Ronnie Daniels liked his job as a full-time driver for a septic service in suburban New York City. But after about eight years, he got the entrepreneurial itch. “It was easy to shut off the truck every night and just go home, but I wanted to do more … to run a business the way I thought it should be run,” he says.
For Daniels, 38, that meant a septic tank pumping business that emphasizes personal service. After mulling the idea for a couple of years and having the support of his wife, Iris, he made the final decision to strike out on his own around Labor Day, 2008.
“I thought long and hard about buying an existing business but I decided that I’d rather earn my customers, not buy them,” Daniels says. “Iris and I talked it over. I really felt that if this goes smoothly, it was meant to be.”
Since he took the plunge, Daniels’ life has been a whirlwind of paperwork, decisions, long days and short nights. While the startup process has occasionally been bumpy, Daniels still believes he is destined — even blessed — to be an entrepreneur.
“A year ago, I had money in the bank and no credit card debt. Now, I have no money in the bank and some credit card debt, but I’ve never been happier,” he says with a chuckle.
Challenge #1: Financing
When it came to finding money to launch a new business, Daniels’ timing couldn’t have been worse. Just as he was shopping for a service truck in October, the nation’s banking system became embroiled in an unprecedented crisis that made it next to impossible for businesses to obtain credit.
“Oh yeah, financing was tough. Much tougher than I expected,” Daniels says. But, he quickly points out that new business relationships ultimately came to the rescue.
One of those relationships was with the late Bill Abernethy of Abernethy Welding, a North Carolina-based vacuum truck building company. Another was Tom Myers, managing member at North Star Commercial Credit LLC, a business loan broker based in Naples, Fla.
Daniels got acquainted with Abernethy as he was researching new and used service trucks through the pages of Pumper. After several telephone conversations, Daniels arranged to visit North Carolina for a few days to look at equipment first-hand and meet some suppliers.
During the two-day trip, Daniels saw a brand-new Abernethy-built rig that was on display at Cooper Kenworth, a dealership in nearby Hickory, N.C. He also eyeballed other new and used rigs, tanks, pumps and all of the related specifications.
“I was honestly a little overwhelmed by it all,” Daniels admits now.
Daniels ultimately decided on a 2009 Kenworth T370 built out by Abernethy with a 2,500-gallon steel tank and a Masport HXL 400 liquid cooled pump. “I decided if I was going to do it, I’d do it right with a new Kenworth. It should last me 20 years,” he says.
But, financing was another matter. Banks simply weren’t making loans. With traditional bank financing unavailable as an option, Daniels had to look elsewhere. He located Myers and then a crucial first step was to prepare a comprehensive business plan.
“I lost a night’s sleep putting the plan together. I’d never done anything like that before, but Iris and I pulled our numbers together and got everything to Tom,” he said. “We used a 12-page template we found on the Internet and it turned out to be a pretty thorough plan.”
In his business plan, Daniels determined he could cover his new venture’s ongoing monthly expenses and turn a decent profit by pumping an average of four tanks per day, or 20 tanks a week. Using his industry knowledge and experience in the local market, he established a flat rate of about $300 to pump and service a tank up to 1,250 gallons.
Daniels finalized the order with Abernethy and Cooper Kenworth in December 2008 with the completed rig to be delivered at the Pumper & Cleaner Environmental Expo International in February 2009.
A five-year equipment loan was arranged. Daniels used a combination of his savings and loans from family members to put down $20,774 toward the purchase and financed the $86,000 balance. The terms of the loan call for him to pay 10.5 percent interest for the first 12 months with the opportunity to refinance at a lower interest rate after that.
Challenge #2: Permits
Daniels can laugh about it now, but the bureaucratic hurry up-and-wait of the permitting process was frequently nerve-racking. “Sometimes I’m surprised I still have any hair left,” he says.
He was required to obtain a septic pumping license for Westchester County and a waste hauling permit for neighboring Putnam County. Getting the local permits was relatively simple compared to the required waste transport permit from the New York State Department of Environmental Conservation.
“The state required me to prove I owned a truck and had insurance on it before I could even apply,” Daniels says. “Then, they told me it would take four to six weeks to process the application. There was no getting around it. I was looking at two months of truck payments while I waited.”
To try to speed the process, Iris drove to the state offices in Albany to hand-deliver the ap-plication. “Believe it or not, they wouldn’t accept a hand-delivered application. She ended up putting it in the mail anyway,” he says.
Meanwhile, Daniels had resigned from his job in March. With little choice but to wait on the state permit, he used the time to prepare for the business launch.
The Launch
When the state permit finally arrived on April 1, Ronnie’s Septic Tank Service was ready to go. Daniels had already launched a Web site (www.ronniesseptic .com) and purchased advertising in the telephone directory and local shopper publications. He also “rang a lot of doorbells” to introduce himself to area real estate agents and plumbing contractors.
Daniels spent nearly $4,000 getting the business off the ground. Startup expenses included the Web site design, computer software and upgrades, tools (shovels, rakes, etc.), printed return envelopes and promotional pens and T-shirts. He and a friend in the plumbing business split the cost of a Prototek Model 67R03.2 locater. When necessary, Daniels calls on nearby friends in the industry to rent an excavator or other equipment.
“Whenever the phone rings, there’s no hesitation. I’m out the door,” he says. “My approach is, customers are my friends. They can call on me at 2 a.m. if they have to because that’s what friends do.”
Daniels also believes that his flat-fee pricing, which includes two to three feet of hand digging as needed, delivers value to the generally affluent suburban residents of Westchester and Putnam counties. “I think a lot of people like to know that the owner is the one responding to the call,” he says.
Daniels will recommend the installation of risers and tops to bring some systems to the surface for easier service in the future. He points out that because he’s his own boss, he generally charges for the materials rather than the labor.
Iris, who works full time as a billing analyst for an expense management firm, keeps books for the young business with QuickBooks software. “Her checkbook is balanced to the penny, so it’s natural that she handles the bookkeeping,” Daniels says.
Daniels keeps detailed information, including the system type, size and layout, on each completed customer job for future reference. He’s set to send every customer a reminder for a follow-up pumping on a 12- to 24-month cycle, depending on system requirements. And, he’s quick to use his customer records for networking.
“I want to know as much about my customers as I can. I’ve done work for investment bankers, lawyers, a dentist, a chef. You never know who might be your next referral,” he says.
A Proud Day
Looking back over the challenges faced over the past many months, a high point was easily the day that Daniels brought home his new rig. He’d included a surprise for his stepsons, Joel, 13, and Julian, 6, by having their names lettered on the door.
“It’s been a great thing for the kids to see this business being built from the ground up,” he says.
Daniels is also encouraged by early word-of-mouth advertising like a memorable Sunday evening emergency call he responded to last summer.
“Turned out, the woman ran a daycare center and passed my name along to several other people she knew. I got eight jobs through that, believe it or not,” he says. “The satisfaction is earning each customer one-by-one.”
