A Georgia PRO Shares His Formula for Riding a Wave of Economic Revival

Smart logistics, tighter control of inventory costs and logical business acquisitions drive successful comeback for Blu Site Solutions

A Georgia PRO Shares His Formula for Riding a Wave of Economic Revival

Justin Lancaster services units at a commercial construction site in Avondale Estates, Georgia.

Like many portable restroom operators, Blu Site Solutions was hit hard by the economic downturn several years ago. Currently operating from seven locations throughout the Southeastern United States, at one point the company had laid off more than half of its employees as business faltered. That was shortly after PRO first featured the company, then called Blu-John, in a cover story.

“We were shellshocked,” says Jeremy Hawkins, a minority owner of the company along with Germany-based ADCO Holding GmbH, a global portable restroom rental and service operation. “I remember when one of our biggest customers in southwest Florida, a construction company, called and said they needed restrooms picked up. The dispatcher asked where and was told, ‘You don’t understand — we need all 2,500 units picked up because we just declared bankruptcy.’

“Then more and more of our customers went bankrupt,” he adds. “It took us months to complete all the pickups.”

But while no company welcomes an economic disruption of that magnitude, Blu Site Solutions made the best of a bad situation and emerged as a leaner, more efficient company. In fact, the business has generated double-digit revenue growth during the last three years and is looking to acquire more portable restroom companies, which is how it grew exponentially in the years following its inception in 1998.

MAKING LEMONADE

“We basically made lemonade out of lemons,” Hawkins says. “Of course, I would’ve preferred that it never happened, but it did force us to better understand our business. … Operating during a downturn helped us learn some operational efficiencies.” For example, the company renegotiated pricing with vendors for everything from fuel, oil, and transmission fluid to tires, toilet paper, and chemical products, such as deodorants and cleaners, he says.

“You learn more in a going-down economy than in a growing economy,” Hawkins explains. “When you’re in full-growth mode, you’re just trying to keep up — not managing expenses like you should because there’s no time to price shop. So we looked at the downturn as a learning experience. Now that we’re more efficient from an operational standpoint, we can squeeze more profit than ever from a dollar.”

One saving grace: The company had paid cash for the acquisitions made in the early 2000s, as well as equipment purchases. “So we didn’t have a monthly nut to pay to banks while operating with diminished revenues,” Hawkins points out. “We didn’t have any debt to speak of. … So we just battened down the hatches and cut costs as much as possible.”

The company also benefited from eliminating employees who weren’t strong contributors. Instead of doing layoffs by seniority, the company employed a weakest-link-first strategy. Service solidified because no one wanted to be the weakest link, Hawkins says.

Furthermore, the company used the downtime as an opportunity to take stock of its restroom inventory and remove units that were in marginal condition. “In the long run, that allowed us to increase the quality of the product we were putting out,” Hawkins says.

In markets where it made sense, the company also used its vacuum trucks to generate revenue from different markets: cleaning grease traps and pumping septic tanks. “We figured we already have the equipment, so let’s just increase the scope of our work and get the most dollars out of our equipment,” Hawkins explains. “That helped a little, but other companies already in those industries were cutting their prices, and they could still do it cheaper because those are their core businesses. So it helped us somewhat, but it definitely was not a cure-all.”

EQUIPMENT LIST

To build a presence in the United States, ADCO established Blu-John in 2001 as a startup venture in Atlanta. The company tabbed portable sanitation industry veteran Hawkins to lead the venture, which relied on acquisitions for growth.

Under the corporate umbrella of Blu Site Solutions, ADCO now operates seven U.S.-based portable sanitation operations: three in Florida (Jacksonville, Fort Myers and Tampa), two in Georgia (metro Atlanta and Savannah) and two in North Carolina (Raleigh and Jacksonville). 

While it downsized its fleet of equipment during the period between 2008 and 2010, the company still owns a considerable number of service vehicles. Across the seven locations, Blu Site Solutions owns thousands of restrooms, primarily from PolyPortables. The company also owns dozens of Hino and Ford restroom service trucks carrying aluminum tanks ranging in size from 500-gallons waste and 250-gallons freshwater to 5,000-gallons waste and 800-gallons freshwater. They’re equipped with pumps made by Masport, Jurop/Chandler, and National Vacuum Equipment and were outfitted by TankTec, Lane’s Vacuum Tanks, and Crescent Tank.

