The Entrepreneur: Daniel Long, Clearabee
Named among the top 20 start-ups in the UK, Clearabee's co-founder explains he's made millions from other people's rubbish...
Co-founder: Daniel Long
Company: Clearabee Ltd
Description in one line: Nationwide on-demand rubbish removal business
Previous companies: M&A at Rothschild
12 month target: We’re on target for £5m in 2015
Describe your business model and what makes your business unique:
- Clearabee is a rapidly growing on-demand rubbish removal – we cover most of the country with a next-day collection service and offer a same day service in most major cities.
- We started by offering domestic customers a compelling alternative to tipping and skipping. That has funded our expansion to the point that we can also service contracts with big national businesses.
- Our technology enabled approach means we can respond rapidly, work incredibly efficiently and provide a complete audit trail. Customers love that we remove the hassle associated with removing rubbish and ensure that their junk is disposed of legally and in an environmentally friendly fashion.
What is your greatest business achievement to date?
Clearabee is about to open depots in the North East and Scotland, meaning we can service the whole country using our own teams. We’ve achieved this nationwide rollout in a little over two years of trading using only cash flows generated by the business. Expansion isn’t cheap, so I’m pretty happy with this.
What numbers do you look at every day in your business?
The first number I look at every day is the number of bookings combined with the total volume of waste collected each day. With tipping costs by far our largest expense I also look at the tonnage tipped by our vehicles as a factor of the revenue they generated.
To what extent does your business trade internationally and what are your plans?
We currently have no plans to expand internationally – the UK market potential is huge and we’re firmly focused on growing our market share and service within the UK.
Describe your growth funding path:
Clearabee started with some personal debt, an unproven idea and no funding on the horizon. I moved back in with my family in the Midlands, coded a website, hired a truck and started collecting rubbish myself. To protect cash flows, we hired trucks on flexi-lease (so they could easily be returned if required), negotiated zero deposit rentals to prevent having cash tied up and moved into ‘easy in, easy out’ offices which support start-ups with flexible terms and low deposits.
Over the past year we’ve managed to grow our account list considerably and engage more with larger companies that tend to pay on 60-90 day terms. We’ve had to pay greater attention to credit control and cash flow management.
Being only in our third year of trading, we’re still deemed a relatively new company, which has limited access to finance at rates we’d be happy with. We’ve had investment offers, but so far our growth targets are being met by the cash flows generated by existing operations. We are keen to retain freedom to experiment with the business model and be able to respond quickly to threats without worrying too much about loan covenants or shareholders, particularly at this stage in our growth.
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What technology has made the biggest difference to your business?
Mobile and cloud-based technology has allowed us to roll out a nationwide service and remain in control of our assets and service delivery. Clearabee’s integrated vehicle telematics and job system allows us to dispatch trucks on the go and ensure new jobs are allocated to the most suitable team with minimal human interaction.
For example when a truck requests to tip, our system will identify the most appropriate waste transfer station taking into account variables such as location, traffic and recycling credentials.
We’re also able to deliver a better customer experience through this integrated system –through SMS arrival alerts, automatic electronic receipting and responding faster to collection requests.
Where would you like your business to be in three years?
I’d like Clearabee to be approaching at least £15m turnover in three years, which based off the current growth rate would seem pedestrian, but I’m keen to keep us grounded and ensure our growth is sustainable and profitable.
We’re growing our business development function and hope this to pay off over the coming years, with greater penetration into the ‘big business’ market and local government tenders.
We hope to achieve greater stability as we further cement our position into the market – such rapid expansion can be testing for all parties and ensuring our systems are scalable and robust enough to handle whatever we throw at them is an essential part of our strategy.
What is the hardest thing you have ever done in business?
As the company expanded, I found a number of our early staff couldn’t grow with us. Having to let them go was tough.
What was your biggest business mistake?
As we sought to grow account work we let some of our larger corporate customers get a little away from us in terms of credit and weren’t initially diligent enough in chasing payments. This led to a brief cash flow crunch last winter. We sorted this out quickly and learnt a valuable lesson – strong growth and healthy profit figures are worth nothing if you aren’t getting paid.
Piece of Red Tape that hampers growth most:
Vehicle licensing requirements are hugely important, but it is also a complex area to manage and it takes time to ensure drivers are fully trained to operate our larger trucks.
What is the most common serious mistake you see entrepreneurs make?
Quickly detaching from the operational side of a business can be a big mistake until a company is really established. It’s easy to get wound up thinking about the big picture and expansion plans, but if the operational side of the business isn’t keeping up plans can quickly fall apart or service delivery collapses.
How will your market look in three years?
The waste industry is a very dynamic market, with changes in regulation creating risks and opportunities every year. We expect further industry oversight, particularly around enforcement of disposal channels, and more prosecutions of rogue operators that don’t comply.
We already provide electronic transfer notes and full waste tracking, which means our customers know their waste is being deposed of correctly, so we see this as an opportunity to grow our market share.
What is the single most important piece of advice you would offer to a less experienced entrepreneur?
Be adaptive – even the best made plans can come un-done when you’re trading. Almost every assumption I made in my own business plan turned out to be completely wrong. In hindsight my business plan probably wasn’t the best, but then I am believer in giving it a go, rather than a meticulous planner. Don’t be phased by something not working quite as well as intended, as long as you understand the reason why, and don’t be afraid of making big changes if necessary.
We booked hotel rooms for all our staff and hired Marco Pierre White’s restaurant in Birmingham for our Christmas party last year. It was money well spent.
Executive education or learn it on the job?
I went to a good university and that helped me get into banking. I’m sure there is value in executive education, but I’ve learned so much more running Clearabee, a lot of which you wouldn’t find on a business school syllabus.
What would make you a better leader?
Delegating further – it’s something I’m a lot better at recently but it takes time to get out of that start-up mentality where a business is so finely balanced that relinquishing control can be tough.
One business app and one personal app you can’t do without:
Salesforce -we use it to manage our business leads and the app allows us to stay in touch wherever we are. We can post new leads as we’re out and about ready for follow up by the office based team.
For personal use, it is a close tie between The Economist’s app and Fruit Ninja.
I’m a ferocious Googler, which helps me find the insight and inspiration I need. I’m afraid I’ve not read a business book in years.