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How to start a roll-off bin business for construction from scratch

Peter Kenter

When Katy and David McGregor launched Northern Disposal & Sanitation in Katrine, Ontario north of Huntsville, , buying a couple of roll-off bins and a delivery truck seemed like a great way to make some extra money as part of a family business. The young couple felt that the local roll-off construction market was underserved.

“A lot of the bins were coming from the Muskoka area, an hour south of us, and there were no real options between us and North Bay to the north,” says Katy McGregor.

“We researched the market carefully and talked to a friend who ran a roll-off business, Central Disposal in Orangeville, and tested our business model on him. Shortly after, we started off with two roll-off bins and a truck.”

A former sales coordinator for the Deerhurst Resort, Katy had just left her position on maternity leave. Husband David would pick up and deliver roll-off bins to construction sites on the way to and from his job as a tool and die maker.

“Then David lost his job,” says McGregor.

“It was either move to the city or go into the roll-off business with full force. We decided that the best way of moving forward was to concentrate on the roll-off business.”

Buying capital equipment to expand the business posed a chicken-and-egg conundrum. Chasing new revenue meant renting out more bins, but at a cost of between $4,000 and $7,000 each the company couldn’t afford to overextend itself on capital purchases.

“We bought some extra bins, but by the following year we realized that running a business dedicated solely to roll-offs wasn’t the most competitive way of engaging the construction industry,” says McGregor. “Contractors were asking us if we also offered portable restrooms, so we bought a small septic service business in 2007 and added portable restrooms to our line-up later that summer.”

Offering both services to contractors simultaneously brought in more construction business and gave the company an added stream of non-construction revenue as well.

“Before our bins were available, a large number of contractors used pick-ups to remove construction waste,” says McGregor. “Once they tried bins instead of pick-ups, there was no turning back.”

Today, the company offers a much larger selection of 14- and 20-cubic yard roll-off bins primarily serving demolition, roofing and modular construction contractors.

Still, the business landscape is a tough one to negotiate. While larger competitors a few hours away have to consider the cost of delivering the bins, some of them own their own transfer stations and can be flexible on disposal fees.

“We have to pay whatever the going rate is at publicly-owned sites,” says McGregor. “It leaves us less room to negotiate, because we can’t give people a deal on dumping fees.”

The various townships and regions may also be adamant about dumping requirements, demanding that only construction waste generated locally can be disposed of locally. Some landfills require source separation of waste, while other accept mixed loads.

“We try to promote recycling wherever possible, although the availability of recycling facilities is the key consideration in a lot of remote areas,” says McGregor.

Bin scheduling is also like a game of musical chairs. Ideally, bins would be picked up, emptied and delivered to the next client in a single operation. That’s rarely the case. Construction is weather-dependent, and most of the contractors ask for bins during good weather and on short notice. If a rainy day delays construction on one site, a bin may be held over for an extra day.

“The whole idea of efficiency is to flip the bins as quickly as you can,” says McGregor. “You don’t make a cent while the bin is sitting there. But, one of the advantages of working with a local company is that we can look at individual situations and avoid nickel-and-diming the contractors over situations they can’t control.”

The couple was honoured last year with the 2011 Young Entrepreneur of the Year Award, presented at the Northern Ontario Business Awards.

“It’s a challenging business,” says McGregor. “But both David and I want to do something that makes a difference in the community, promoting recycling and being appreciated by the companies we serve on a personal level. I think we’re achieving that.”

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