Nick Kozak for the Toronto Star
Case Studies

Cash-flow crunch confines Toronto container business

Vital Stats
Giant Container Services
Marylyn Kroft
12 Stoffel Drive, Etobicoke, M9W 1H8
Contact:, 1-888-97-GIANT
Shipping container sales
7 years in storage services, 3 years in container sales
New, used, and modified shipping containers
Notable Achievements:
Partnered with Humanitarian Mobility International

Though his family has been in the industry for 65 years, Daniel Kroft wasn’t interested in joining the trucking business. Instead he chose to study architecture and design, with hopes of one day pursuing his passion for creative builds.

When he was lured back to help the family establish a portable storage business in 2003 after graduation, he thought it would be a brief pit stop. But when customers began requesting modifications for the shipping containers they sold, Kroft found an opportunity to work alongside his family while still maintaining his creative outlet.

Today, Giant Container Services provides new, used, or modified shipping containers to companies such as Lockheed Martin, Nike and Wal-Mart, and have gained a reputation for their ability to convert a shipping container into just about anything.

“We built a solar powered, 10-foot, fully-functional kitchen,” says Kroft, now company vice president, sitting behind his desk at Giant Container Services’ head office near Dixon Road and Highway 401. The company has also worked on a number of projects within the city for the municipal government and the TTC, and it is currently converting two shipping containers into a bat cave for researchers and students at the University of Toronto.

Nearly 60 per cent of the business is now comprised of selling new and used containers. Of those, about 40 per cent require unique modifications.

In 2013, the firm ditched the trucking company altogether to focus 100 per cent on containers, “which was the best move we ever made,” says Kroft.

While sales have been strong, Giant Container Services often finds itself in a cash flow crunch. Kroft says it typically takes a minimum of 45 days between filing an order and receiving payment, during which time new orders require upfront capital.

“A lot of bigger customers, issue (purchase orders), and they won’t even put a deposit on the materials or anything. So we have to go out and invest our funds in all the materials — from the shipping container to the steel to any materials that the inside is being outfitted with,” explains Kroft. “As these orders come in they stack up, and it’s a lot of funds we need to push out and wait to collect on.”

Kroft invested his own money to help the business pivot away from the shipping industry, and has even had to sell the company’s trucks at times to keep it afloat.

“It puts me in an uncomfortable situation because I have to worry about my employees,” he says. “I want to make sure we have the best possible working environment, and that they’re never jeopardized by my customers or the funds I’m receiving. I make sure they get paid before I do.”

According to Devon Cranson, president and founder Cranson Capital, a Toronto-based boutique investment firm with a focus on small- and medium-sized business, the only way for Giant Container Services to manage its cash flow crunch is with outside investors.

“They’re going to have to give up some ownership. It’s really the only way you finance a business that doesn’t have any assets or cash flows that can be funded by a third party,” he says.

But Kroft is weary of bringing outsiders into his family-run business.

“I’m just not open to that at all,” he says, particularly after one investor sought equity in addition to gougingly-high returns on a loan. “If we have to grow organically and it’s going to have to take another 10 years, than that’s what we’re going to do, but I refuse to pay ridiculous interest rates.”

Having struggled to secure bank loans in the past, Kroft believes “it’s going to have to be a slow process,” but one that he’s prepared to wait out.

Kroft hopes that a new partnership with Lowes, which will help the retail home improvement company become the first big box store to sell shipping containers, will ease the cash flow crunch in the future.

But in spite of those white knuckled moments when Kroft needs to come up with funds to fill new orders, the company has been growing steadily, thanks in large part to online marketing and social media.

“With our young team here, they all understand it and how important it is,” says Kroft. “Funny enough, my father now does too. He’s one of the only 63-year-olds you’ll see hash-tagging five things in every Instagram comment.”

With online marketing yielding about 15 leads a day, Kroft is confident that he’ll have a successful business to pass on to the next generation.

“I kind of feel blessed that I was able to go work for my family,” he says. “It’s something I would love to pass on to my kids and see where they can take it.”


As Interviewed by: Rosemary Westwood

Giant Container Service's customers, Lockheed Martin, Nike and Wal-Mart for example, hold the power in this relationship. These firms define the terms and conditions, including when invoices will be paid. Kroft should still attempt to negotiate with his key accounts shorter terms. It is clear that GCS is a valuable supplier to these firms. Whether Kroft is successful or not in negotiating faster payments in the short term, more funding is needed for the long term. GCS continues to realize success through its innovative marketing tactics and its new partnership with Lowes. Kroft hopes selling through Lowes, which will likely have similar terms to that of Nike or Wal-Mart, will ease the cash crunch. But more sales will only make the cash flow problem a larger one. I believe Kroft has to seek outside funding, an angel investor such as from the Ryerson Angel Network, to assist with the growth of the business, meet his financial commitments and avoid placing the entire firm at risk by becoming the victim of its own success and running out of cash.

by Steve Tissenbaum Ryerson

Kroft has great training, a steadily growing company, and impressive customers. A third-party investor is risky for a family business, given that their only function would likely be financing. Kroft has a few options. The first is to take orders, furnish them, and negotiate payment terms with customers so that some amount of the required financial outlay is paid by the customer upfront, a common feature in contracts today. Good customer relationships and negotiation tactics will help ensure that orders are increasingly being financed by the customer. Alternatively, Kroft could negotiate the same deal he has with customers, with his suppliers — order materials with agreement of payment when Kroft’s customer pays him. Finally, vertical integration is an option that allows materials development to be brought in-house — this is the classic ‘make’ decision. Kroft could develop the materials/products himself, under Giant Containers’ roof. Any of these three scenarios would solve Kroft’s cash-flow concerns and position the company for further growth.

by Brynn Winegard - SEEC

The number one reason profitable companies fail is because of a cash crunch. But Kroft doesn’t have to sell ownership. He could change billing practices with customers and suppliers, so he can get the cash up front. I realize that big players — Wal-Mart and Nike — have more clout than he does, but there’s no reason he can’t start putting penalties on late payments. Let them know you’re doing it ahead of time, or start printing it on the bottom of bills. Then go to suppliers, show the solid projected sales, and ask for a break, some kind of credit. In terms of a line of credit, Kroft has had trouble getting loans because banks look at recent cash flows. But the trick is to sit down with someone at the main branch, someone who works with entrepreneurs. Come in with real projections and cash flow projections, commitments from customers, historical data, and make the case and negotiate. If he’s really out of his depth, hire a finance person who really knows what they’re doing. It’s going to cost him, but it’s worth it.

by Deirdre Fitzpatrick - GBC