Before the boom of e-commerce sites such as eBay and Amazon in the late 1990s, Jeffery Zaslow and Jeffery Cabel were already harnessing the internet to grow their business, Overseas Aircraft Parts.
Today, Zaslow and Cabel are again pioneering business growth in the rediscovered frontier of international exports. But instead of relying on emerging technology to reach new customers, the Deerfield Beach, Fla.-based businessmen credit the availability of capital through SBAs Export Working Capital Program as a key driver in their success.
Overseas Aircraft Parts opened its doors 22 years ago. Zaslow and Cabel previously worked together at a south Florida aviation company.
“I was the company CPA and Jeff was familiar with aircraft engines. When we started the company, Jeff’s knowledge of aviation and my finance background seemed to be a combination that would work” recalled Zaslow. “For me, the most rewarding part of opening our own business was not having to be worried about being forced out of work in the future because of age. Our futures were in our own hands.”
Overseas Aircraft Parts is like a neighborhood auto parts store. Like their counterparts in the auto industry, airlines rely on companies like Overseas to provide refurbished and certified parts and materials for their engines at a lower cost than that of the original equipment manufacturer, saving airlines millions of dollars. The business is also akin to a championship dog breeder because each aircraft part is backed with meticulous documentation detailing where it came from, as well as when and how long it was used previously. Parts are refurbished only at FAA-licensed facilities and parts from airlines involved in a crash or other incident type can’t be resold. “In this business, it’s all about paperwork and pedigree. The documentation and traceability we provide is as important as the actual parts we sell,” said Zaslow.
The aircraft parts industry is a billion dollar industry. However, there are fewer companies than what some may think. Zaslow credited their company reputation and attention to detail as key reasons why they have existed for so long.
With 70-80% of their sales going to overseas customers in Japan, China, Singapore, Turkey, Spain, and Portugal, online data bases, reputation and longevity have helped Overseas Aircraft Parts’ bottom line. But to lift the business to new heights, the availability of capital was needed.
“Selling good material is easy, but finding the right inventory is the difficult task. Our business is capital intensive and purchasing a used aircraft engine to refurbish or teardown could cost us $2-3 million,” said Zaslow. “The landscape is different than in the early 1990s. Financing has become more difficult and it’s even more difficult if you’re selling parts overseas.”
According to SBA International Trade Program Regional Manager Mary Hernandez, many banks are hesitant about lending capital when repayment is based on future payments by foreign buyers.
“E-commerce makes it easier for small businesses like Overseas Aircraft Parts to find potential markets overseas, but finding trade finance can be a significant challenge. The SBA-backed Export Working Capital Program (EWCP) loan allows lenders to mitigate their risk while providing their customers with much needed short-term working capital,” said Hernandez.
Through Suntrust Bank, Overseas Aircraft Parts has received several $2 million EWCP loans that gave them greater flexibility in negotiating export payment terms in advance of a sale or contract.
“This industry moves quickly so you need to have capital available to operate,” said Zaslow.
Overseas Aircraft Parts had their best year ever in 2012 with over $10 million in revenues. This year, they expect to exceed last year’s revenues by 20-25%. A large part of that success was their ability to access capital used to expand.
With humble beginnings in Coral Springs, the company has moved twice before landing at its present Deerfield Beach location. The company has grown to seven full time employees and owners Jeff Zaslow and Jeffrey Cabel are still looking into future opportunities and growth. The second generation is now at work as well with both owners sons working in the business, bringing with them fresh ideas and opportunities for continued growth.
At a time when people turn 50 years old and start to think about retirement, there are some people like George Brydon who are just catching their second wind.
Brydon is part of a new clique of entrepreneurs known as encore entrepreneurs who are starting their own businesses just when others their age are planning on slowing down and taking it easy.
“I was a regional vice president for a large corporation that was involved with paper and janitorial supplies,” recalled Brydon. “I worked in the business for 30 years. In 1999, the company was sold and went through a reorganizational change with new leadership. I guess my tolerance for change wasn’t that high so I decided it was time for me to leave.”
After a stress inducing corporate career, you can literally say George went sailing off into the sunset. He and his wife moved to St. Petersburg, Fla. where they moved aboard a sailboat with their daughter. But that wasn’t the end of this story. George wasn’t ready to drop anchor and settle down.
“Back in 2000, I ran across a business that was in trouble. They had just lost a contract with a movie theater chain and it was in bad shape,” recalled Brydon. “I saw the opportunity to take it over and thought it would be something to keep me busy and make a little money.”
Brydon didn’t realize how the business would grow and put him back in the ranks of the work-a-day world but this time as a business owner. He formed Premier Chemical in 2000 and began to sell cleaning products to distributors.
“Intellectually, I knew about cash flow and I did end up chasing it the first year. But this was a business I was familiar with as I worked in it on a much larger scale in my previous career. But now I was doing the sales work myself and I never had so much fun interacting with customers.”
George admitted having a pension from his previous career provided him a financial buffer other entrepreneurs don’t enjoy. But he stressed that entrepreneurs should not get into anything they don’t know about.
“Do what you know and love what you do,” said Brydon. “Unlike the corporate business world, small business owners manage many small pieces. It can be a little lonely because you don’t have a lot of people to collaborate with like you do in a large company.”
Four years after forming Premier Chemical, a new opportunity arose when he had a chance to buy manufacturing equipment that produced Styrofoam “peanuts” used in shipping packages. Now that he expanded into the packaging business, Brydon rebranded his company CleanPak Products which is its name today.
“Expanding the business to handle this product made good sense for CleanPak Products. We sold to distributors in the same geographic area as our cleaning products, they were lightweight, and filled the excess capacity of delivery trucks,” said Brydon.
What used to be a 5000 square-foot business grew to 25,000 square feet.
When rough economic times hit the nation in 2007, CleanPak Products was pressured like many other small businesses. The business was already competing in a highly competitive market where customers change frequently. With customers cutting back or going out of business altogether, things got even more competitive.
"I was transforming my packing peanut business away from Styrofoam to a new biodegradable packing material and I needed capital to do it. Problem was no one was lending money. I learned about an SBA loan through Sun Trust bank and applied. I was able to get a loan through SBA when no one else was lending,” said Brydon.
Brydon received a $225,000 SBA 7a loan from Sun Trust bank. Because of this loan, he was able to remain competitive with a more improved, green product. Today, about 25 percent of CleanPak Products business is selling biodegradable packing material.
CleanPak Products is four to five times larger than George Brydon imagined or intended it to be when he formed the company in 2000. Today he has eight full time employees and two part time employees. He sells to more than 120 distributors and in addition to the Florida customer base, he exports to the Caribbean, Ecuador and Mexico.
“I’m committed to growing my business by helping my customers grow their business,” said Brydon. “It’s easy to get an order in this business but what I want to build are long term relationships with customers.”
For someone who literally planned to sail off into the sunset after a successful corporate career, George Brydon has found success as a small business owner instead.
What can you learn from SBA South Florida District Small Business Persons of the Year? Read about Steve Miller who found a business idea at work. Lisa Hickey expanded a woman-owned screen printing business. John Diaz lost his job then started his own industrial supply business. What are you waiting for? Become a small business owner like these pros!