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Part
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Portable Toilets
Key takeaways
- The portable toilet rental business is expected to pick up as the effects of the coronavirus pandemic wear off.
- An initial capital investment of approximately $160,000 is sufficient to start a portable toilet business in the United States.
- From Satellite Industries' business plan, an ROI of 14% is achievable with proper management and effective planning.
Introduction
A business plan is a template around which any organization tailors its success. It helps in managing, running, and growing the business more efficiently.
A great business plan defines the objectives and goals of the company and outlines how to achieve them. At the very least, it explains who the company is, what it will do and how.
Overview
Depending on the nature of business a company wants to operate, a good business plan will typically cover the following segments:
• An overview of the company
• An identified problem(s) and potential solutions, meaning the company's products and services.
• A description of the target market (the ideal consumers: the problem the company intends to solve and the area).
• Execution plan (sales plan, marketing, operations).
• Financial plan
Examples of portable toilet business plans in the U.S.
(a) Satellite Industries Portable Toilet Business Plan
Overview of the company
Satellite Industries is a portable toilet manufacturer that "actively leads the industry by innovating and educating consumers on how to better market and sell portable toilet services." In addition, it offers guidelines on day-to-day operations and provides clients with practical tools for effectively managing their business.
For over 60 years, the Minneapolis-based company has been re-engineering their portable restrooms, restroom trucks and trailers, and deodorizers to last longer, be stronger, and user-friendly.
It offers a choice of two business plans: a 150 unit operation with a single truck driver plan and a 600 unit operation with 4 trucks/drivers. The two plans are based on a full start-up company and consider any expenses, including buildings, real estate, and all operational costs.
Business Plan: 150-unit operation
Basic figures
The number of weeks per year the cabins rented out = 41.6 (i.e., 52 weeks * 80%)
Number of days per week the cabins are rented out = 5
Number of cabins rented out per week = 150
Number of cabins serviced weekly = 30
A. Cabin calculation
Buying price per cabin = $771.75
Years for cabins to be written off = 8
Depreciation per cabin per year =$96.47
Interest rate from bank/leasing company per year = 5.00% $38.59
Maintenance and replacement costs per year 0.75% $5.79
Basic costs per cabin per year = $140.85
Total costs for all cabins per week = $507.84
Total costs per cabin per week = $3.38
B. Service Truck Calculations
Initial investment module = $13,179.73 MAL 450 with HP
Years before write-off = 8 years
Residual value = $1,317.90
Depreciation module per year =1,482.64
Initial investment truck = $32,057.10 (Mercedes Sprinter)
Years before write-off = 6
Residual value = $3,205.70
Depreciation per truck per year = $4,808.57
Interest costs truck + service module = $1,583.26 (3.50%)
Insurance costs truck + service = $2,612.06
Taxes truck + service module = $712.38
Maintenance costs truck service = $6,785.42
1 set of tires per year = $854.86
General costs per year = $12,547.39
Fuel price per liter = $1.60
Fuel consumption = 15
Annual kilometers = 50,000
Fuel costs per year = $12,021.41
Annual costs per service truck = $30,860.30
Number of trucks operating = 1
Total annual truck costs = $30,860.30
Number of working weeks per year = 52
Total vehicle costs per week = $593.47
C. Labor and Salaries
Number of drivers =1
Annual driver salary = $22,796.16
Payroll tax (35%) = $7,978.66
Annual employer’s insurance = 1,187.30
Annual wage costs driver = $31,962.12
Number of working weeks per year = 52
Total labor costs per week = $614.65
Number of office workers 0.5 (part-time)
Annual salary = $24,220.92 ($2,018*12)
Payroll tax (35%) = $8,477.32
Annual employer’s insurance = $593.65
Annual wage costs office = $16,645.95
Number of working weeks = 52
Total annual labor costs per office staff per week = $320.12
D. Consumables
Safe-T-Fresh liquid costs per liter = $14.25 (STF 6000 23L)
Used quality Safe-T-Fresh per cabin (ml) = 20
Total Safe-T-Fresh liquid costs per cabin = $0.28
Cabins serviced per day = 30
