trash cans. How long did that take?

I think 45 days.

Holy crap.

Or less. Maybe less.

Run me through that timeline. So hits your bank account, next step.

It was a nerve wracking situation cause it hit the bank account and I'm like, I refuse to do this. Truck and trailer. First thing was like scouring Facebook marketplace and just dming everyone who had a trash truck for sale. Which introduced me to some people who own trash companies and they kind of told me what to look for. One of the things they said is if you can get a side loader that would be great because you're a one man shop and you can move much faster with a side loader. Coincidentally this one came up in a Facebook group for trash trucks and then went through the process of buying that.

What's next?

We had to get the bins here and I thought the bins would be easy. And then everyone I called said they had 40 day lead times and I was like, that's not gonna work. Cause we go live in January. And what's nice about the trash industry is like you just ask for help. And I got introduced to like a third party company in Michigan that sells used trash bins and I bought 200 of them.

And then you shipped them out and put them in your driveway.

So I paid for the bins and the bin company's like, yeah, they're here, come get em. I didn't know this, but in the freight world they have this thing called like empty route. And basically if somebody is in X location and they are going home anyways, they might pick up a route that would be five grand and they'll do it for 2,500 because they're going that way anyways. It's found money for them. And so we were able to get the bin shipped down here for about $2,500. And then I had a bunch of used nasty trash bins and they delivered them into our driveway. The best part is they got here December 23rd.

I don't know how you're not divorced.

Two days before Christmas.

Yep.

Okay.

And then you got.

I started power washing them in our driveway and they didn't fit. So I had like a wall of trash Bruins which the HOA did not love, but most of the neighborhood had signed up so they were their bins. So like no one really had a problem with it.

Then you get them clean, get them clean. Slap some Stickers on them.

So get them clean. And the stickers didn't get here in time before January 3rd. We went and delivered the bins to everyone. But the funny thing about that was they were branded. Some other company, not a single person had a problem with it. They all knew the story from the beginning. Right. So everyone was like, we love this, honestly. And we got the stickers in and then it was like a slow roll on that, just getting them stickered. Cause we realized people didn't actually care about them being branded or not as long as we picked up the trash. Here we are, a bunch of used trash bins and we just ordered 250 more.

Yeah, buddy. Let's talk about revenue. So how much money do you think you can make in one year in this business and a bad year?

So bad year, I would say 150,000.

And then a good year. What do you think you could do?

So probably like 500,000.

What do you think the profit margins are on this business?

So I can say with a level of confidence that like scale, it's like 20%. That seems low to me. The reason I say it seems low to me is it comes down to your debt tolerance. So I've paid cash for a lot of stuff which as I've spoke to better people than me, they finance it because it's a monthly reoccurring business. So it's really easy to finance.

How much money do you think you'll take home this year in this business in your first year like to put in your pocket?

Ideally none, because I want to buy more trucks, buy more drivers, buy more bins.

Could you pull out a living WAGRE in the first year in this business, running it?

Yeah.

How much could you pull in owner's earnings?

I would say 50 grand. Yeah, if we did 150, we could probably pull 50 grand.

So if you're getting up to 30, 300, 400, 500,000, obviously it's not going to scale linearly, but you might be able to make six figures on this business doing 300 to $500,000.

100%.

And then when you sell that six figures that you're doing, you're selling at a multiple that I would imagine is like what, 4 to 8x?

I don't think it's that high profit.

Not of revenue.

Yeah, correct. Yeah. So of revenue, it would probably be.

Close to 2, 2x revenue.

2X revenue, which means you're probably. Probably 7x EBIT. Yeah, I would say.

And EBITDA obviously is this guys similar to profit but actually a little bit meatier. This is crazy. We're in an RV park right now. Isn't this where you guys typically see dump trucks?

Yeah. RV life. My favorite part. This is a 2006 Condor, which is a freightliner with a cat engine, an Allison transmission, automatic side load arm with a Heil Packer. And my favorite part of the Heil Packer, is she thick.

