The business world has a garbage problem, but waste management audits can start to solve it. Somewhere between the millions (or billions, depending on your definition) of pounds of garbage businesses produce each year and extreme pressure from customers and regulatory bodies lies a very tangible issue. How can you simultaneously reduce the costs of waste management and meet these rising waste expectations? In a post- (or mid-) COVID economy, the immediate economic interests of your business are colliding head-on with new consumer demands, regulatory burdens, and an ever-expanding monopoly of utility companies and vendors.
While waste isn’t always the immediate thing that jumps out when business leaders think “cutting costs,” your proverbial (and physical) trashcan should be the first place you look during a financial planning session. Why? Because waste is costing you a lot more than you think.
In healthcare alone, companies waste over $7 billion on waste management. While those little candy wrappers and used business equipment may not seem like much, they add up — fast. In an ecosystem where 82 percent of businesses invest heavily in cost-cutting but very few see results, simple daily costs like waste and utilities can be the bridge between sustainable business practices and out-of-control spending.
So how do you cut costs on waste in the ever-complicated and regulatory-dense waste management space? You use waste management audits — which help businesses cut 30 to 45 percent of their waste costs on average.
What Is a Waste Management Audit?
There are plenty of ways to define a waste management audit. For some large businesses, waste management audits serve as a tool to help them build sustainable waste management processes across a variety of facilities in multiple distinct markets. For others, waste management audits provide the fuel necessary to develop strategies to meet regulatory waste requirements and minimize environmental risks. Still others utilize audits as a simple way to understand their waste ecosystem.
We could define waste management audits using any of these complex, unique, and corporate-centric terms. But, at the core, waste management audits are simply tools to help your business cut waste expenses and understand your waste stream. From massive enterprises with hyper-complex waste ecosystems to small businesses relying heavily on local haulers, waste management audits serve to:
- Sniff out superfluous expenses
- Discover errors and problematic waste contract clauses
- Define and detail waste spending to demystify waste streams
It’s important to note that waste management audits aren’t intrinsically tied to any one specific corporate strategy (e.g., environmental, operational, sustainability, etc.). Instead, waste audits are cost-saving tools that can be leveraged as a bridge to nearly any cost-centric strategy.
Want to save some quick cash? Great!
Need to understand your waste stream better to capitalize on some amazing environmental strategies? That works!
Interested in understanding your overall waste structure better to initiate some awesome facility management strategies? Then waste management audits are perfect for you!
Waste Management Audits vs. Waste Stream Management
Some companies use the words “waste audits” to refer to waste stream management. These are companies that go through trash bags, identify waste types, and attempt to reduce waste burdens or spur environmental efforts like intensive recycling practices. Those are extremely helpful. But that’s not what we do. We unravel your waste management ecosystem (from each individual dumpster to every complex trash vendor contract) to help you save significant amounts of money, discover awesome opportunities, and create groundbreaking strategies.
Cash for Trash: How Private Haulers, Public Entities, and High-Profile Waste Companies Take Advantage of Businesses
As businesses continue to grapple with rising costs, spontaneous revenue leakage, and immense social and environmental pressures, securing best-in-class waste arrangements can seem “back of mind.” After all, why spend time going through waste contracts with a fine-toothed comb? You have bigger fish to fry… right?
Get this: the average business overpays service vendors by 10 percent. That’s peanuts compared to how much they’re overpaying for waste management. Some sources suggest that around 60-80 percent of businesses overpay for waste management. In our experience, that number is closer to 95 percent. We’ve spent years helping companies curb excess spending on utilities and waste. During that time, we have yet to find a business that wasn’t overpaying for waste management. It’s that big of a problem.
Virtually every waste management contract is peppered with ancillary fees, unnecessary service levels, and confusing (and costly) verbiage. There’s a reason the private garbage industry has outperformed the market for the past decade. They’re very good at ensuring that your business pays over the odds for waste management. Of course, it’s not just the big private companies. Small private haulers and municipal waste companies (which are dwindling by the day) overcharge businesses significantly.
And here’s how they do it:
8 Ways You’re Overpaying for Waste
1. Too Many Pickups (High Service Levels)
Every trash pickup your vendor makes puts cash in their pockets. So, it shouldn’t be too surprising that most businesses are “over-served” by their vendors. This includes both trash and recyclables.
In fact, McKinsey estimates that 60 percent of total plastic use will come from recyclables within the next few decades. As businesses grapple with regulatory and consumer pressures — 78 percent of people want to do business with environmentally-conscious companies — to recycle, many fail to set up cost-practical contracts with private recyclers. In turn, those recyclers “over-service” businesses to earn more revenue.
2. Waste Stream Mismanagement
For businesses with multiple locations, managing waste gets complicated — fast. Ensuring that waste is managed appropriately across every location can be a nightmare. You have to deal with multiple vendors, various contracts, and plenty of local and regional regulations. As a result, many businesses simply use RFPs to secure contracts quickly. This can cost you big in the long run.
3. Auto-Renewal Clauses
Watch out for evergreen clauses. These types of auto-renewals often charge you significant fees for early termination. Also, they give you significantly less wiggle room during vendor negotiations. Luckily, it’s possible to renegotiate these clauses mid-contract. But you need someone with intimate knowledge of waste management advocating in your corner.
4. Hidden/Ancillary Fees
Waste management companies love hidden fees. From “administrative fees” and “minimum tonnage fees” to paying for their fancy, self-serving technologies, virtually every waste contract is littered with ancillary charges. These fees are so commonplace that they don’t even try to hide them anymore.
