Austin Gray: Well, welcome back to the OWNR OPS podcast. I've got Brock Peel from Canadian Sanitation back on the show. We're doing a second episode here because earlier this week we recorded the first episode, and I realized that the best part of the conversation happened on our phone call after our actual podcast episode recording. So I said, "Hey man, this info that you're talking about on how you built Canadian Sanitation could be awesome for a second episode." So Brock agreed, and thank you so much for being back on. I really appreciate you taking the time. We got into some really good content about you building your business in our phone conversation.

Brock Peel: Yeah, thanks for having me back. I think our phone conversation was just as long as the podcast. I don't know how many words you got in there. I think I had a few too many coffees and kind of went on a bit of a rant there with you, but glad to be back.

Austin Gray: Too many coffees is a good thing! It makes it easy on me as a podcast host in those scenarios. But what we got into… so it’s interesting— in the first episode we didn’t even talk about your growth, but something we did get into in our phone conversation is that you grew this business from zero to—was it 1.2 or 1.3 million?

Brock Peel: We were just about to cross 1.3. We were at 1.2 million in seven months.

Austin Gray: 1.2 in seven months? That's incredible! And you did that because you specialized in one specific industry, and that was something that you were super passionate about in our phone conversation. So tell us about that process. Why did you decide to specialize from the get-go?

Brock Peel: I think I touched on it a little bit in the other episode, but I was talking a little bit about my previous contracting company. I was doing contracting. I was a jack of all trades, master of none, right? I felt like every day and every week I was going to work and had to learn something new. I was spending so much time trying to be the best. You know, if we were framing a house or we were doing concrete or whatever we were doing, I was spending so much time on each little thing. And then all of a sudden I would feel like I was getting the hang of it, and then after the next month, we were on to something else. I felt like the quoting process and everything about it—doing multiple things—I just felt like I was never the best guy at it. I could do the whole scope of work, but I was never the best.

Once I kind of got into septics and I started to see the demand and got a bit of inspiration from my partner now at Canadian Sanitation, who was in the septic industry, I saw the demand for it. We like doing it; we had good contacts around the industry, and I decided I wanted to have a business where I was the best guy at it. When you think of septic, you know to call us or when you look at our business, there's not a doubt in your mind what we're doing. You're not questioning in your mind, "Can they do a septic? Are they really qualified?" It's like, "Well, if you do your research on us, you're going to see this is what we do day in and day out."

We eat, sleep, and breathe septics. That's it—maybe we don't align with you budget-wise, timeline-wise, or whatever that may be, but the undeniable fact is that septics are what we do, and that's kind of what I was going for. I think specializing is key. You can create a little bit of a demand there, but you just want to make sure that, you know, when someone's hiring you, there's not a doubt in their mind that you're qualified for it.

Austin Gray: That takes guts because, you know, being around the trades and growing up in construction, if you're generally handy, I think that's the hardest part. You can figure out how to do anything associated with construction. So I think, as an entrepreneur, the hardest thing is like—well, these people are asking me to put in a boulder wall. Like, yeah, I can do that. And the people you're hiring are typically handy as well, so it's always very tempting to say yes.

In your case, somebody asked you, if I remember from the story, "Hey, can you do concrete?" You're like, "Yeah, we can figure it out." But one thing we talked about in our phone conversation was it’s hard to want to specialize in the beginning because—like in my scenario—you still have those doubts of like, "Is there going to be enough demand in my specific area for this one service?" So how did you get through that doubt in your mind?

Brock Peel: I think I just looked at it as a whole. It's tough. When you start doing your research on it, you go, "How many other companies are there in my area doing this?" There’s going to be a significant number of people, likely in your area, already doing it. I find that with any business, that's a big hurdle to get through—saying, "Oh, well, they’re already doing it, so I can’t do it."

The thing is, I looked at it as, "How can I improve what they’re doing? What can I do better than them? What are they not doing right?" There are so many businesses that have been idle for 20, 25 years or even longer. Maybe they're a household name in the area, and everybody knows them, but they haven't really changed their processes in the last 30 years.

I kind of looked at that, put together a plan for how we were going to do it better than other people. Specializing, knowing we were only going to do one thing, was definitely a bit of a mental block because, again, I know I can dig foundations and do massive retaining walls. I’ve done huge concrete pours. I’ve even framed a 25,000-square-foot equestrian center. There’s a lot we can do. But it's just not jumping from job to job and getting that shiny object syndrome, right?

I was actually listening to a podcast yesterday on another construction podcast. There was a younger guy on there promoting the idea of going where the money is. If someone offers you more money in this industry or this looks like it pays well, go do that. You can always come back to this industry. He was promoting just following the money, and I disagree with that. If you want to be established in any industry, you really need to focus on that and learn how you can be the best.

We've been fortunate; we’ve been busy. But it’s definitely not from lack of effort and work put in to be busy. When we first started out, we began in the beginning of May when half loads came off. We didn’t even really have a credit card yet. Our website wasn’t even hardly live, and we were just kind of getting going. The first two months were tough.

We had some jobs that leaked over from our other companies, but we didn’t have a whole lot going on. My partner brought in some work from the previous year, so he had some work that we could do. Some of them weren’t coming up until later in the year, so we had maybe one system to do, and then we had another one to do in the next few weeks. I had some excavation work from my previous company as well.

Contrary to what I said about focusing on how to get more work and not jumping to the next thing, we did take on another job. We split that up between the three of us, and those guys really jumped in to try and get that stuff done. I was like, "Okay, I’m going to really focus on how we’re going to get more work here."

So, we focused on marketing and also on relationships—trying to talk to the right guys, trying to get in the right rooms, introduce ourselves to the right people. Once we got a few jobs rolling, we got a few from a builder going and kind of just got some traction.

With social media and everything too, we impressed a few people with what we were doing. We got a referral there, started doing some work for a local environmental engineer, and she ended up sending us some more work. It just kind of started to come in, honestly, Austin. I would say about 30-40% of our work came just from probably two people—two builders—realistically. The rest of it was all organic.

