Turning rain into cash flow

Worried about metro Atlanta’s future water supply? Higher water rates?

Two local entrepreneurs have teamed up to do something about it — and make money in the process.

Randy Kauk

Randy Kauk

Randy Kauk and Bob Drew are collecting and distributing one of Mother Nature’s most precious gifts — rainwater.

Kauk’s Cumming-based firm, RainHarvest Systems, sells the necessary equipment to businesses and homeowners. Drew’s Atlanta-based company, Ecovie, engineers and installs the systems.

Both have seen explosive growth, which they believe is just the beginning for an industry in its infancy.

“We started as a result of the drought,” Kauk, 49, said. “I think we can be a solution to the water crisis.”

Instead of letting rainwater escape after it hits roofs, roads and other hard surfaces, the systems capture, treat and distribute it to reduce usage costs and conserve water.

One customer, the Atlanta Braves, is trying to reduce its $1 million-plus annual water bill.

Bob Drew

Bob Drew

“It makes financial sense and environmental sense,” said Mike Plant, the team’s executive VP of business operations.

The big expense for the Braves, Plant explained, does not come from watering the field, as I’d thought. Instead, it’s the pressure washing of the seating bowl and plaza area that guzzles the most water.

Starting in May, the Braves experimented with a 1,500-gallon collection tank that is expected to save about 20,000 gallons over the season.

“It showed the power of the idea,” Plant said. Now, the team is planning at least 10 more tanks to multiply the savings.

Homeowners can benefit, too. Just last week, the city of Atlanta held a public hearing on whether to establish a permitting process to allow homeowners to drink, wash and bathe with rainwater. Currently, the water can be used for toilets and laundry inside, and anywhere outside. With special treatment and permission, it also can be used for drinking, cooking and bathing.

Drew, 49, estimates that the average homeowner might spend $10,000 to $15,000 on a system, including installation. It could take four to eight years to recoup the investment from lower water bills, he said, not counting the likely increase in the home’s resale value.

But there can be wide variations in the return on investment, Drew said, depending on the scope of the system installed, water usage and rates.

Kauk’s company supplies the four essential products: Holding tanks (from 700 to 50,000 gallons each), filters for cleaning, pumps and pipes for distribution, and the controls to run the system.

He got started in the business after getting frustrated while equipping his Lake Lanier home. He discovered that there was no central supplier for all of the equipment.

“It took 10 companies to find everything I needed,” he said.

That led Kauk to launch his own firm, which he said is now the country’s biggest supplier. From $180,000 in his initial year of 2007, Kauk expects revenue to hit about $5 million this year.

Drew expects his three-year-old company to reach about $750,000 in sales his year.

“The potential for growth is astronomical, given metro Atlanta’s water-supply challenges and high water rates,” he said.

– Henry Unger, The Biz Beat