505 Junk Vancouver began as a class business plan project when co-founders Barry Hartman and Scott Foran took their schoolwork all too seriously and dropped out of college to pursue their entrepreneurial dreams. With a used pick-up truck and a trailer found on the roadside, this duo came from humble beginnings but had a had big dreams from day one.
Fast forward five years, and 505-Junk is now an award-winning junk removal company that is the first of its kind to install innovative scales in their trucks, allowing them to charge clients by exact weight. With a team of 15 and revenue in the millions, much has changed at 505 Junk since the days when Barry would cold call prospective clients from a plywood desk in his parents’ basement. The company is now poised for expansion into multiple new markets across British Columbia, with exceptional profit margins, and revenue that is rapidly growing every month.
Daily KPI’s (Key Performance Indicators) were established along with goals and a tracking system to monitor results. This allowed Scott Foran to track Gross Profit margins daily and make quick adjustments as needed when margins dipped below target. The dedicated focus to daily revenue and gross profit goals caused a cultural shift in the company, where the KPI that started to be measured were improved drastically. As a result, monthly revenue has grown by 210% in the past 18 months and gross profit has increased by 5% even with significantly increased staff wages.
Just 18 months ago, when 505 Junk joined the Breakthrough Academy program in the Fall of 2015, cash flow was tight, profit margins were low, and revenue was stagnant. With big dreams however, Barry and Scott were set on turning things around and implementing everything they could from the training program. Ultimately, it was 3 key changes that led to their success…
A second important factor in 505 Junk’s growth was their focus on putting the right people into the right roles on their team. With a defined strategic direction, Barry Hartman took on the job of piecing together the roles and organizational structure that would be required to achieve their goals. For example, it became clear that a General Manager was required for the Vancouver area in order to give Barry and Scott the time to work on activities that will impact long-term growth of the business. Coincidently, Truck Team Driver Alex Elsey was looking for a role with higher responsibility and had proven himself consonantly in the four years he worked at 505 Junk. Alex was quickly put into a General Manager role, allowing the owners to work on initiatives that took the business to the next level.
A third key to success was the proper targeting of clients to whom 505 Junk could provide the greatest possible value. While the majority of the marketing was initially focused on residential clients, analysis made it clear that commercial work was much more profitable and also more valuable to the customer. Commercial clients benefit from the easy, consistent, and fair pay-by-weight pricing model, rather than having to negotiate with traditional, volume-based junk removal companies. 505 Junk’s model creates a win-win situation with commercial clients, it simply took focused analysis to understand that and adjust marketing efforts accordingly for drastically increased results.
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