One thing every PRO understands is that it takes money to make money. Whether building a fleet of service vehicles or an inventory of portable restrooms, every PRO eventually — and usually sooner rather than later — has to find the funds to finance the large expenditures that jumpstart a business.
Based on the rather large number of PROs surveyed for this column, there are as many approaches to raising capital as there are people needing to do so. Some operators see large capital outlays as a regular part of doing business, and have no problem financing their purchases through the dealers they buy from.
Others remain liquid by carrying a line of credit through their bank, which allows for flexibility to take advantage of opportunities as they arise. Yet others are the “strictly cash” type, who save up to be able to hand over the greenbacks at purchase time, and can only sleep well at night knowing they’re not owing.
These PROs share their approach to the large expenditures of green that keep them in the black.
Tony Patrick, foreman at Brent Allen Septech in Murray, Ky., says his boss has stayed in business for nearly 30 years by keeping things simple. “Our shop does it all: septic pumping, installation, and portables. We’re too busy to spend a lot of time shopping for equipment, so we prefer to work with a one-stop shop. We work with a dealer that carries everything: trucks, heavy equipment and portable units, and we do the financing right there, too. It just saves a lot of headaches and keeps us in the field where we can make money instead of spending it.”
Todd McMahon of Bluewater supplies his busy shop with large equipment by shopping for the best deal. A septic pumper just entering the portables business, Bluewater finances either a direct purchase or leases, depending on variables such as duty life expectation, end-of-lease buyout terms and interest rates.
“Usually, if we’re convinced it’s the best deal we can make, we’ll buy outright and finance it through the dealer. But about 30 percent of the time, we’ll lease. Generally, the vendors want to move product, so they’re willing to deal to our satisfaction. We use mostly Ford and Sterling trucks, and our dealer knows what we want and makes it easy to work with them.”
Anthony Foster owns Bermuda Sanitation & Engineering on the island of Great Bermuda, 640 miles off the coast of Cape Hatteras, N.C., in the Atlantic Ocean. His company services the entire 21-square-mile island with 50 portable restrooms. Foster does all his vehicle and equipment buying at the Pumper & Cleaner Environmental Expo International.
“Just recently, I had to replace a piece of equipment. My banker didn’t see the value in it, so I approached my dealer, and they financed it for me. I paid them back faster than I would have paid the bank, but I wouldn’t even have been able to do that deal if I hadn’t developed that face-to-face trust relationship through the Pumper show.
“Here, it was a phone call, and I had what I needed. That face-to-face time is critical to develop this kind of trust. At an average show, I usually spend about $20,000. I’ll shop and then bid on trucks I’ve seen afterward.”
