184. Building a $2M Business from the Ground Up with Ian Hecht from Dumpster Rental Enterprises

[MUSIC] What's going on podcast? There's Neil here for another episode of the Freedom Formula Podcast. I'm here with Ian Hacked and anytime I could hop on a podcast and just like talk shop about business, especially local business, I freaking love it. And Ian Hacked is the man Ian rents dumpter rental enterprises. They do over $2 million per year as a dumpster rental business. And he's in over 20 states. He started the business only in 2020, so I've been crushing it. Ian, excited to have you on, dude. Yeah, excited to be here. Ian, tell me a little bit more about your background, dude. Be like, were you always in the local business game or how did you start from your career to where you are now? Yeah, so after college, I went to school in LA. I started in the entertainment business. I took that age-old advice, follow your passion. I had a good four year run in entertainment. I was working mostly for a brand partnerships agency, but there was no room to move up. So I started looking for other ways to make money. I always knew I wanted to travel. I always knew I wanted to be my own boss. So I was getting Facebook ads for like make money online, learn SEO. I actually did one of those courses and I would say it worked. I learned how to do SEO. They advised doing SEO for local businesses and basically generating leads for local businesses. So they recommended a few different industries like rufers, home builders. One of them was dumpster rentals. So I thought, oh, this is a great business. Like a lot of people are probably going to think, oh, it's smelly business. I don't want to deal with dumpsters. Well, I'll have less digital marketers competing for these businesses. And I also figured they also probably have bad websites. They need SEO. So I started trying to sell my SEO services to them. And they were not about it. They were very resistant to trying to pay money for leads. A lot of them were already overwhelmed with the amount of work that they had to do. So one day, one of these people I was trying to sell my services to, they just said, why don't you just call me with their credit card and tell me where to drop off the dumpster. And then we'll work together that way. So that was kind of our aha moment. We then decided to basically handle all the customer service. So if someone calls our phone numbers, we would then arrange the dumpster for them and then pay the local provider to do the service. And basically, as long as we have enough margin on top, we have a business. So that's how we started. Yeah, that's incredible. I mean, it's a remote local business. Like that's exactly what I started with me this as well. And it's funny because you and I were talking beforehand. You live in Los Angeles. You saw the me this brand around at like my old apartment and my new apartment. So it is funny how we've kind of crossed paths loosely with the remote local business. So that's really cool. Totally. What do you live now? So I'm traveling full time now. All my stuff is currently in a storage unit in Los Angeles. But I'm currently in New Jersey for my dad's 70th birthday, but on Saturday heading to Thailand. Well, yes, that's awesome. And I want to dive into the economics and how your business model works, because I'm fascinated by that special talk and shopper about marketing. But before that, I'm super curious. When you decided to travel full time, did you think, you know what? Let me get X amount of income coming in before I could decide to do this. Or what was your thought process of number one, quitting your job and going full time on your business? Did you do a side hustle? Did you go full time on it? And what did you just thought to round like some sort of freedom number to have coming into bank before you felt comfortable taking the leap and leaving the country? Yeah. I'm glad you asked that, because I get a lot of questions from aspiring entrepreneurs about like, when is the right time to make that jump? For me, I was trying to sell these SEO services while trying to hold down my 9s 5 at the same time. And so I'd be taking calls in my lunch break like I'd be getting calls from prospective clients like while I'm at work and I can't take the call. It was clearly picking up steam. I was not making the same amount of money that I was making from my 9s to 5, but it was clear that I couldn't balance both anymore and that if I wanted to keep growing this business, I needed to leave my 9 to 5. So I wasn't so much a number. I had some savings that I was okay with living off of while the business built up, but it was really just kind of at an unsustainable point where I kind of needed to, leave the job to help this business grow. Was your goal always to make this a full time thing or did you just think, "You know what, I'll make some side income. "Well, I'll have my day job." - Yeah, the goal was to replace the day job because the day job was great for the time I was there. I learned a lot, but it was a dead end 'cause it was a small company and there just