Daniel McCarty 🏴‍☠️

1. Men act purposively to attain ends 2. Their wants are endless 3. Their means are limited 4. Their values are personal (subjective) 5. Their ideas, values and goals are always changing 6. They may make mistakes 7. At any instant in time, they are aiming at what they consider most important 8. They try to use the easiest way to get what they want

We’re the first and only pay-by-weight junk removal company in the country. Every other competitor charges by “volume”, or guessing how much room the items may take up in their trucks. We outfitted our trucks with scales, and charge a simple per-pound price. Much fairer to our consumers, more transparent, and a better business model for the entrepreneur.

About 4 years ago. Supply/demand is just crazy. I love investing and can't wait for the pendulum to swing back. However, my base case is that the next 10+ years will be a generational time to create assets. Then you can see the cash to buy well-priced assets when/if the pendulum swings back. I searched for almost two years before pivoting to starting JunkStart (knowing it was time to create assets). And it's the perfect vehicle for this build-over-buy thesis. I build a meaningful asset by helping our franchisees build meaningful assets.

Good find! Our family had a ready-mix business for 40+ years, and had forms, and sold blocks with the excess concrete we brought back to the yards. It was a no-brainer, but we didn't start doing that until 10 or so years ago. I'm sure plenty of operators still don't. An even better operation was in the sand and gravel mining business. In Houston, we had sand and gravel plants all over. And we had a company that would set up shop at the front of our locations, and take all the overburden/shitty sand that we couldn't use or wouldn't meet concrete spec. We basically gave it to them for free, or sometimes they even had their own trucks and equipment and would do the stripping for us until we got into paydirt. Anyways, they would take that shitty sand, mix it with concrete, and sell it as CTB (cement-treated base). They did large-scale demo, concrete recycling, and some other stuff outside the CTB business, but they sold that business for a few hundred million dollars a few years back. What I love about it is that CTB business would never work 200 miles away in San Antonio. Plenty of limestone and base material around, and roads are built mainly on solid ground. But in Houston, where its a swamp, and most base material has to be railed in, it was a killer business.

Advice for picking which zip codes to target for upscale service business: Find a local high-end magazine (luxury real estate, etc.) and ask for their media deck. Below is the map “Elegant Living San Antonio” has in their advertising packet, and the blue/red map is our geo targeted PPC campaign… If you are selling premium service… you need to find customers who value premium service. We wasted a lot of money ($50k+) this year running ads all over San Antonio when in reality, we should have just targeted the higher end zip codes. Our conversion %, average job size, and just overall headaches are all directly tied to which zip code we operated in. — What are other ways you’ve seen to help identify got to market to your target demographic?

Average Job Size (AJS). Running a $500 AJS company (like Junk Removal) is WILDLY different than running a $10k AJS company (like roofing), or certainly a $100k AJS like home-renovation. It’s night and day different. Getting to a million bucks $500 at a time is different than getting to a million $10k at a time. To operate well in a low AJS environment, you have to have a truly great marketing machine. You need to drive 20-50x more leads than your larger AJS competitors. The systems, processes, back office orchestration, customer support functions to support 30, 40, 50+ unique jobs every single day is just not even in the same galaxy as a larger AJS business model. BUT… Challenge brings opportunity. The barrier to entry for junk removal, where I work, is low. But the level of sophistication and support needed to reach past $1-2 million puts it out of reach for 99.9% of operators. It’s just too complex, requires too much time, money, and skill. So if you can execute on putting the right systems, support, and plan together to build a multi-million dollar operation, the competition gets a lot more scarce. Gross margins can be higher on lower AJS jobs than higher ticket counterparts. And the sheer volume of clients you interact with can give you an amazing retargeting list to work with (5, 10, 15,000 customers to target after you have been in business for awhile). So next time you hear about revenue here on X, just ask yourself about the AJS and business model profile. There is a lot I like about the smaller AJS business model, but you have to be totally committed to building a beast of an operation (or joining a franchise system that has this already built). Otherwise, if your goal is to get past $500k or $1 million in revenue or so, you are probably better off choosing a medium or high ticket business that can get to scale without having to build such a robust support system and operation.

As a leader/coach, its helpful to think about removing the blockages as opposed to painstakingly building competency step by aching step. It's daunting to think you need to build someone up from scratch. Instead, focus on removing the blocks that are keeping them stuck.

Guerrilla marketing tip: Go get stuck in traffic. If it’s a little slow, go send all your trucks (3+ to really pop), stack them back to back to back, and just go get stuck in the absolutely busiest/most congested highways in your area. You don’t think people will notice 4 orange lettered junk trucks neatly stacked one after the other? You don’t think they will assume we have an army of junk mercenaries if in one location they had 4 trucks together? You gotta be scrappy and creative if you want to own a SMB. Whatever it takes.

The price of a new roll off truck is now above $300,000. The unit economics weren’t great 4 years ago when the trucks were selling for $175,000. They are a lot worse now. Add $300k of dumpsters, and the capital costs are stupid. Especially when you have to earn a return doing $600 turns at a time. - We own an older roll off fleet and are not upgrading or reinvesting. - Large, integrated players do not offer more than asset value for C&D roll off operations. Meaning no juicy multiple (bc ROIC is poor). If you have municipal front load routes they get more interesting, but that is also a very capital intensive business. - If you factor in actual economic depreciation, you will likely earn 5-15% ROIC at scale. I do not believe the brain trauma and on the road liability is worth that return profile.

Put in place a marketing and human capital plan. And then execute. Strategy session over. Go do.

Starting a home service business? Here is my biggest tip: Pick 3 neighborhoods for the first couple of months and just own them... Don't do what I did and try to be everywhere. Saturate