Oil Well Cleaning: Interview with Owner
There’s a renewed interest in searching and drilling for oil these days, both on state and private properties, with the oilfield services business becoming a fast-growing industry. Apart from the actual drilling for oil, one of the more lucrative ventures in this field is the cleaning of gas and oil wells in order to maintain full operating efficiency. Oil and gas drilling is a dirty business and wells will quickly become clogged even with regular maintenance. See Truck Factoring Rates.
Larry Smith is the owner of an oil well cleaning company who works with several drilling companies in providing cleaning and maintenance of oil wells. Over the past couple of years, Larry has managed to grow his business considerably thanks in large part to his perseverance and determination. However, things were really tight when Larry first started up his company and at one point he was faced with a dilemma that he didn’t know how to overcome.
The following interview with Larry tells how he managed to expand his company at a crucial time thanks to oilfield services factoring. If it wasn’t for the presence of factoring companies that worked in his field, Larry might be in a completely different business today.
“Good morning Larry. Thank you for taking the time from your busy schedule to meet with me and share your story.”
Larry Smith: “Thanks, I’m glad to be here.”
“Larry, tell us a little about how you got into the oil well cleaning business first as it’s something our listeners may not be fully aware of.”
JF: “Yes, certainly, I’ll tell you how it all started. About ten years ago I joined an oil well crew as a roughneck, working my way up through the business. It was pretty hard work, and usually we were out in the middle of nowhere; but advancement opportunities kept coming up for me, and the money was really good. I was fortunate that I was able to learn the business pretty quickly, and was soon hired by a few drillers to manage their rigs over the next few years while we were in the oil industry boom.”
“Even in the beginning I was noticing the oil well cleaning guys that worked the rigs, and I got to know them pretty well over the years. It slowly dawned on me that oil well cleaning could be a very profitable business because the work was steady and the money was good – probably better than I was making at the time. So, with the money I had saved up along with a couple of partners I opened up an oil well cleaning company of my own.”
“It certainly sounds like you struck gold so to speak. So tell us how your business started.”
JF: “It was pretty straightforward as we got our business loan, purchased the equipment and hired a couple of experienced people to help us clean oil wells. We had some pretty good connections and the orders started to pile in, but then we ran into a problem that none of us could even dream of happening. We became victims of our own success.”
“I don’t think I quite understand, could you explain just how that happened?”
JF: “Certainly – our business was raging, then about six months into it we had new drillers wanting our services, but we just didn’t have enough money to expand. Because we get paid on our invoices, payment can take anywhere from 30 to 60 days, and this meant that we were paying payroll, paying down the loan, and buying equipment, fuel and other running costs, and there was no cash on hand to enable us to expand. We were in a situation where, if we couldn’t hire new staff members and purchase new equipment, we would miss these great business opportunities. However, one of my friends told me about oilfield services factoring companies that could help us out.”
“What are factoring companies?”
JF: “What a factoring company does is to basically buy your invoice and give you immediate cash. We had good credit and our invoices were certainly good as well. By using the factoring company we had access to immediate cash and were able to buy new equipment in order to expand our business.”
“It certainly sounds like the factoring companies saved the day for you, but just how do they work?”
JF: “Well, it was a pretty simple process. We just filled out a few forms with the information that they requested and then we sold the invoices we had already collected, but had not collected to the factoring company. We got the cash we needed immediately and they collected the invoice.”
“It does sound very simple and straightforward, but were you not able to just get another loan?”
JF: “This was something that my partners and I discussed, but we all felt that paying off yet another loan would just be another burden. We were still paying off the original loan which was quite considerable, and none of us wanted any further debt. By going with the oilfield factoring companies, we didn’t owe anyone, anything. We just collected the money that we were owed a lot more quickly.”
“So, how is business today?”
JF: “It’s amazing – better than ever. By using a factoring company I was able to buy new tubing, cleaning fluids, a new vehicle and other equipment that let us take on the new orders. Our business has expanded a lot, and with our already great reputation we’ve been able to work with even more drilling companies.”
“It certainly sounds like a great business idea – a dream come true for you, I guess.”
JF: “Absolutely, and I’m not sure how we would have proceeded if there were no such thing as factoring companies. We still use them when we need cash for new equipment or products to do our job. It’s immediate, it’s safe, and it provides us with money in order to continue growing our business.”
Larry’s company really benefitted from using oilfield factoring companies that served his industry. There are factoring companies for other types of businesses as well that can take invoices and turn them into quick cash for businesses that need to expand. For Larry and many other small business owners, factoring companies can make the difference in the success of your efforts. Read Truck Factoring Rates.