The Royal Touch

Business diversity, hardworking employees and good equipment help Potty Queen deliver kingly customer service.
The Royal Touch

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About 13 years ago, Les Rinehart III decided to scratch an entrepreneurial itch by buying a portable restroom business in Pottstown, Pa., with the unlikely name of Potty Queen. Total equipment inventory: three service trucks and about 200 restrooms.

Today, Potty Queen boasts a fleet of equipment fit for a king, including 10 restroom-service trucks, 2,550 portable restrooms, 10 restroom trailers, three septic service trucks, five tractor-trailer tankers and nine
flatbed trailers.

Potty Queen's ascent to relative portable sanitation royalty is the result of Rinehart's simple business philosophy: Surround yourself with competent professionals, provide great customer service, and diversify your services.

"I attribute a lot of our growth to my great employees," Rinehart says. "I've got a great team, great management, great drivers and great office and sales staff. You've got to have good employees to run a good company.''

CATCHY NAME

Rinehart bought Potty Queen after spending about 30 years working for a large, solid-waste hauling company in Pennsylvania.

"I gravitated toward portable restrooms because the company I worked for used to be involved with them, but then divested from them in our area," he says.

What about the Potty Queen name?

"The owner was a woman, hence the name," he adds. "I liked it a lot – thought it was pretty catchy. It's funny, because when men hear the name, they sort of tilt their heads and look at me funny, but women love it."

Through telemarketing, some outside sales reps, a website and a strong phone book presence, Rinehart started to expand the company's geographic market west from its main hub in Philadelphia.

"But providing good service really made the expansion possible," he notes. "We achieved that through a lot of training – things like how to clean restrooms properly, preaching the importance of getting to customers on time ... building relationships with people. We attracted a lot of customers from word-of-mouth. But no matter how you look at it, it all comes back to having great employees."

In the second year of Rinehart's ownership, the company's gross sales revenue grew 700 percent. The third year, it increased 44 percent.

"We went up every year until 2007, which was almost flat," Rinehart says. "But in 2008, gross sales went up another 35 percent."

ACQUISITION FUELED GROWTH

The main driver behind '08's growth spurt was the acquisition of Philadelphia-based Johnny On the Spot, a company with gross sales revenue of about $800,000, 11 employees, nine trucks and 800 restrooms,
Rinehart says.

"The goal was to tuck them in and create more route efficiencies," he explains. "Most of their routes overlapped with ours, so it was easy to create route density. That's the advantage of acquisitions ... the productivity improvements.

"What it boils down to is we could service more units per hour and per day," he says. "Our costs went up a little bit, but not as much as running two trucks in the same area. It was
a pretty seamless acquisition, over
-all. They had good employees and decent equipment."

Earlier, another acquisition, as well as entry into a new market, also contributed to Potty Queen's growth. In 2001, Rinehart purchased a septic-pumping company that owned one vacuum truck. A few years after that, Rinehart started hauling industrial waste, which came about as a natural extension of his restroom services.

"We started out (with tanker trailers) because we needed more volume to handle special events, where we might have 200 or 300 units out," he says. "Rather than make many trips back and forth to waste treatment facilities, we started using the larger trucks to handle the volume.

"Once you have that additional capacity, you don't want trucks sitting around because you're still paying for insurance, tags, licenses and so forth," he says. "So we started bidding for (industrial waste hauling) jobs and building it up. Now we also haul waste between treatment facilities if one
is overloaded."

"We're thinking about fence rental, too. We look for sectors that are different, but still fit into the realm of the portable restroom business ... where we can use the same drivers, the same kind of equipment and sometimes sell to the same customers.''

Les Rinehart III

COMPLEMENTARY SERVICES

Portable sanitation accounts for about 60 percent of Potty Queen's gross sales revenue (that, in turn breaks down roughly into 30 percent construction, 20 percent special events and the rest from monthly rentals); waste hauling accounts for 37 percent, and the remaining 3 percent stems from septic pumping.

When seeking new markets to enter or companies to acquire, Rinehart sticks to a basic strategy: Fill a niche that complements Potty Queen's existing services. For example, septic, portable restroom and industrial waste all fall under the umbrella of liquid waste hauling, with intertwined customer bases.

