Who Won’t Make It Into The Black?
It can happen to any business, a once reliable service provider can become unreliable. In the waste management business it is now more important than ever to evaluate service providers and partnerships as the New Year is fast approaching. The relationship with service providers is extremely important to business operations and can affect business in many ways. If a service provider is failing it not only affects their business but yours as well. Failing waste management service provides can affect business in different ways from unwanted invoice increases to less reliable pickups that will put your business at risk for compliance violations and fines. It is important in the waste management industry to have positive partnerships not just service providers.
Signs Your Waste Management Service Provider Is At Risk
Having an understanding of your waste management service provider’s financial history can be very beneficial. Ask them if they have any outstanding debt or if they are looking to expand in the future. Find out their vendor payment terms. Knowing the company’s reputation in the industry is important and how long they have been profitable in the business. Always ask for references that are similar to your business to see if they were satisfied with their service. Seek to understand who their clients are and how diversified their portfolio is (clients can present the greatest risk). Companies that are beholden to price competitive clients or have heavily weighted portfolios in ‘at risk’ markets, should be warning signs to you.
Bankruptcy is a good indication that your provider has not managed its finances and risks appropriately. By the time Bankruptcy occurs, it’s already affecting your business as vendors stop service if payments are not made or are late. Your service provider does not have to notify you that their budget was cut or sales have plummeted. Keep an eye on your service provider’s quarterly earnings and monitor their presence in the media. Infusions of large cash amounts by equity companies or other investors are not always a good thing. While private companies can be harder to track, they have the advantage of not having to meet Wall Street expectations. In these cases, bank references and cash on hand statements are very effective. Service interruptions can occur for a multitude of reasons in the waste business. However, having a large or continuous volume or sudden increase of disruptions should be considered a warning sign that a larger problem might be afoot.
Lawsuits, while common in this contract business, need to be reviewed as they indicate a company’s service and compliance track record. Because the potential for large judgments exists in this industry, this often-overlooked area is an important indicator of future health. Large judgments can force companies into Bankruptcy and even Bankruptcy reorganization will have an effect on your business. Does your provider’s contract limit liability?
Increase Service Costs
Have you noticed a spike in your waste removal bill? Have extra fees started to appear? Increased service costs can be a sign that your waste management service provider is feeling the pressure of the competition in the industry. To make up lost revenue, service providers may increase service fees. With the commodity markets down, along with fuel costs, many waste carriers are actively seeking alternative fee opportunities to make up for the decreased revenue.
Quality of Service
Struggling waste management service providers can lead to the decrease in the quality of service your company receives. Loss in revenue could cause layoffs or cut service options. Layoffs could lead to disruptions in your service pick ups and the frequency you need them. Service providers may also take on more than they can handle because they need the money to recoup losses leading to unsatisfactory practices. Asset heavy companies may suffer from over extending the asset or under maintaining, which results in increased breakdowns leading to service issues such as missed pickups.
Decreased Service Options
Changes in regulations and laws within different states make it difficult for waste management providers to continue to make profit from certain service offerings they provide. Services like recycling could be cut due to the company not making profits from the service anymore.
For example, recycling of e-waste has been a topic of change over the years. Many states now require the disposal of e-waste to be recycled in a specific way, which costs more for the service provider to dispose of the waste than which they can produce a profit. Global Environmental Services (GES), once e-Stewards certified recycler, was caught dumping and burying old electronic devices. These negative recycling practices are not only bad for your business and the environment, but they produce heavy fees and fines for not complying.
Benefits of Working with a Management Company
Understanding your waste management service provider’s financial status is important to how operations will run within your company. Having a financially stable waste service management company (like National Waste Associates) creates a positive partnership. National Waste Associates has been a stable waste management partner for over 18 years and operates as a debt free company. NWA will pro-actively look into all possible warning signs, resolve service interruptions and follow up with service providers to save company time and hassle. Invoice auditing is preformed on every waste management invoice to make sure billing discrepancies don’t impact your service. A company shouldn’t have to worry about service interruptions, wonder if waste is being disposed of properly or if they are being fairly charged. Stable management companies will perform this service for you with the flexibility to change vendors as market conditions change.
At National Waste Associates we take out all the stress of finding a reliable partnership. National Waste Associates, LLC is a privately owned, nimble company built on 4 generations of waste removal experience. Having been established in 1997 we are one of the originating Companies of the management model. NWA is proud of our conservative business practice and traditional business philosophy, both of which have made us a debt free company. NWA completely manages the waste streams of organizations with multiple locations typically 100 to 5,000. Start a conversation with us for a free fifteen-minute consultation to evaluate the efficiency of your current waste stream reporting. Learn more about our services by calling our sales team at call 1-888-692-5000 or email at firstname.lastname@example.org.