Fifteen years ago, Jason Sonju was pounding out dents at his father’s auto body repair shop. Today, he’s director of programming for the family-owned business, Sonju Industrial Inc., which has acquired top-dollar defense contracts with some of the largest aerospace and defense corporations in the world- Boeing, Lockheed Martin, Raytheon and Northrop Grumman.
From collision repair to laser-guided missiles and assault rifles, the company has expanded steadily through the years, seizing on one opportunity after another. Sonju Industrial’s aggressive search for new business ventures has allowed it to expand through the recession, adapting to the changing political climes and mounting a firm reputation in the world of defense contracting.
The growth, while steady, has not been without its obstacles.
When Congress stopped funding of the F-22 Raptor in early 2009, for example, Sonju Industrial’s contract with Boeing was jeopardized. Although Lockheed-Martin makes the jet, some of its components come from Boeing, and Sonju Industrial was a direct supplier of those parts.
Opting for a less expensive plane, Congress shut off the tap and the contract dried up.
Fortunately, Sonju Industrial was enjoying a revenue spike in another of its ventures – manufacturing assault rifles. In fact, Sonju Industrial opened up a sister company to manufacture the AR-15, SI Defense.
Sonju Industrial has cultivated the “mentor-protégé” relationship with some of the biggest names in aerospace and defense, including Raytheon, a Tuscon-based company that is currently the fourth-largest missile manufacturer in the world. The corporations appreciate Sonju Industrial’s quality work, timely production, on-time delivery and consistent cost estimates.
Today, Sonju Industrial has a staff of more than 30 full-time employees. They program software and operate robotic machines, which cost between $250,000 and $3 million. The machines produce parts so small they fit in the palm of your hand, and other the size of your thigh.
The machines bite into tungsten, aluminum and titanium, constructing fins for missiles, lower receivers for semi-automatic assault rifles, as well as “fracture critical” parts that go into the production of airplane wings and landing gears.
“People are getting on these planes and their lives are in our hands,” Dick Sonju, president of Sonju Industrial said.
He’s come a long way since pounding out dents, and now spends much of his time sitting at a computer, programming data that tells each machine precisely what and where to cut, down to the tiniest fraction of a millimeter.
“You enter the wrong decimal point and that’s a thousand-dollar scrap of titanium,” he said. “If something zigs when is should have zagged, you have to start all over.”
Manufacturing these types of products is not cheap and requires a lot of capital. Sonju Industrial must get specific certifications and those certifications are hard and expensive to obtain and maintain, as well as the price of it’s raw materials and machinery. Luckily Sonju Industrial has been able to take advantage of SBA’s loan programs along the way.
While many businesses are shying away from taking out more debt and looking at cutting back or even throwing in the towel, one Montana business sees this time as an opportune time to invest in their business. Bill Kronmiller and Paul Neutgens, partners of American Steel, a steel fabricating business in Billings, took advantage of reduced costs, low interest rates and market position by building a new 26,000 square foot facility.
The new facility offers radiant floor heating, separate painting and production bays, elbow room for their employees and even indoor plumbing- a far cry from their previous location, which didn’t have indoor plumbing. Not only does the facility offer more room to take on bigger projects, but both owners agree providing extra room and space makes for happier employees.
“The employees seem to be happier, because they’re not all cramped up in a small space,” Neutgens said. “They have their own elbow room to get their jobs done and don’t have to worry about crowding into someone else’s area.”
American Steel was able to build the new facility and acquire land because of a Small Business Administration 504 loan for $1.468 million provided by the Big Sky Economic Development Corporation. The SBA 504 loan program provides long-term, fixed rate financing for major fixed assets, such as land and buildings.
“Not only did the 504 loan program allow for funding of the new facility, but it also provided us a better position with our cash flow,” states Kronmiller. “It’s an important part of business to understand your cash flow and make sure you have enough, especially when you are dealing with big projects and government contracts.”
In fact, 85-90% of American Steel’s business comes directly from government contracts or other projects somehow funding by the government. This wasn’t the case a few years back, when their focus was on the private sector, but because of the economy American Steel changed its focus to where the money is, which is in government funded projects.
Kronmiller and Neutgens are optimistic about the future- that’s why they built the new facility in such a ways that further expansion could be done easily by adding on to either side of the structure.
While business is stable, but not overwhelming, for American Steel, Kronmiller and Neutgens take this time to “practice” their skills and perfect what they do. Neutgens has also been taking advantage of SBA’s Emerging Leaders Initiative program to polish his business sense and financial background.
Alex Rincon, Jr., known by his friends as “Papu”, always knew he would start his own business someday. It wasn’t until after graduating from Carroll College in 2004, and managing multiple retail businesses, that his business idea began to take shape.
While attending Carroll College, Rincon obtained a triple major, including a B.A. in Business Administration with a special interest in Marketing, Management and International Business; a B.A. in Spanish Language and Literature; and a Multi-Disciplinary major in Visual Arts with an interest in Graphic Design. In his spare time he enjoyed all that Montana had to offer including, snowboarding, hiking, fly fishing and much more. It was this love for Montana’s outdoors and lifestyle, along with his diverse scholastic background, that brought fourOsix to light.
In 2007, Rincon opened fourOsix in downtown Helena, a lifestyle and retail store that promotes art, music, style, forward thinking and Montana living. The name “four ‘O’ six” represents all of Montana, as (406) is the only area code for the state.
In the beginning, Rincon assembled a team of professionals, including advisors from SBA’s local SCORE Chapter to help get his business idea off the ground. With his stubborn “not going to give up attitude” and ample planning, Rincon fashioned a sound business plan and secured the needed funding to launch his business venture.
“Some people see problems- I see solutions for those problems,” says Rincon, referring to the challenges of starting a business. “It took some people time to see and understand my vision for a retail store that is also a lifestyle store and a socially aware business.”
Rincon’s business model has always been to build a successful brand while simultaneously making a positive impact to its local community and economy.
Rincon jokes about not running his business as the ideal for-profit business, but rather tends to run it as a non-profit venture, by investing most of its profit back into the community in and contributes time and resources to local schools, and by organizing & funding art, music and recreation events around Montana.
While maintaining its stance on supporting the community, fourOsix has indeed made a name for itself. While stopped at a stoplight in Montana it wouldn’t be uncommon to find the fourOsix logo on nearly every other vehicle. Due to the success of its own brand fourOsix recently began doing their own on-site screen printing which allows customers the opportunity to customize their favorite fourOsix branded clothing.
Rincon has had a great year, after being named SBA’s Montana Young Entrepreneur of the Year, he was selected to participate in an exclusive event at the White House called Champions of Change. This program highlights stories and examples of citizens across the country that represent President Obama’s vision of out-innovating, out-educating, and out-building the rest of the world through effective projects and initiatives that move their communities forward.
Rincon humbly admits being an inspiration to other people, including the usual younger generation that shops in his store. “I get to talk to my customers about what it’s like to own my own business and talk to them about dreaming big and sometimes just going for it,” Rincon said. “More than just the success of my business though, I love being able to really have passion for what I do.”