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.
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.