In this ToiletTalk episode, Curtis Ingels, CEO of Nexgen P-Pod and P-Pod Manufacturing, discusses the 2022 Portable Sanitation Industry Benchmark Report and shares valuable insights for operators in the industry.

Transcript:

Matt: Hey, Matt here in the Service Core Studio. This episode of Toilet Talk is all about the 2022 Portable Sanitation Industry Benchmark Report. Our CEO sits down with Curtis Ingels, a longtime operator who also founded Nexgen P-Pod and P-Pod Manufacturing. You don’t want to miss this episode. So let’s get back in the booth and get this started.

Jonah: So Curtis, welcome to the studio today.

Curtis: I sure appreciate it. Thank you for having me.

Jonah: What do you think about the inside?

Curtis: Well, I have to admit there are a lot more people here, a lot more folks than I expected. I’ve had small meetings with you guys in the past, and getting to see the whole crew has been kind of cool.

Jonah: Yeah. Well, thank you so much for giving us your time and joining us today. We’re gonna talk about the first-ever benchmark report for the portable sanitation industry. So we made this because we want operators to have the data that they need to stack themselves up against competitors and see where they might have opportunities to optimize their business. But before this, I mean, where were people getting information?

Curtis: I think that’s one of the biggest problems. People would ask others, so they knew their own network of people. So they’d ask other operators, some of the Facebook groups, things like that. But the problem was, we tended to find localized or regional information, never get really a nationwide view. And this study gives us a great nationwide view from the operator perspective because the bad news is your competition doesn’t wanna tell you what’s going on and what they’re having great success with. So this is a good way to say, “Hey, what are the general other operators in my area doing or, well, or not so well?”

Jonah: Yeah, I think that’s great. And we got over 300 people to submit their data from all across the country so I think we got a pretty good sample.

Curtis: I think its a great start. I think the fact that you guys are gonna do this every year will mean we’ll only continue to see better and better data. And like I said, the other reports that I’ve seen tend to be from other perspectives or points of view. So getting it from other operators and really what they’re doing is really valuable.

Jonah: So let’s look at some of the findings.

Curtis: Great. Let’s do that.

Jonah: The first thing that we did, we tried to benchmark six key areas of cost. So those are fuel, paper goods, chemicals, fleet maintenance, disposal fees, and overtime for their drivers. So what we found is ideally, people want to keep the total of these costs below 30% of their revenue. Some of the things are easier to control than others. Where do you think people should focus to take costs out of their business?

Curtis: The two that most seem to come up most often are the fuel and the overtime. If you can control the direction your trucks are going efficiently and do it in as quick manner as possible, you’re going to reduce that overtime as well. For us, human cost is one of the most expensive things. Fuel, it’s been all over the board, right? We use diesel equipment, so that cost continues to be higher. So we find that route optimization and minimizing and being able to know how long things are going to take, absolutely critical. Those two factors, toilet paper and chemicals and supplies, those are things that are always going to be an issue, but it’s harder to control those because somebody else uses those. So from my standpoint, those are really the two that I can help control and we focus on.

Jonah: Yeah. So I know, you know, most operators, they have their standard set of service routes and then as new jobs are coming in, they’re adding to these routes, they’re changing things around. But over time, those routes can kind of get under control. Do you think that if people looked at the average expected time for each of their routes that they’d find opportunities to better balance them, so they’re paying less overtime?

Curtis: Absolutely. I think that one of the things that we’re constantly doing is route optimization. So for us, not only do we do that on a daily basis, but we do that on a weekly and a monthly basis because our drivers not only do services, they do pickups and drop-offs at the same time. So they do it all. And so figuring out where is it? Because each day, I don’t know where my drop-offs or pickups are going to be because I get calls every day for those. So being able to quickly integrate those in with the existing routes has made a huge difference for us.

Jonah: That’s great. And then on the purchasing side, so chemicals and consumables and things like that. I mean, are prices pretty much set for this or are there ways that operators can look to reduce their costs on that side?

