- The amazing ROI benefits of buying a septic system business
- What you need to run the business profitably even without prior experience
- Proven growth strategies to boost your profits in your new septic system business
- How to generate recurring revenue from a septic system business
- How to consider business location during the acquisition process
There are some products and services that people might not be proud to talk about. However, these services are essential aspects of our daily life. Sewage cleaning is an example of such a service. Here are our thoughts on buying a septic system business.
It can be a dirty job, but it's necessary too.
As an entrepreneur, you know that every problem presents an opportunity. You just need the right pair of eyes to recognize the potential of a business idea. Fortunately, this article is going to be that pair of eyes for you, if you don’t already have them.
We will help you identify the profitable benefits of buying an existing septic system business and how you can delve into it without worrying about the stink.
Why You Should Consider Buying a Septic System Business
In 2015, Circle of Blue reported that 1 in 5 of American households have septic systems installed. These numbers aren’t current enough to speak about the situation today as the number has increased.
Sara Heger, a researcher at the Onsite Sewage Treatment Program at the University of Minnesota, says in an interview that the number of septic systems is increasing as more people shift toward rural areas. It is expensive to install a sewer system in rural areas due to the long distance from major cities.
And there are more reasons:
1. The industrial cleaning industry in the USA is thriving
The industrial cleaning industry grows with the usage habits of residential and non-residential buildings using the septic system.
According to IBISWorld, operators in the industry of waste management and cleaning have been at the upper hand during the last five years.
In the five years of 2016-2021, the relaxed credit conditions led to more new residential and non-residential buildings. It resulted in more sales of cleaning industry services. The industry is expected to reach $3.3 billion in 2021, with a year-on-year increase of 7%.
These figures indicate the thriving nature of the cleaning industry in American society even though it is not a green business.
3,237 companies in the septic tank treatment business have been registered in America. Imagine the potential of a single business when the industry gross is $3.3 billion. If you have the management skills, you can thrive well in this niche.
2. A septic system business is easy to manage
The playing field in the septic system business is very vast. Unlike a tech startup where the entrepreneur must have practical experience in the product field, a septic system business is easy to manage.
Having prior experience is a plus point. However, the absence of experience does not fail your business. A good business sense and leadership can be enough to run a septic business.
As a business owner, you can decide if you want to work in the field or not. For example, if you don’t want to get into the practical side of the business, just create the team and assign different tasks for operating the business.
3. There is an increasing demand for operators in this industry
We have already discussed the increasing number of residential and non-residential buildings and the migration of people to rural areas. Then we connected this to how this affects the demand for sewage and wastewater treatment operators.
The infographic above shows the usage of the septic system states of the USA as at 2013. One-third of all the new constructions since then are served by septic systems or other decentralized wastewater treatment.
Besides, the demand for wastewater management operators is directly tied to local and state government investment. The purchases by state and local governments are expected to increase at the rate of 0.6% annually by 2024. And the wastewater management industry is expected to grow at a CAGR of 6.5% by 2025 to reach a market worth of $211.3 billion.
The industry growth is incredible and keeps going up.
4. Minimal resources are required to run the business
The attractiveness of owning a septic system business is the minimal resources required on a recurring basis. Instead of buying the machinery, you can lease the trucks and equipment to run a successful septic system business.
If you have the right customer acquisition strategy, you can leverage the need for septic cleaning every 1-3 years by targeting and retargeting your customers. In the industry, your profit margins are directly related to customer acquisition.
You can maximize your profits by minimizing the operational overhead (which is already little) required to run a successful septic system business.
Therefore, you can maximize your profits by minimizing the operational overhead (which is already little) required to run a successful septic system business.
5. Avoid the uncertainty of starting from scratch
Most entrepreneurs believe in starting their own business. However, the certainty of succeeding is significantly lower for a startup. According to research studies, only 10% of startups survive. Whereas 21.5% of startups are not fortunate to run for even a year.
Therefore, you can buy a septic system business and bypass this unfavorable statistic. You can invest your energy in the right amount and direction by working on an existing business.
Imagine getting your business already registered, licensed, equipped, marketed, branded, staffed, etc., with customers ready to do business.
You can avoid the hassle of the starting process and focus more on customer acquisition and marketing yourself to the target audience. It will help you to grow a business and maximize profits by positioning yourself properly in the market.
What You’ll Need to Run a Septic System Business
Whatever business you buy or start, you need to fulfill some prerequisites.
For running a septic system business, you will require some knowledge, equipment, marketing strategy, customer relations skills, etc.
Besides having good know-how of wastewater management compliance and regulations, you need to have:
You can easily outsource this to a manager or supervisor.
Although you are not required to have the practical experience of running a septic tank cleaning process — you can easily outsource this to a manager or supervisor. Unless you want to do it yourself, a good knowledge of how things work, complexities that might occur, and how to handle different wastewater processes is expected from you.
Being the leader of your team, everyone will look to you for guidance. You can not sit clueless about your own business. You must know about quality control and analysis, monitoring of machines, etc.
Therefore, knowing how mechanics work in your industry, you can also handle the administration and marketing part well.
We recommend anyone to enlighten themselves about the broader industry of wastewater management, different procedures and which one is better in varying scenarios, and safety standards. It will help you a lot to market and position yourself with good authority.
For running your septic system business, the primary and most essential equipment is a septic tank pump truck.