They also own restroom trailers from Satellite Industries. The company also owns more than one dozen GMC 5500 flatbed trucks used for restroom delivery and pickup, PolyPortables hand-wash stations, and transport trailers manufactured by Liquid Waste Industries.

LOGISTICS ARE KEY

At first glance, it would appear smaller operators wouldn’t have much in common with Blu Site Solutions, which employs about 100 people across all its locations. But large or small, restroom companies all depend on efficiency to maintain good profit margins, Hawkins points out.

“We’re all in the logistics business,” he says. As such, the company relies on RouteOptix software to keep tabs on drivers’ productivity and develop route-density levels that maximize revenue while minimizing fuel and labor expenses.

“GPS allows us to see when a driver arrives at a job site, how long he’s there and so forth,” Hawkins explains. “Along with RouteOptix, they offer us a lot of efficiencies. It’s hard to quantify what they’re worth financially, but I also know that not having them is very inefficient. And when your routes are efficient, it always leads to better service for our customers and better overall profitability.”

Using GPS does more than just allow supervisors to keep track of route drivers. It protects them when customers claim drivers didn’t show up — and saves a quality-control manager a trip out to a customer’s site to verify the driver was there. “Thanks to GPS, we don’t have to do that anymore, which saves gas and time,” Hawkins says.

Analyzing route density also plays a role when Blu Site Solutions is deciding whether to acquire another company. The company is primarily looking for “tuck-in” acquisitions — companies that share a territory with Blu Site Solutions. “We pay the most for companies whose routes lay over our existing routes,” he explains. “By adding more restrooms to existing routes, they become more profitable.

“Density is directly related to profitability,” he continues. “In this business, driving equals cost and stops equal profitability. It’s optimal to limit the number of miles between stops. And multiple restrooms at stops is even better.” Other factors in acquisition decisions include the average price the company charges and how loyal the company’s customer base is — information that requires performing thorough due diligence, he notes.

FORWARD THINKING

Looking ahead, Hawkins expects Blu Site Solutions to continue on a growth trajectory, with a strong focus on acquiring more portable restroom companies. “We’re very much going back into acquisition mode and have a bunch of prospects in different markets,” he says. “Continued growth is our No. 1 priority.”

Hawkins believes that competition for buying well-run portable restroom companies will increase in the years ahead as some of the industry’s larger players also seek further growth. As an example, he cites United Rentals’ recent foray into nationwide portable restroom rentals, available through its network of rental facilities.

“It’s going to be interesting,” he continues. “I’m a positive person, and I try to look on the bright side. We might not be able to buy all the companies we want to buy. … But if everyone puts out a professional product, that raises the value of the services we provide, which then allows us to price services accordingly. And that’s a net positive for everybody.”


The benefits of four-day route drivers

The recession a decade ago forced Blu Site Solutions to find ways to operate more efficiently while maintaining good customer service. One successful strategy emerged during that period: staggered four-day-a-week schedules for route drivers.

Here’s how it works: The company’s technicians only drive routes four days a week. For example, some drivers might work Monday through Thursday, others from Tuesday through Friday and so forth. On the fifth day, the technicians can work in the yard. Or they can handle pickup and deliveries, eliminating the need to hire part-time employees to perform the same job, Hawkins says.

The system also ensures routes aren’t disrupted by illness, holidays or employee no-shows — a common problem for many portable restroom operators, he points out. “Invariably, guys don’t show up because they’re sick or for whatever reason,” he says. “So unless you have a backup driver to fill in — which is a luxury that not very many companies have — you have to ask one of your drivers to double-route it, which means a 14- to 18-hour day. That’s just not a good long-term solution.

“But if drivers only drive four days a week, you always have a backup driver and truck available,” he continues.

While the advantages are difficult to quantify financially, Hawkins says company officials intrinsically know it’s been “massively beneficial” to Blu Site Solutions operations. It also yields another benefit: A day off from driving keeps drivers refreshed. “Doing something new keeps them interested,” he says. “A little change is good for you.”



Discussion

Comments on this site are submitted by users and are not endorsed by nor do they reflect the views or opinions of COLE Publishing, Inc. Comments are moderated before being posted.