All Systems Go for All Cycle

When Anthony Grutadaurio and Stubb Luce purchased Greater Atlanta Sanitation Systems in 1993, they inherited a beat-up rear loader and 388 residential customers. Revamped and renamed All Cycle Sanitation and Recycling Service Inc., the company has since grown to a $4 million per year operation serving nearly 8,000 customers.

Anthony Grutadaurio laughs when he looks back at how All Cycle got its start. A joint purchase made in March 1993 with his friend Stubb Luce, "our startup company was hysterical," admits the co-owner and unofficial spokesman for the company. Buying the original company, Greater Atlanta Sanitation Systems, based on the advice of a friend, the Alpharetta, Ga., business actually had little to offer - it consisted of 388 residential customers and that lone truck, a 1981 "relic," Grutadaurio says.

With only their experience in the collection business - both worked at different companies before becoming managers at Perry Enterprises Inc., a hauling company based in Burlington, Vt. - the two decided to make a go of the business.

Neither had experience working in Atlanta, much less in North Fulton and Forsyth counties, the areas served by Greater Atlanta Sanitation Systems. But a friend, Corney Bedford, who owned a commercial construction and demolition (C&D) debris hauling business in the area, told them Greater Atlanta was for sale. It looked like a ready opportunity, so Luce moved to Atlanta in February 1993 and handled the bulk of the operations until Grutadaurio arrived two years later. Together, they rooted themselves in the South and maintained the commitment to residential collection to avoid competing with Bedford's commercial business.

Obviously, improvements were needed to make the business profitable. The first step was changing the company name in 1995 to All Cycle, which they felt better represented their business.

Next, the pair had to concentrate on improving the day-to-day business. Luce, who had a commercial driver's license, collected garbage with the '81 rear loader, while Grutadaurio focused on getting the recycling end of the business up and running. Grutadaurio and his wife, Jodi, also delivered garbage carts and recycling bins to houses in another beat up vehicle - a 1979 Chevrolet pickup with a two-by-four wooden frame that served as the storage area.

Although the early days were tough, Grutadaurio says he and Luce never gave a thought to giving up the business. "We never had a doubt we'd be successful," Grutadaurio says. By working hard and implementing a marketing strategy, they soon launched themselves on the road to success.

Marketing Strategies Realizing they had a small customer base, the owners created a plan to win more customers. They distributed flyers showing a drawing of a fist clutching a wad of dollar bills and the words, "Save, Save, Save" to emphasize the company's lower garbage collection fees. The flyers worked, but more important was Grutadaurio's decision to speak at local homeowner's association meetings about All Cycle's services. Grutadaurio knew this was an excellent opportunity to sign up customers, so he crafted a message that emphasized aesthetics, safety and savings to homeowners.

"Streets will look better if one company's carts are at the curb once a week instead of several companies' carts on the street throughout the week," he told residents. With fewer garbage trucks, streets also would be safer for children, and there would be less road wear, resulting in less money spent on road repairs, he said.

Grutadaurio feared his stance would create a venue for complaints. Instead, his strategy worked. After one homeowner's association meeting, approximately 200 new customers signed up, he says.

"We just kept plugging at it," Grutadaurio says. "We started going to a lot of meetings. Realistically, our biggest technique was consistency. And before we started to realize it ourselves, people started talking about our presence in the small market."

Customer Satisfaction Once word-of-mouth boosted the business, All Cycle had to concentrate on satisfying customers, Luce says. True to its word, the company began its routes early in the morning and finished pickups by late afternoon so that trucks weren't on the streets when children were coming home from school.

"We stressed timeliness," Luce says. "Our guys were the first haulers in the subdivisions at 7 a.m., and were done by 3:30 p.m. A lot of our competition was still out [on its routes] at 7 p.m."

The two continued to build on their good reputation by providing efficient service and responding quickly to customer complaints. For example, Grutadaurio recalls one customer who threatened to cancel her service because one of All Cycle's haulers was driving recklessly. Grutadaurio personally visited the woman at her home, and eventually ended up firing the driver and refunding the customer for the nine months of service. Grutadaurio says it's also the company's policy to respond to customer complaints "immediately."

A competitive pricing strategy also has helped to ward off rivals, Grutadaurio and Luce say. Charging a dollar less per month for collection than a competitor is a common practice to attract customers, but All Cycle charged $8 per month - half the amount of its main competitor. The company could accomplish this cost-effectively because at the time, All Cycle offered minimal service - garbage pick up without recyclable service, with customers providing the garbage containers, Grutadaurio explains.

When All Cycle branched into recycling pickup in late 1995, it began providing residents garbage carts and recycling bins for $12 per month, and increased its rate to $14 per month when it added yard waste pickup.

