As part of her Main Street Millionaire Series, Codie Sanchez featured Spencer Scott, a software engineer who built a thriving trash business in just over two weeks. We found his story inspiring and insightful and thought to share the thread.
Seeing the Opportunity
Spencer Scott lives in a fancy neighborhood that was super frustrated with their new trash disposal service. He made a post on Facebook asking the people of his neighborhood if they were really serious with their complaints and were really willing to switch garbage service providers? It turned out they were as the post would blow up with hundreds of likes and comments.
He then made them a simple offer: if 200 of them signed up at just $99 for three months, he would start a new garbage disposal company. Oh boy, in just ten days, 150 people had signed up, bringing in $15,000—enough to get him started.
Seizing the Opportunity
First things first, Spencer needed a truck. He searched and found one on Facebook Marketplace going for $40k. In true venturesome entrepreneur style, he ordered it from Tuscon before ever seeing it in person. Next, he bought 200 used waste bins from a company in Michigan for just $35 each. He slapped branded stickers on them and LONE STAR TRASH was born.
The Economics of Spencer’s Trash Business
According to Spencer, the business costs just under $2k a month to run, though this can vary. His breakdown showed that he invested the following into the business:
- Truck: $40,000
- Bins: $7,000 (200 bins at $35 each)
- Operating Costs: <$2,000 (per month or $24,000 per year)
In a bad year, Spencer could expect his Lone Star Trash to bring in $150,000. In a really good year, he would be looking at $500,000+. And that’s from just one truck making rounds once a week! That is a great piece of an industry that is valued at $77.1bn in 2024 for one person. In Codie’s words, “the economics of trash is shockingly good.”
The Big Picture: Acquisition Potential
According to Codie, smaller trash companies are acquisition magnets to bigger waste management companies. They often sell for 2-3 times their revenue. All things considered, Spencer’s biz could potentially sell for seven figures.
What We Can Learn: 5 Trashy Yet Classy Lessons
Codie ends the thread with 5 key takeaways from Spencer’s success story. In her words:
- Find Pain Points in Stagnant Industries: Look for industries where customers are fed up with bad service. Trash, landscaping, cleaning—these are ripe for disruption.
- Presell to Validate Your Idea and Fund Your Start Up: Spencer didn’t spend a dime until he had paying customers. With preselling, you can prove demand and raise funds before even starting.
- Focus on Recurring Revenue: According to Codie, the magic of Spencer’s business is the subscription model. Recurring revenue is stable, predictable, and attractive to buyers.
- Acquire Undervalued Assets to Boost Margins: Spencer bought a used truck and bins at a fraction of the cost of new ones. Auctions, fire sales, and liquidations can help keep costs low.
- Build with an Exit in Mind: From day one, Spencer knew trash disposal companies were acquisition targets so he built his trash business in mind to be sold. Plan your exit strategy from the very start.
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