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H20 + Exporting Ingenuity + the SBA Export Express Program = the Right Chemistry for Small Business Success
In 1996, John Wong, a Cleveland, Ohio based biologist and chemical engineer, founded TLC Products to answer the need for live, non-toxic, environmentally beneficial bacterial products for water purification. In partnership with Richelle Bell, co-owner, the company has grown from total sales of $100,000 to 2012 sales of $860,000. Now with ten employees, TLC sells world-wide, with the support of the SBA Export Express Program.
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From its inception until 2007, TLC Products was similar to its competitors and offered an expansive product line, using specialty products to treat specific water quality issues. The company served garden centers, pet stores and hardware stores. Throughout this period, TLC Products showed steady, manageable growth, while leasing a five-thousand square foot facility in Westlake, Ohio.
However, as the economic downturn of 2008 and 2009 hit, TLC’s primary outlets were seeking to reduce inventory, carrying costs, and improve their cash flows. As a result, many of these stores stopped ordering specialty products from industry manufacturers. TLC suffered along with the rest of the world during this time. Despite these conditions, TLC Products maintained and even grew its revenue due to product line repositioning devised by John Wong. This crash product development effort successfully combined the specialty products into single, multi-purpose products. These new flagship products combined the features of the 2007 original products into one superior formulation: StartSmart Complete (for aquariums), PondPerfect (for ponds), and Septic Medic (for septic tanks). To complement the product development, John Wong and Richelle Bell conducted an aggressive marketing program which explained to buyers the advantages of reduced shelf space requirement, higher SKU turnover, and easier customer decision making afforded by the products. Because of this campaign, TLC Products was able to actually increase the number of stores in the U.S. carrying its products from approximately 600 in 2008 to over 1,500 in 2010.
However, the R&D costs of reformulation, packaging design and production of the reformulated products, and the costs of spreading the “All In One” marketing message put a severe strain on TLC finances. Also, John Wong and Richelle Bell hoped to increase TLC’s international marketing scope, and wanted to export to select foreign countries, which had additional costs. To assist with the cash flow requirements needed to launch TLC’s new products both domestically and internationally, John Wong and Richelle Bell turned to the SBA and the Ohio Department of Development (now the Ohio Development Services Agency - ODSA), and secured SBA Export Express Program working capital loans from Lorain National Bank of $75,000 and $150,000. The program allowed TLC to manage its growth and successfully and dramatically expand its domestic and international markets.
The National Export Initiative was announced by President Obama in January of 2010, with a goal of doubling exports in five years. SBA Administrator Mills is a Member of the President’s Export Council and has placed a priority on helping small business exporters. Providing increased access to export working capital is a key component of the National Export Initiative. The SBA Export Express program provides participating lenders with an enhanced 90% guaranty on loans and lines of credit made to small business exporters. The bank is able to use its own forms and receive an approval from SBA within 24 hours. 70% of all companies that export have less than 20 employees.
In addition to the SBA Export Express program, TLC took advantage of Ohio Development Services Agency research to identify and prequalify possible distributors of its product in Europe. This program has assisted TLC in penetrating the EU market, where TLC is now making strong inroads, especially in the UK. TLC products has grown over 35% a year since 2009. In November, 2011, TLC purchased a new facility near the Cleveland Hopkins Airport, where it has room for its expanded activities and ample room for growth for the foreseeable future. TLC has added two full time employees recently, and plans to hire two more full time people in 2013. TLC “All In One” products are now sold in over 2000 domestic outlets, and are exported to an expanding list of countries including Canada, UK, New Zealand, Australia, India, China, Mexico, and Japan.
Family-Owned Food Market in Cleveland Announces Up to 50 New Jobs Thanks to Expansion
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CLEVELAND, OH—A small business owner in Cleveland has used three loans from the U.S. Small Business Administration (SBA) to expand a successful food market business and create 31 jobs, with the expectation of creating up to 50 more when his new store opens later this year near University Circle. U.S. Sen. Sherrod Brown (D-OH) and U.S. Small Business Administrator Karen Mills visited Constantino’s Market on January 27th to highlight the success of SBA loans and recent efforts to help small businesses grow.“Constantino’s Market is the classic American success story. Thanks to three loans from the Small Business Administration, Costas Mavromichalis has been able to turn his father’s convenience store business into the successful, unique grocery store itis today,” Brown said. “And in just a few months, he will open a new store in the growing University Circle neighborhood, adding as many as 50 additional jobs in the process. This is a perfect example of the federal government working with private industry to help small businesses grow, expand their sales, and add new jobs.” “In Tuesday's State of the Union, President Obama laid out a blueprint for an economy built to last—built on small businesses and the strength of American workers,” Mills said. “Constantino’s Market is an example of just what the President was describing—a business that is growing stronger every day with a tireless work ethic, a commitment to the community and a little help from the Obama administration. The SBA is working hard every day to make sure Constantino’s Market and all of Ohio’s small businesses have the tools they need to grow and create jobs.”
