New Jersey’s Buddy Van Sant seized an opportunity to serve post-hurricane rebuilding efforts, and now works to transfer his new restroom company to a younger partner.
When Don “Buddy” Van Sant started his second portable restroom business, he made two significant changes. First, he wanted to keep the Seaside, New Jersey, company small and manageable. Second, he wanted to have an exit plan for a secure retirement.
At 59, Van Sant says he believes he is in the same position as many portable restroom operators who have years of experience and built up a good business, but want to pursue hobbies and enjoy retirement with some kind of income security. Taking on a younger, 25 percent partner, the owner of Jersey Shore Restrooms is hopeful he’s on the right path.
SECOND TIME AROUND
After selling the portable sanitation business he ran for 20 years in 2008, Van Sant had no plans of getting back into restrooms. But the devastation of Hurricane Sandy in 2012 changed that.
“The Jersey Shore had so much work — even now,” he explains. “They say it will be 15 years of work to get it back.”
He recognized the need for portable restrooms and an opportunity because his noncompete clause agreement had run out. So in 2014, he rented a building, purchased a Crescent Tank truck and 100 PolyJohn PJP3 restrooms, and started slowly building the business through word-of-mouth. By the end of 2016, he had grown to three trucks and 380 restrooms.
Growth was made easier due to the major construction occurring along the Jersey Shore. Because of rezoning and to avoid expensive flood insurance premiums, homeowners are participating in a federally funded program to have their homes raised on pillars to comply with the Federal Emergency Management Agency’s advisory base flood elevations. It takes three to six months for contractors to complete the process, and they need restrooms.
Van Sant notes that because so much construction work is going on in a concentrated area, it’s ideal for a PRO. “The way to make money is to have a lot of customers close together on the same street,” he says. His business is centrally located along the 80-mile stretch of the area he covers, and having many customers clustered together is a bonus in setting up the schedule for weekly service.
Van Sant encountered an unexpected benefit in April 2015, when Andy Bennett (now 46), approached him with a proposal to buy into the business. Bennett had 24 years’ portable sanitation experience and served as a route manager for a large New Jersey company. Bennett left when the company was purchased, so he was facing an uncertain future. With a wife and two children, one in college and one in high school, he needed dependable income.
Van Sant readily accepted Bennett’s financial offer to buy 25 percent of the business and take over full ownership Jan. 7, 2019. Nearing retirement, Van Sant recognized it was an ideal situation to set up his exit strategy. Plus there are other bonuses.
“When Andy came knocking, I decided it was a nice way to build something up. And, I am able to take more vacations,” Van Sant says.
When his mother died last summer, Van Sant could take care of the funeral details and not worry about the business, because Bennett was handling the scheduling for two employees. Again in November, Van Sant left Bennett in charge when Van Sant had hip replacement surgery.
“It’s a perfect example of why I have to have a partner at my age,” Van Sant says.
HIGH COST OF BUSINESS
The biggest challenge for the partners is the cost of doing business. Van Sant was surprised by the increased costs during his six-year hiatus from the industry. Though supplies, equipment and portable restroom rental fees hadn’t changed much, regulation costs (insurance, liability, workman’s compensation, taxes, etc.) and fees are significantly higher. Plus, Van Sant had sold the building he used in the first business.
“Our No. 1 expense is rent. At my age, I’m not buying anything. So we rent and keep everything inside a 6,000-square-foot building,” Van Sant says.
While he encourages his younger partner to buy a building when he takes over the business, for now Van Sant emphasizes keeping costs down from lessons he learned in his first business that had 2,000 portable restrooms.
“I don’t want to get in debt with loans and credit cards. I want controlled growth, buying equipment when I can pay for it and adding restrooms six at a time. I plan to stop at 500 restrooms because it’s manageable with a nice profit margin. After that you have to add trucks and men,” he explains.
Besides regulatory fees, the cost of labor increased, especially for health care coverage.
“We used to give family health insurance benefits, and employees paid 25 percent. Now we just offer single employee benefits (a 50 percent employee match),” Van Sant says.
One thing Van Sant didn’t change was the vendors and manufacturers he used in his past business. His restrooms are all from PolyJohn Enterprises and include 380 PJP3 portable restrooms, eight flushable units, eight handicap units and eight PolyJohn hand-wash stations.
“I had to do something to jump out and grab people’s attention, so we went with purple,” Van Sant says. The white lettering with his business name and phone number stands out and provides free advertising.
To clean and stock the restrooms, he purchases toilet paper and deodorizing chemical from Porta Pro Chem out of Pennsauken, New Jersey.
The truck fleet includes a 2012 Ford F-550 from Crescent Tank with a flat 650-gallon waste/350-gallon freshwater steel tank and two 2014 Isuzu flatbed rigs with 350-gallon waste/200-gallon freshwater slide-in steel tanks from Crescent. All trucks carry Masport pumps.
