Ready to Scale? Get the Timing Right

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Welcome to our newsletter! One of the biggest questions I get is, “When’s the right time to buy a new truck or expand?” Here’s my take: if you’re not maxed out with what you’ve already got, it’s too soon. Keep your asset utilization rate at 90% or more for most of the year before you even think about new assets.

This means that for most of the year, your trucks and dumpsters should be out on jobs, bringing in revenue, not sitting idle. Underutilized assets drain profitability by adding to costs without pulling in enough revenue to justify them.

Think of it this way: if you add another truck before maxing out your current fleet, you’re essentially spreading the same demand over more assets. This makes each asset (each truck or dumpster) less profitable because it’s not being used enough to cover its cost. So, before you add, make sure you’ve maxed out your current setup, and you’ll know you’re ready when your current trucks are constantly booked up.

The Expansion Trap: Cost of Expanding Too Soon

There’s a misconception that expanding territory will automatically increase business. Here’s what many don’t realize: covering more ground isn’t just about reaching more customers; it’s also about increasing costs. Each additional mile adds up in terms of fuel, labor, vehicle wear and tear, and drive time. Routes become longer, and as a result, each job becomes more expensive to service.

I learned this firsthand when I jumped too soon into a neighboring county without enough resources to keep things streamlined. The routes were all over the place, and although we didn’t lose money, it was harder to stay as profitable. I ended up pulling back, shortening the radius around our headquarters, and refocusing marketing close to home. By honing in on the local area, I was able to increase our profit margins and streamline our operations.

The takeaway? Focus on building locally and optimizing your market. You’ll get more out of maximizing your reach in one area before taking on the costs of additional miles.

Taking Calculated Risks and Knowing Your Limits

I’m all for taking risks in business, but they need to be well-calculated risks. For example, last year I took on nearly $300,000 in loans to expand, but that wasn’t a leap of faith—it was a decision backed by data, demand, and a solid strategy. I knew we had the marketing strength and customer base to support those assets.

If you’re considering taking on loans for growth, ask yourself:

• Do I have enough steady revenue to cover loan payments?

• Will this investment generate additional income quickly?

• Have I tested the waters and ensured demand in the new area?

Without a solid plan, a big loan can quickly backfire. It’s easy to take on debt thinking it will lead to profit, but if you’re not prepared to generate the income needed to pay it off, you could end up in a situation where you’re barely breaking even—or worse, scrambling to stay afloat.

The “Wait It Out” Rule: Delaying for Profitability

When you think you’re ready to expand, give it another quarter or two. Waiting allows you to observe trends, see if demand holds, and make any final tweaks to your operations. This delay can be especially useful if you’re in a seasonal area. Buying new assets or expanding right before a slow period could leave you with unused trucks or equipment, draining money without providing a return.

Waiting also gives you time to build up cash reserves and further refine your current operations. By the time you do expand, you’ll have the resources and processes needed to take on the extra demand without missing a beat.

Building a Strong Local Base Before Expanding

Expanding successfully starts with a strong local base. This means you should saturate your current market—become the go-to service in your area before stretching beyond it. Invest in local marketing, reach every potential customer, and focus on high-quality service that builds a loyal client base. This foundation of repeat and referral business will keep revenue steady, giving you the buffer you need if you choose to expand down the line.

Growing your customer base close to home keeps your operation efficient and your costs lower. When you’re confident you’re the leader in your market and can’t push your marketing any further locally, that’s the signal to consider expanding.

My Final Thoughts

Expanding is more than a decision—it’s a strategy that requires timing, research, and preparation. Make sure your current operation is maxed out, focus on efficiency, and take calculated steps. Expansion should feel like a natural next step, not a gamble. And if you’re feeling uncertain about when to make that leap, reach out—I’ve been through the ups and downs, and I’d be glad to help guide you through it.✌️

Justin Hubbard

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