What does this thing cost? Like, if you were gonna buy this thing brand spanking new, what does it cost?

Oh, I have no clue. So, 200,000.

But if you were sneaky and you said, no, sir, I wanna get a deal.

Yeah.

So what'd you get this bad boy for?

35,000.

And you financed it?

I financed it.

Did you have to put cash down?

No.

How'd you do that?

I have good credit. I took a personal loan at 7%, and it was not tied to anything, so they just wrote it to me because, like, it's hard to finance a 2006 trash truck.

Could you have financed it from the owner of this truck?

I tried. He was selling it as a down payment for a $250,000 truck.

So he needed the cash.

So he needed the cash. Yeah. And I found out after I bought it that he got it out of auction for, I'm guessing probably like, 15 or 20. The secret that I'm learning is city auctions. So this is formerly owned by the city of Tucson, which is good when city owns stuff because there's maintenance records back from the day it was purchased.

So, you know it's not going to be a.

It's not been beat up.

Does she have a name?

No.

You need one. You may put something back here. There's no branding on this bad boy.

Okay, what kind of.

What are we doing?

I've had it for, like, 15 days. I was like, okay.

Oh, actually, why don't we do this? Why don't you comment what you guys think we should name this bad boy? How did you make sure when you were buying this that you weren't gonna be in trouble because the tires were gonna immediately blow or you didn't?

I think that's the most stressful part about this whole thing is I bought this sight unseen, and we were in the hospital, so the guy's like, are you gonna fly out here and come look at it? And my third kid was being born, and I was like, I can't. And then I also thought about it for a second when I was in the hospital. I'm like, what am I gonna do, fly out there? And be like, yep, looks like a trash truck. Yep. Turns on like, I don't know. I don't know. I've never had a diesel, I've never had hydraulics. I've never sat in a cab over, like, I don't know what any of this stuff is. Like, if I would have flown out there, he would have been like, oh my God, this is an idiot. The only thing that gave me like peace of mind, which he was willing to work with me on, was I was like, hey man, I know you're asking 35. Do you mind if I only wire half of it until I know it's on the trailer?

Yeah.

And so I had to hire my own freight driver, which was $2,500, to go pick it up in Tucson and drive it to Dallas. And I told the freight driver, I said, send me a picture when it's on the trailer and I'll wire the second half. Love it. And the guy on Facebook's like, this is like no deal I've ever done before, but I'm totally down. And so get it on the trailer, send them the second half of the money. And it got here and I started shitting my pants a little bit because the batteries were dead. Cause I left the lights on when they drove it from Tucson to here. So I couldn't get off the trailer. And I had my 82 year old neighbor Bill with me. So me and Bill went to Walmart and Jerry rigged some batteries to get it started so we could get it off the trailer.

Everything's kind of figureoutable.

It's just like I feel broken to stress at this point. Like nothing really bothers me. I think it bothers my wife more and that probably being married to me is actually the stressful part. Not this stuff. Feel that.

Well, I think, you know, there's lots of ways to de risk it too, that people could do in this instance. Right. They could have a third party actually analyze to make sure that the valuation is correct. Now, that might not have worked because it wasn't fast enough. It's old and they won't guarantee it.

Yeah, I mean, the de risk for me was like, is it real? Do I have the vin, which I do in the title, And I know that that's clear. If it gets here and it is a lemon, can I sell it for at least what I got it for? Yep, I think I could sell it for more. Like, I think there's a whole nother world where I could have just flipped this for 10, 20 grand.

That's a great way to do it is ask yourself the question instead. How could I make this a yes no matter what?

Yeah. What's the worst that could happen? The worst that could happen is the truck doesn't work. Then what? Like, if you just keep asking, then what? It's like, well, then you just sell the truck. How much are you going to lose? Well, I don't know. You'll be able to tell when it gets here, but probably not going to lose $35,000. Honestly, I thought I could make money on it. I think I still could make money on it. I think I could sell it for 40, 45. Who would have thought? My tip to anyone trying to buy a trash truck. Facebook marketplace is gold. Everywhere else on the Internet, people are trying to, like, broker, like, auction vehicles. But if you get on Facebook marketplace, that's the golden secret, because anyone who's selling a trash truck owns a trash company. So then you meet all these trash owners, and they just tell you everything. A lot of the flyout costs right now. Storage is 120Amonth. A month. Financing on the truck is 700. I have to get you what the insurance is, but it's under 700.

