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SMALL BUSINESS FRANCHISE OPPORTUNITIES IN THE NEWS
Advocate - Baton Rouge, LAFinding Cash in Trash Baton Rouge Firm Mines Gold From Client's Waste
Author: Gary Perilloux  |
Fate commissioned Williams and his Zachary High School Beta Club mates to sell neither chocolate nor fruit cakes nor gift wrap - but banal plastic garbage cans as a fundraiser. Unfazed, Williams knocked on neighbors' doors, strode into local bank lobbies and boldly pitched his product at the largest nearby company - Georgia-Pacific (where his mother worked) - to produce some remarkable numbers: More than 500 garbage cans sold, outpacing the second-place Beta seller by nearly 40 dozen.
History, in 1977, recorded Williams as a salesman of note. Seventeen years later, Williams would have another brush with trash. His startup venture - Environmental Waste Solutions - would mine the commercial garbage and recycling accounts of clients for free, eking out an existence with a 50 percent commission on actual savings produced by the art of audit and negotiation.Somehow, in an offbeat business model that advisers scoffed at, Williams mined gold. This year, EWS will generate $14 million in revenue, all of it mined from waste unwittingly wedged into business budgets. "We were easy to hire," Williams said recently in his Baton Rouge headquarters. "Our agreement said: If we don't find anything, you don't have to pay us anything."
Brilliance hasn't always studded Williams' business career. Between high school and EWS, he stumbled spectacularly into Louisiana's black hole daily-double - an oil bust and property devaluation crisis spawned in 1984. When Inc. magazine caught up with a more prosperous Darwyn Williams a decade later, he still recalled the days of his early real state development career in Orwellian tones. "It was pretty damn serious," Williams told Inc. "We were without jobs or ways to make money." In the mid-1980s, he carried an inventory of apartment buildings and a shopping center that weren't worth the $14 million debt he carried on the properties. Williams would climb out of the black hole the only way he knew how - leveraging his real estate experience to make money a new way.
The first method attracted similarly hard-hit investors. Because property values were plunging, Williams knew tax assessor rolls weren't keeping up with the times. For a fee - half the savings produced for five years - Combined Resource Technology would obtain a lower tax toll on client properties. The company saved $7,000 for its first client, a printer, and took the entire commission in the form of brochures, letterhead and business cards to raise its profile. By the end of 1986, CRT grossed $100,000. "Nobody could afford a consultant at the time," Williams said. "So this idea came that the only way I could get paid was to share in the savings that were generated." Eight years later, annual revenue swelled to $2 million as services branched out to utilities, waste disposal, freight, leases and other expense items for untapped savings.Soon, Williams received a fateful call from a Massachusetts man, Stephen Ellis, who loved what Williams wanted to do next. When asked by Inc. where he saw himself in the future, Williams said he was searching for consulting work he could perfect in one cost center. "I was looking for a single expense area our company could tackle, something that every company has that's at the point of growing out of control," Williams told The Advocate. "That's what I wanted - not dabbling in five or six things." Ellis called with the one sure thing. The former Waste Management executive told Williams that a cost center nearly universally overlooked was waste.
In 1994, they launched Environmental Waste Solutions, with Ellis moving to set up one office in Sarasota, Fla., and Williams remaining in Baton Rouge after selling his interest in CRT to partner Chris Moran. "When we started the company, it was me and Steve calling on accounts - it was literally two guys running this small company," Williams said. "We found out pretty quickly that our services were in great demand. Companies were scrambling to cut costs."
A decade ago, Williams approached Baton Rouge Coca-Cola Bottling Co. "Our plant had expanded, we were producing and running around the clock on several of our lines and our waste got out of control," said Gary Sligar, the retired Gulf Coast Region president of Coca-Cola Bottling Co. United. "We've always recycled but (Williams) led us into a broader look at that. He knows this business very well, and we didn't have anybody with the time or skills to do what he was doing." Renegotiating waste-hauling schedules, containers and billing, while securing new outlets for recycled materials, EWS saved Coca-Cola $60,000 annually. "We were both able to reap a reward," said Sligar, now a Coca-Cola consultant developing the bottling company's new 100-acre site near Metro Airport, where EWS is helping Coca-Cola maximize its equipment and facilities for recycling. "More important than the fact that we kept ($30,000), is you don't just do these kinds of things to save money, really. What you really want to do is say there's a problem there and you want to get it fixed," Sligar said. "We got this problem behind us, and our folks continue to use Darywn."Typically, clients strike the same deal with EWS as they did with Williams' first venture more than 20 years ago. The parties sign a five-year contract, with EWS earning half of all savings. Contract renewals are common. Meanwhile, 500 affiliates trained by the company across North America spread the gospel of EWS: There's wonder-working power in the waste. "Fifty billion dollars was spent on commercial waste disposal last year," Williams said. "Our 500 offices do not even scratch the surface."
