How I rescued Hire a Box from administration
Last year removal company Hire a Box collapsed into administration shortly after the founders started expanding into the US. It was unknown at the time whether the company could recover but new owner Brett Epstein got to work restructuring the business.
Epstein, who previously owned his own businesses and worked in online marketing, says the company has made key changes that should enable it to continue growing in the long term, but it hasn’t been easy.
So what happened when you took over the business?
I partnered with a finance company to take over the assets. The previous owner had gone around selling franchises before it was sustainable and they decided to roll out internationally as well.
He used a lot of funds from here to expand that and the whole thing went under. It was going for a number of years but it never really made any money and at one stage it had 25 franchisees who weren’t making much money.
There were a number of franchisees – what happened to them?
There were over 20 and now there are six. When we took over a lot of them left and the ones we hadn’t rolled over the agreements for left as well.
We did have a small number of them and tried to get them profitable but we didn’t want to keep too many people holding on so we came in and basically refreshed the brand and did a lot of work online.
How did you personally get involved?
A few years ago I actually used the service and I was really impressed. The guys came in uniform and had an information pack for me, and marketing material and I thought the whole experience was really good.
They dropped the boxes off, I gave them a call to pick up and I was impressed. I thought it was good for the environment and seemed like a really good, same day delivery service.
Had you had any business experience?
I was a director of my own business and before that I was into online marketing as well.
What was the condition of the business when you took it over?
The unfortunate thing is that we got very little information when we took the business over.
We didn’t know who the customers were. We didn’t know how much money they were owed and we had no computer systems. It was nothing. We were taking a big gamble.
Unfortunately when the company went into administration there was money owed everywhere and it sort of burned a lot of relationships with customers and acquirers.
When you drop off the boxes the customer gives the business some money as a deposit and they didn’t get it back.
There were some pissed off people but we did refund 50% of those deposits to anyone who was waiting on a refund, even though we weren’t liable for that.
At the moment we’ve got six franchisees and we’ve doubled revenue since last August.
So what’s your revenue now?
I’d say around $50,000 to $100,000 a month but there is the issue with holding onto that money as well.
We probably do about 25 jobs a day so there is definitely room to grow here. Our competitors are mostly removalists and people are unaware that you can just hire boxes.
We’re trying to do a lot of marketing online as opposed to just television and radio, and it’s going to take time to grow.
What was the response of the franchisees when you took over?
The franchisees actually tried to band together and buy the business so they were obviously pretty hesitant about us coming in.
I’m 32 and they obviously saw me as a young guy running the business but I’ve built a couple of businesses from the ground up, I know finances and I know costs.
We looked at how the company was working, we streamlined everything, redid the back of the website and made sure we got an automatic ordering system in. The business used to be very paper heavy and now it’s all automated.
How many staff do you have now? Was that number reduced?
We used to have 10 staff and now it’s about two or three. We also used to have a big warehouse in Sydney, where we would ship boxes across the country.
Our manufacturers hold stock for us now so there is no longer a need for warehouses. Boxes are made in their own cities so our role is just marketing and sales to make sure everything is running smoothly.
How did you approach the customers? Were many upset?
Plenty were, yes. We explained that we weren’t liable for the deposits and there were tens of thousands of dollars’ worth, we did refund half. Removalists were trying to get paid as well so we promised to get everything under control as quickly as we could.
What is your long-term goal for the business? How do you want it to run?
The business is still growing although it’s definitely a slow process, but we think we have a good offering here, a good professional service.
Our drivers show customers how to unpack the boxes, give them some marketing material and we have a top-up service as well if they didn’t get enough. It’s slow growth but we are starting to build.