Curtis: Yeah, I think a couple of things. One, for us, the cost finding good vendors that you can rely on, also buying in bulk. So, you know, that’s the other thing is I’ve actually seen operators sending people into Walmart to pick up toilet paper because they ran out. We’re always working with our vendors to make sure we have a storehouse of that, both our blue chemicals, our cleaning chemicals, and our general supplies, hand sanitizer, all that. And I think that staying ahead of the curve and keeping the inventory up is important, but also when you’re buying in bulk, you get a better price. So we really try to focus on that.

Jonah: Okay, that’s great. So I wanna shift over and talk about macroeconomics for a second. So there’s some interesting things that came back in the report. One is, I mean, the vast majority of operators seem really bullish about the market. Like most people thought their businesses were to grow more than 20% per year. But, you know, there are concerns about what’s gonna happen with the economy. We’re in a place of uncertainty. Home builders, we saw, were about 40 to 50% of revenue on average, and new home construction is a place that is pretty closely tied to the successes and failures of the economy. What are your thoughts about that?

Curtis: Yeah, home builders actually are a pretty small part of our business. We’ve actually, we’ve found a lot of niche places where things that are higher, producing shorter-term home builders are always going to be an issue. We’re in a great market, the Denver market here because there is a net growth in our economy. That’s not the case everywhere and to rely on interest rates to, you know, to take us where we want to go, we know they’re going to keep going up and for now until the inflation and you know, session talk goes away that’s always something you need to be concerned about. For us it’s diversification. We find more different ways to provide our services and not center all of our work with one or two segments of the business.

Jonah: I think that’s really smart and as we think about revenue diversification, I mean, we have this trillion dollar infrastructure bill which everybody is anxiously awaiting to come out and any thoughts on how people might look to capture some of that revenue?

Curtis: Yeah, I think the construction companies are a huge force in what we do because of the fact that they have to have toilets at every job site. And so we’re going to see roads, bridges, a lot of infrastructure that’s been neglected hasn’t been dealt with in years. We’re going to see those jobs pop up. And really the big thing is to be there when those jobs get bid, make sure you’re there and you’re doing that for us, that’s a huge incentive on what we’re trying to focus on for the coming year.

We know in Colorado we have the winter season, we don’t get as much road work, we don’t get as much construction, but come spring time that happens well, we’re expecting that once this bill comes out. It’ll even be more important. And also remember these jobs, even though they’re approved jobs, they’re not. No vendors have been selected. So you gotta be in there and be ready to choose and be ready to take advantage of it.

Jonah: Yeah, I totally agree with that. And I think operators that stay close on the guidance and are first to the party are going to end up winning a lot of that business.

Curtis: And, and that’s the, that’s the biggest thing is those relationships we’ve built over the last two or three years with these larger construction companies. These are the ones, the road builders, the, you know, the steel erection companies, all of these different people that are going to be involved in it, they’re counting on it as well. So for us getting them to be able to bid us in there automatically is, is a great thing.

Jonah: So I think another place that people could look is to diversify the products that they offer. So we found in the report that the most profitable operators, so people that had more than 20% profit margins were offering at least two product lines. So, you know, this report and we’re focused on portable toilets. But, if you’re gonna expand your product lines, where would you recommend people look?

Curtis: Yeah, I think that the, you know, the industry as a whole, people tend to look at, you know, there’s a lot of, you know, large things they can do. The new businesses, they can enter, you know, the portable toilet business. People go into the septic business. Obviously, we’re waste haulers, trash business, the roll off dumpsters, those are all large things you can do. They typically require additional equipment, things like that. Great news is your software works well with those kind of businesses, but there’s a lot of small things you can do, auxiliary extra, you know, waste tanks, not only for your job trailers, but we found a great niche in the RV world. A lot of people are living in their RVS while they’re building their new houses. So we’re not only providing a toilet for the job site, we provide a tank for the RV while the homeowner is there.