Yeah.

It's high, though. Gas is about $70 a trip. So I've gone through two drivers. I pay them $18 an hour because they're under CDL. If they're over, I'd pay them more. And then I pay them for the day, even if we end up short. So that's about $145 a day.

And maybe website costs like 20 bucks a month.

Yes. Then webflow. Yeah. And then we use Stripe for credit card processing. So Sprite takes 3%. You pay 100 bucks a month for a routing software, and that's who owns that.

Should I buy that?

We should die.

Let's go dump some trash, huh?

You ready? Let's do it.

Have you hit anything yet?

Do you want the truth or the lie?

The truth.

My second day, I left the arm down and forgot to eject a bin. I was just driving around, just dragging a bin down the road.

Okay.

I went by someone's car, ripped a hole on the side of it.

Second thing, you were in soccer before you were a software dude?

Yeah.

And the next logical step is not typically being a trash man, but you kind of talked about boring businesses and that you liked them for a few reasons. What attracted you to maybe not just trash, but this industry?

That one's easy coming from the software side. Like, it's very much like Software, It's a monthly reoccurring revenue. And so, like, if you look at. Obviously boring businesses don't tend to go away because everyone needs them, especially with this AI stuff. But if you look at, like, trash in general, like, I don't have to start the month over. So, like, if you were to do, like, roofing or plumbing or something like that, I still think they're great businesses and would totally invest in one. But I don't think I would start one just because the whole, like, compounding interest of, you know, subscriptions in Dallas in particular, like, there's such an expansion of, like, houses. Yeah. That I'm like, man, like, this is gonna be forever. Like, trash is forever. So I thought it was a good opportunity to go after that.

You got that Lindy effect you're chasing.

Yeah. And I felt like the timing had to be quick too, because that company just sold and there's no way the PE firm continues to be crappy.

Yeah.

And so I'm like, they'll turn it around and, like, reduce, churn. So, like, I've got a window to pick up probably a couple thousand customers. I wouldn't have done it if it wasn't monthly reoccurring. That was like, the deal breaker for me.

So almost to you, you're like, a software company is a widget that is reoccurring and you only have to acquire a customer once and they pay you for a long duration. A trash company is a widget or a service. I guess you could say both of them are that you only have to acquire a customer once and they continue to pay you. So really, there's a lot more in common than not.

It's the delivery of the service. Right. The service. It's the same exact business. One is more automated through software, but also can be disrupted a little bit easier, as we kind of been seeing. And this one is like a labor delivery. Like, I gotta find trash guys. Which isn't the easiest thing. But if I can figure out that process or systematize it, I think we'll be in good shape. So in my mind, it was the exact same business with just a little more headache on the operational side of things, which, if you do software, there's just as much headache. And maybe the headache doesn't require you to get out of your chair. Yeah. Which for me, like, my favorite job as a kid was installing H vac units. I thought that was the greatest job ever. The only reason I didn't stick with it is the only person who, like, I Saw that really killed it the way I wanted to kill it was the owner.

The other cool part about doing, you know, more blue collar businesses is it's just not as saturated with our generation and people who are really operationally proficient because they didn't have to be.

What is interesting about blue collard is those aren't people who are high educated. So like the people I'm competing against are being steeper with like sales and.

Marketing because they just never, they never did it.

There's no education. They like they're doing it through trial and fire, but they're trying to learn technology when they're. That's not their thing. If it was their thing, they probably wouldn't went to college.

Yep.

So easier to operate this business now. What's interesting about this truck is it's a rear loader so they have to get out at every single house. And that's a huge truck. He's gonna heck a heck of a time getting out of here.

And you have to have two people in this truck.