Austin Gray: Let's dive into this because a lot of people have reached out to me on X and asked, "Hey, I've got a little bit of work lined up, but how do I go and get more in the beginning when I’m starting the business?" This is something that comes very naturally to you. It sounds like you didn't really have to think about this; you just went and did it. Can you tell us specifically—take us back—take a second to try to put yourself back in that situation. You know, you’ve got a $10,000-a-month equipment nut to cover. Those jobs fell through. Where does your head go? You mentioned marketing, and you mentioned getting in the room with the right people. Can you specifically tell us some steps that you took in that situation?

Brock Peel: Marketing is definitely key. I was happy that we pulled the trigger again around April to get the website going and get going with our SEO and our Google ads. But, again, you pay that money for a website. You start your SEO; you start your Google ads. You’re a guy with zero reviews on Google—Google doesn’t essentially give a [expletive] about you, and nobody else does, really.

We had high hopes for that, and some work came in from that. But really, it was just... I realized, “Alright, Google is great, but it’s almost like you need time on Google. You need good reviews and a lot of time with SEO.” So, you need to be a good functioning business before you're going to be looked at as a good functioning business on Google.

So, starting out is kind of tough on it. The first thing my head goes to is looking for builders, talking to other contractors, cold calling guys. I'll go around; if I see a builder online in my area or see a sign up, I’ll just call that sign or stop at the site.

This year, for example, I cold called a guy two weeks ago. I was out that afternoon to quote a septic for him for a brand new build, and I got there, gave him a $60,000 estimate, and I had a deposit the next day. He sent me two more to quote right away.

I quoted another builder in the summer, and he sent me six drawings right away to quote. Actually, we didn’t even end up getting those, but it’s the fact that we got the opportunity. He already had somebody lined up, and he was looking to see if we could come in and beat all those prices. I was pretty forthright with him and told him, “Hey, we’re not the cheapest. I won’t say we’re the most expensive, but we’re kind of middle of the pack. If you’re looking for the absolute cheapest price, you’re probably not getting it from us.”

Just a matter of getting in that room and speaking with him. As long as he has a good experience with you, you know there could still be a referral. Maybe he can’t afford you, but he’ll think, “These guys are pretty good and easy to deal with.”

Austin Gray: So, builders... Just talking to people—cold calling builders, cold calling other contractors, showing up to their site, calling them—get yourself out there and talk to people. That’s the biggest thing. You don’t know who they’re going to know or what they’ve got going on. They may have their guys they work with, but this whole industry is relationship-based. That’s what we’ve really found.

Once guys establish a good relationship with a company to work with—we have one or two builders that we work exclusively for, and we have to quote fairly because there’s a good chance they may have to get other quotes. They like dealing with us; they like the process with us. They know we treat them fairly, and we do a good job. There’s no question about it—what’s the advantage of them going out and starting with another company, working with another company? Even if they’re saving 3-5%, why would they ruin that relationship or start fresh with somebody else when they know if they hire us, we’re going to do a good job?

I think you did something similar to how I started Bearclaw—investing right out of the gate in a website and SEO, and some other marketing channels because you were confident in your ability to drum up work by doing exactly what you just talked about in your first year.

But we both know from running other businesses that a Google strategy and a digital strategy takes, I mean, it’s a solid—at least 18 months in—we're just starting to see real results. We own the state of Colorado for the land clearing search term, but it wasn’t that way in the first several months.

So, my question for you is, if you could go back and do it again, would you change anything about the timeline of your investment strategy? Because you invested the money first, then you went and drummed up work.

I’m going to make a big guess that the fact that you went out boots on the ground this last year and drummed up work and did 1.3 million, got a bunch of good reviews, and built a bunch of great relationships with builders—now you're going to feed Google's algorithm. I'd be willing to bet this year is going to be off the charts for you from even like a lead-on standpoint. What's coming through the pipeline on your website?

Brock Peel: Pretty much bang on. That’s pretty well exactly what happened, and I wouldn’t really change anything. A part of me thinks maybe I’d spend more, I don’t know. Probably not. I think it was a healthy spend for sure.

But no, I think kind of investing in that is just all about... I mean, marketing is just all about casting a big web. It’s just a big net. I look at it as there’s no one channel—especially if you're trying to grow a business. That’s why you see so many of these larger businesses with little marketing strategies everywhere right? You do have to pay attention to them and make sure that certain ones work, and certain ones don’t.

I don’t really inundate myself, worrying about every detail right now. The most important thing to me is that I want everyone to recognize our logo. I want everyone to recognize who we are. So I’m just trying to be everywhere—I mean wherever I can be, that’s where I want to be—billboard signs, whatever it is.

But it’s just a big net. If you can get one builder, you know, if you can get one—I don’t want to call everyone a builder; it depends on your industry. For us typically, a lot of our work for new installations is going to be coming from builders. The competitive part of it is that a lot of site works guys will do the septic as well. So that's a hard thing for us; I would say that’s a big challenge.

You're going to hire a guy, you know, the process of hiring a guy to do the excavation, all the site works, the grading, and not to have them do the septic. It’s kind of rare. Usually, that guy always does the septic. We’re really unique there, because they want to dig the foundation, do the site works, and we say, “No, we won’t do it.”

Not that we’re not qualified for it; it’s just that’s not our lane. We want to stay in our lane. But again, if you can get some work from you—if you can get two or three jobs from one guy, and you get a couple jobs from another guy, pretty soon you can find yourself where you say, “I know 30-40% of my work, I’m going to get like, say 30-40% of the revenue or work that I need.”

You’re not guaranteed, but there’s a very good chance that you’re going to get that, and that’s going to keep your business alive. It’s not going to feed your whole business. And I think that's where people go wrong; they look at some of these contacts and really think they can build their business off the backs of somebody else’s business. Any other business can drop you like a hat, right? Things can change quickly.