Total Safe-T-Fresh liquid costs per day = $8.55
Number of working days per week = 5
Total liquid costs per week (all cabins) = $42.74
Toilet paper costs per day = $0.13
Cabins serviced per day = 30
Working days per week = 5
Total toilet paper costs per week = $19.59
Cabana Spray per cabin, per week = $0.11 (10-15 sprays = 15ml)
Sanitizer dispenser + refill per cabin, per week = $0.036 (1600 uses/1L foam)
Waste water dumping costs = $36.52 per 1000L/1m³
Waste collected per unit per week = 80L
Waste water treatment costs per cabin, per week = $2.85
Fresh water costs = $5.94 per 1000L/1m³
Freshwater per unit per week = 50L $0.30 Including 19L charge and cleaning
Other costs per cabin per week = $0.00
Number of cabins serviced per week = 150
Total miscellaneous costs per cabin per week = $3.29
Total miscellaneous costs per week = $494.09
E. Office & Property Costs
Price of land (500 m²) ($1.1900/m²) per month = $593.65
Unheated warehouse (100m²) ($5.94/m²) per month = $593.65
Office space (50m²) ($8.31/m²) per month = $415.56
Utilities (electricity, heating, water, wastewater) per month = $237.46
Number of working weeks per year = 52
Total office & property costs per week = $434.69
F. Other Overheads
Tax, VAT, legal costs, insurance per year = $2374.60
Phones, stamps, fax per year = $2374.60
Marketing (decals, yellow pages, brochures) per year = $2374.60
Office supplies, equipment, IT per year = $1187.30
Number of working weeks per year = 52
Total overheads costs per week = $159.83
G. TOTAL
Turnover
Your rental price per cabin, per week = $29.68
Number of cabins rented out per week = 150
Total turnover per week = $4452.38
Total turnover per year = $185,218.80
Costs # of weeks per week per year
Total costs per cabin 52 $507.84 = $26407.93
Total vehicle costs 52 $593.47 = $30860.30
Total labor costs per operator / driver 52 $614.65 = $31962.12
Total labor costs per staff office 52 $320.12 = $16645.95
Total Safe-T-Fresh liquid costs 41.6 $42.74 = $1778.58
Total toilet paper costs per week 41.6 $19.59 = $814.49
Total miscellaneous costs 41.6 $494.09 = $20554.54
Total office & property costs 52 $424.69 = $22083.78
Total overheads costs 52 $159.83 = $8311.10
Total costs $3177.04 = $159418.77
H. NET PROFIT PER YEAR
= $25800.03
Return on Investment (ROI) = 14%
(b) Royal Flush Porta Potty
- This is a Las Vegas portable toilet rental company. It prides itself on "its customer care service and ultra-clean porta potty equipment." The company's range of products and services include Porta Potty for regular users, Wheelchair/ ADA Porta Potty for handicapped users, and foot-operated wash sinks.
- The company targets special events and construction sites.
Business Plan
- Royal Flush Porta Potty's business plan is anchored on its rental and service rates. These are as follows:
Construction sites
- Porta Potty charges between $130 and $180 per month depending on the distance from its yard. This excludes a $50 delivery fee.
Special events
- The company charges $180 for a single unit. It also offers discounted rates of $150 per unit if clients take more than two units for at least three days. The service fee includes delivery, chemicals, interior lighting, scent spray, two rolls of 2-ply toilet paper, clean-up service, and pick up.
- For an additional $100, the company throws in a hand wash sink. Otherwise, the hand wash sink goes for $200 per month. This charge includes paper towels and a soap dispenser. Extra service calls are billed at $200.
Industry overview
- There are over 3,500 portable toilet rental businesses in the United States employing some 10,500 people. This industry "generates an average of a billion dollars annually" and grew at a CAGR of 3.1 percent from 2012 to 2017.
- The revenue is expected to continue on its upward trajectory as the housing market expands, thanks to a stabilizing economy. Further, as the country recovers from the debilitating effects of the COVID-19 pandemic, the demand for portable toilets is anticipated to rise commensurately as events proliferate.
Research strategy
One of the research requirements was to present a business plan for a portable toilet company operating in Las Vegas. However, this objective was not achievable despite the research team's spirited efforts because no such plan is publicly available. To make up for this gap, the research team provided a summary overview of the portable toilet rental industry in the United States to give the client a perspective of this niche segment.