wasn't room to move up, so I needed to make it change. - How did your revenues increase when you started going full time on the business? In that first year, you went full time, how did it go? - Oh, well, it was night and day 'cause before that, I mean, I was still trying to sell the SEO services. I left my job in about, it was October 2019. So, was kind of floundering around trying to sell SEO here, not really working with the dumpster companies because they didn't want to pay for SEO. It wasn't till February when we got that feedback, "Hey, you should just handle the customers "and let us do the dumpster jobs." And then we officially incorporated the business in April 2020. This is right in the middle of COVID too. So, we were like, "Oh my God, do we have a business anymore? "Are people gonna want dumpsters?" Luckily, a lot of people wanted to clean out their garages during that time. So, the man was steady. Luckily, we didn't collapse the business or anything during that time. So, I mean, yeah, the revenue generated was night and day from when I was at a job to the following year. - Yeah, it's funny 'cause I talk to a lot of franchise prospects and franchisees now about what to do. And I did it the same as you. I did it as a side hustle. I think I wanted to quit and travel. And I think I made $2,500 or $3,000 a month when I decided to do that. No one near replacing my income. But the first year I left by nine to five, the business doubled and it kept going after that. And part of it is time and business. It's not just 'cause you leave and go full time that it's gonna grow, but you also have built up some foundations, some work equity in there, which lets you get a full. But I do think now, if I look at franchisees you're coming in, I pretty much always say, "Hey, you gotta do this full time." Just 'cause I know number one, it works. And you know what it's gonna work because you and I are in a very old school industries. It's nothing new. But number two, you just move a lot faster. You move a lot faster. And more than like double as fast if you're doing a part time or full time, you go like three or four times as fast as what I've noticed. But it's kind of the mindset, right? Of like being scared of letting go of sure income. How would you, like if you're gonna go back and tell yourself in 2020, the mindset around that, what would you say to yourself? - The mindset about like when is the right time to leave and how you have to approach it. - Yeah, pretty much. - I mean, I guess it's kind of cliche, but go all in. When it's time, then you pick your opportunity and you wanna make it work, then it's time to go all in. And just focus on your one business, make the experiences good as possible for your customers, solve any issues as they come up. But basically as long as you're resilient and you're committed, I don't think there's a way you can lose 'cause you'll pivot if you, if you find what you're doing is not working and you're committed, you're gonna pivot to something that works. - Yeah, kind of like what you did is well here. So walk me through that. So going back to 2020, we decided, you know what, let me pivot, let me start servicing the customers myself, not just being, not selling SEO services. Did you start in one city and like what marketing channel did you use to get the leads to start with? - Yeah, we were in a few cities at once, but we basically use SEO to generate all of our leads. So, yeah, we basically set up websites in a particular market and it'll be targeted around dumpster services in that area. So whether it's, you know, dumpster services in St. Louis or dumpster services in Riverside, California, with people are doing those local searches because this website is all about providing dumpsters in this local market. We generally have an advantage over like a big company that's trying to market dumpster rentals nationwide. 'Cause Google will look at our website and say, oh, this is the guy who knows about Riverside because that's what the whole website's about. So that's kind of the strategy. We have all of these websites that are focused on particular markets. We don't enter just-- any market, we do research beforehand based on can we actually operate there for one? What's the competition like there? And then also a bit of like, you know, what are the customers like and what are they looking for? But assuming all those check out, we'll enter the market. And it's generally with a website focused on that area. Do you guys develop the pricing yourself? For do you say, hey, here's how we're going to sell it on the phone when someone calls in and on the back in you have a deal with whoever at a certain price point? Yeah, how do you guys decide the pricing packages? So when we're doing the research, that's part of it. Are there local haulers there? And that's kind of the term for a dumpster company? Are there haulers in the area who offer reasonable prices and offer a decent service? And then based on that, we kind of, we try to make the pricing as easy as possible for customers because if anyone's rented a dumpster before