So lots of ways, look at what your customer base is and offer the thing that they buy in addition to your toilet every single time. Some are fencing. Some are, you know, other things like that, I’ve even seen people rent, you know, going into renting equipment but for us, the really, the focus is let’s get really good at what we do and let’s offer the customers as much as we can still staying in our core business.

Jonah: Yeah, I mean, that customer relationship is the foundation, you know, you were talking about construction companies. You have that relationship, there’s a lot that goes into construction site prep, they’re gonna need more stuff. So, as long as you’re providing that good service, you could probably,

Curtis: Yeah, any, any construction person wants as few bills as possible and as much stuff delivered on time and as easily as possible. So that’s really the focus if they can get, you know, the toilets, the hand wash stations, the, the, the tanks and fencing and, and roll offs for the same person. That’s great. Do your invoices.

Jonah: Ok, great. So, yeah, I mean, I think those are two good ways that people might look to diversify. don’t rely so much on home builders and then check out some new product lines.

Curtis: Yeah, and it’s great to have that insight, you know, knowing that people are that far into this segment, it was actually good the opposite direction. We looked at this and saw there was a couple of segments that we were not in as, as much as those in our area. And we, we’re looking to kind of, you know, focus more on those areas. So whether it’s, you’re too leveraged in an area or not in there penetrating enough. It, it’s good insight.

Jonah: Yeah, but, you know, good news is, it doesn’t seem like the change in the economy is gonna catch up to our industry any time soon.

Curtis: And I say, you know, our business will stop when people stop going to the bathroom and we both know that’s not gonna happen. So, the difference is is that where they go to the bathroom and who’s paying for it. Those are the two things that we’re always focused on. How do we be more convenient and how do we be more effective with things like our billing, things like our invoicing. So they become transparent because if there’s a problem with those, even if you provide good service, it could be an issue. So we try to eliminate those.

Jonah: So speaking of billing, this is one place where we’ve seen a lot of change in the issue over the last couple of years, people really modernizing their practices. Something that seems like is relatively ubiquitous at this point is 28-day billing and then upfront, at least for that first bill before we go to arrears. Some things that didn’t have as much adoption were requiring credit cards upfront and then billing more frequently. So instead of this once a month, you know, kind of a day or two of chaos, people are trying to get closer and closer to that to that daily billing. What advice do you have for people who are trying to modernize their business practices?

Curtis: Yeah, we we, we definitely, so we do daily billing. So every single day our office manager comes in and she looks at what’s due and automatically bills every day. The other thing is, is every one of our accounts we do set up with the 28-day billing, we also have a credit card on file that not only do we build them initially before we deliver the unit, but all subsequent billing goes on that credit card as well. So for us, it’s a seamless thing. They get a notification when we clean their unit, they get a notification when we drop it off, when we pick it up and when they get invoiced every single time, and the billing departments tell us that makes a big difference. They don’t have to fight back and forth and figure out who to win. It automatically goes on the credit card for us it has simplified things. It’s minimized our A R down to almost none. We have a couple of vendors that we do large business with that do have billing terms, but everyone else is pretty much on credit card advanced billing.

Jonah: You know, and with collecting that credit card, right, a lot of customers aren’t gonna want that to be the first stop, especially for your, your larger customers, but at least to have that as a backstop. So 60 days later when they’re not paying you, you have a card you can charge.

Curtis: Yeah. And actually what we have found is that more and more companies are moving to a credit card based system because of the fact that each they do job costing. So we have actually a couple of vendors that actually create a credit card just for that job. And all of the services get billed on that credit card. And also we’ve been getting with some of the service providers, we’ve been, they do temporary credit cards. So each time they have multiple orders on it and they’ll use a card and you have to get reauthorization, but it has saved us so much time and energy. That’s really the biggest thing. It’s, we eventually get our money either way. But the difference is, is how much time and effort we have to put into it. If it’s a couple of clicks issue, the invoice charge the credit card, you know, send, send the payment receipt, that’s very quick and easy if we do that every single day to minimize the work. This once a month thing where I don’t even know how companies do it. It would really be a stressful time for us a little every day. Honestly, it as little as 20 minutes a day it’s all taken care of.

