Per­sonal touch sets Green Planet apart

Old grease a highly lu­cra­tive busi­ness for bio­fuel com­pany

Toronto Star - - BUSINESS - JARED LINDZON SPE­CIAL TO THE STAR

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.”

AARON HAR­RIS FOR THE STAR BUSI­NESS CLUB

Green Planet Bio-Fu­els pres­i­dent Steve Hy­man has a tough de­ci­sion ahead in re­gard to ex­pan­sion.

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