One of the challenges of remaining profitable for many PROs is determining when a service call is too far to be worth the trip. Many factors can influence the decision to take on a new rental placement: fuel prices, driver overtime, mileage on a given delivery or vacuum truck, how tough terrain can vary that mileage, going rates in the market, availability of disposal and licensing to operate in the area in question.
A few of your colleagues attending the 2010 Pumper & Cleaner Environmental Expo shared how they’re dealing with this issue:
CB fields about 100 units, primarily for construction in a town of about 13,000 near the Arizona-California border. “It’s a small town, so we do a lot of different kinds of jobs,” says Curt Crecelius, a technician who’s learning the ropes to eventually take over the business from his dad, Wes Crecelius. Their regular service area is roughly within a 100-mile radius of Blythe, and they charge a mileage fee to recoup fuel costs on service calls.
Asked what would make them accept or reject a job outside their territory, Curt replies: “If the money’s right, we’ll do the job,” regardless of distance. His dad concurs, with some caveats:
“We have the ability to travel. Money would be an issue, most definitely. We do have our limitations on how far we can go, on our workforce, and we only have 100 units,’’ Wes Crecelius says. “We wouldn’t damage our local business by placing units outside our regular territory and then not have enough for regular customers.”
He says permitting is not an issue because CB is licensed in both Arizona and its home state. So they’re ready to travel if a job doesn’t compromise their ability to support local business.
Joe McKamey says when he gets calls from outside the company’s traditional territory, he does some math to determine if the job is cost-effective. “If it’s 70 miles away and it’s only one unit, you can’t make any money on that,” he explains. So he’s developed a kind of mutual aid agreement with colleagues on either side of his territory to subcontract jobs that are out of reach, profit-wise.
“Either we’ll take our unit out there and they’ll service it, or they’ll take theirs out and take care of the whole job for us.” He says this agreement is reciprocal.
In this western suburb of Chicago, disposal doesn’t affect the out-of-territory decision, McKamey says. “Having a septic company, too, we’ve got the bigger trucks and can always pump off the little trucks and just keep going.”
Permitting doesn’t limit McKamey, either, since the company regularly services the seven-county Chicago metro area, but is licensed in the entire state.
“First I find out how big the job is. If it’s a huge job, it’ll probably make it worth it to go wherever it is. If not, I’ll usually refer it to a friendly competitor who will hopefully recommend back to me if they come across something in my area that I can take care of,” Trinity Kincaid says.
Located in a small town halfway between St. Louis and Kansas City, Kincaid’s regular territory extends to about 20 miles outside of Versailles. Mainly, he says, what will ultimately determine whether an out-of-territory gig will be worth the distance is “the amount of competitors in an area. If there are a lot of competitors in an area, there’s a lot of business. But is it worth it for you to expand? Is there enough room in the market for you to come in and make a profit?”
For Kincaid, this is more than a question for a one-off job. He’s considering expanding into adjacent territories, so distance from home is something he’d have to deal with on a long-term basis. “It’s an investment, and you need to have enough capital to make it a good venture,” he says.