Jonah: You know, I think people might be concerned around changing billing because of upsetting their customers. But getting those credit cards billing more frequently, I think actually provides a lot more consistency and fewer mistakes, better service. And ultimately,

Curtis: There’s benefits on both sides. So not only do we have the confidence that we’re going to get paid, do we, we get quick payment? But there’s also the benefit on their side in knowing that that you’re not bothering their accounting department for writing something to them. You know, a few $100 is a pretty minimal thing. Many of their, you know, expenses are tens of thousands, hundreds of thousands of the dollar. That’s what they want their accounting people working on. Not these little things. So these, you know, I have seen very little reluctance for, most of my customers to move the credit card quickly and those that, that aren’t interested in doing it, I always have to question and go well, great. Then let’s set up a program and let’s see how it works, but I still collect the credit card and making sure I’m getting paid.

Jonah: That’s great. So the report also showed that there was two things for sure. Customers who are modernizing their billing practices, diversifying their revenue are more profitable. The third one was that operators that are adopting tools to run their business are also more profitable. What kind of tools do you think are important?

Curtis: So the biggest thing for us is having a single place to go for things. So the onboarding of the customer from the initial quote all the way through the, you know, the ongoing via us having a single platform for all that.

But also ensuring that the driver activity is there, ensuring that when we make a commitment that we’re going to have a unit dropped off, that we already know that our driver is going to be in the area, things like that, that tie those things together. We recently onboarded a new driver and it came from a system that was a completely paper system. And within 2 to 3 days he had the system down, understood it and actually was like, wow, I don’t have a huge pack of paper that I got to struggle through and it’s good for us. It also gives us good clear expectations every time we serve us because of it’s all integrated. The customer gets pictures of the units, the customer gets a verification that it happened and then we don’t get the phone call. Hey, when are you guys coming out or have you come out? All those things happen. I still see people online, you know, saying that they’re writing down when they service the unit, you know, inside the unit. Well, that’s great. But the problem is the person that’s doing the building or did the order rarely is the person that’s using the toilet. So we do both. We have the customer satisfaction inside. We have QR codes that tie to our system. Every time our driver gets there, they scan it. We know immediately that it happened and we have a record that, that the service to pick up the drop off all happened. And that just simplifies things when we do get a call from a customer, we can not only say it happened but we can have proof to back it up.

Jonah: Yeah, for sure. I love the way you’re thinking about that and it’s tying together the back office with the techs with the customer.

Curtis: The integration across the different software applications. You know, we have bookkeeping software, our software automatically updates and keeps that connected. And the great news is it simplifies it. Now, our accounting software is really just tax software. You do it for our, you know, we run our payroll through it and we, and we do our year-end taxes or our, our sales taxes and things, but it’s become more of a tax engine that it is a building engine because our, our integrated software handles all the billing and it, it has a communication mechanism because I would hate to have to do put things in multiple places multiple times. It just increases the chances of ARs Yeah.

Jonah: So you mentioned QR Codes. I think the industry is kind of split on this. Some people love it. Some people don’t want to do it, you know, tagging your inventory and then having that as a part of software, it’s gonna help you forecast better. It’s gonna help you make sure you don’t overbook your jobs. It’s gonna make sure you don’t lose inventory. But tagging units is a huge headache. So you’ve done it.

Curtis: I’ve done it. I went through the process. So the great news is we actually worked with AirVote and ServiceCore and AirVote ServiceCore went together and actually in, added our inventory to our system made it very seamless for us. We have the stickers, we have stickers inside the unit and stickers on the outside of the unit. So the great part is, is it doesn’t matter if the service technician is pulling a unit off the truck, they can scan the outside. If they’re working on a unit, they’re cleaning a unit, they can scan the inside. Exactly the same thing each time they’re able to then take pictures and update, document the usage, any issues, take photographs and it all goes to the customer. So the QR code means that I don’t have to, there’s very little data entry. It’s simple, you know, you scan it that comes up, they do a couple, answer a couple of questions, no data entry again. They’re drivers, they’re, they’re meant to go out there and clean and do as good a job of a delivery as possible. So they’re focused on what they do. They’re not data entry specialists and trying to figure out where your inventory is in a recent update. One of the great things about the software is I can see where all my units are. How great is it to be able to see that and we can do it by day so we can see that they’re all Mondays or Tuesdays or Wednesdays and we can use it to optimize and, and change where things are. So, some of the technology by knowing what’s at each location, is it a toilet? Is it a sink? Is it a tank? What is there is oftentimes as important as where it is? So the fact it does the geo tagging, it shows me exactly where things are and how many I have at that site really been revolutionary for us.

