Bins Business are a long-standing company and has operated in the Central Coast of NSW for 20 years

(established 2004) under a remaining brand Bins Business 1.0. It has been owned by the current owners for the last 6 years. They wish to sell the business and concentrate their resources and time on their other businesses.

It is a ‘boring’ strong cash-flowing business whose main activities focus on waste management, recycling and skip bin deliveries/pickups. In essence it is a simple business with limited impact from technology.

The business has a strong reputation and a good spread of customers with no single client making up more than 6% of the turnover. Therefore the loss of any single customer would not have a significant impact on the business.

Top 9 customers by percentages

1) 5.4% 2) 4.3% 3) 4.2% 4) 4.0%

5) 3.9% 6) 3.6% 7) 3.2% 8) 2.7%

9) 2.6%

The business has had low staff turnover and all current staff members are expected to stay on. The current owners will also be staying on as a shareholder capacity and in a part-time position within the company. This will ensure a smooth transition and business continuity.

The business is well located to serve its Central Coast clients, northern Sydney and as far as Lake Macquarie. The business can stay on its current premises for at least two years. This provides an opportunity to relocate the business and purchase its own ‘transfer station’. Investment in that would mean that we can open it to use by other providers and potentially the public. This would provide the business with an additional revenue source.

Location-wise the Central Coast has some significant tailwinds driving growth.

‘The Central Coast was identified by the NSW Premier as part of the vision for a Six Cities Region in December 2021. The Commission was tasked with coordinating and facilitating the delivery of key investments and infrastructure to drive a globally competitive Six Cities Region’

There are several significant building activities occurring on the coast now with Gosford the central hub and a local council backing infrastructure and growth. Indeed, it looks like a mini-Crane city right now.

What’s happening in Gosford Frazer Commercial Real Estate

Major Projects | Central Coast Council (nsw.gov.au)

Turnover has been steadily increasing despite limited marketing activities. 2024 is expected to see a decrease in turnover for the first time in the last 6 years. Projected to be approx. $1.15m, this is due predominately because of underlying economic conditions and split focus on the other business. The company has made limited profit ‘on paper’ since it has been formed and run very much as a family business. Any excess profits have been distributed out.

There are number of expenses that can be avoided, reduced and or removed resulting in some cost savings.

The company has recently implemented new sorting processes that should see a net reduction in the cost of disposing of the waste and increasing profitability. Focus on more efficient turnaround of skip bins (collecting when full) would also increase profitability. The company is also likely to benefit from additional bins being added as it is often running at nearly full capacity.

2019 Revenue $626K

2020 Revenue $1.06m

2021 Revenue $1.24m

2022 Revenue $1.33m

2023 Revenue $1.37m

The two largest risks are:

Economy

A recession would have an impact on sales. Our clients are all vulnerable to the economic environment. However, this risk is partly offset by the demographics discussed above. The business would also have to suffer a significant fall in demand to become unviable.

Covid or covid type event.

Covid didn’t see any significant fall in turnover. The first industry that the Australian Government tends to stimulate in any significant decrease in economic activity is the building industry. The business has relatively low fixed costs and so is likely to be able to survive all but depressionary conditions.

The business has successfully operated for over 20 years with the current owners increasing turnover steadily (slight fall expected in 2024). There are several areas that the business is in the process of implementing that should improve margins and other tail winds that should continue and have put the business in a strong position.

Marketing

The lack of any real marketing spends, or plan does provide a significant opportunity to increase sales. This is something that needs to be addressed. The business does not even appear on Google Maps. The implementation of a proper marketing plan and competitor analysis should see significant improvements in results.

Improved efficiencies

The business is currently undergoing a process to improve efficiencies. This involves a more rigorous ‘sorting’ process at the transfer station to make sure that loads with minimal value are moved straight to the waste site so avoiding ‘two moves’ of the same load. Also skip bins with a significant amount of ‘fines’ (fine material) are sorted at our transfer station as the waste disposal cost on these is significant less (approx a third) than the waste site cost. Waste disposal is the biggest cost for the business for decreases in this translates straight to the bottom line of the business and increased profitability.

Demographics

Australia’s immigration policy is supportive of the business. In addition, the trend for people to be able to work more remotely has attracted families to the Central Coast. Often these families move with ‘Sydney’ wages. This increase in population in the central coast translates directly to increase in building works and waste requirements. See background area for more info on this.