I Found A Recession-Proof Business

Imagine completely changing your career at 31 to own a street sweeping business and making millions doing it. Brandon did exactly that and we're going to steal his homework to teach you how to do it too. But first, how did he find this business?

He was 75 and he just wanted to get out of it.

And did he know anything about street sweeping before that?

I wasn't super confident in not having any business experience. I came across a podcast you were on and I just remember thinking like, this is how you build wealth.

In this video, we're going to break down exactly how he found his business, the business opportunities and street sweeping and his key pieces of advice, to start your own business just like this. Why? Listen to me. Well, I've bought a bunch of businesses just like this and own more at this company, Main Street Holding Company. So if you want to own small businesses, we might know a thing or two about that. Hit that subscribe button. I'll teach ya. All right, so let's talk about how big this business is today.

Last month we did 75,000 in revenue.

What do you think you're going to do in a full year?

We're on pace to do around 650 to 700. If we go from May to May, will probably be in the 800 range.

That's pretty damn good. Especially because you started at what we.

Were doing, about 15amonth when. When we took it over. Yeah.

Wild.

Yeah.

So you've basically somewhere between 3 and 6x to the business.

Yeah.

The best part about it is how you bought this bad boy. Does it cost you like a couple million to buy?

We bought this for 60,000, fully seller financed over five years. 2,500amonth or something like that.

How do you get somebody to agree to sell you a business for $60,000?

He was 75, the baby boomer, Silver Tsunami, all of that. And he just wanted to get out of it. So we gave him an offer. He came to us and was like, hey, I want to get out of this. So we thought, okay, the equipment's maybe worth 100, 150 grand at most. Let's offer half that. And so we went with 60 grand. And he said, all right, you own.

A sweeping company, you're a former baseball player.

Yeah.

Which leads naturally to street.

Yes. This is like a common path. Yes.

And I imagine like you had no idea what a truck cost. How do you determine that it's worth 150k? Are you just throwing 60k around?

Just pretty much Google. So we looked up used equipment, a good Truck is going to run for five to 10 years, and if you buy it used, you're probably looking at 80 to 100 grand at a minimum. We found some on auction that we use and we got them for 15, 20 grand each.

But what were you looking for when you wanted to get out?

I was looking for freedom. And so I did a bunch of research. I came across a podcast you were on forever ago with Eric Jorgensen. And I just remember thinking like, oh, okay, this makes sense. Like, this is how you build wealth.

Let's break down the business equipment really quickly. You got how many trucks?

We have six total trucks. We run four consistently. Okay.

And then you did something kind of brilliant with this other one. When you realized you didn't want to do parking lots anymore, what happened?

So we weren't making a ton of money on parking lots. We only had maybe eight to 10 customers. And the average ticket price for parking lots is like maybe 700amonth on a high end. And so I was getting calls, you know, 2:00am, 3:00am, hey, my, my truck broke down or my driver would go and take a nap in the parking lot. And those were problems I didn't sign up for and I didn't want to take care of. So I found a local owner operator. He was pumped because he has a pressure washing. So I give him, I subcontract everything. We made a nice little deal and he helps me on the parking lots and pressure washing and he sends and refers customers our way. I will not say no to a customer. So we have asphalt quotes going out. We have. We're doing pretty much anything pavement related. We've done a good job on the Legion. And I just ask every customer, like, if our driver sees a pothole, he sends me a picture and he's like, hey, this needs to get fixed. At some point, I contact the customer and let them know.

So how big is this business today?

Today it's about 700 grand.

Nice. And how big do you think you can make this bad boy?

We have a competitor that does 5 million to 12 million.

Not too shabby. Why did you decide on a street sweeping business if you had been looking at all of them? What were like the 10 things that made you think this one?

So I wasn't super confident in not having any business experience. I was a little worried. And so I thought, how can I make it so I'm not going to fail? At minimum, I'm going to learn and maybe lose 60 gr at most. I have a business that's profitable. And I didn't put any money into it. It just was an investment and a place that I could learn the skills of business and then do what I wanted to after.