But if you can get 30-40% of your work from a certain selection of people, you know, maybe you can pull in another 30-40% of your work through Google. Once you start getting up there on the SEO, you know, just through your Google and a few people, you’re now at 70-80% of the work that you need for that year.

Boots on the ground, social media, whatever it is—whatever other channel you need. You’re really only trying to make up that 20-30%, not trying to make 1.2 million through your Google SEO search engine worth of work. You're just trying to make up that small percentage.

But it’s all kind of bite-sized in each individual avenue, whether it’s Google, Instagram... Like I said, I haven’t really got much from Instagram; it’s more of a digital resume. But that’s the way that I look at it—casting a web.

Austin Gray: 100% agree with you. I have two questions for you. One, and this one can be a short answer: how much did you invest in the marketing strategy before you even had work?

Brock Peel: Close to $4,000 on the website, and right out of the gate we were about $3,200 a month for SEO, Google Ads, and website management. Then, I think we chewed up another $500 a month.

I had a sign at a gas station—like a big sign. So, we were probably close to $4,000 a month, you know, right out of the gate, no revenue. We had $10,000 a month in equipment payments, $4,000 a month in marketing, plus payroll... and we only had one employee—it was myself and my partner. But we had to get paid. We had all these expenses. So we were starting at about $20,000-$25,000 a month in expenses.

Austin Gray: I can hear you on that. It’s very similar to how we started. I'm curious, though— you obviously had an unbelievable amount of confidence in yourself to pull that off, to be able to say, "Hey, I know that we need these expenses." You know that you need the equipment; you’ve got to sign up for that monthly payment. And then you know that you need the marketing and eventually the investment in payroll to be able to fulfill these jobs. So you pulled the trigger on that early on. You’ve got an unbelievable amount of confidence to go fulfill the work. Did that drive you even more to go get the work?

Brock Peel: 100%. When you’ve got those kinds of expenses, you know, I got my home. I’ve got a wife; I have kids. My wife’s on maternity leave. My life is expensive. Not that I’m overspending, but just to live my daily life is expensive and I need money coming in, right? Plus taking on this massive undertaking—this is a huge undertaking for us, and I think it was a lot of blind confidence in some ways. But I think, in most situations I’ve ever put myself in, it’s just that confidence that I have—that I will figure this out.

You know, even like the machine for $7,500 a month, I thought, "Okay, if we take this machine at $7,500 a month rent, if everything goes to hell in a handbasket, we’ll send it back." So it was kind of like, “What’s your absolute worst-case scenario?” Generally, I look at most things and consider, “Am I going to die? Am I going to go bankrupt?” If neither of those are going to happen, then I'll probably take the chance.

My business partner had a lot more experience in the industry; he had a little bit of a better handle on the business side, financing side, and basically the plan of attack for how we’re going to do this. He had the blind trust in me and I’m glad that worked out because he would have been a little upset if I convinced him to do this and we didn’t make it three months, right? So I just said, “Let’s pull the trigger on this.”

We’re sitting there with $400,000 worth of equipment right out of the gate.

Austin Gray: Yeah, definitely nerve-wracking, to say the least. But I think just the confidence and knowing that you’re going to figure it out—one way or another, you send that machine back, my employee lays off, or whatever. You kind of go back to the roots of it if we have to. My partner and I talk about it all the time—if everything goes to hell, it's just him and I, and we get rid of the big machine and the mini-ex that’s paid for. We go back to the roots of just low expenses and just start from the ground up, cut all of our expenses and just start from the ground up.

Brock Peel: Getting rid of those expenses doesn’t need to sink us.

Austin Gray: I’m laughing because we’re so similar in this aspect. We did the exact same thing. We did like $60,000 in revenue in our first three months, and that was right before our winter time. Then I just knew that we were going to need a skid steer and we needed a forestry skid steer that’s all reinforced, so it’s literally the most expensive skid steers on the market. But I just knew it was what we needed to build the business.

I remember specifically talking to my dad before year-end, and I’m like, “Man, I know I need this skid steer.” He’s like, “Then why are you questioning it? Just go freaking get it and go sell the work. You’ve never backed down from a challenge before, so why are you questioning this?” I remember having that conversation and just being like, “Yep, he’s right."

You have to place a bet on yourself in these kinds of industries because there's always the chicken-and-the-egg problem. So many people are always asking, "How do you think about getting the equipment before you have the work? Or do you need the work before you get the equipment?" It's like you need both, so just go figure out a way to get both.

Brock Peel: So I brought in a three-and-a-half-ton excavator and the skid steer that we have. I actually ordered it in my previous company. I was planning on coming into this year with that skid steer because I’d spent $30,000 on rentals the year before, and I thought, “That’s enough of that.” So I decided I’d buy one; I already had it on order.

When we came into it, we had a new skid steer on order; we just basically changed the financing documents to our new business. We had a bobcat T66 skid steer (75 horsepower) and a Komatsu PC35 three-and-a-half-ton mini-excavator.

Austin Gray: How much did you purchase that one for?

Brock Peel: It was $102,000 plus tax.

Austin Gray: And how did you set the financing terms up for that one?

Brock Peel: It’s basically just over five years. It’s $2,500 or $2,600 a month over five years. We got, I think it was like a 1% interest rate, so it didn’t make sense to put any money down on it. So we just financed the whole thing.

Austin Gray: Yeah, we did the same thing. I’m more of the mindset of keeping cash in your pocket for operating cash early on; finance those first pieces of equipment—keep your payment down as much as you can. What about the mini?

Brock Peel: I own that outright. I bought it cash, so I had that in my previous company. Again, it’s hard because I don’t want to make it sound like I just woke up one day and knew all the equipment that I needed for a septic. I didn’t put this perfect plan together and executed it with no prior experience.

My partner had two years in pumping and two years in installing septics, and I had two years in contracting. Taking on small jobs, you kind of have to, I mean you don’t have to, but it's best to get in there and get your feet wet and start doing a little bit of work.