a lot of times, it's like reading a really complicated invoice where there's all these separate fees, there's taxes on top of certain fees, the not others, then there's an invoice at the end of the rental that you weren't expecting. So we try to make it as easy as possible by just offering a flat rate price that comes with a lot of things. So customers don't get and surprise that the end with an extra bill. So that's kind of our general pricing strategy, but because we're using the local people in the market, we always have to base it off of what they're providing and then we just make it easy. Got it. And in each market, G-Only partner with one main provider or is it like a constant recruitment cycle of you finding additional providers? We usually have like a pervert provider in each market, but there'll maybe be some zip codes they don't go to, there'll maybe be sold out of sizes. So we always have backups. And that's one of the reasons why using a company like us, where yeah, we're not the local guy and we're not as cheap as the local guy. But if the local guy's out of dumpsters, we'll get a dumpster from our backup and the customer doesn't have to lift a finger, they won't even know that there was an issue. We just solve it for them. So we definitely have backups, but we have preferred foriders. And why do you decide to go across multiple states, multiple cities? Why not just go extra deep in one? You know, like go with SEO, go with multiple things, increase lead traffic in one area. Yeah, to walk me through why you decided to go broader. Yeah, we've kind of found that our leads were kind of just plateauing. So we kind of enter a market and we try different marketing strategies. I mean, I'd love to hear from you about the different kind of things that you do to really penetrate deep into market. Frankly, we probably could be doing other things. But just kind of this strategy that we found just kind of works. And it's a big country. There's lots of areas to service. So we've kind of just rinsed and repeated the same SEO strategy, but there probably are some other ways that we could penetrate deeper into the markets. Gotcha. Interesting. No, I mean, like a couple of things which struck me about what you said is the SEO rankings for like making micro websites on different locations. I think in the cleaning world, it's probably gotten too competitive to be able to just quickly spin out a website for most markets. Some markets you probably still could where you could spin it up and rank really fast, but I think in a lot of markets, it's become very competitive, meaning SEO works, but it's going to take you while to get there. It sounds like, correct me if I'm wrong, it sounds like in the dumpster rental industry. It's like maybe where cleaning was eight years ago, where you could still have websites that you do the right SEO, you get Google My Business set up, you get the reviews, you could rank way faster. Is that what you've noticed in terms of getting lead gen from SEO dumpsters? I guess easy is kind of like it's relative, right? Depending on what you're going against, but yeah, what is there like something unique you're doing or is it just the industry is very behind the times? Well, we like to call it low hanging fruit when we find a market that looks good to enter, but there's not a lot of competition. So obviously you want to pick the low hanging fruit before you need to climb up higher in the tree to get the fruit on those higher branches. So there, especially when I started, I would say that there was more of that, but we've kind of run out a lot of those, and we've run out of a lot of those markets where there'd be a lot of people looking for dumpsters and the competition would be kind of weak. So the markets that we're answering these days are more competitive, but because we're kind of confident in our system and confident in our customer service, we're not afraid to compete in those markets. Gotcha. Yeah, I mean, for us, like to your question before, what do you do for lead gen? SEO is part of it. We have Google, Google LSA. I don't think the dumpster rental industry has local service ads, does it? It has. I think it has, you're talking about like the word says Google guaranteed. Yep. To be honest, I'm not, I'm not sure. I think some markets have it, but not all of them. Gotcha. Yeah, so I mean, most of our franchisees in terms of marketing will do SEO for them. So that's kind of handled. And then there's just the paid ads sources, right? So paid ads is going to be LSA, it's going to be thumbtack, it's going to be those types of go-to quoting platforms. The goal of anything is you pay until SEO hits and you don't need to pay. For you pay until you have enough repeat clients. And then you could just milk your CRM for the repeat clients because things get dirty all the time. The hard part though is like most markets now are quite competitive. Like back then, you get just to SEO, our people would just do Google local service ads, our ring people. Can't really do that anymore. So what we tell our franchisees to do is pretty much