Bad Luck Turns Good Despite its good fortune, in fall 1997, the company received some unfortunate news. Fulton county commissioners were considering offering municipal garbage service. Alarmed that they could lose most of their customers, Grutadaurio says All Cycle and other area haulers protested at county meetings, taking the stance that municipal service would result in a monopoly, higher prices and poor service.

To strengthen their fight, in November 1997, the private haulers organized a one-day work stoppage and planned to park their garbage trucks in a strip mall parking lot, Grutadaurio says.

However, All Cycle was the only company that followed through with the plan. TV news programs reported the company's one-day strike, which created publicity. Some customers were angry that their garbage hadn't been picked up, but for the most part, the company had gained additional customers as a result of the broadcast and regained the trust of the angry customers by picking up their trash the following day, Grutadaurio says.

Several stormy public meetings later, the county rescinded its municipal service plan.

Although All Cycle's business was skyrocketing in the following years - growing to 26,200 customers - in 1998, the company discovered that it wasn't financially healthy enough to raise money through a public offering in the stock market. A financial analyst told Grutadaurio the company had too much debt and not enough equity.

The Decision to Sell To build equity, Grutadaurio and Luce sold All Cycle to Waste Industries Inc., Raleigh, N.C., in August 1998 in an all-cash deal. As part of the agreement, there would be no drop-off in service, and Waste Industries would be allowed to keep the All Cycle name for one year.

"We thought Waste Industries would provide the level of service we did, and wouldn't compromise the name," Grutadaurio says.

With the money from the sale, Grutadaurio and Luce decided to start up another hauling company - called All Cycle Sanitation and Recycling Service Inc. - in Cherokee County, Ga.'s town of Woodstock. Although the company previously stuck to residential pickup, the pair decided to add a roll-off C&D business now that their friend Bedford was no longer a competitor.

Woodstock seemed ideal because it was one of the fastest growing markets in north Atlanta, Grutadaurio says. "It's a good market. [When] you need growth, you need to look for a weakness in service."

Joined by partners Barry Skolnick, an Atlanta lawyer who handled legal work for the company for several years; friends from Boston, Joseph and John Spagnuolo; and Tim Citrone, who joined the company in 1994 as a driver and later became a salesman, the new All Cycle began its collection service in September 1998.

Citrone and the Spagnuolo brothers handle the residential business, while the other three concentrate on the more lucrative commercial roll-off business, which accounts for about 80 percent of revenues, Grutadaurio says.

Building their business with the same marketing strategy that they used in Alpharetta - by distributing flyers, attending home association meetings and placing local newspaper ads - as of August, the company has been signing up 800 to 1,000 customers per week, Grutadaurio says. In total, the company has 7,010 residential customers and approximately 800 commercial roll off customers.

While their strategy has been effective for getting "any customer," now All Cycle is targeting larger businesses, Skolnick says, noting they have been evaluating the roll-off business.

"We've grown to a size that we wanted to, and now we're fine tuning it," he says. "Now we've got a good base to ramp up with."

So far, Skolnick says the company has signed contracts with 23 of the top 25 general contracting firms in metro Atlanta to pick up C&D debris at one or more of each company's construction sites, They plan to further expand their residential hauling business into Cherokee and Cobb counties.

The Atlanta market is fast-growing and very competitive, which creates conditions that are ideal for starting a hauling business, Skolnick adds.

"Competition in [Atlanta's] commercial and residential market runs from Fortune 500 companies to the mom-and-pop operations with one garbage truck," he says. "There are very few barriers to entry. It's not necessarily like that in other markets."

"Our toughest competition always have been independent services," Luce says. But All Cycle prides itself on customer service, which gives the company an edge over other haulers, he says.

While competition is stiff, the owners say they have no plans to sell their business a second time. In fact, they have added a portable toilet and septic tank business to their operations.

The owners also may add home maintenance services to their business, with the hopes of taking All Cycle public within three years.

"There's nothing in our way [preventing us from] going forward and doing what we want to do," Grutadaurio says. "We want to stay in our market. We don't want to expand too far like the big companies."WA

All Cycle Sanitation Inc., Woodstock, Ga., has an array of equipment, including:

Trucks and Trailers *4 rear loader garbage trucks for residential collection (Two with McNeilus Companies bodies with International chassis; one with a New Waste Concept Inc. body and Ford Motor Co. chassis; and one with a New Waste Concept Inc. body and U.D. Chassis.

Roll-offs * 11 Mack Trucks with Galbreath Inc. hoists.

Miscellaneous * 1 Mechanic service truck;

* 3 Portable toilet pump trucks;

* 1 Portable toilet delivery truck;

* 1 cart and bin delivery truck; and

* 1 Repair truck.