You don’t want to have no excavation experience and take on a $50,000 or $100,000 job. You want to be doing some small jobs, kind of get your feet wet in there, rent the machine. I was told a long time ago, "If you can’t make money renting, you’re not charging enough."

That’s a great analogy, but when you’re hungry and trying to get work and be competitive, it can be tough. It kind of goes both ways. I bought my mini, I bought it for, like, $30,000 with a float trailer. It was used. I made a hell of a lot of money with it. I made my money back with my contracting company—I made that money back in about three months.

I never had that much excav work until I had the excavator; people always say, “Once you have it, somehow the work just comes.” It’s kind of weird. I don’t really know what it is, but I never had that much excavation work. All of a sudden, I bought this mini, and I didn’t really have much work, and I was like, “Well, I’ll use it for digging post holes for doing decks or doing whatever.” Then all of a sudden—I don’t know if it was me—it certainly wasn’t the prettiest machine that was drawing in so much work.

I don’t know how it happened; it just did. It kind of just started bringing in some work.

So, I brought that in. I think if you can have something, you know, that you can pay cash for to kind of get your feet wet—if you're working a nine-to-five job right now and you want to kind of do something on the side, if you can somehow find a way to have something with minimal payments to just kind of start getting your feet wet, I think that’s pretty powerful too. Just kind of get in there and start to learn the industry a little bit before you make that jump.

So then what we did… and again, back to the equipment. My partner had a 4-ton TRX excavator as well. So we came into it with the skid steer, two mini-excavators, I also had a roll-off truck—just some old jalopy truck with three disposal bins. I would not rent out my bins; I just supplied them to my job sites. I got sick of paying other people for bins, so I got a good deal on the truck.

Then we brought on the 13-ton Hyundai right when we started out. So we had a 13-ton, a skid steer, and two mini-excavators. I had a float trailer, he had a float trailer, I had the roll-off truck, and he had the septic pumping truck. A little bit of an equipment list, I guess, right out of the gate.

If I were to do it again, the answer probably that anyone would want to hear is if I was starting out, I would have a skid steer, a 5-ton mini-excavator, or maybe an 8-ton. A 5-ton can do a hell of a lot of work. A 5-ton and a small tandem dump truck with a little float—you can tow it all behind. I think if you can have that, to me, is like the septic installers' Swiss army knife. If you can get outfitted with a small tandem dump truck, a float, a 5-ton or an 8-ton, and a skid steer, you know, you’re pretty much off to the races there with that kind of setup.

Austin Gray: How much did you spend on your dump truck?

Brock Peel: We just bought it at the end of the season, so we didn’t have one all year but spent probably $200,000 on trucking. We bought it for $55,000 used.

Austin Gray: What year?

Brock Peel: It’s a 1999 Western Star.

Austin Gray: And how many miles?

Brock Peel: It’s got the equivalent of 400,000 miles—around 600,000 kilometers.

Austin Gray: Okay. I bought it from someone I know, and we may kick ourselves for buying used. We might be inundated with too many repairs, but right now it's about just trying it out and seeing how we like having our own truck.

Brock Peel: We were fortunate enough to be able to pay cash for it because we bought it at the end of the year after we made some money. So, we bought it cash, no payments. We’re going to see how it is; try it out. If we do a year with it, and the truck never shuts off, and we find it’s a huge asset to the business, then we may assess buying a new one, right?

Austin Gray: For sure! We’ve definitely discussed this in our business as well.

Brock Peel: How you said you spent $200,000.

Austin Gray: On trucking?

Brock Peel: Yes, how much is it billed by the hour up there in your market?

Austin Gray: It depends. That’s why we bought a truck. If we’re loading out fill—that’s clean fill—then it’s billed by the hour for the truck to sit there. It’s about $150 an hour for the truck to sit there for our loads we’re bringing in.

A truck will not make you money; a truck will only lose you money. The only way the truck makes sense is if you have 20 or 25 of them. I’ve never dealt with any excavation company I’ve talked to or any guys I know that say they’re profitable with dump trucks.

I just—I don’t know how you are. If you’re saying you are, then you don’t understand your numbers and you’re not keeping track of them closely enough, because you will not make money with your dump truck if you look at it over five years or ten years. When you look at the cost of replacement, cost of fuel, maintenance and repair, driver—all that kind of [expletive] roped into one.

What you’re saving—again, we didn’t buy it to save money; we bought it for convenience. It’s about speed. My thing is with the septics is if I can’t increase my cost (if I already feel like we’re at where we’re at for the market), if I want to make more money, how do I make more money? It’s by increasing efficiency.

For us, that’s the way I looked at it. I can increase my prices, but how do I want to make more money and get more done? The only way to do that is to increase my efficiency. So having our own truck is going to make us more efficient, and in turn, that’s how we’re going to make the money.

If I can finish a job a day or two days early because I did my own trucking and didn’t have to wait on trucks and have trucking delays, if I’ve got two guys on a site on two pieces of gear, that’s $3,000 sitting there at minimum. If I get pushed back a day or two because of trucking delays or can’t get the fill out of there, that’s costing me $3,000-$5,000.

If I have the work lined up to go to the next job, right? That’s the way I look at it. I definitely wouldn’t recommend anyone to buy a dump truck thinking they’re going to make money with it because you just don’t.

Austin Gray: It’s interesting; you look at a trucking company that’s got to be your bread and butter, and you have to know that business inside and out. It’s a volume-based business. It’s just the same, say, with the septic pumping. You can’t make money pumping 10 septics a week; you’ve got to be doing 30 or 40 to make money, right?

Tim Hortons or McDonald’s, they don’t—there aren’t big, you know, it’s a penny business, right? It’s all about pennies—you’ve just got to sell billions of them. That’s kind of the analogy to it.

If I look at bringing a load of material, even if it’s a couple in a day, if I can pay a tri-axle load of sand for $400 from somebody else, and I can send my truck and I pay $100 for it, that $300 is okay.

