Shred-Tech Tears Up the Industry

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Courtesy of Shred-Tech Corp.

Hospitals, government institutions, banks, law firms and corporate offices—all worry about liability associated with the confidential documents they handle. Even corporate marketing plans, blueprints, and personnel and payroll records are potential powder kegs if confidential information becomes public.

Not surprisingly, many entrepreneurs are profiting from all this corporate angst—and it's not only perfectly legal, it's efficient and environmentally sound, too.

Empowering this nucleus of entrepreneurs is Shred-Tech, the world's largest manufacturer of low speed, high-torque shear shredders. Shred-Tech goes beyond 'have truck, will shred,' however, by selling the equipment and helping get them started in the business.

Shred-Tech's Mark McKenna, an industry pioneer who's earned a reputation as the 'King of Shredding,” describes the way his company works with entrepreneurs. “The first thing we do is provide information about the industry in general, educating them about the legislative drivers that are helping fuel the growth of this industry.” Uproar over identify theft is piling on top of corporate concern about government regulations like HIPAA, which governs confidentiality in the medical community, Gramm-Leach-Bliley, protecting consumer financial information, and the Economic Espionage Act, guarding the confidentiality of trade secrets.

“Though Shred-Tech isn't a franchise, we make the prospect aware of franchise opportunities like Pro-Shred and Shred-It. Then, we offer the investor an alternative that appeals to many who don't want to pay franchise fees, royalties or residuals, and who prefer to buy direct from the manufacturer,” McKenna said.

Shred-Tech also provides demographic data about competition and potential clients, and offers models of business plans made to encourage a prospect to analyze the potential risks and rewards in his or her particular market. McKenna acknowledges that, as a manufacturer, Shred-Tech is in business to sell equipment “but, more altruistically, we don't want to sell equipment to anyone who is not going to succeed in the business. It damages the industry and our reputation.”

Despite competition from franchises in some markets, Shred-Tech has been extremely successful in introducing independent operators into the business. Says McKenna, “The technological advancements Shred-Tech has made in the last couple of years have really differentiated the independent operators from the franchise model. Typically that model has priced its services on a per-minute basis, which doesn’t encourage the development of more efficient technology. The independent operators enjoy the ability to shred more material and, ultimately, generate more revenue.”

Most of the new owners start with one truck and the most popular model is the MDS-25GT, which costs about $192,000. Many financing options are available, including the U.S. Small Business Administration.

McKenna says most of the people who enter the business are coming from other careers. “Typically, they want to get away from big business, become an entrepreneur, and be their own boss.'

Take for example, Tom Hanlon, a technology industry executive who started AllShred, a mobile document shredding company in Chapel Hill, NC. In addition to shredding documents, his business also destroys plastics, computer discs, CDs, data-storage tapes, VCR/VHS tapes, and x-ray films. “I took delivery of my third truck one month ago, and my service schedule is already fully booked. We are currently negotiating the purchase of our fourth truck. The revenue ramp-up has far exceeded our expectations, and Shred-Tech has been there with us every step of the way,” Hanlon says.

So, how's the future look? According to Hanlon, “We are thrilled about our success. From day one, we’ve enjoyed tremendous support from Shred-Tech. They continue to meet the challenge of maximizing equipment productivity, which allows me to focus on the growth of my business.”

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