Yeah, right. Yeah. Otherwise you're getting out as the driver.

Right.

And he does have a cart. Two cart tippers here, which will be nice because he doesn't have to lift it, but he's not gonna be able to turn this around. So I wouldn't be shocked if he has to back it all the way out.

They come all the way here for this one customer.

Yeah. So they're losing money on this for sure. But they're publicly traded so I mean, good for them. Yeah.

They'll probably buy you one day.

Yeah, hopefully. I think that's how the M and A space works. I think. Waste connections. Republic, they're private equity. Just like at this point they basically are like, hey, go get all the hard customers that we can't just get in one swoop. Yep. And then we'll just buy you up when you get to 10, 30 million.

100%.

Companies like this love companies like us. They're like, thanks for doing the hard work.

They can't go acquire individual customers anymore. It like almost doesn't make sense from a economic standpoint.

They do city contracts. They basically are like, we're not going to really work on it unless it builds. And I'm just guessing, I've never, I have no accurate information here, but I would guess that they don't really do too much if it's under like 5 million like city deals. This is a freaking nightmare right here. Like so as an owner, this is a nightmare. Cause like if he hits a car That's a bunch of problems. If he hits a mailbox, that's a bunch of problems. This is a super heavy truck. So since it's a double axle and the weight is so heavy, you have to hire trucker truck drivers, like CDL certified truck drivers, who have to, like, be up to date on all the CDL stuff.

Not to mention look at them in.

The trees, ripping the trees off. And then if you see the big chain hanging off the front of the truck, that's for. If they get stuck in the dump, they can pull them out. All of this I've learned in, like, the last 30, like, 60 days, by the way. Like, this is. Who knew I was gonna be so passionate about garbage trucks?

This is an important point that people wouldn't realize how much. One, labor's hard. Two, licensed labor.

Right.

Really hard and expensive. So explain the difference between your truck where you can drive it and that one.

There's a bunch. So the truck that we bought is. They call it asl, which is an automatic side loader, which means you don't have to get out of the truck. That makes things way faster because you can just push buttons and go. Also, the truck I have, I call it a unicorn truck. And the reason I call it a unicorn truck and think I got extremely lucky is it's under cdl. So most commercial trucks, like all of them, honestly, are over cdl, which means you have to hire a specific person that is CDL approved. I gone through all the drug tests and all the training. And then the problem with that, cdl, people you have to pay a premium for because there's less of them, and you gotta keep that certification up. So what we just saw, in my opinion, was a little bit of a nightmare, because that was an over CDL truck coming down here to pick up $33 a month, probably less than 33. And this is a week, so maybe like seven bucks. And they just had two people that they're probably paying. One of them $18 an hour and the other one, like, $25 an hour, not including gas. With our truck, one driver under CDL don't have to get out. It's great. When you do have to get out, it sucks.

Do you want your kids to eventually take over one of your businesses?

No.

No. Why?

They can if they want to.

I don't care.

It goes back. I kind of want them to be happy, but I think what I want, like, we have one. We don't have any really holes in our house, but one the world is. Can't say can't. So, like, anytime they say can't, I'm like, you can ask for help. Just don't say can't.

Don't.

Can't. Just for Twitter. Part of me doing this is not for them, but showing them that they can't.

You know, young people thought this wasn't cool for a long time.

Yeah.

We were at a dry cleaning thing the other day. Remember it? This incredible dry cleaners in Austin downtown. It's been in the family business for, like, three generations. And I asked the guy, I'm like, are you gonna sell this business? Are you gonna pass it on to your kids? And he's like, oh, I'm just gonna run it till I die. And I'm like, how old are you, man? And he's like, I won't say his name, but he's like, I'm 70 something. I'm like, well, it's not that far away.

Yeah.

He's like, what's the plan after that?

Hey, bud.

And he's like, well, I don't want my kids to do it. I worked hard so they don't have to. And I'm like, that's beautiful.

Oh, no, it's not, right?

