California Portable Restroom Operator Focuses on Service & Business Diversification

When called to provide a new product or service, NOR-CAL Portable Services won’t give “no’’ for an answer.
California Portable Restroom Operator Focuses on Service & Business Diversification
Renee Commins operates a street sweeper at NOR-CAL Services. When a portable sanitation customer requested construction site cleanup services, NOR-CAL bought a sweeper and provided the service.

After David Leal started NOR-CAL Portable Services in 2003, he faced a decision at a figurative fork in the marketing road: Do things on the cheap and be a low-cost portable restroom provider, or differentiate his company as a more expensive outfit with higher-end equipment ­– and justify those higher rates by providing exceptional customer service.

Leal and his wife, Kelly, chose the latter strategy. And in the ensuing 10 years it’s worked well, bolstered by a strong emphasis on diversified services. Based in Gilroy, Calif., NOR-CAL started out with 100 restrooms, a slide-in vacuum unit on a Ford F-550 flatbed truck and two employees: David and Kelly. Today, it’s a multi-million-dollar company (in terms of annual gross revenue) employing 25 people and maintaining about 2,000 restrooms, 800 hand-wash stations, more than two dozen restroom and shower trailers, and nearly two dozen vehicles.

In addition, NOR-CAL rents temporary fencing and storage containers, and provides street-sweeping services at construction sites. Leal estimates 60 percent of his revenue comes from restroom rentals, 30 percent from temporary fencing and the rest from storage containers and miscellaneous service. About 80 percent of the company’s restroom revenue comes from construction rentals; special events generate the rest.

“Early on, I decided to be the Nordstrom of portable restrooms, not the Target,” Leal says of his business philosophy. “Instead of buying [standard] restrooms, I spent a little more money [per unit] to buy Maxim restrooms [made by Satellite Industries], well-built units with higher, more comfortable toilet seats.

“In this industry, a lot of people buy less expensive used trucks and cheaper restrooms, and go cheap on price,” he adds. “I did the opposite. I went with higher-end restrooms, new higher-end trucks and charged higher prices. And so far, it’s been working.”

SERVICE JUSTIFIES PRICE

To maintain profit margins and firmly establish his company’s branding through differentiation, Leal refuses to cut his rates to meet competitors’ prices. “I tell people that if someone else can do it for $15 to $20 [a month] cheaper and provide good service, go ahead and give them a call,” he says. “I’m in the business to make money.

“We pay the same dump fees and the same fuel costs,” as other providers, he continues. “But I also pay for my employees’ health insurance premiums – they only pay the deductibles. So I need to make money. I’m probably spending $60,000 to $70,000 a year on health insurance alone.”

Leal emphasizes that providing great customer service is the key to getting customers to accept higher rates. As he puts it, “It’s all about service, service and service.” If the phone rings on a Saturday or Sunday, he answers it. If it rings at 5 a.m., he answers it. If someone needs restrooms on short notice, NOR-CAL delivers them.

Leal’s business approach includes another wrinkle: If a customer needs equipment he doesn’t have, he often goes out and buys it ­on the spur of the moment – another customer-service enhancement, he says. For example, if a customer calls and needs four restroom trailers and he only has three, he’ll buy one. In another instance, a customer renting restrooms on a construction site needed a street sweeper to avoid getting fined for allowing debris to flow into storm sewers. The result? Two days later, NOR-CAL was cleaning the street with a new $125,000 sweeper.

RISK AND REWARD

“Whatever the customer needs, we provide,” Leal notes, saying he doesn’t do any kind of return-on-investment analysis. “Yes, it’s risky. But you know what? It’s all worked out. I can always sell equipment if we don’t need it anymore.” He also points out he can defray the cost of new equipment, and generate a new revenue stream, by renting trailers and other equipment to competing contractors.

With that buy-it-as-you-need-it approach, NOR-CAL now owns a considerable fleet of vehicles and equipment. The company’s inventory of restrooms is mostly made by Satellite Industries (including 50 high-rise construction and 75 ADA-compliant units); with about 800 hand-wash stations made by PolyPortables Inc. It also owns 15 solar-powered NuConcepts trailered restrooms; nine restroom trailers (two made by Ameri-Can Engineering, four by Comforts of Home Services Inc., two from Rich Specialty Trailers and one by JAG Mobile Solutions Inc.); and three shower trailers, made by Ameri-Can, Comforts of Home and JAG.

Leal says customers in eco-conscious California increasingly ask for the solar-powered NuConcepts units, and he likes that they don’t require a power source. “You just pull in with them, level them out and they’re ready to go – no need to hook up power or water [units feature self-contained water tanks],” he says. “Their batteries will hold a charge for a weekend party or special event, even if it’s cloudy.”

The company’s restroom-service vehicles includes four International 4300 models (2004 to 2007) and eight Hino 338 rigs (2010 to 2013). Trucks feature Jurop pumps and 1,500-gallon waste/500-gallon freshwater aluminum tanks, some provided by Southwest Products. In addition, NOR-CAL owns three pickup trucks from Ford and Toyota, an Isuzu street sweeper, a 2007 Hino tow truck, two Isuzu flatbed trucks, one Ford F-550 flatbed and another cab-forward Ford.

“I love the Hinos because they’re bulletproof – good, good trucks,” Leal notes. “Our drivers say they’re more comfortable in terms of the interior and the ride. We have 100,000 miles on our Hino tow truck and it’s never been in the shop for major service or repairs.”

CONSTRUCTION CONNECTION

Before he entered the portable-restroom industry, Leal worked for about 10 years for a company that built data centers for Internet service providers. He founded NOR-CAL after getting burned out working for someone else.

“Getting into restrooms just seemed like a logical extension of what I’d been doing,” he says, noting much of his career was spent in construction-related jobs.

Aside from handing out business cards at construction sites, running a phone book ad and eventually establishing a website, Leal says he had no real marketing strategy. He says word-of-mouth referrals were his most effective advertising tool. And as for a formal business plan, Leal says his was simple: Get up at 4 a.m. every morning, work seven days a week and make great customer service a top priority.

Leal admits that part of NOR-CAL’s success stems from it’s location in the Silicon Valley, home to large, extremely profitable tech companies like Facebook, Google and Apple that are constantly expanding their facilities. That, in turn, generates strong demand for construction-site restrooms and the other related services he provides.

But he also says the company’s success is a result of putting in 60- and 70-hour workweeks, and keeping a close eye on all aspects of operations – especially a never-ending emphasis on customer service.

DO YOUR BEST

“I believe you have to be involved day-to-day and provide great service,’’ he says. “We’re very fortunate because we have great weather, great employees and a great market here, with some of the biggest companies in the world within a half hour of our San Jose yard.”

What’s the most valuable lesson Leal has learned? Whatever you do, you should always strive to be the best.

“You can’t ever back off,” he says. “Once customers get used to a high level of service, you must keep providing it, or you won’t have a business anymore.”



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