So basically you were like, I don't care if it's a widget, a trucking company, a street sweeping company. I just want it to be a yes business, which is no matter what, I win.

Yeah.

Heads I win, tails I win. I think that's brilliant. But then if you think about street sweeping, overall, it's kind of a brilliant business. Recurring revenue, you can run it remote, which you do. You live where?

Arizona. And we are where we are in Oxnard, California.

Not next to each other. You also have a business that doesn't require very many people. You have four main full time employees or two.

I have two drivers, a contractor that helps us mechanically, and then a contractor overseas.

So not very many people in this business. This plot of land doesn't look too expensive.

No, no.

And you get to rent it out.

Yeah, we're renting it out.

And you also have a business that doesn't have that many moving parts. So if you're learning the game of business, you get to do it without a really complex business.

Yeah. And the competition isn't crazy. There's not 50 sweeping companies in here. It's pretty much us and a couple other smaller parking lot jobs. And then the big private equity. It was a no lose situation.

I love that. Because if you can pick your competitors as either the guys so big they care nothing for the little clients, so you can steal them. Private equity or people who have been in business forever, but they're small and they're not really wanting to compete anymore, you get to sit in the beautiful middle, which is, hey, I'm hungry, but I'm small. I can steal from both competitors.

Yeah.

Love it. Oh, important tip. When you're building a business, don't reinvent the wheel. Pricing is hard to get right and if you mess it up, it can cost you a lot of money. You could waste time crunching the numbers yourself or worse, just wildly guessing with projections, but you don't have to. And HubSpot's got you covered with this template, which we're stealing. This is the thing that does math for you on nine different pricing strategies. One's based on your competition's prices, one on your hourly rate. You just plug in your own numbers and it will tell you exactly how much profit you can expect to make. So you can find the perfect price for, say, your new street sweeping business. Steal HubSpot's Homework. This resource is completely free. Link is in the description. Thanks, HubSpot. By the way, you guys really actually do love this template. I'm stealing it too. So how long did it take for you to go from I want to buy this business to the businesses closed about a month.

So we found out about it in I think April of last year and we closed in May.

We have to put like a big disclaimer. Not representative of all results, but that's kind of wild. I think a lot of people would say, man, Brandon's just lucky. But you actually were searching around and learning from the sidelines for a couple years and then you knew when you saw something that's unique.

Yeah. And honestly, there wasn't any due diligence to do. It was. You have trucks, you have contracts. Let's see if we can make this work and we'll give you a low ball offer.

You ready for some 2nd Mass?

Let's do it.

Okay. How much do you charge per job?

747.

40. How many hours does it take per job?

4 hours.

4 hours. How much does it cost you per job?

300.

How many jobs could you do in a day?

2.

2. How much does that mean you can make in a day? I can do this math. 1480.

There you go.

And how many days a week do you guys work?

Five days a week.

Five. I don't have a napkin for that. And so if you worked 5 days a week for an entire year, you'd make 385.385k a year as a one man band. This is called napkin math. You should tell us in the comments. If I did this incorrectly, I'm sure you'll tell me anyway. All right, we're not going to use a napkin for this one. But let's say there's some young gun listening out there and they think, I don't want to buy one of these companies, I want to start one. How much would that cost, do you think?

On a small scale you could buy a parking lot sweeper for 50 grand and it would be a, you know, a nice sweeper. But you would be doing small jobs for some of the bigger jobs like the hoas and city work, you would need a truck that you're going to spend 150 to 200 grand for a reliable truck.

So you got a great deal on buying this bad boy.

Yeah. So we've actually replaced all the equipment. We got this one that does our city work on auction. Thank you, city of Scottsdale. And we bought that for 15 grand, and we got two just like it. And then the other two we bought fairly new or fairly used. This one's the newest one that we just bought for 205,000. And then that one we bought for around 150.