The pump trucks are essential for the removal of waste from septic tanks. The wastewater is stored in holding tanks. A septic pump truck can cost $20k-$30k, or you can also lease trucks for your business.
But if you buy an existing septic system business, it will most likely come with a functioning truck.
The other supporting equipment includes sewer jets for clogs or hard-to-reach areas during septic cleaning. Additionally, if you also provide inspection services, video inspection equipment is used for inspecting residential & non-residential septic tanks. You also need to make sure to comply with OSHA’s rules for such treatments. Personal protective equipment is another vital expense in running your septic cleaning business.
Business & Disposal Location
Choosing the location for your business is an important decision for any sector. However, it becomes of more importance for the septic system cleaning business.
You have to choose a business that’s in a location close to customers who need their services. This includes researching the market demand of your services, similar service providers in the location, nearby disposal location, the purchasing power of locals, etc.
The second important location to decide for your septic business system is the disposal location. You must explore your options for secure disposal of sewage waste before buying the business.
Your decision will depend on the proximity between your business and the disposal location. Your business location must be near your target audience as well as your disposal location. This helps to keep efficiency high and costs low.
How to Grow a Septic System Business After Taking Ownership
Once you have bought the septic system business from an existing service provider, what’s next?
Your competition is fierce in the industry. You are not only competing with septic system cleaning operators but also other wastewater management companies. What can you do to achieve a sustainable and growing business model in the septic system cleaning sector?
Here are tips and best practices to grow your business after acquiring it:
1. Enter with a sound marketing strategy
With such a level of competition, you cannot ignore your marketing strategy. Marketing strategy includes branding, targeting, positioning, and closing the deals. You must enter the market with a properly laid marketing strategy that addresses your target audience’s concerns.
It starts with introducing your business to the local target audience. You can use conventional marketing ways like brochure distribution to residential and non-residential businesses around.
Another viable way is to leverage online business directories like Yelp to be easily found by your ideal customers. Integrate social media marketing, search engine marketing, and content marketing to boost brand awareness.
Your marketing strategy is not limited to these options. You can explore as many means to promote your business as possible.
2. Get the best prices for high-quality treatment products
Transfer all the costs of treatment products to your customers. Sounds alluring, right?
But how about retaining your customers who can be your long-term asset by bringing you repeat business built on a trusting and mutually beneficial relationship?
You need to set a price that works best for your business and your clients as well. Instead of charging high prices to customers, you can apply different cost-reduction strategies without compromising the quality.
Start by buying your detergents, cleaning chemicals, etc., from the wholesalers or importers to get the best price. The best price also means using your resources in the right direction.
Instead of spending thousands on operating costs with no gain, you can minimize your operating costs to spend more on marketing and promotion.
Keep in mind that you may need to analyze your pricing and increase it. We find that oftentimes, older businesses haven’t raised prices in a few years. Take the time to dive deep into your cost and make sure you’re pricing properly.
It will not only bring in the business but will also allow you to cover the operating costs.
3. Focus on retaining clients with a smart customer loyalty strategy
Retention of customers is of supreme interest in every business. But how can you retain customers in a septic system business?
The easiest answer to this question is:
Encourage customer loyalty.
Your customer retention depends on how loyal your customers are. You’ll need a well-crafted customer relationship management system in place. Then, you should work on ways to improve and maintain the quality of your work.
Customer loyalty is also built by providing your customers with insightful information and services to make them feel cared about.
You can go a step beyond your customer management by a follow-up once services have been delivered. Don’t miss a single way of communicating with your customers. Consider an email newsletter as well.
4. Strengthen your brand identity and reputation
In such a competitive industry, differentiating yourself from others and positioning yourself as a brand requires a little more work.
Time, effort, and capital are necessary to build brand awareness, signifying your corporate identity in the industry.
How about you increase your social media activity and run campaigns about the importance of septic cleaning for your community and your health?
Or sponsoring a community awareness program?
And create a website to provide useful information to your target audience beyond geographic boundaries?
There are many strategies you can follow to identify yourself as a responsible brand.
5. Monitor your competition
Never ignore your competitors in the industry. Always keep an eye on what your competitors are doing.
It will help you be proactive and devise counter-strategies to win over your competitors — yes, you can also win over your competitors and even discuss mergers.
Identify your competitive edge or create one to outperform your competition. It can include pricing models, marketing strategies, customer retention, loyalty, etc. Your expertise and equipment can also become your competitive edge over your market counterparts.
6. Hire skilled and talented people
We already talked about the skill-intensive nature of septic system cleaning. Therefore, it is very crucial to hire skilled and talented people for doing the job. It is one of the deciding factors to indicate your success or failure.
If the face of an organization is unqualified or untrained, it will run into some challenges. Hire skilled labor, invest in their training, equip them with customer relation skills, and start growing your own business.
You can get into the dirty but profitable business of septic systems and build a success story for yourself. You can
- Tap into the boom market in the septic systems industry in the USA
- Easily manage a profitable septic cleaning business, and
- Maximize your profits with the small overhead required to run these businesses
The key to success is always adopting the right strategies, proper planning, and execution. Learn how here.
Acquira is a business acquisition in a box service. We help entrepreneurs buy businesses and we invest in them and their chosen businesses. We are here to help ensure that each business we work with is posed to make the biggest positive impact possible for its owners, employees, and community.