Saving the Recycling Business, 2009 (continued)

How I Saved My Company in 2009-10: Yearbook 2

I described yesterday the precipice I found myself on in January 2009.   I'd just purchased 50,000 s.f. of overhead.   The renter who paid (the other) half of the mortgage had gone out of business.

Learning to enjoy the desert

Scrap prices from almost everything we tore down, except for chips and boards, were at pre World War I lows.  I had a business consultant tell me to liquidate everything and try to rent the building, and a couple of VC (vulture capital) deals come circling around.  A competitor started offering all my VT and NH clients 1 cent per pound recycling on CRT televisions, something unheard of, supposedly financed by an international company overseas - but mysteriously carpet-bombed at all our New England clients - no similar interest by the Asian company in Arizona (where we also did business), and as mysteriously, the Asian company disqualified it if it was collected in Good Point trucks and delivered to the same place...

And this sounds like a joke, but some people out there know the guy - a scrap dealer from outside the state started calling my cell phone and saying the F word and saying I was screwed and he'd locked  up ALL my accounts, and I was going to regret not having sold to him.  I'd hang up and he'd be the next call, 30 seconds later.   (I think he must have had a brain aneurysm, it wasn't normal, even for scrap dealers.)

All I had going for me was Chicas Bravas - the NPR discovered our fair trade recycling banquet in Sonora Mexico.  And our long-running partnership with the SKD (contract manufacturer) in SE Asia was still alive.  And both had CRT glass cullet end markets for free nearby.   We were hitting 22% reuse then, which was not as high as off-lease computer dealers, but it was 90% of our income in January 2009.  We just had to believe in it and make sure our clients could believe in us.

How I Saved My Company in 2009: Yearbook

Snapshots of the 2008 crash, 4 years of Education

In 2008, after 5 years of outgrowing space and adding trucks barely in time to keep clients, and after outsourcing hundreds of thousands of pounds of shipments to other companies  because I didn't have the space to do it "in house", I got a tremendous opportunity.  Next month will be "graduation", the end of 4 years of this wonderful opportunity.

We were paying roughly $8K per month to rent 1/3 of a plastic factory, which was still producing.  Another tenant was renting 1/4 the space from the plastic company for $9K per month.

View from 5000 feet... and falling

The plastics company went out of business, and the mortgage on the building was available for roughly $15k per month (quite roughly).  I had an opportunity to take over 100% of the place, meet half the mortgage through the other renter, double my space, and be paying into equity rather than just a rent check.   It took 5-6 months to get the loan approved, to empty college funds, put my house on the line, and borrow from family.  It was about $330K down, and we bought the whole enchilada in late October, 2008.

Crash...   What was that?  That was the banks, the stock market, everything hitting the fan a few weeks later.