Part Seven of a Series

This series of informational blog posts come from a document Mike,Caesandra and Kevin created to help orient new Buffalo ReUse board members to our mission,vision,values and the actual history of our organization. Earlier parts: One Two Three Four Five Six

The demolition business certainly has more challenges to achieve financial self-sustainability, but this aspect of our organization has created an identity for our organization and captivates the imagination of people in so many other cities who call us with great regularity to learn about what we do.  We’re convinced if we can make green demolition work here in Buffalo, it can work anywhere. 

There are challenges.  For one, as mentioned earlier, the cost paid per ton for waste disposal here in Western New York is extremely low.  Waste diversion is our greatest competitive advantage over traditional demolition.  However, in Buffalo, 50 tons of diversion only saves us $1,250.  In New Jersey, that same diversion would save us $6,250.  If there were higher disposal rates here in Buffalo, we could invest more of the savings into the higher labor costs associated with our method. 

Demolition contracting is also “CASH FLOW” intensive.  Lots of money comes in and goes out the door.  Thus, as a not-for-profit we have the immense challenge of balancing these transactions without a line of credit.  This situation created many of the cash flow challenges we experienced during the winter of 2008, while we were waiting for reimbursements for State Grants. 

Finally, equipment rental costs are exorbitant.  Had we financed a machine when we first started, we would have more then paid for that machine by now with the funds that we’ve spent on equipment rental alone.  Equipment rental also puts immense pressure on the organization to complete projects in an expedient fashion.  We pay per month and for the purposes of estimating we figure we can complete two projects per month.  However, if a project takes thee weeks because of weather challenges, we end up paying more for equipment rental, and we lose money.  Owning a used all-terrain forklift will provide more project flexibility, and decrease our demolition costs per project.  It’s an asset that will retain its value and can be sold in the future if green demolition proves to be infeasible for Buffalo ReUse. 

Labor is ultimately the greatest costs on our demolition projects; however, over time, with experience and more training, we’ve gotten more efficient and we’ve developed more techniques that allow us to complete projects more efficiently and with less labor cost.  It’s critical that we expand the market for antique, salvaged lumber.  In doing so, wholesale revenues of lumber can be applied to provide more cash flow to sustain the organization. 

We have discovered very few markets for reclaimed lumber locally; however, the search continues.  There are larger buyers in the West and the Southwest, but we’ve largely been resistant to this strategy of sales, particularly because of the associated environmental impacts.  However, we do intend to increase contact with these buyers to determine if there is potential for wholesale sales of lumber in other regions.  Similar to the acquisition of material for the ReSource, we are continuing to educate the public about the alternative that exists in Green Demolition.  Clients benefit from a tax-deduction for the value of reclaimed materials, the community benefits from the creation of more jobs, and the environment benefits from the diversion of waste from our landfills and the reduced demand for virgin raw materials.  These benefits underscore the need for green demolition to be successful here in Buffalo.