Black Tie Services was incorporated in 1998 by Dave Bandauski. Dave began the business on the premise that there was a niche in the American portable sanitation business for upscale restroom facilities in the high end hospitality marketplace. With this in mind, he approached the PGA of America in early 1999 with the proposal to be their sole source for their Championship series. This includes the PGA Championship, The Senior Championship and The Ryder Cup when it is hosted by the USA. They reached an agreement for Black Tie to provide the sanitation services at the Ryder Cup in Boston in the fall of 1999. At the time of the negotiations, Black Tie’s fleet consisted of two trailers. Needing additional trailers and capital, Dave approached Bill McEnery with an investment opportunity. Bill invested the funds and Dave in term gave up 50 percent of his ownership. Dave then went to ACSI and purchased 40 trailers to fulfill his commitment to the PGA. With the success of that tournament, Black Tie was awarded a 5 year contract. To this day we continue to be a preferred vendor of the PGA of America and this year were awarded the 3rd five year extension on that original agreement.
Dave continued to expand the fleet and market the company on a nationwide basis as the premier provider of upscale restroom facilities. While the revenue did continue to grow in the next few years, the expenses grew at an even faster pace. By 2002, Black Tie had continued to expand its share in the marketplace but Dave was unable to manage the business in a way that resulted in a profit. Based on the losses Bill decided that he wanted out. Instead, Dave got Bill to agree to stay if he hired someone to manage the business.
In April of 2002, Phil Meegan was hired as General Manager of Black Tie. It was Phil’s job to analyze the business, determine what changes need to be made, and implement them. One of the first changes implemented was to outsource some of the services Black Tie provided. The first of these was transportation, and Jason Hamer was hired to create a logistics department and find vendors to perform this function. During late 2002 and into 2003 we continued to develop relationships with vendors and expand on the services that they perform for Black Tie. We also began to analyze the inventory from a utilization standpoint and sell off underutilized equipment. This did two things for us: it became another source of revenue and it began to reduce debt. The final piece of the puzzle was to cut staff and make other adjustments to the payroll.
By the summer of 2003, it was necessary for Bill to inject hundreds of thousands of dollars into the company in order for it to meet its debt obligations. As a result, there was considerable conflict between Dave, Phil and Bill. Although we were unquestionably moving in the right direction at this point, Dave was not happy. Phil suggested we sell the enterprise. Dave instead looked for investors to buy Bill out. We did eventually attempt to sell the business. It was unsuccessful. Finally, Dave agreed to a buyout and the deal was finalized on October 31, 2003.
Phil continued to sell assets and make adjustments to the staff and payroll. Year end 2003, Black Tie finishes in the black for the first time in its history.
Black Tie Manufacturing
By the spring of 2004, an issue that was beginning to become a large expense was equipment repair. By this time the original trailer fleet was 5 years old. It became obvious that we had an issue with the design of the ACSI trailer. This was made all too apparent when an Army private stepped out of a shower and fell through the floor of a trailer. Phil contacted ACSI to see what they intended to do about this. His request fell on deaf ears. After talking with some other owners, he realized that ACSI was not going to step up and fix the problem. With this realization, the decision was made to pursue another source for trailers in the fleet. At this time, we were approached by a manufacturer from Elkhart, Indiana and we partnered with them on the design of new trailers. We also agreed to market the trailers under the Black Tie name. Although, we were very involved with overseeing the production process, by 2005 we were unhappy with the consistency of the product and the changing cost factors. So Black Tie Manufacturing was incorporated and dedicated production staff was hired. The business plan for the manufacturing company was based on an annual order from the event company (for fleet expansion and replacement). At this time we owned in excess of 100 ACSI trailers that we knew from experience were flawed and deteriorating rapidly. We also began marketing the product on a retail level. We realized that it would take some time to become a profitable enterprise, but there was also no substitute for controlling the quality of the product in the rental fleet. There has been a significant increase in the number of trailer manufacturers in the U.S. over the last few years. While this certainly made it challenging, we have built hundreds of trailers and have customers all over North America. In fact, through our website, we have received inquiries from all over the world. We continue to believe that this is a growing business and worth the sacrifices so far.
Black Tie Sanitation
By the end of 2007 and into 2008, it became obvious that the event restroom trailer rental business was catching on. The competition to this point has been mainly regional. However, around this time, United Site Services purchased Amason’s in Jacksonville, Florida. For the first time this seemed to change their business plan as it related to large events. They were now a force to be reckoned with. We now had a national competitor that had something that we don’t - portable toilets. By this time, Black Tie had developed very strong partner relationships with regional portable toilet companies but it was no substitute for owning some. On this basis, Rich Vegter was hired in the fall of 2008 to start the sanitation division. Rich brought a wealth of experience and immediately hired two of his former employees from Service Sanitation (his former company in Chicago and the largest operator in the city). With this base staff we were positioned well to acquire portable toilet companies across the country. When the press release went out, we immediately received inquiries from 7 companies across the country that wanted to join the Black Tie team.
It was early in 2009 and while we had many targets, finding a bank that was willing to lend money for these acquisitions proved to be a challenge. As a result, we used Black Tie rental trailers as collateral and we acquired several small companies in the northern suburbs of Chicago. This was the beginning of the sanitation division. Our first acquisition was finalized on February 18th 2009. This was on 2 small companies with a common owner, and in April we added a third company, located in Southern Wisconsin but with the bulk of their business in Lake County Illinois where the other two businesses operate. The projected revenue for the combined businesses was approximately $900,000.00. After our staff applied their business practices and marketing strategy, the company reported income of $1,370,654.00. This was a significant increase by any standard but particularly noteworthy in this economy. Much of their increase in business was in the event marketplace. This supported our assumption that owning trailers and portables in the same marketplace is a big advantage.
Black Tie Opportunity
While the years have been challenging, Black Tie has continued to grow and expand in different directions to meet the demands of a changing marketplace. While we have great equipment and an impressive customer list, our greatest asset is our employees. We have accomplished an amazing amount with negligible financial backing, through the shear determination and dedication of the employees. Black Tie Event Services is currently registered to do business in over 40 states and has a total staff of 15. Most of these also provide some kind of support to our manufacturing company. Black Tie Manufacturing has a staff of 9. Six of these are production personnel that work hourly as needed. From a manpower perspective, Black Tie Sanitation currently has the most staff at 20 but many of these are seasonal help necessary to deliver toilets to our large weekend events. Also of note, two of the staff are the original employees hired with the national expansion plan in mind. The expansion into manufacturing and sanitation was funded from Black Tie Event Services. While this has put a significant strain on the business, it is our belief that with the proper funding of our proven business approach, the company will continue to grow and flourish. We have many relationships in the sanitation industry and many companies that would like to join us. We have an outstanding reputation in all three of our enterprises, and that reputation is unparalleled. Because we operate our businesses in a very lean fashion, we are in a unique position to grow in a controlled manner that will result in bottom line profits across the board.
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