"It all fits together," he points out. "We're thinking about fence rental, too. We look for sectors that are different, but still fit into the realm of the portable restroom business ... where we can use the same drivers, the same kind of equipment and sometimes sell to the same customers.

"To some extent, it's about providing customers with one-stop shopping, because we deal with the same people for different kinds of business," he adds. "This allows us to more effectively utilize the existing capacity of our equipment ... we don't need to make significantly more capital investments to generate more business.

"It also helps when they fit together seasonally, like our bulk waste hauling business, which is busier in winter, and the restroom business, which is busier in summer," he says.

"The uniforms create a more professional image. When we provide great service, we look professional doing it. And the vehicle branding is important for name recognition. It adds a lot of value.''

Les Rinehart III

BIG FLEET

Providing an array of services requires a large fleet of equipment. On the restroom side of the business, Potty Queen owns 10 service trucks: seven Internationals, two Freightliners and one Ford, built out with steel tanks by Pik Rite. They range in size from 650-gallon waste/250-gallon freshwater tanks to 1,000-gallon waste/500-gallon freshwater to 1,200-gallon waste/350-gallon freshwater.

The company also relies on four restroom delivery trucks, all equipped with steel tanks: a Ford and an International equipped with slide-in units made by Pik Rite (250-gallon waste/100-gallon freshwater); a Chevrolet with an 800-gallon waste/300-gallon freshwater tank, and a Freightliner with a 600-gallon waste/200-gallon freshwater tank, both built by Crescent Tank Mfg.

In addition, the company's restrooms (including about 110 handicapped-accessible units), are mostly from PolyPortables, with some from Satellite Industries and PolyJohn Enterprises, and about 60 hand-wash stations, most from PolyPortables. The company also owns 10 restroom trailers: four made by Black Tie Manufacturing, three by ACSI (Advanced Containment Systems Inc.), one from Olympia Fiberglass Industries, one from Wells Cargo and one from Ameri-Can Engineering. The company also owns an Ameri-
Can shower trailer.

The company runs three trucks on the septic side, including a 2004 International 7600 with a 5,000-gallon steel tank and a 2007 International 7300 with a 3,600-gallon steel tank, both built out by Pik Rite. To haul industrial waste, the company owns five aluminum tractor-trailer tankers made by International and Longhorn Tank & Trailer, with capacities ranging from 5,500 to 7,000 gallons.

Potty Queen also owns nine delivery flatbed trailers, made by Wee Engineer, Belmont Machine and Load Rite Trailers; two John Deere tractors with forklift attachments for restroom loading; and one forklift made by Case Construction Equipment (a division of CNH America).

DIFFERENTIATION IS KEY

Rinehart says the company invested in restroom trailers to satisfy customer demand. At first he rented trailers from a competitor, then slowly bought new ones, one by one. When the economy is good, they provide a nice return on investment because they command higher rental rates, he says.

"You've got to make sure you rent them out eight to 12 times a year,'' Rinehart says. "Sometimes we'll rent to other operators outside our market. It's good for them because they don't have to spend the money on buying one, and good for me because it generates more rental income."

With 20 competitors scattered throughout his service areas, Rinehart says it's important to continually build on a good reputation. He preaches employee professionalism, backed up by company uniforms and consistent branding of company trucks, with white cabs and a distinctive orange-and-
blue logo.

"The uniforms create a more professional image," he says. "When we provide great service, we look professional doing it. And the vehicle branding is important for name recognition. It adds a lot of value. When customers see a truck that's all banged up and dented, it creates a poor image – you appear unsafe."

FORESEES A BRIGHT FUTURE

Looking ahead, Rinehart says he's optimistic the economy will improve a little more this year, and he expects further growth for Potty Queen.

"Our outlook is tremendous – We're still looking to grow," he says. "We've got our sales team focused on our goals. I also could see making another acquisition if it allows us to tuck in routes in the same areas we already serve.

"I've always planned to be bigger," he adds. "I like to be aggressive. I've always wanted to grow the company and keep people working. I learned that from working at the waste hauling company, where it was always grow, grow, grow. My father was the same
way, too.

"Does it come with challenges? Sure," he says. "But at the end of the day, I enjoy what I'm doing and the people I'm with."

Which keeps that entrepreneurial itch satisfied.



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