“I’m extremely grateful for the loan programs through the SBA,” said Costas Mavromichalis, owner of Constantino’s Market.“These critical resources have allowed me to expand my business and achieve the goals that I’ve worked so hard to accomplish.” The Constantino’s Market Story The Mavromichalis family emigrated from Greece to the United States in 1955 when Costas,the present-day owner of Constantino’s Market, was 12 years old. Costas became involved in the grocery business in 1976 when he opened stores on the west side of Cleveland. In 2003, Costas obtained an SBA loan to open a showplace store in downtown Cleveland, on West 9th Street. He later obtained a second SBA loan in February 2010, through the Recovery Act, to expand the store. That store employs 31 workers and has enjoyed a 19 percent increase in sales thanks to the expansion. Seeing the success of the store on West 9th Street, the Mavromichalis family decided to open another market in the University Circle neighborhood, and recently received a third SBA loan to open their new store in March 2012. The new store, which will also be family-run, plans to initially employ 35 people and will increase to 50 within the next year or two. All three SBA loans have been provided to Constantino’s Market by Cleveland-based KeyBank. SBA and Small Businesses In Fiscal Year 2011, the SBA approved nearly $760 million in loans for Ohio small businesses, for a total of 3,228 loans. From Fiscal Years 2009 through 2011, the Northern District of the SBA saw more than a 65 percent increase in the volume of SBA loans to area small businesses.
Leveling the Playing Field
The month of March has been designated Women’s History Month in the United States, when the nation celebrates the great achievements of women leaders, educators and entrepreneurs. The number of women-owned small businesses continues to grow, and many have done so with the assistance of the U.S. Small Business Administration.
Entrepreneurs like Dawn Ochman, President of Dawn Incorporated of Warren, a trucking/general contracting company, are making tremendous contributions to the Ohio economy. In 2009, Dawn’s company was certified in the SBA’s 8(a) Business Development Program as an economically disadvantaged women-owned small business. The 8(a) program assists socially and economically disadvantaged businesses better compete in the American economy and access the federal procurement market. .png)
Thanks in part to SBA’s assistance opening up federal contracting opportunities, Dawn has seen her 20-year old company’s revenues grow by 102%.
Prior to obtaining its 8(a) certification, Dawn’s firm had no success landing work with the federal government. The company was surviving with commercial work, but it had limited prospects for growth. She saw the 8(a) program as an opportunity for growth. “There was not an abundance of work available, so, to survive, we knew we needed to explore other markets,” said Dawn.
The 8(a) program has helped Dawn find some success in the federal arena, winning government contracts and helping the company has also added employees, and its professional staff now numbers 13 full time employees and 5 part-time personnel.
The 8(a) program has also provided Dawn with learning and mentoring opportunities that have helped her to better compete in the business world. The program enhances the capabilities of its participants and improves their ability to successfully compete for federal government contracts, including subcontracting on current contracts, teaming on new opportunities, and joint venture proposal development. 8(a) also offers participants periodic, no-cost training opportunities. In addition, in 2011 Dawn participated in the Youngstown Emerging Leaders Initiative. The SBA Emerging Leaders (e200) Initiative is a federal training initiative that specifically focuses on executives of businesses poised for growth in historically challenged communities. The initiative provides these executives with the organizational framework, resource network, and motivation required to build sustainable businesses and promote the economic development within urban communities.
SBA continues to work to increase contract opportunities for women entrepreneurs. The agency recently announced a new Women-Owned Small Business Federal Contract Program which allows contracting officers, for the first time, to set aside specific contracting opportunities for certified women-owned firms and will help federal agencies achieve the existing statutory goal that 5% of federal contracting dollars are awarded to these firms. This new Program also identifies over 83 industries in which women-owned businesses will benefit from such opportunities. For additional information, visit www.sba.gov/wosb.
As a woman-business owner in a “non-traditional” field, Dawn Ochman knows all too well about the difficulties women-owned small businesses have endured in competing for federal procurement contracts in certain industries. SBA is helping her overcome some of these obstacles.
