Adapting to a shifting economy and increased competition helps Michigan PRO John’s Sanitation stay in the black and on track
A portable sanitation company in business for 38 years has undoubtedly weathered the ups and downs of economic cycles a few times over. That said, navigating an economic downturn is never a picnic. So say John and Linda Measel, owners of John’s Sanitation, a portable restroom and pumping company in South Lyon, Mich., located between the economically hard-hit cities of Detroit and Ann Arbor.
While Linda Measel says the current downturn is the worst she’s seen in her career, she and her husband have worked tirelessly to ensure the company’s revenues stay steady or grow despite the forces at work around them. Employing shrewd business judgment and a deep understanding of their market, the couple has identified potential revenue pipelines as others dry up. They’ve been proactive in making changes to ensure the company’s long-term viability, changes that include adding their sales savvy son-in-law to the employee roster and moving into a market that was new to them until recently: special events.
Having built their business from the ground up, the Measels are well aware of the challenges inherent to creating a sustainable enterprise. In fact, when they launched their business in 1972, they couldn’t get a bank loan, so they used their resourcefulness and ended up buying an old beer truck to convert to a septic pumping truck.
That beer truck proved to be a better purchase than they’d anticipated, when, upon arriving home with it, they discovered the truck was full of cases of beer. True entrepreneurs, they sold the beer to friends, family —anyone who wanted to buy it — and raised a fair amount of capital to put toward outfitting the truck with a tank.
“It was probably easier to sell the beer than to get the septic business,” Linda Measel jokes.
Using their community ties (they grew up in the area) and friendly contacts, the Measels began drumming up business and were able to secure a few jobs. Their luck, however, took a turn for the worse when the tank they had bought one day imploded — the result of a stuck pressure relief valve.
“It looked like a pretzel — and it was brand new,” Measel recalls.
While Measel remembers “sitting out there crying,” the couple quickly got back on their feet. They headed back to the bank, and secured a loan that allowed them to launch the business they operate today.
THE EQUIPMENT MIX
The Measels began supplying portable restrooms to golf courses and over time shifted to serving construction sites primarily — which provided a respectable living for the family for more than 30 years. Recently, though, major shifts in local manufacturing and automotive industries have changed the region’s economy considerably.
As the business environment in the Detroit area grew increasingly more difficult over the past few years, it became clear to the Measels that they could no longer count on some of the markets they’d always relied upon (namely construction) and must instead work to identify ripe market opportunities — then diversify their offerings and shift marketing approaches accordingly.
The special event market quickly emerged as the leading option. And the Measels are grateful they went after it when they did, as good timing helped them grow quickly in that area and offset the loss of business elsewhere.
From a bare-bones business with one truck and five restrooms in 1972, the couple today own about 1,200 restrooms, mostly from PolyJohn Enterprises Corp. and PolyPortables Inc.; 150 handicap units and assorted sinks, flushable restrooms, urinal restrooms, ADA-compliant units and sanitizer stands.
The company has 12 employees and runs seven trucks: a 2000 Ford F-350 and a 2003 Ford F-550, both with 600-gallon waste/300 gallon freshwater steel tanks built by Lane’s Vacuum Tank; a 2008 Ford F-250, a 2005 Ford F-250 and a 2005 Ford F-350, all with 300-gallon waste/125-gallon freshwater stainless steel tanks built by Best Enterprises; a 2009 Ford F-550 with a 700-gallon waste/400-gallon freshwater aluminum tank built by Imperial Industries. Rounding out the fleet is a 2007 Sterling with a 3,600-gallon aluminum tank from Imperial.
The couple just purchased a new restroom trailer from Ameri-Can Engineering Inc. to meet increasing customer demand among the newly acquired clientele. This trailer will be used specifically for weddings and special events. The 16-foot air-conditioned Oasis restroom trailer features three women’s stools with sink and three men’s urinals, with one stool and one sink. Sinks have hot and cold running water.
“If we find that it’s going well for us we’ll continue to move in that direction,” Measel says of the prospect of purchasing more upscale trailers. “We’re focusing on weddings and special events because the state of
Michigan and the construction industry is so down right now. So we’re making a lot of calls.”