5. Incorrect Equipment
Choosing waste equipment is more complicated than it sounds. First, you need to check the overall cost of equipment rental against pickup fees. You may save more money using a few large dumpsters. Alternatively, small dumpsters may be the way to go.
Next, you have to consider the overall burden of equipment. Finding places to physically put dumpsters and preventing employees from wasting time looking around for open trash receptacles impacts your bottom line.
Finally, you should consider your equipment mix. You may find leveraging multiple vendors with multiple equipment contracts to be the most financially sound option. Again, waste management audits help you navigate this complex space.
6. Unnecessary Services
Haulers have one primary goal: to make money. Unfortunately, this money-making endeavor often happens at your expense. We’ve seen trash haulers use 80-yard containers to pick up small amounts of waste, and we’ve certainly seen trash haulers use “on-call” and “scheduling” tricks to drive up costs. These are just the non-contract-related tricks they pull.
Believe it or not, waste management errors are common, and they’re costly. A few incorrect lines of data or a few overcharged pickups can lead to significant revenue leakage. This doesn’t only happen with small-fry businesses and behemoth companies. Major cities are usually shocked at how much they’re overpaying waste management companies after audits. This error problem pops up constantly — so much so that some cities have created their own trash services simply to cut down on the overwhelming overpayments. As a business, you may not have the muscle to simply create your own trash company. But you can certainly put a stop to the errors and overcharges.
8. No Provisions for Poor Service
If you put out a poor-quality product, underperform for a customer or client, or downright fail to deliver your deliverables, you have a problem, right? So, why can trash vendors miss deliveries, make errors, and leave missed trash around dumpsters without consequences?
Chances are, your vendor contract has no clause for poor service. In fact, you may have clauses preventing poor service from impacting your pay. While this isn’t necessarily a direct cost, having your business contractually bound to poor service creates plenty of frustrating indirect costs.
Remember, these are mostly direct costs. Waste management audits can do more than save you money. They can help you create new and exciting revenue streams.
When Should You Book a Waste Management Audit?
Today. We’ve been helping companies reduce operational spending for years. Normally, we would ask a bunch of questions specific to your business, discuss contract specifics, and dive into the dirty details.
But, when it comes to waste management, virtually everyone is overpaying. Since waste management audits are, by nature, cost-saving tools, there’s no risk management or deep-dive decision-making necessary. You’re likely overspending on waste, and waste management can cut that spending.
A better question is: “How often do I need a waste management audit?“
In general, we recommend scheduling periodic waste management audits. But we’re not making those periods specific. It depends on the context of your unique business needs. For example, a small business may only need a waste management audit before choosing vendors at the end of the year. A large business, on the other hand, may need multiple waste management audits throughout the year to ensure waste is flowing appropriately throughout all of its facilities.
For example, we recently worked with a large commercial property owner who was frustrated with the current waste monopoly in the area. Not only did we uncover $459,000 worth of annual waste-related savings, but we helped align that property with recycling goals. For this specific client, we would recommend yearly audits. The hauler ecosystem in their area was very monopolized, and their current state and local guidelines were in a state of flux. For a larger client, we may change that recommendation to once bi-yearly or — in the case of multi-facility businesses — quarterly.
The Non-Cost-Related Benefits of Waste Management Audits
So far, we’ve talked about brass tacks. The big fish. The dollar. But let’s take a moment to address all of the non-cost-related reasons you should consider waste management audits.
Meeting Customer Expectations
CEOs at the top 54 companies in the United States believe that 98 percent of customers will be “extremely interested” in the waste sustainability of the companies they do business with in the next five years. At the same time, 82 percent of businesses are “extremely concerned” about plastic waste issues. But less than 50 percent actually feel like they’re doing something about it.
So, how do you open that wonderful world of new-age waste management? You leverage a waste management audit to uncover costs and regulatory burdens while providing the assistance you need to navigate the local vendor space. We helped one business transition from almost zero recycling to nearly 100 percent recycling. And we can help you too.
Creating a Sustainable Business Culture
To be honest, letting waste monopolies take advantage of your business isn’t sustainable. You have a choice. Municipalities in developing countries are spending nearly 50 percent of their entire budgets on waste management alone. Monopolies combined with legislation and sneaky contracting practices can quickly cause you to overpay on waste. As a business, you want to create a culture where costs are contained, dollars are scrutinized, and every decision is made in the best interests of you and your customers. Then you won’t hand over the keys to massive private companies who nickel-and-dime you.
Minimizing Your Environmental Footprint
Want to reduce your footprint? First, you need to know your shoe size. Waste management audits give you the details you need to make informed, environment-centric decisions.
Alignment With Local, State, or Federal Laws
From recycling requirements to specific waste instructions, understanding your waste lifecycle can give you the tools and resources you need to comply with federal laws. Additionally, waste management audits uncover “buried” or “obscure” waste-related laws in your area. These laws could help you save some serious money.
The list goes on. Waste management audits can be as big or as small as you make them. Some companies leverage audits to create massive changes. Others just love the saved cash. How you use your audits is completely up to you.
Are You Ready to Take Out the Trash?
Waste management audits can reduce costs, boost productivity, and spurn actionable business changes. At Util Auditors, we’ve built our business around helping companies like yours save money, energy, and time on utilities, waste, and commercial services. Don’t waste your time on waste. We’ll go to war with the trash monopolies, navigate those increasingly complex regulatory requirements, and combat hidden fees and sneaky contract mistakes. Contact us to schedule a waste audit today. Chances are, you’re about to drop your jaw at just how much you’re overspending on waste.