what other people are unwilling to do, right? If we're competing against all the side hustlers, they're not going to be in eye meetups. They're not doing the Chamber of Commerce. They're not doing offline marketing. And all of that type of stuff we found with their data. It's usually more recurring clients who stick around longer and there's no competition and less price negotiations compared to digital marketing. The downside is it doesn't scale as much, right? Versus like meta ads, we could just throw money at it and let it grow. But you know, I do think marketing, especially digital marketing for cleaning, it goes through ebbs and flow cycles, right? Like there's golden age of yelp and then it sucked. There's golden age backwards and then it became too expensive. And it's just because I've been doing it for 10 years. I'm like, yep, this is this is currently a down cycle when it comes to digital marketing. They will be an up cycle though. And then there's a down cycle. But the ones who win when I've talked to any cleaning companies who are winning, the constant is they don't rely on digital. And then they win. Like that's kind of what it is. But at least for the cleaning industry, it takes time to build those relationships in the market. It takes time to kind of go deeper and go, like you said, to the higher branches to get the apples. So yeah, I think it's more about time and effort. And how long that that's going to take for us. So what are some of those offline methods like like chambers of commerce? Do you guys do mailers? Is that a strategy? Some markets it works well or not. One, we use a lot called a neighborhood blitz. So I'm sure you've heard the stat before, which is someone needs to see your brand seven to nine times before they buy. Right. And if you have a well established brand like May this in Los Angeles, you're going to see us because we have two GMBs. You might get a referral. You're going to get hit with Google pixels which go around you. Right. So you're going to see it seven to nine times. But let's see you go in somewhere and you don't have the digital presence. Let's say Ian, for where you live, we're going to hit you with a door hanger. Door hanger because you have to take it off. Next, you're going to say yard sign. After that, you're going to get ads in the areas as much as possible. Next, we're going to be in your next door in Facebook groups. Right. When you finally hit the website, you're going to get hit with a Google pixel, a Facebook pixel for you to be kind of constantly around you. So is the ROI there on the first sale? Typically not, because you're doing a lot of these different avenues. But the goal for us is get them in the CRM because we're going to remark into them at some point. That's one example. It could be mailers. The other parts which are working really well would be kind of more scrappy stuff, you know, going after realtor groups, honestly walking in to property managers and apartment complexes with the pricing sheet. That kind of stuff just really, really works. We recently had a franchisee who partnered with a moving company to kind of share leads back and forth. Right. I met them through B&I. They run a local service. So now they're sharing leads. Right. So when you have that kind of cross marketing happening, lead costs is essentially zero. Right. Because you're just sharing leads back and forth. So those types of connections and relationships do take a while to build, but that's going to cause lead sources to come from a lot of different places. That's not just paid ads for us. And that's hopefully what we try to get people to. The unfortunate side is like it takes time to build. Right. So I kind of only do it if you try to build a business for the long run. But if you're trying to do something shorter term, it doesn't really make sense. I see. I mean, well, I guess that's one of the beautiful things about house cleaning too is that a lot of them are recurring. So if you maybe break even on the first sale, like hopefully they sign up for a monthly or a weekly. And then you can keep selling to them. It's kind of it. And it's interesting for dumpsters because it's going to be a one-time sale. Right. So like, it almost doesn't. You can't overspend on paid ads from what I understand. Like, are there paid ad platforms you could spend money on or not even? The best one that makes the most sense is Google. Google. We've tried it last year. We were able to get leads and we're able to get customers, but we weren't able to do it profitably. But I do see other companies like mine who, you know, they don't own any trucks, but they're marketing all the time on Google ads. So we think we're going to give it another shot this year. We have a new Google ads partner, another DC year actually who looked at my business and he was like, I don't see how I can't get this sort for you. So we're working on starting up a new Google ads strategy this year. But yeah, it's tough because our margins are slimmer than the local guys. So a local guy with, you know, a good ad campaign should be able to do really well in