And you finance them when you buy them for 200k, you probably could pay cash for one for 15k, but even so, you could use the assets of the business as a loan to buy the truck. Lots of different ways to do it. The problem if you start it is you got no money. You got to go out and buy the thing yourself. You could finance the truck purchase, but that has to be off of your income in some way, shape or form because there's no income from the business. It's why I actually push people a lot to buy businesses. Because if you don't have a lot of money, how are you going to start?

It's a high barrier to entry. So I'm not going to get competition just kind of hopping up, which is really nice. I like that part. But I was able to get in at a very low level, which is sweet.

So it's not always true. You can totally start businesses, but sometimes it's easier to buy. Let's break down every single cost in this business from an equipment perspective in 60 seconds. Ready these gutter brooms.

40 bucks a piece.

How many on a truck?

10, 400 bucks. Cost skid plate, $300. This one we have a new water system, new skid plates, new vacuum, new hopper. Probably about 15 to 20 grand we put into it.

For this business. You also need water.

Water keeps the dust down.

And you have an interesting model here with this water.

So we're next to avocado farms, and this is technically part of the farm. So we rent from them. They get runoff from the avocado farms and it gets cycled into our water tank. And so we.

Free water.

Free water.

So the costs are essentially this labor, hourly wage, your trucks, anything that goes wrong with the trucks. Water and dump.

Correct.

Anything else?

Insurance is obviously all the other overhead. Insurance is a big expense. Rent, we pay two grand a month, and then any of the supplies on the trucks come with it. So that's baked into the hourly rate.

You too can rent this beautiful establishment for $2,000 a month, should you so choose. Let's talk about decreasing risk. Are we ready? If you want to decrease the risk in your business, what do you do?

You lower your cost to buy it and you make sure that you're going to have the customers come along when you're actually buying it.

How did you do that?

We looked at how long customers had been on with them and they hadn't lost any customers in the last year. We've taken over and we've only lost one from just typical. Increasing your rate.

What else do you think first time business buyers maybe like yourself didn't think about when it came to risk?

I thought every business just kind of does 15 to 20% profit. I didn't really think through like, okay, if you get to 50,000 in revenue, then all of your costs are covered and then the rest is profit or whatever it is. So the numbers got better as we got bigger and they keep getting better. Each customer has stayed on for the entire time. But each customer is worth around six grand right now. Well, every month that increases. But because they're on recurring contracts, what's valuable now is only going to keep growing as we grow our customer list.

Yeah, so smart. Not to mention the more customers you bring on board, the more diversified your business is. Which means that if you go to sell it, you're going to be able to sell it for more. If your customers have been there for longer and there's more of them, your multiple goes up for what people will purchase you for. And then simultaneously, if you're trusted, you can sell them more services. One of the cool things you talked about as to how to increase revenue and profit in a business is you.

Said I will not say no to a customer. I don't say no.

Tell me about that.

So we have clients that deal with any sort of asphalt or pavement maintenance. And so we're the ones who are on site the most. We're there either weekly, twice monthly, whatever it is. And so if there's a new pothole or the stripes are getting a little pale or whatever it is, they need a new repaving. We. I have my drivers look for those things and they contact me. I call them and say, hey, if you're ever looking for a quote for repaving or blacktop or whatever it is, any service, let me know, I'll help you out. So we do pressure washing, we do asphalt, we do all of that. And I have some local companies that I use, they love the leads. I say, hey, you know what, what kind of finders fee can I get for this? Or I take their price, I mark it up depending on how hard it's going to be for me and then send it to the customer.

This is called subcontracting and it's brilliant. We're going to break it down for you. All right, let's explain subcontracting and how to make money without doing more services using a bunch of random sh t we found in your rat infested warehouse.

Let's do it.

Okay, first you guys do street sweeping here. If somebody calls you and they want street sweeping, you go out there and you do it. If somebody calls you and wants paint striping, what happens?

I find multiple paint stripers and get prices for them and send it to the customer.

And then how do you make any money?

I take a little bit off the top.

Amazing. So you quote this, you take this and then you charge this price for somebody else to fulfill it.

Correct.

Why does anybody want to do that?