Jonah: That’s great. And speaking of making things easy for the drivers, I mean, back to your point around, we gotta connect dispatch with the drivers with the customers in an easier way. What’s it like when you have to make a same-day change to her out?

Curtis: Well, that’s actually one of the things that we specialize in. So we actually keep units on our truck at all time. We can carry 16 units on a truck. So we not only do we service the unit, we drop them off and pick them up all with the same equipment. So the ability to quickly get a unit to a customer or from a customer, oftentimes getting it out of the location is as important as getting it into the location. We can do that on the fly. So our person knows exactly where our drivers are in route and they can set that expectation. Can they get to it today or will it have to be a drop off tomorrow. By setting the expectation early with the customer, you eliminate any of their concerns.

We’ve had recently, we had a major customer up north that was a major manufacturer and they had a package in their sewage. They called us up and they were like, we need a truck. We need toilets. Now, we need multiple toilets right now and that ability to know within two hours they would have that. Well, actually we actually delivered them in just over an hour from when they called us, we had units on site, and as soon as we closed the door and walked away, they had their first person going in to use it to show you how important, how important it was for them.

But, we got accolades because again, setting a clear expectation with the customer and being able to deliver on that is really where it’s at. Your driver is going to run through issues. You can see if they’re having troubles when we’re having weather. This is Colorado. So we have winter that’s here and it often will slow down the route. But our, our, our back office can see each and every one where they’re at and how much time they’ve got left and the pace they’re going at. That’s another big one.

It’s, you know, if I had a lot of sites where there were 25 units at it, well, that’s a different scenario. But we have a lot of them were 1 2 3 units of each which means a lot of drive time. And that’s the great news is we can see all that detail, remote and the driver has a clear expectation when they start their day.

Jonah: Yeah, and when you have your expected route time going into the day, you can measure your driver’s performance.

Curtis: Yeah, we’ve, we’ve found that, that we’ve got a new driver and they absolutely are very, very good at getting a lot of units done. We have another driver that’s very detailed, very good at making sure that they are super, super clean, but he’s slower.

One of the things we found is finding the right number of units per driver per row because again, everyone works at their own pace, everyone has their own skills and their own specialty learning how your drivers are doing. Their things really is critical and tailoring it a little bit to them because again, putting five more units on a on a route doesn’t really improve if that driver now is feeling pressured and rushed for sure.

So for us, optimization is not just the driving route, it is the how many units per driver for that driver?

Jonah: So to wrap it up, was there anything in the benchmark report that surprised you?

Curtis: A couple of things. I think the individual mix of, of services, you know, who they consider their service mix to be. We found a few that we, we weren’t really, you know, heavily invested in and 20% of our competitors’ business was there. So that, that’s been great. It’s helped my sales team to optimize what they’re doing.

But also one of the things that I look across this is because not only am I an operator, but I also manufacture equipment. So we make the P-POD, but we also have a are looking to expand it into new areas. This is one of the hardest things to figure out where should I have operations at without being able to see across the nation. And so it’s helping us also look towards the future. You see a lot of these operators that are growing through acquisition. Well, the great news is, you can see this study shows where are the markets that are hot, where are the markets that are going on? And I think though that’s insight that’s been missing.

Jonah: Ok. Well, I really enjoyed getting to break this down with you today. Thank you so much for your time.

Curtis: I sure appreciate you taking the time as well.