And then I said, so, okay, what do your kids do? And he said, well, one of them's an accountant. And I just. I was like, amazing. And I was. And he's like, I'm like, what does the other one do? Yes. The other one went to college and is trying to be an attorney. And so it's just.

Those are the two boringest jobs in all of the world.

I would rather be outside.

I would rather be picking. I always made this joke that came back and bit me in the butt. But I'm from Michigan. There's an island in Michigan called Mackinac Island. It's the craziest, awesomest place ever. It's beautiful. There's no cars allowed up there, and so they have horses, and there's just all in the road. And there's a guy who comes by with a trailer and scoops. And I tell people, I'm like, I could scoop if I own the company. Like, I would totally scoop if I. And now I'm picking up. Yeah. I'm like, that was a bad joke that I told myself years ago. Like, you know how they say, yeah, I made some mistakes. I said what I wanted, and then I got it. Damn it.

Obviously, it's a lot of work. We don't mean to belittle that at all. There's a Lot of work in this business. It's just a different type.

It doesn't. I mean, it doesn't feel like work.

Kind of like what you little boys play with when you were a kid.

People stop. Kids run out and stop us. We have a. There's a house over here that waits for the trash truck, and they come running out. This lady and her kids waited for me to get there and brought out a peanut butter. I have a picture of it. Brought out a peanut butter and jelly in a Ziploc bag with an apple and a cheese slice and a Diet Coke and gave it to me.

I'm crying.

I'm like, no one in software has ever given me as much as a high five. Like. Like, this is the greatest. The way that this is all played out is, like, weird local celebrity status. Like, people are like, oh, we love this. Like, the neighbors are buying T shirts and, like, wearing, like, a great day. Start with a good dump shirt. Like, it's just the weirdest thing.

Show me that again.

Yeah, you didn't see this.

This is fantastic.

Oh, speaking of, I got something for you. We got. You'll love this. This is our company saying, Yeah, I love it. So I'm in Texas. We'll come and take it. I don't know if that'll fit you. That's a large kind of.

Thank you.

It's a. I'm styling. There you go.

Let's spit some truth here. What are the best parts? And then we're gonna get to the worst parts about running a dump truck business in general. What's your favorite part?

Driving the truck.

I like the recurring revenue.

I like going to the dump.

Of course you do. I like that you can sell these bad boys. Somebody will buy it.

I like not sitting behind a desk.

I like that you can buy used trucks at a discount and then potentially flip them.

I like this one day a week.

I like the fact that you can start without a lot of cash if you pre sell like you did.

I definitely like the multiple when we get there someday. But, yeah, I like that I can also do this with no outside investment so far.

I like the way you set it up with licensing. Smaller truck, no cdl.

Yeah, I like that it's no cdl. You stole that one from me. That was a good one.

I stole all these from me. Let's talk about cons. I'll go first one is, it's a dirty business. Be prepared for that liability.

It's a big truck, and a lot can go wrong. It's a rolling Liability hiring is definitely a con right now. We're so small, so I can't give somebody 40 hours a week. So the ideal person right now for us is like a college student or a retired person.

The other thing that's tough is, you know, you can't turn a customer into a 400, $500 a month customer. You have a cap on all of the people that you sell to in this business. Another con is your competitors are big. These are big, big players. The worst thing you could do in some of these service businesses and come in and go, those people, they don't really get it. They don't understand it. I'm brand new, I'm way better. That's. You got to have some respect for the fact that you're playing with billion dollar competitors. Last con, I'd say it takes big equipment. Pre orders are smart. Understanding how to evaluate the cost and value a piece of equipment like this is really important because you have a risk that could be the cost of an entire year of sales for your first year if you don't buy this intelligently. And what we always try to do on this channel is be as transparent as possible without being negative and scaring people away from the fact that you are probably way more competent than you think you are and you are capable of doing things that most people your entire life have told you you are not capable of. Because only 7% of Americans even own a small business. And of those small businesses, less than 2% ever become worth a million dollars a year. And so it's just a game of numbers. Most people don't actually try. I think you should, but at least now you know you're working with.

It's the worst that could happen.