Trash talk

In 2010, Les Leith needed some quick cash. His growing doorstep trash-removal business, which collected garbage from apartment complexes, wasn't growing as aggressively as he'd hoped. He needed cash to fuel the firm while contracts matured and deals closed.

So, starting with a borrowed truck and a shared prepaid cell phone, Leith and his two partners started a junk-removal business.

Then the foreclosures came calling.

What was a bust for many businesses in the recession turned out to be a boom for Leith's company, Accelerated Waste Solutions. Finding a niche in removing junk and clearing abandoned lots, the company started to service mortgage giants Fannie Mae, Freddie Mac and Bank of America.

With Florida holding steady at the second-highest foreclosure rate in the country, business hasn't slowed. At the beginning of May, Pinellas County awarded Accelerated Waste the county's contract for code enforcement, vacant lot debris removal and maintenance. First quarter revenue is up 43% year over year, while gross profit grew around 70%, according to Leith, chief executive and financial officer of Accelerated Waste Solutions. In the last year, net profit increased nearly 600%. Leith declined to disclose specific numbers.

Using the same business model, the company expanded to other Florida markets with high foreclosure rates, including Miami, West Palm Beach and Orlando. Miami has a foreclosure rate of 1 in 170 homes, ranking second on the list of metro areas nationwide with the highest rates, according to industry research by RealtyTrac.

“We see a whole cross section of America,” Leith says. “We see folks that are doing well, buying homes, and those in bereavement situations.”

Follow the Customer
Leith, 36, says the company uses a team-driven approach, splitting executive tasks with his business partners Fred Tomlin Jr., 34, and Sherrod Hunter, 32. The three friends met while working in business-to-business sales at AT&T. This job set the stage for what they consider to be their best sales tool: building relationships. The trio builds relationships with property management companies, office management companies, city services, banks and individuals.

No matter the customer's situation, the company's No. 1 priority is customer satisfaction to ensure repeat customers and referrals. “We treat every single customer like they're our paycheck, and they are that important to us,” Leith says. “We want to make sure they remain loyal to us for life.”

Despite the Florida statistics, foreclosures nationwide are slowing, and the trio is now focusing on a new client, women with what they call a “Honey-Do List.” Leith says their average junk removal customer is a 35- to 54-year-old educated, white female with disposable income.

To keep up with the shift in demographics, the trio found a new way to lessen the inconvenience of trash removal: a smartphone app providing an instant quote with a snap of a picture. The Junk Shot app, released in late 2012, boasts more than 1,000 downloads to Apple and Android mobile devices.

The app has also helped streamline the business's operations. Not only do customers know the price without having to wait for a representative to provide a quote, the company can now map routes ahead of time for loading the truck most efficiently. The truck drivers all work on service orders sent to their iPhones, allowing operations to direct them through the best route for filling and unloading their trucks.

While the truck is headed to pick up the load, the operations team sends out pictures of the incoming material to the company's network of thrift shops, appliance recyclers, hardware salvagers, and scrap metal groups.

“The dump is the last resort,” Leith says. The company's “dump diversion rate” or the amount of material that it is able to sell or repurpose, is about 70%, according to company statistics.

The app also differentiates the company from competitors and national franchisers like College Hunks Hauling Junk and 1-800-GOT-JUNK. According to Hunter, it's the first junk-removal app in the country that allows a customer to get an instant quote by submitting a picture of the items they'd like to remove.

Before entering the junk-removal business, Leith, Tomlin and Hunter learned everything they could about the competition, working to pinpoint areas where they could improve.

Hunter, head of operations for junk removal, gathered his initial research in the field. “It's all about getting out into the streets and doing the dirty work,” he says. They found many of their customers wanting accurate upfront prices, without having to wait for a consultation and without guessing at the weight or volume of junk they'd like to remove.

The team of founders held a conference call every night to discuss strategies and to monitor progress. They created weekly spreadsheets to track individual jobs on metrics such as fuel expenditures, disposal fees and money made from recycling.

To break into the existing market, they took an aggressive online strategy, investing in Google Adword campaigns to place them at the top of local, targeted searches.

They came up with the motto, “Bigger Trucks, Better Pricing,” claiming that investing more money upfront in larger trucks allows them to offer a lower price to their customers.

For example, Accelerated Waste Solutions' trucks hold 18 cubic yards of junk; College Hunks' trucks hold 16 cubic yards. A cubic yard is about the size of a clothes dryer. Accelerated Waste Solutions charges an average of $25 per cubic yard for junk removal, while College Hunks' Tampa prices range from $80 per cubic yard for smaller loads to $35 per cubic yard, if you can fill the whole truck, according to College Hunks.

Doorstep Service
With the hike in junk-removal contracts, the team was able to foster relationships in the property management industry, giving a boost to its original business, doorstep trash-removal services. The doorstep trash service assists apartment complexes by collecting trash at peoples' doors to save residents the time and inconvenience of bringing trash down to the dumpster.

The doorstep valet service is an ancillary service for property managers, much like pest control or carpet cleaners, explains Tomlin, head of the doorstep trash operations. As a luxury amenity, property managers can charge higher rent, and it removes the need for the managers to hire someone to clean around the complex's shared dumpster. Property managers can make around $60 a unit a year from offering the service, which they can include in the rent. This can bring in an average of $18,000 in net operating income for a 300-unit property, he says.

Working for 11 large property managers based in Florida, the group was asked to expand its services to the companies' other properties in Texas and Virginia. The firm now services the Washington, D.C., metro area, San Antonio, Dallas/Fort Worth and Austin, Texas, using contractors in these locations.

The initial success of the business wouldn't have been possible without the help of the Tampa Bay Black Business Investment Core, Tomlin says. The state-funded operation provided a loan for Accelerated Waste when no banks would. Even when the company reached $250,000 in revenue, the company couldn't secure a bank loan to pay for equipment needed for future jobs it had already been awarded, Tomlin says.

The Black Business Investment Core “played a pivotal role in giving us early capital, lending for the trucks and inventory such as our containers,” Tomlin says. The company has nearly paid off its debt, with only a small portion remaining to pay off the fleet of $50,000 trucks.

With 25 employees on the payroll, the company is now interested in new funding relationships to expand nationwide using franchises. Leith estimates AWS will need about $1 million to develop the franchise and expand its doorstep valet service in other states. He says this will help ensure the company can recruit high-quality franchisees and then support them with the necessary resources in their first year. “The model works so well, basically all it needs is a solid injection of capital,” Leith says.

Junk Shot app
Number of pictures received each week through the app: 20
Number of app downloads: 1,000
Number of junk pickups/day: 8
Percent of junk repurposed: at least 50%, goal is 70%
How much the firm makes from recycling and second-hand sales: 10% of its revenue
Average time between receiving quote and getting driver to pickup: Same day or no more than 18 hours 
How close estimates come within actual charge via a picture: Quotes within 5-10% of actual price
Average amount of junk for each pickup: 8 cubic yards
Cost per cubic yard: $25 including labor