If I look at the fuel, the maintenance, and the labor, and the cost of replacement of that truck—I mean, to only save $300 on that load, or say it’s $250 in the load—it just doesn’t. Unless you’re doing 10 loads a day consistently throughout the year, I don’t see how you can make a whole lot of sense of it.

Again, it's for efficiency and for convenience; it wasn’t really a financial decision for any sort of revenue.

Austin Gray: Gotcha. So, I want to jump ship a bit here back to a topic that we were discussing earlier. I had a local builder ask me the other day, “Hey, what makes you guys different if you're coming in and clearing the land?”

Because normally, like the way a lot of the guys do it around here is the excavator just comes in and they do all the clearing and grubbing, and then they start digging the foundation after that.

Now I had my answer to that as to why our services can be a value add. It basically came down to the fact that fire mitigation is a big thing around here. We're the experts in fire mitigation. It’s going to cost your customers money to have us come back and do the fire mitigation after the fact.

So, we might as well just knock all that out in one go, and it’s a big value add. Plus, we increase efficiency for your excavators. The excavators who are focusing on the foundations around here, every time they clear and grub, that’s less time they’re able to dig foundations.

If that’s their specialty, my selling point to the builder is, “We need to create a well-oiled system. If you hire us to come in and do the clearing and grubbing, we can get in and out. Then your excavator can come in and do exactly what they do well.”

You know, they’ve got big front-end loaders and big hoes to dig and dump trucks. That’s not what we have, so it makes sense from an efficiency standpoint.

My question for you is, septic is very similar. You mentioned this earlier. Normally, the guys doing the foundation just kind of do it—that’s how they do it around here. It sounds like that’s how they do it up there. What is your selling point to the builder as to why they should even consider you or someone different than the guy digging the foundation to come in and do the septic?

Brock Peel: Again, it’s all about what can you do that they're not doing, right? Like if you’re the guy doing the digs and doing the site works who can also do the septic—if I do 40 or 50 septics a year, and he’s doing five or six, or you know, maybe even 10 of them a year—he’s doing other work.

I likely have a better understanding of septics, and we’re likely more efficient at it. That’s not really just a selling feature. You can’t go in there and say, “Well, I guarantee I’m better than that guy.”

The guy’s going to go, “Well, it’s just pipes in the ground. As long as it flows and [expletive] runs downhill… If he’s cheaper, then I’m going to go with him.”

That’s kind of an uphill battle there. But again, it’s just trying to be the best in what we do—our design process, our quoting process.

Also, like I touched on this when we were on the phone: we stay in our lane. If you’re the guy who wants to do everything, you know, maybe your clients are like you, but you don’t make a ton of money. You’re not going to have a ton of comrades in the industry because you're always in competition.

For us, the other excavation guys who are doing the digs—like we're so efficient at the septics, and we do such a good job at it—they actually like when we come in. They can do the dig; they do all the site works, and we come in to do the septic.

They’re starting to prefer it because they’re not as efficient at it as us. We have a large excavation company that’s maybe hiring us. They do septics, but they may be just subbing it out to us and having us dive in to do them because they’re more complex systems that they don’t have experience with.

So if they can take our price and tack on their 10%. Traditionally, they can sell the job, hire us to come in to do it, which is fine by me. I don’t touch site works. I don’t touch the dig. I don’t touch anything like that.

We have some other guys—we get work from other excavation contractors who do site works. They could do the septic, but we send them work.

When someone calls us for a job, sometimes a builder will reach out to us first. His first thing is, “Alright, I need septic and I need this excavation done.” If they reach out to us first, I always ask the question, “Hey, do you have somebody for the site works yet?” If not, “Okay, I know a guy that we work with a lot. We can kind of come in as a package price and offer a full site works thing.”

Again, I’m offering my price on the septic, but I have a really good contractor—excavation contractor I work with that will kind of try to sell his business in there too. He’ll put his numbers together, and I’ll put mine together, and we kind of come in on the job as a whole. I feed him work, and he feeds us work all year round.

That’s how we work—just to stay in our lane. We find that we make more friends this way. Maybe not with the other septic installers, but certainly working with other guys we do.

Austin Gray: I’ve been thinking about this since we had our last podcast recording. You said that, and it really hit home with me. I think it’s such a unique way to build a business. Would you agree that, like, right now the way construction is done, it’s like, “Oh, I have my excavation guy, and they just do everything?”

I’d say on a lot of jobs, at least from what I see around here, would you agree that it would be more efficient if the site work guy focused on the site work, the clearing and grubbing guy did the clearing and grubbing, and the septic guy did the septic?

If it’s all a well-oiled machine, if you’re a builder and you had that network of, "Hey, this Canadian Brock and those guys like they are going to be in and out on that septic.”

Brock Peel: Yeah, I would say… I mean, we understand that. Again, it goes back to trying to be the best, right? There are some serious players in this area, but just the other week, I was asked to quote one of their septics that they designed.

It was just a 5,000-square-foot bed in a completely hardwood tree lot. You’re talking about clearing—you know, clearing 6,000-7,000 square feet of trees with the laneway and everything to get in there just to get this bed in there.

They’ve had four or five other contractors, or maybe not four or five, but they had two other septic guys quote this. Well, you know, I went in there, and it was around $80,000 they projected what the other guys were going to do with all the tree clearing.

Again, it was disheartening for me because I just looked at this beautiful lakeside lot that was just going to be annihilated for a septic system. In just five minutes, I said, “You know what? I can design these with a calculator on my phone or even in my head. I know every number off by heart right.

So, I know five or six different systems, seven different systems. I know those calculations and I know the flow rates for the house; I know all that off the top of my head.”

So, I said, “I can cut it down from 5,000 square feet to 900 or 850 square feet. Let me take ten minutes to run some numbers.” Oh, and also, I don’t have to clear 6,000 square feet of bush and bring in this much material? Those prices were $80,000, and I can get a better system—the Cadillac of all systems, an advanced treatment system—and I can get it in for $55,000.

