Getting the edge: Startup strategy pays off for portables business in Cloquet
Savvy moves by a new Cloquet business are giving it a growing customer base and early profits. But along the way, its tactics have caused resentment among competitors. A year ago, Laura Walsh and her husband, Chad, started Advanced Services Inc.,...
Savvy moves by a new Cloquet business are giving it a growing customer base and early profits.
But along the way, its tactics have caused resentment among competitors.
A year ago, Laura Walsh and her husband, Chad, started Advanced Services Inc., providing portable toilets to contractors and at special events. From the beginning, they set up their business to take advantage of hiring guidelines for federally funded projects and those that are union-driven.
By making Laura the principal owner with 51 percent, Advanced Services became a woman-owned small business. It’s also considered a small disadvantaged business and a service-disabled veteran-owned business, because Chad was injured while serving in the military in the Middle East.
All are among the subcontracting hiring goals lead contractors face on projects that receive at least $1.5 million in federal money. The guidelines, designed to help small companies, also apply to related products and services that get at least $650,000 in federal dollars.
Those subcontracting goals - which would include portable toilet services at construction sites - include 23 percent small businesses, 5 percent female-owned businesses, 3 percent service-disabled veteran-owned ones, 3 percent veteran-owned and a 5 percent disadvantaged category that includes minorities.
“They have to reach those goals, or they’re not going to get the job,” said Laura Walsh, who runs Advanced Services while her husband works full time at United Piping.
These categories also are often sought by contractors on state-funded and and other big projects.
For the couple, the strategy has helped their company get big jobs and is positioning it for government-funded jobs in the future.
They have seven portable restrooms at the Maurices Headquarters building under construction in downtown Duluth. They have portables at a school construction site in Hermantown; at the Northeast Regional Corrections Center as it undergoes improvements; at the Western Lake Superior Sanitary District expansion; and at the new animal shelter being built in Superior.
But their biggest job is the Enbridge Superior Terminal expansion, where they have 42 portables.
“You have to have a lot of connections and know people to break into the business,” Walsh said. “My husband was working for United Piping, the lead contractor. So we had a good chance of getting them in there.”
For an additional edge, Laura Walsh made her business a union shop.
Although she has only one employee - her father - she worked out a contract with the Teamsters Local 346. With it, the business became the only portable toilet company that’s a union shop in Minnesota, Wisconsin and North Dakota, Walsh said.
“The closest one that’s union is in Illinois,” Walsh said. “They can’t join any other union. There’s no other union covering them except Local 346. We’re the first to make it in. That’s why we’re so special.”
Local 346 spokesman Roderick Alstead said he believes Walsh is right about being the only portable toilet company in the region that’s union. But he could confirm only that they’re the only one in the local’s coverage area, northern Minnesota and Northwestern Wisconsin.
Teamsters Local 346 represents a wide range of workers, including truckers, construction and pipeline workers.
Advanced Services having just one employee didn’t bother Alstead, the union’s secretary-treasurer.
“She’s trying to grow,” he said. “She just started out. She realizes the benefit of having an agreement.”
The wages and benefits worked out with Walsh are good ones, Alstead said.
“You’ve got to keep it competitive with the nonunion,” he said. “The benefits package is pretty good. A lot of times they get the wage but not the health insurance and pension. She is paying health and pension. She has to; it was a demand of ours.”
Advanced Services charges more than its competitors because of the union wages and benefits it pays, Walsh said. But, she said, the union status gives it an edge with contractors that use union workers. Besides delivering portables to construction sites, a company truck visits the site once or twice a week to service and pump them out.
“We promote using them in our construction pre-jobs meeting,” Alstead said of Walsh’s business. “It’s our job to promote her. This is a union shop. We promote using all union. We want them to get work.”
However, Advanced Services may not be the region’s only union company in the portable restroom business for long. Alstead said Local 346 is close to signing a company in Bemidji.
The business boom expected with the planned Enbridge Sandpiper pipeline project is a reason that company is going union, he said.
“When the Sandpiper pipeline comes through, they’re going to need portables, lots of them,” Alstead said. “It’s going to go from the Bakken oil fields to Superior.”
Walsh also plans to seek jobs with the Enbridge Sandpiper Pipeline project.
Walsh was no novice to the business before she and her husband started Advanced Services. She had worked for a large portable restroom company on the Iron Range for 12 years.
“I was a secretary,” she said. “I did all the sales and talked to every single person who needed a toilet on site.”
By taking orders, dispatching deliveries and pickups, and doing the billing, payables, payroll, taxes and more, she got to know the business well.
That led to Walsh and her husband starting their own portable restroom business last March. They picked a name that would allow them to expand into other services and one which, shortened to ASI, would be the first listed in the phone book.
Walsh had made a lot of contacts and friends at her previous job, and she said she used them to get customers.
“It was easy for me to call everybody I knew and talk to them,” she said. “They gave me a chance. They were very happy to learn we were woman- and disabled-vet owned. They said if you can provide a great service, we’ll take you.”
Her former employer isn’t happy about that, she said.
“I probably took some business away from him and probably from others around here,” she said.
Indeed, some local competitors aren’t happy. Those contacted by the News Tribune declined to comment on the record, however.
“We have had friction with existing companies around here,” Walsh acknowledged. “People will talk about you behind your back. There’s a couple of companies out there that are bitter.”
In one case, two Advanced Services portables were dropped off at an annual disabled veterans barbecue in Cloquet, next to a competitor’s paid portable, seemingly to gain the business.
But Walsh said it was a donation.
“It wasn’t to make any money,” Walsh said. “My husband is sentimental about veterans. We just wanted to donate our toilets and shake everybody’s hands. We plan to donate our toilets there again this year.”
Growth with profits
The couple’s efforts are paying off, with their business growing.
“We’re in the black our first year,” she said.
They started with a few dozen almost-new portables, followed by the purchase of 100 brand-new ones in what’s becoming their signature colors - forest green and pink. At a cost of $400 to $900 each for new ones, the investment was substantial. More portable purchases have followed.
“We started out with 50 portables in March and now we’re in the hundreds,” she said.
While they are licensed in Minnesota, Wisconsin and North Dakota, so far they have portables out on jobs as far west as Bagley and south to Elk River in Minnesota and east to Hayward, Wis.
“We cover a wide territory,” Walsh said.
Their inventory includes hoistable ones, nicer ones for special events such as parties and concerts, some equipped with heaters and some with washing stations.
They hope to soon triple their inventory and hire one or two more employees this spring.
Walsh said a lot of their success is due to the way she handles customers. When she worked for the company on the Iron Range, she said a lot of customers would deal only with her.
“There’s a lot more involved with talking to customers besides the price,” she said.