Personal touch sets Green Planet apart
Old grease a highly lucrative business for biofuel company
Steve Hyman feels good about his business.
The family-run operation, Green Planet Bio-Fuels Inc., collects used cooking oil from small restaurants all over southwestern Ontario and sells it to the biofuel industry as a clean, alternative energy source.
Customers have grown fond of his mom-and-pop style and Hyman is concerned that taking on too many new clients will ruin his friendly culture. It’s a legitimate worry — Hyman primarily credits his accumulation of more than 1,000 customers over the last five years, most of whom are mom-and-pop restaurants themselves, to his company’s personal touch.
“My challenge is how to continue offering a high level of service and that family feel as we grow to the next level,” he says.
A chef by training, Hyman was working as a cook at the Maple Downs Golf and Country Club, about 40 minutes north of downtown Toronto, when he realized he could power his diesel car on the restaurant’s unwanted cooking oil. He began researching biofuels in his spare time, then left his job to start Green Planet with his brother and some of their friends in late 2008.
When restaurants want to dispose of used cooking oil, they deposit it into containers supplied by the company. Hyman’s staff empty the containers with their vacuum trucks every four months or so.
The company leaves lucrative contracts with chain restaurants to its many competitors — including Guelph-based Rothsay, which has more than 500 employees, and Sanimax, an international company with 15 locations across North America.
These major players have little interest in small accounts, leaving Hyman and a few similar-sized competitors to fight over the remaining restaurants.
Some of these competitors offer large rebates — which vary depending on a client’s location and the amount and quality of oil produced — in exchange for the waste product. Hyman offers cash as well, but the rebate is much smaller. He says his clients are more interested in customer service than making a profit off their waste. “Our rebates aren’t the highest, they’re not the smallest. But while someone might offer you double the money, I’m going to offer you double the service,” he says. Unlike much of the competition, Hyman guarantees next-day pickup for customers, has a 24-hour emergency line in case waste oil bins reach capacity ahead of schedule, and makes sure his staff cleans pickup areas before they leave. “I tell (our) people all the time to leave things in a better state than when they arrived,” Hyman says. “That (service) is what separates us.” The company has only five staff — an in-house sales manager, two drivers, a warehouse employee, and an office manager, a role filled by Hyman’s mother. He works closely with his team and encourages them to treat the business as if it was their own.
“It’s one thing that I try to instill in them from the beginning,” says Hyman. “They’re all local Toronto guys, they’re from the city, they work inside their community, and that’s really what we’re going for — having a community feel, and approachable people.” Hyman says that touch was key in growing Green Planet almost100 per cent year over year in its first three years. But that growth is slowing now that Hyman has mostly saturated his niche in Toronto — business only increased 58 per cent in 2012. Growing it further means expanding geographically and hiring more staff. “I have to be really careful with how the business is scaled,” says Hyman. “That’s the one thing I struggle with. How do I continue be a small guy when I become a big guy?”
Joel Baum, a professor of strategic management at the Rotman School of Management, says Hyman is at a critical juncture.
“It’s a niche protected by the high cost of doing the collection,” says Baum. “If you try and scale up from that to get a market for larger loads and larger restaurants, you can undermine your ability to effectively serve your original client base.”
Baum says Hyman has two options if he wants to grow: continue to focus on small restaurants while expanding to a new geographical area, or shifting the business to focus on serving the mass market.
“Personally, I like the smaller stuff,” says Hyman. “I’m happy to be the guy in the industry that’s servicing the mom-and-pops and the smaller chains. I feel like that’s where I can offer a lot of value.”
Hyman has taken a third route to revenue growth — adding services. He now offers grease trap cleaning to existing customers, which hasn’t required him to scale because staff can do the job while making scheduled pickups. But it only provides a small amount of additional profit, and Hyman knows continued growth will require hiring additional staff, moving to a wider geographical area, and signing more clients.
“How do we double in size or triple in size and maintain this feeling for the customer of a family-run business?” he says. “I have to be really careful with how the business is scaled in order to achieve that.”