In the mid-1990s, though, business advisers frowned on Williams' way of multiplying accounts nationwide. "The way I chose to grow and expand EWS was a little unorthodox," he admits. EWS wanted to avoid the steep capital costs of company-owned branch offices and the formality of franchising. An alternative emerged. Affiliates pay a $25,900 one-time fee, train with EWS and then seek accounts through independent offices. Such a blueprint could spell disaster, Williams and Ellis were warned, if the affiliates cannibalized business and became EWS competitors. Nervously, they proceeded. And a model of shared interest worked: Today, each EWS account comes from a joint venture with one of 500 affiliates. Affiliates keep the income from smaller accounts but share revenue with EWS on large accounts - clients with monthly waste disposal bills of $20,000 or more. An account management office led by Allen Banfield in Springfield, Mo., serves as the company's foundation, finding potential savings and recommending solutions.
Doctors, attorneys, engineers - even owners of other businesses seeking an inventory-free enterprise without huge capital requirements - have flocked to EWS. And while not itself a franchise, EWS has contracted with many of them, including Baton Rouge-based Raising Cane's. Tyler Brunson of Asheville, N.C., became an EWS affiliate in 2002 while still attending Appalachian State University in Boone. "When we first got started, I got a chain of 78 Wendy's restaurants that gave us credibility with a very well-known and respected brand," Brunson said. "That got our foot in the door, so that now I work with over 400 Wendy's." Brunson's other clients include manufacturers, grocery stores, convenience stores and hotels. For one Wendy's group, Brunson and EWS renegotiated waste disposal services with a 50 percent savings. "They were absolutely thrilled," Brunson said of the owners. "It's not like they were idiots running their companies. It was just because they were flipping burgers and making Frostys. And at some point, everybody got comfortable with that number being built into their budget."
Now 27, Brunson said he didn't succeed with smoke and mirrors. He fanned out in the business community, networking with entrepreneurs and furnishing real results for early clients using the EWS system. "Very early, I thought there was huge potential," he said. "It really has turned out to be a very, very sound business model. We're providing efficiency where there's a lot of inefficiency. And it doesn't cost (clients) anything out of pocket." Waste-hauling companies, Williams confesses, don't love the EWS way. "But they don't hate us," he said. "We're not in the slash-and-burn business."Williams contends the goal isn't to gut profit margins for waste haulers but to slim down padded accounts and remove unnecessary services. Solutions often are more dynamic than negotiating bills. In Illinois, EWS affiliate Bob Kulas helped Walker Process Equipment save 74 percent of its former cost to dispose of Black Beauty, a coal-derived sandblasting material. Walker had been paying $700 per truckload to dump Black Beauty at a landfill. Kulas negotiated a cheaper truck rate for Walker to haul the material to a neighboring community with no disposal costs: The town mixed Black Beauty with salt, gaining better coverage to de-ice wintry roads, and environmental regulators approved the solution.
Dynamic remedies are a big part of the company's organic growth now, with clients topping 8,500 and including Kroger, Winn-Dixie, Harbor Freight Tools, Goodwill Industries, Dave & Busters, LSG Sky Chefs and American Airlines, the No. 1 air carrier for whom EWS helped lower costs to regain profitability in 2005. A year ago, Williams bought out the equity of his co-founder, Stephen Ellis, who retired. And though he controls the company, Williams said he's neither flying on auto-pilot nor trying to be an autocrat. He's trying to pique his staff's interest in picturing the possibilities that lie in $50 billion a year of waste.
Key EWS figures include Diana Shapiro, a former affiliate and current vice president of operations who manages all divisions from Baton Rouge; Banfield, the vice president who oversees the Missouri account management office; and Tampa, Fla.-based Douglas Maher, who leads affiliate growth and support. What Williams pursues with them is management by leadership, something whetted in his appetite while at Louisiana Tech. Following two bruising years as a practice squad wide receiver on the university's football team, he switched extracurricular gears and campaigned successfully for student body vice president and president. In his mind's eye, the clack of billiard balls still ignites his drive to be part of something bigger. It was at the Sigma Nu fraternity house in Ruston, with Williams sizing up the pool table, that his roommate came down and told him Dr. Allen Copping was on the phone. Before graduation, Williams had become the first voting student member on Louisiana's higher education Board of Regents, and the thought of LSU's medical school chancellor beckoning him from New Orleans amazed him. At 46, retirement's not on William's radar, and the potential to build something bigger still captivates him.
EWS projects yearly revenue growth greater than 20 percent in 2007, to $14 million. "My vision, which I started to carry out a little over a year ago, is to give this company its own life, that this company is not dependent on me for survival and growth," he said. "I don't want the company to be defined by Darwyn Williams. I want the company to be defined by the services that it offers its clients."
Anatomy of EWS
COMPANY: Environmental Waste Solutions
HEADQUARTERS: Baton Rouge, with offices in Florida and Missouri
CEO: Darwyn Williams, a Baton Rouge resident and Louisiana Tech graduate
BUSINESS STRATEGY: Scrutinizing waste and recycling streams to save companies money and to earn EWS commissions on those savings
EMPLOYEES: 35
AFFLILIATES: 500 North American business partners who manage small accounts independently and share large accounts with EWS
ANNUAL REVENUE: $14 million
Take a look at other articles about successful at home business ventures through EWS!
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