Small-Business Success Story: Tailgate Guys

Kiplinger's spoke with Tailgate Guys' co-founder Parkey Duffey (pictured at left with fellow co-founder Michael Otwell), of Auburn, Alabama, about how the pair turned tailgating into a profitable business. Read on for an excerpt from our interview:

What's your game plan? Tailgating at football games is a way of life in the South, but it's a hassle. You need to secure a place to set up and lug your equipment there. We partner with universities to provide a reserved location close to the stadium, as well as packages of equipment [tents, tables, chairs, linens, coolers, ice, personalized signs and even TVs], catering options and physical support. We can host a small group or thousands of people—say, members of a large university alumni association.

Who’s the other "guy"? My cofounder and the chief operating officer of our company, Michael Otwell. We met at a Halloween party in 2008. At the time, I was a project manager for a commercial contractor and he worked for a home developer. We hit it off, and three months later he was my business partner. My strengths are planning business development and strategy. Michael’s are getting out in the field, communicating with our staff and making it all happen. He's great at it.

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Who are your current partners? We're the "official tailgate management company" of Auburn Athletics, Florida Athletics, Georgia Tech Athletics, Texas Athletics, Texas A&M Athletics, the Goodyear Cotton Bowl and the Chick-fil-a Peach Bowl.

Where did you get the idea? On an Auburn football weekend in 2008, I met someone who was doing the same thing on a small scale. The next day, I began writing a business plan to show how you could develop the idea by partnering with universities.

How did you finance your start-up? With a $30,000 line of credit from a local bank and a lot of sweat equity. Plus, we saved everything we could from our salaries to put toward the start-up until we quit our jobs in 2009. After we began selling in the summer of that year, we poured cash back into the business.

How have you grown? We have 43 full-time employees and another 50 to 75 part-time employees during peak periods. In 2014, we introduced the Event Group [serving East Alabama, West Georgia and Central Florida] to offer year-round rentals.

We've averaged 50% to 60% growth in sales annually since 2009. We may exceed that in 2015, when we expect gross sales of more than $5 million. In 2016, we’re shooting for $7 million.

Are you making a living? Yes, but a humble one. We pay ourselves as employees and take distributions when we can. Our wives are accomplished professionals, and their incomes allow us to plow more money back into the business.

What's your greatest satisfaction? Seeing team members who are 100% behind our mission build their careers and succeed. It's very rewarding to see all these people and their families become part of this bigger family. Plus, we're building relationships and finding unique opportunities with some of the more well-known schools in college athletics.

What's the most unusual piece of equipment in your inventory? Cake plateaus [decorative presentation bases for wedding cakes]. They're kind of an odd thing to own when you start a business based on college sports.