Now I’ve taken a bed that’s over 5,000 square feet, and it’s now 900 square feet. I’ve saved him $25,000, and I also saved him 4,000 square feet of bush and space on his property.

They basically couldn’t throw the money at me fast enough to do it.

Austin Gray: Do you have to have septic engineers design the system?

Brock Peel: No, I do all of our designs. I have my BCI. Here in Ontario, you can be an installer designer. I can install, and I can design a system that I can install. I can’t design a system and sell it to somebody else that they can install. Mind you, I help a lot of other guys design systems and they just put their BCI on it, but that happens often. I can’t design a system and sell it like I can’t design it, and then someone else installs it.

Austin Gray: Got it! Any thoughts in your head? I know last time we spoke on the phone, you said there were a couple of things that you wanted to hammer home in the next episode. I remember one specifically, but what else comes to your mind?

Brock Peel: I think, and again we don’t have to dive into any of these—I just want to point out a couple of things based on my reference and experience.

I think a big thing is, and I’ve heard this—I think I heard this from you; I don’t quite remember—don’t count on anybody else. When I say it’s good to make relationships with builders, don’t base your business off it. Never base a decision on what somebody else tells you.

I mean, I’ve had so many guys over the years tell me, “Oh, I can give you all this work,” and people want to talk big with all the work they can send you. I’ve never seen any of it pan out from anyone who's ever made those guarantees for me on anything. I let it roll off one shoulder and out the other, but I’ve fallen into that trap before where I get so excited about what I’m at home telling my wife, “This could be huge. This guy’s got all this work; he’s got too much, and he’s going to send it to me."

It’s usually complete [expletive]. They may have the work, but they have to feed themselves first, right? You could possibly be there to pick up scraps, but in my experience, it’s never panned out.

I mean, other contractors say, “Oh, we got so much, and I can send you all this work. You can take some.” Take some advice and work well with them; don’t base your business on them or decisions off them.

If somebody tells you, “You buy a skid steer and I can give you all this work,” don’t trust that. Make sure you have a good business plan on its own, because it's probably [expletive].

The other thing is, with your friends and family—everybody wants to see you do well, but no one wants to see you do better than them. I think that’s something I’ve learned. Everybody wants you to do well; they just don’t want you doing better than them.

So, just be careful about the advice and criticism you get from people, right? You’ve got to follow your heart and what you know you’re capable of.

Austin Gray: I’m glad you brought it up—friends and family. I’ve done business with friends and family, and I think you just have to understand that nothing can be taken personal. In my opinion, business is business, and I’m in business to run a profitable business.

That doesn’t mean I’m trying to screw anybody else. I have my numbers, my margins, and I need to hit my percentages on every single job. If it works, great. If it doesn’t, then no harsh feelings—don’t take it personal. I’m going to the next customer.

When I’m working with subcontractors, I’ve brought friends in on subcontracting agreements and had to have really hard conversations because at the end of the day, I have my rates that I pay subcontractors. Just because you’re a friend doesn’t mean you’re going to get a friends-and-family deal. You know?

This is doing my business a disservice and the people working in my business a disservice if I’m giving out discounts or cutting margins. That’s disrespectful not only to the business, it’s disrespectful to the people working in the business because we’ve developed a system to make sure we can pay for our overhead—equipment associated with the business, insurance associated with the business, the employees working in the business.

Those employees are relying on this business to pay for their expenses.

What’s your take?

Brock Peel: I made a rule years ago. I kind of came across it and made this rule for myself: it’s either full price or free—only one or the other.

If they’re that good of a friend or family, or if you have the time to do it, you’ll do it for free. Obviously, friends and family always pay for material; that can’t come out of your pocket. But it’s either I do it for my full rate or I do it for free.

When you’re not doing it for full price, there’s this mental block that you get where “I can cut corners here,” or “You know you’re not getting—everybody wants five-star service with a two-star price.”

Don’t think that your friends and family are any different. They feel the same way; the fact is $330,000 job for them—giving it to them for $20,000—they only know $220,000 is a lot of money for a job, and they want one hell of a job done.

They want you there when you’re supposed to be there. In my opinion, it’s a little harsh, but I’d rather you feel that you’ve got [expletive], I don’t want to do it for cheap…

If you're pissed off about anything, then we’ll deal with it and rectify it. But again, if I’m charging full price, I’m going to treat you like every other client, and I’m going to do one hell of a job and stand behind it.

When you do it for a discount, you always treat that job differently. I don’t care what anyone says; it’s just natural.

Austin Gray: Thanks for sharing your perspective.

Let’s get real with some people right now. I know you last time, like, I think everybody always thinks, “Oh man, you know, you own your own business; you’re making all this money.”

It’s a load of crap. In the beginning, when you’re building a business, you’re building the business. There’s so much going on and being reinvested back into people because people run the business and then the equipment in our lines of business.

People just think, “Oh, you’re making money hands over fists.” It’s like if you could actually see what I’m paying myself salary-wise, you would disagree with me on that.

I took a big pay cut to come build this business from what I was making at my past corporate job or when I was working for somebody else—the early years of building a business.

You’re making a huge sacrifice in hopes to get a payoff long-term, to build something that can generate profits long-term, but that’s not the case in the earlier years.

You mentioned you were paying yourself, I think you mentioned it last episode—what you were paying salary-wise.

Brock Peel: Yeah, I’m paying myself around $7,000 a year. You know, I was making good money. I was a heavy equipment mechanic before kind of got into this on my own; I was making six figures a year on average—always around that $95,000-$110,000 mark.

I was working four days a week, 410s, and doing overtime on Fridays. I made good money doing that.

So, doing what we’re doing now, I’m making less money. The business has made money, but we’ve reinvested all of it. In my second year with my contracting company, we did about 650,000 in revenue. I made about $200,000 that year—what I can take out of the business.

To get to a point where I’m making 200 grand with this business, I think it’s going to take a while. I had half the revenue and almost three times the income.