EYE ON THE FUTURE
Breaking into the event market is not a decision the couple took lightly, but Measel had the foresight to know construction-related industries were soon to hit a rough patch.
“We knew that was going to happen,” she explains, “so we started preparing for it by pushing for the special events.”
The special events market “helped us hold our own,” Measel adds. Even though John’s Sanitation doesn’t do much business with the automotive industry, its ripple effects on the local economy have been felt by everyone. In addition to a construction services decline, septic pumping numbers have taken a hit.
Making the right adjustments to accommodate for changes to the business climate has been a pathway to profits for John’s Sanitation. Bringing in new talent also has poised the company for growth, Measel says. Notably, the couple’s son-in-law, Daniel Docis, who joined the company this year as a sales rep. With a background in sales and finance, Measel says he has been vital to targeting new business.
Forging partnerships with tent-rental and disposal container-rental companies — businesses that already serve special event customers — has proven to be a profitable strategy for John’s Sanitation as well. Each company will recommend the other’s services.
“There’s tremendous growth right now,” she adds. “It’s great.” Measel said she prefers the special event market now, in part because there isn’t as much wear and tear on the units. Profit margins tend to be better, and servicing the units is easier since they’re generally less spread out geographically.
COMPETITION HEATS UP
Another facet to the challenging business environment has been new and increasing competition — and competitors willing to cut prices for the short-term sale. The Measels have had to rest on their laurels — good service and clean product — and hold firm to their pricing, despite fear of losing business, to remain competitive.
There has been an influx of companies buying 15 or 20 portable restrooms and attempting to go head-to-head with established portable restroom companies. Often, the newcomers’ first approach is to charge lower prices. “It’s taken many years to get our prices where they are and now we’ve had to go backward, so to speak.”
Holding the line on pricing, though, is a belief the Measels hold strongly.
“We’ve hung in there,” Measel explains. “The competitors are cutting prices and we do what we have to do. If we lose some (customers), which we do, we lose money. But we have to dig our heels in and try to get something else to make up for it.”
Top-notch service and reliable, clean products provide that value to customers, Measel contends.
“We have good equipment because we have special portable restrooms that we use for the weekends — they’re newer,” she explains. “After two or three years, we start putting them out for construction.” Rotating in new inventory has helped maintain a reputation for well-kept equipment.
“Our equipment gets old and we get rid of it,” Measel adds. “They want clean units and they want newer units, and they want you to be there on time â¦ They want dependability. And they like to see the nice, clean trucks,” she adds.
“Customers get good service, and they know that. We keep good contact with our customers and we have a good rapport.”
Losing out on price doesn’t always mean the end of the road with a customer, either, says Measel. “Last year we lost two accounts to competitors. Those competitors went out of business in the middle of the season and we got that business back.”
IN PURSUIT OF PROMOTION
Meanwhile, Measel says the company has used and found success with many traditional marketing methods, including sending postcards, ads in local papers, the company Web site and reminder cards for pumping customers. Beyond that, they’ve made a push with outbound phone calls. The company gets lists from local chambers of commerce, and Measel, Docis and another office employee “spend a ton of time on the telephone calling.” They also do Internet research to pre-qualify event leads.
She says advertising, postcards and ramping up operations help, but maintains that everyone has had to work a little harder and a little differently.
“We’re not hurting â¦ but we’ve had to work a little harder at keeping it this way. If we just let it go and cried over spilled milk, we’d be down a little bit. But we’ve ventured down new avenues of getting business and that’s how we’ve been able to maintain sales.
“We’re always talking to customers and people. We’re constantly looking at papers, getting ideas, churches, any type of flier,’’ she continues. “We even have people from the office bringing ideas in — they let us know when things are going on.”
The new trailer will also help the business stay competitive, Measel says. It had 12 bookings before it even arrived in the yard. Measel’s decision to buy it was based on the number of people who requested such a unit (she kept track), and the numbers finally justified its expense. The purchase, they hope, will result in even more gains in the special events arena.
“Sometimes, I wasn’t able to bid out events because we didn’t have the trailer,” she says.
This year — and moving forward — that certainly won’t be the case.