“They are a great truck for a startup company,” Van Sant says. Each rig is “like three trucks in one. They can pump, handle routes and deliver restrooms. Each truck holds six restrooms to handle weekend events.”
In the office, Ritam Technologies Portable Restroom Software helps plan routes. To keep it simple, Van Sant says drivers follow paper copies of their routes instead of phones or other technology.
About 80 percent of Jersey Shore Restrooms’ work is delivering and servicing units at residential construction sites. Another 15 percent comes from renting restrooms for parties, craft shows, rodeos and numerous eating and drinking festivals. Because of the need to fence off areas where alcohol is served, the company also provides 6- by 12-foot chain-link panel fencing, manufactured by Davis Gates. Van Sant had purchased the fencing for a business he owned in Delaware before he started Jersey Shore.
While he doesn’t want to get into a lot of extra services, renting fences for events is a good add-on in his area and provides about 5 percent of the business’s revenue, he says.
A benefit of working along Jersey Shore is a relaxed culture with plenty of oceanside tiki bars and parties. The many tiki bars are also perfect networking opportunities for Van Sant to meet contractors and hand out business cards. In addition to the new clients, he works with many former ones. Though he is restricted from soliciting old customers, they have been coming to him as word-of-mouth — and those purple restrooms — let people know he is back in business.
Good communication has been the key to landing customers, he says.
“It’s the personal touch that makes a difference,” he says. “It’s the most important item in a company, picking that phone up. I have my phone with me, every time it rings.”
Because of that, he can respond immediately to clients calling with problems — either personally or by sending an employee.
TRANSITIONING TO RETIREMENT
Only in business a couple of years, Van Sant is pleased with the pace of the company’s growth as it draws closer to his 500-restroom goal. He also feels on track with transitioning his younger partner into taking over the business.
Starting with planning routes and working with employees, Bennett is systematically learning about all aspects of the business. In the next couple of years, Van Sant will involve him with everything from truck maintenance and repair to bidding special events, billing and all the office work.
Van Sant also understands the importance of working with a certified public accountant and financial planner to avoid “getting killed with high capital gains taxes” so that he has a monthly check from the business. Because his wife, Geri-Lynn, retires from her job as a school librarian in 2019, that is the year Bennett will take over ownership, based on an amount the partners have already agreed on.
Van Sant looks back and realizes that he was too young (50) when he sold his first business. He is grateful to have a second business and a partner. He also recognizes an important difference from his first business.
“My exit strategy is the No. 1 thing right now. I’m trying to grow a company for another person,” Van Sant says. “I’ve got to make sure that it’s a very strong company with low debt to make sure I get paid and that he (Bennett) has a nice company for him and his son.”
From partner to purchase
Andy Bennett never planned to own a business. After more than 20 years in the portable sanitation industry, he had worked up to midlevel management for a large company, scheduling 60 drivers for 10,000 services a week. When the company was being bought out and his future was uncertain, he started looking for new opportunities. The timing was right in 2015, when he approached Don “Buddy” Van Sant, who he had known for a decade.
Besides buying into the business he has time to learn how to run it effectively — hands-on and with Van Sant’s guidance.
In the transition plan, Bennett started in the area he is most familiar with, dealing with employees, scheduling routes and driving some routes. After that, he’ll work with Van Sant in the office handling the business side of permits, insurance, bids, etc. And, Bennett will learn about general maintenance and repair for trucks and restrooms.
“The mechanical stuff is the most challenging (for me),” Bennett says. “I know computers and route systems. But it can cost a lot of money if you don’t know how to do repairs.”
He is adjusting to the more varied workload, and he agrees with Van Sant’s emphasis on answering the phone in person. As he takes over leadership near the end of the transition, he (or an office person) will be the one answering the phone at all hours.
“I am realizing the importance of each and every phone call,” Bennett says. “One single phone call can generate six months’ worth of income or several hundred dollars for a weekend event.”
Plus, there’s one other benefit he appreciates. “I have a teenage son, and it’s a nice bonus to have him work with me,” Bennett says.
Bennett is developing ideas for the business when he has full ownership. He plans to put serial numbers on the restrooms for better tracking, to utilize more technology such as route maps on phones, and buying a building instead of renting.
He will count on the advice of Van Sant, his father and other friends in the industry when it comes to buying equipment. “It’s an uncertainty because I’ve never done it before. Knowing when to buy and what kind to buy,” he says.
Bennett says he’s building a good foundation for the unexpected career move.
“I never had a dream to be an entrepreneur,” he says. “My dream is to be successful, and if this is what it took, I had to take this opportunity.”