It's the easy button. So I say yes to every customer and I don't care what the job is. I'll find it and I'll do their job.

So what else would you make money on?

Striping, pressure washing, asphalt services, repaving. I don't know the point of the business, anything.

The point of this is in every single business you have multiple lines of revenue. Even if you start with what's called your core or your foundation product or service, you have satellite products or service that surround it. And whether you fulfill it or somebody else does, it allows for diversity classification in your business model, which means that you have less risk. Should we go clean some now?

Let's do it.

Okay. If you guys like this video this week, you should check out our newsletter. I'm obsessed. We write pieces like this every single week with even more detail. Go check it out. Now back to the video. What do you street sweep here?

This is a future paving job that I'm going to contract, hopefully. But I need to. I met him yesterday and I need to ask more about his business. I'm really curious about what you do, so.

So four things you do to 3X your business.

One, we. Well, one, we raise prices on current customers to market level. Two, we got a good website presence, SEO, Google Ads. Three, a lot of cold contacts. So any construction job I drive by. When I'm here, I leave my number, I leave everything. Hey, you know, you ever hire this service, we're here, we do it all.

Number four, how many emails do you think you send a month?

8,000Amonth.

That's like an automated.

Automated set up. Yeah.

So you got a little army of robots back there?

Yes.

Okay, so all it really takes is having a better website, more cold calls, a little army of robots and not being scared of door knocking.

Yeah.

Also, didn't you just Come back from somewhere?

Yeah, I was in Hawaii for the last three weeks.

Did your business completely fall apart?

No, it actually was our best revenue producing month. Month and profit.

So you just need to leave.

I just. Yeah, I was like, okay, maybe I have my hands in too many things. And it was a good opportunity to trust the team and see what they're capable of. Let things break and then fix it. And nothing broke.

So I'm just gonna go on vacation more. Except when I do, my businesses fall apart. So you're doing it right?

Yeah. I don't know. It's simple.

Let's do a game of pros and cons. Why you should absolutely not do this business and why you should do this business. I'll start with pros. You give me the dirty cons. Pro. Recurring revenue.

Expensive equipment.

Easy market.

Not a ton of customers want your service.

Not a ton of competition.

In rural areas, CDL drivers are hard to find.

Add on services.

California restrictions and regulations.

California general. California big red flag.

Homeless people of California.

Yeah, that's true. Average order value high.

Low amount of service area. We have to drive to every spot.

Pretty simple task.

Expensive disposal.

Not very many employees.

Only can service a customer once or twice a month.

Cheap rent or place to lease.

Low search volume on Google.

A type of business that private equity buys frequently.

The typical call I get is, are you sweeping my street today? And it costs me money because it's a Google Ad.

Usually it's a lead.

It's usually a lead. And it's a resident saying, is my street getting swept?

What's the name of your company?

Cleaner Streets.

What's the website?

CleanerStreets.com Straightforward, very simple.

CleanerStreets.com Cleaner Streets is the name of the company. Any pros you think I'm missing?

Prevailing wage the state requires we pay our drivers 78 to $80 an hour so they're happy when we get those jobs. And we can charge really high when we get those jobs.

Ooh, that's a good one.

Yeah.

And maybe the only other con is dirty business.

Very dirty.

15 million baby boomers are about to let their businesses die in this country. It is going to look like a land with no more owners. And this movement for you to become an owner is not just for you to become rich and make a ton of money. It's also because if not, we become a land where the big guys own everything and we own nothing. So if you want to chase your American dream, you're actually doing a favor to the baby boomer who doesn't have a kid that wants to take over their business. Now you get to be that owner. America, baby.

That should be good. Now we. We kill it a little bit and then bang.

Dude, great instructor.

Good work. I'm available for level for hire. Let's go.

I think, you know, you gotta treat her like a lady. I feel like this car is a lady. She needs to be warmed up. She needs to be the right temperature. I. I think. Yeah.

Very picky. Yes.

Yeah. I'm not a lesbian, but I get it. Okay, now I'm gonna turn the actual car off here.

Right there. Yep.

Until next time.