That’s an important thing to remember. Our net profit numbers were great last year on just shy of $700,000 in revenue. At the same time, everybody, once again, especially if customers or whoever is listening to this, think you’re putting $250,000 in the bank.

But in all reality, you’re floating other people’s salaries, you’re floating equipment payments. I’m trying to decide, “Alright, which piece of equipment do I reinvest in or pay down?”

To your point, you went and bought $55,000; you reinvested $55,000 bucks straight in a dump truck, which you said you weren’t convinced would make you money.

I think you and I share this: we are both 100% committed to creating the absolute best business we can create. At our core values—we hadn’t even talked about this yet, but I want a place where people love coming to work.

I want a place where people are proud to work for the business and proud to wear the sweatshirts, and the t-shirts, and the hats around. Because we take great care of our people, guess what? That costs money.

Every time you’re generating 20% profit on a job, like what—I don’t know about you, but what I’m thinking about next year—I’m like, “Who do we need on the team or what piece of equipment do we need to layer in next to deliver the best possible service in land clearing and fire mitigation?”

The reality is that costs a lot of money. If customers are listening to this or future potential customers, in order for Brock and I to deliver a great product and a great service, we have to be able to say, “You know what? We generated whatever; 20% margins, there are a couple hundred in the bank.”

But we aren’t paying ourselves as owners in the early years. We are taking that money and reinvesting that back into people or equipment, or marketing to drive more work.

Brock Peel: I don’t know. I think you hit the nail right on the head there. A lot of the money is getting reinvested right back in. I think that’s the thing—the advantage that—you know, I’d be honest. That was a little bit of my mentality when I started this.

It wasn’t arrogance; it was more of a—I knew what it takes. I know that a lot of people aren’t willing to do what it takes. So, for me, I thought, “Okay, if I’m willing to do what it takes, I know that I have an advantage there.”

The barrier to entry is high; if you want to be a renovation guy, the barrier to entry there is so low. You can show up in a minivan with a bag of tools, and you can do most of [expletive] right?

But the barrier to entry to take on half a million dollars just to get started in the septic industry—that’s a huge barrier to entry. That’s going to weed out a lot of people.

If you look at some of these other construction companies, you can’t compete with someone who’s got $7-$8-$10-$12 million in equipment and their payroll being a quarter million dollars a month.

You will not be able to compete with that person on a job. That’s where I look at it—find your zone, kind of find where you're at, but the barrier to entry is sometimes an advantage if you’re willing to take that risk.

Austin Gray: I 100% agree. To answer your question, ours was right about $130 with the forestry package that comes with a five-year warranty. Then I had to buy the mulcher on top of that.

That was right about $50k. So, what is that? $175k right there just in the skid to deliver this type of service. Then, you know, now in my mind the best business model for land clearing and fire mitigation consists of three pieces of equipment.

Our team worked really hard last year to layer those in. I did the same thing last year—I bought an E50 mini. It’s like a five-ton machine. We feed a tracked chipper with that.

So, to rent that tracked chipper—the dealer around here wanted like $15k a month—10k plus freight. I knew that was a necessary piece of our equipment.

In the beginning, you know, there’s this chicken-and-the-egg problem where you got to go get the work. I bit the bullet on the first couple jobs to showcase what we could do with those three pieces of equipment on this fire mitigation stuff.

But then, to your point, you can pay that $15k a month or you can say, “This is what it’s going to cost me to buy it,” and then put it on a finance payment or a lease payment.

We’re closer to around $3,200 bucks a month—maybe even a little less. What’s the finance period on that? Like how many years do you finance that over?

Brock Peel: I’m working on that deal right now to finalize the purchase. Here we’re looking at a five-year term. Actually, they said they’d give me seven-year terms. I don’t necessarily know if I want to go that long. I’d rather put things on five years because it’s very easy in my mind to say, “Alright, you’ve got like $100,000 in equipment finance payments or lease payments—however you want to word that—$100k a year between those three pieces of equipment.”

That’s a very easy chunk to bite off in my mind, knowing the amount of work that’s out there. So if you break it down to an annualized basis, it just cost me, you know, what is it like $24k to have the skid steer a year, $21.5k a year for the mini, and then I’ve got like shot at $40k for the track chipper—but those are what we need for our business.

So I look at it on an annualized basis. But it still costs, yeah.

Brock Peel: For sure! The other side to that is, I was going to add that the way I look at it too is, say we have four years left on everything that we owe money on. If we stay at $300k a year and the business profits some money, we can put some money away.

At the end of four years, we have a $300,000 machine that’s paid for. We have some thousands—say $50,000 to $60,000— and they’ve depreciated in value, but at the end of four years we’re probably still close, with all of our assets that we have, we’re close to half a million dollars in assets just sitting there—not including any other cash in the bank or the business you’ve built or anything like that.

At the end of, you know, in another four years if we’re paying ourselves $70,000 a year, and if we want to walk away—at bare minimum we have half a million dollars’ worth of equipment that's paid for. To me, that’s powerful too, and you can position the business well.

Once you have your equipment paid for, you can start making long-term plans of where you want to be. Do you just want to run your business with a couple of guys, do some work, and have a little less stress? You’re not really worried about growing your business?

You can almost idle through the rest of your career and not get any bigger. Replace it as it comes up but always have this equipment, and you’ve kind of gotten to that point.

If you get to that point, I think it’s pretty powerful. You can ride out a lot of economic setbacks, you know?

If things get really tough and nobody wants to do it, but if work is scarce, you can reduce your rates if you have to. Maybe you don’t want to, but if it’s going to get you through that year or get you through those couple of months to cut your prices down a bit, if my equipment payments are $20,000 a month and the guy I’m bidding against is $2,000 a month, he can cut me down so low that I can’t even make my payments by doing that job.

That’s a—I think that’s pretty powerful and it’s often forgotten.

Austin Gray: How do you view debt repayment? Did you strictly stick to your five-year plan on that piece of equipment, or do you have a set percentage that you allocate over and above that each year, like out of the profits to pay down debt?