his market. >> Got it. What do you margins look like for the dumpster rental industry? So how much it goes out to the contractor partner? >> So 80 to 85% of every sale is going to the contractor. >> Wow. So for you guys to make sense, it kind of has to be SEO at this point, which is like, you know, quote unquote, free leads. >> Mm-hmm. Yeah, I would say so. Is there a possibility to push that up in terms of more margin on that side? Or do you think markets typically don't support that? >> Yeah, it definitely depends on the market and it depends on the customer because we always are trying to offer a good service at a good value to our customers. We're necessarily going to always be more expensive than the local guy, but our customer service is always going to be way better. That's how we differentiate ourselves. So we don't want it to be too high where customers are bulk at the price. But we also want to make sure that we have enough margin in each sale. So it's definitely walking that fine line and it's different for every market. >> Yeah. And Ian, have you centralized customer service? So let's say you're in 20 different markets. Is there one person handling it for all of Florida? Or do you have one main manager for each city? Or how have you set up your internal team? >> Yeah, it's all centralized. So we have a customer service team in Mexico. And so all of the calls go to them. They all work remote as well. And so most of them are actually, they are, they're lived in the US or US citizens just living in Mexico. So there's no like language barrier. When you answer the phone, it sounds like they're in America. And yeah, they just kind of receive all the calls and can handle anyone regardless of where they are in the States. >> Okay. Ian, how are you using AI in your business? Or how do you want to use AI in your business? >> We're doing a lot with that right now actually. Well, for starters, we have a chat bot on our website that's equipped with our knowledge base. So you can ask questions about what dumpster size should I order, you know, is this acceptable in a dumpster? It's, and then on the next step, we're going to be integrating it into our phone system. So be able to answer simple questions, schedule simple things like pickups or if you need a new dumpster. Of course, if you have any like issues and you want to speak to a real person, we're always going to have real people. Because the main way that we differentiate ourselves is having friendly, nice people to talk to you on the phone, which is maybe surprisingly or not unusual in the dumpster business if you're just calling around local companies. So we're always going to have local people, but at the same time, sometimes we're getting a lot of calls at once and we don't want to keep people waiting. So having an AI agent that can be friendly and handle a simple request for you will speed things up for everybody. >> Yeah, I'm looking at obviously, I've been looking at AI a lot, but I think if you can implement it well in the local service end, we're already well ahead of the time when it comes to local services, because most competitors don't know what they're doing. But if you implement AI on top of that, you're going to be 10 years ahead, which is awesome. I read a stat just earlier today, which I thought was funny. Sales force is releasing AI sales and like solution and they hired 1500 humans to sell it. I was like, if that's not the worst promotion for your product, I don't know what is. You need humans to sell your AI sales bot. I kind of go to show like all the AI sales agents I've tested haven't really been good enough. And I don't know if it's going to be there for a while. I do think the customer service end, it's easy enough to like accept complaints, to respond. And I think that side will probably get there sooner. I can't imagine the sales side getting there soon enough on AI, unless it's something like a simple order taking process. I think the beauty of your business, actually, if I'm looking at it, which I'm jealous of, it's simple. In theory, it's simple. It's dumpster rental. There's less variables involved where I feel like it allows you to streamline a lot of things. Is that what you found? Yeah, totally. I think every business kind of has their own nuances, where there's no perfect business. I definitely like experimented with starting up a couple other businesses while the dumpster business is going. And every business kind of has their own quirks, their own sticking points, their own bottlenecks. But I really do enjoy the dumpster business. And simplicity is a nice part of it too. Yeah. Ian, if people want to follow a long good journey, find you say, what's up? Where can they find you? My website is eannash.co. To ian and a sh.co. That's also my handle on Instagram. That's my handle on x. I'm most active on Instagram, but also starting to ramp up on x. So those would be two places to find me. And my website has all my links there. So eannash.co. Perfect. I will put lean 10 this show and it's as well. Ian, thanks so much for having me. Thanks. Yeah, it's fun.