What should I check before buying a dumpster rental business?
Before buying a dumpster rental business, check the bins and where each one sits, the condition and capacity of the roll-off trucks, who the customers are, which disposal arrangements the seller holds and whether they transfer, and how bookings are taken. Ask your lawyer about permits and disposal duties.
A dumpster rental business looks simple from the street: bins go out, bins come back. What you are really buying is a set of bins, a truck that moves them, relationships with the people who order them and a place to unload. Each piece can be strong or weak without showing on the surface. The checks below help you see which, before you commit to anything. For a wider view of rental fleets, see what to check before buying an equipment rental business.
Bins and where they are
Ask for a list of every bin: its size, its age and its condition. Then ask where each one is today, because a bin left on a site long after the job, with no extra-day charge, earns nothing. Walk the yard and compare the list with what you see. Look for dents, worn doors and rust that will need repair soon. Ask how often bins are replaced and what the seller spends on welding and paint in a normal year.
Trucks and capacity
The roll-off truck sets how many deliveries and pickups can happen in a day. Ask about its age, its repair history and whether a second truck is needed at busy times. Find out who drives and whether the owner does much of it. If the seller is the best driver and the main contact, the business may be harder to run without them. Ask what happens when the truck is in the shop.
Customers and disposal
Ask how orders divide between contractors who rent again and again and homeowners who rent once. Repeat customers are steadier, but a few large accounts can leave the business exposed. Then ask where the bins are emptied and on what terms. Those arrangements may belong to the seller personally, so ask whether they carry over to a buyer. Review booking records and online reviews for signs of late deliveries or complaints.
Questions for the seller
- Which bins are out right now, and which are idle?
- Which customers order most often, and would they stay after a sale?
- Which disposal arrangements are in the seller’s name?
- How are bookings taken, and what does the system record?
Related reading
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Due diligence
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat is the operating profit margin?
- 03Business Development Bank of CanadaGovernmentWhat is Cash Flow
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