Brock Peel: I just stick with the terms. If there’s some excess funds there... You don’t really want to—again, if you’re a growing business, yeah, it’s great if you can pay that equipment off early, and I think that’s amazing if you can.

If you have the money to do that, I just think that if you stick to the four- or five-year mark and you know what your payments are, at least you know what they are. You’re likely going to want to—there’s likely going to be other things in your business you want to reinvest in and things that you want to do, so put some money in the bank, right?

If you have $100,000 sitting in the bank and you drop $75,000 to pay down your equipment, and then you have a major failure, you lose big on a job, I’m sure you’d really rather have that money sitting in your bank account than have a little bit less on your equipment outstanding balance.

It’s definitely good to pay it off early if you can; I wouldn’t really say that’s our plan. The only thing I do say is if we’re going to buy another skid steer, it would be nice to have one paid off before we get another. So, at bare minimum, if we’re going to buy another one—and let’s say it’s $120,000—I’d like to drop $60,000 down on that minimum.

I don’t want to have too large skid steer payments like that.

Austin Gray: I’m right there with you. I mean, it’s a cost of doing business, but at a certain point, there are guys who are really good at finding a good deal on equipment.

I actually just got an email yesterday from our local Bobcat dealer—they're selling their rental equipment, and I’m not saying going and buying rental fleet is what anyone should or shouldn't do. I have my opinions on it, but I was looking at, like a—an I was looking at like a T66 that was about $41k USD, and then I looked at a T870, which is the machine I run, and they wanted like $60,000 for it.

I’m like, “Dang!”—you know? And it had like, I don’t know, less than 1,000 hours. I’ve got like just shot 500 on our equipment. So I was like, “Man, I wonder if there’s a way.”

I’m curious if you’ve had any talks with your dealers about this. Like, if you have a piece of equipment financed and you were to go back and say, “Hey, what if I come and turn in the machine? What would you guys buy that back for?”

Have you had that conversation with them yet?

Brock Peel: No, our large excavator—the 13-ton—they rent out equipment; he told me throughout the winter if we wanted to. We have no work for it, he would try to rent it out for us to cover our payments, but no. We put $65,000 or $70,000 down on that; that was another big chunk we were planning to do zero, but we couldn't get.

So that was a surprise—putting that money down. There’s a piece of equipment that I know. I’ve been thinking, “How can I get it out?” So yeah, I’d rather keep down my expenses. I think I’m just a kind of an exit plan. Not that I want to focus on your exit plan, but you have to think of what’s my worst-case scenario? How am I going to get back from this, you know?

What am I going to do? Even though we take a hit on the 13-ton, if I have to sell it or bring it into the dealer, I know I owe less than it’s worth. To me, that’s powerful if things made really drastic mistakes. If you have to get out of this business, getting rid of the big machine, getting rid of it.

Austin Gray: I haven’t either, but I thought about doing it. I’m planning on doing it just to know, because I want to have that in my back pocket.

If you find a good deal on a machine, I can go pay 60k cash for it, and we owe, you know, $100k on it, and they’d buy it back for $100. I really don’t think they would, but maybe they would only lose, maybe they’d buy it back for $90, or $95, right?

If you can make those numbers work and you find another deal, I could be derailing myself on things that I don’t need to be focusing on right now, but it’s interesting to me that I’m starting to see better deals on used equipment right now than we were like a year and especially two years ago.

Brock Peel: It’s funny to say that because that’s all I was thinking when you were talking about that.

To be honest, I come from the equipment background. I’m a licensed heavy equipment mechanic, right? A lot of people have said to me, “Why don’t you buy used equipment? You can fix it up yourself.”

Or like, “Even say playing around with wheeling and dealing, buying and selling equipment.” I just—I don’t want to waste that brain power on that. What do I need it for? Like, what job do I need to do?

For me personally, I wouldn’t spend that much time thinking about it. What work do I need to get done? What equipment do I need to get that done? Can I make sense of it? If I'm buying used, I buy it cash. That’s the only way I buy used. I would never finance used.

It’s either new financed or used cash. You’re going to pay 7% to 10% or 12% on used. Over the course of however many years, you’re going to pay way more than what you paid for new. If something happens and the machine is a complete [expletive], and you need to get rid of it, now you owe more than it’s worth, and it really handcuffs you.

So, personally, I wouldn’t waste that much brain power on it. I would just say, “What job do I need to get done? What machine do I need? What’s it going to cost me? Get the machine and carry on.”

For my business, I focus on how to make more money and how to get more work.

Austin Gray: So, how to make my business better—that’s what you’re focused on.

Brock Peel: Yup!

Austin Gray: I think my approach here is that I believe anyone can do this, and many people can be successful, but you have to put in the time, effort, and focus.

It can’t be a half-hearted effort or a side project. My business broker friends tell me that if you’re doing it part-time, you have a year of time to figure it out before you can easily go to full-time.

And I think we both know we would not have gotten to this point if we hadn’t learned all those lessons along the way.

Brock, thank you for showing up for this recording and sharing your thoughts.

Listeners, thank you so much for listening. If you are enjoying these episodes, if you're listening on YouTube, would you mind liking and subscribing to the channel? Comment below with your thoughts on this episode. If you have any recommendations for who else you want to listen to on the podcast, make sure to tag them in the comments below.

If you’re listening on Apple or Spotify, please make sure to like and follow the show. You’ll get notifications whenever we release new episodes. If you would take 30 seconds or a minute, we would greatly appreciate a five-star review. Just like building a local service-based business, five-star reviews are very important for podcasts as well, so we’d appreciate that.

Finally, this episode is brought to you by OWNR OPS. OWNR OPS is an online hub specifically made to help service-based business owners start and grow your business, similar to how Brock has done with his septic business. So go check that out—ownrops.com, OWNR OPS.

We’ll wrap up this episode, and we’ll see you guys in the next one.