Although young in terms of age, 27-year-old Jalon “Jay” Petre is anything but when it comes to small business experience.
As president of Renick Millworks, LLC, an environmentally friendly company specializing in wood products that are 100 percent reclaimed, Petre has been involved in entrepreneurial endeavors since graduating from high school.
Petre’s experience and success as a business owner are the key reasons he is being honored as the Young Entrepreneur for 2010 by the U.S. Small Business Administration’s West Virginia District Office.
Petre happened upon his current profession by chance. Fresh out of high school, he was helping manage his dad’s machine and welding shop when work slowed. His dad said it was alright if Petre wanted to go out on his own and find something else.
“I received a contract with the railroad to take down several buildings in the Fort Spring area, which I probably got because of my age (18-years-old) and I worked cheaper than the other bidders,” Petre said. “The buildings were constructed mostly of oak lumber, which once removed, was stacked around my dad’s shop because I had no idea what to do with it. A few days later a guy came by and asked if the lumber was for sale.”
Petre had already gotten paid to take down the structure, and selling the lumber put extra money in his pocket. From that experience, he realized there might just be a need and demand for reclaimed wood.
Along with his brother, Petre continued the demolition business taking down structures all over the East Coast, selling the wood and learning more about the reclamation industry.
“I was selling the wood to a lot of flooring companies and realized the price they were getting for the flooring was a lot more than I was receiving for the raw wood,” Petre said. “I thought there must be a missing link somewhere – somebody was making a lot of money and it wasn’t me.”
After talking it over with his dad, who was in the process of closing down his shop and relocating to Greenbrier County, Petre borrowed enough money from his dad to build a wood processing mill. Thus Renick Millworks, LLC was created.
“That was in 2005,” Petre said. “We started out small with a basic website and used the contacts made while in the demolition business, and have progressively grown each year since. Sales have gone from $180,000 the first year to around $1.2 million in 2008 and we’ve been able to add at least two employees each year bringing us to our current level of nine.”
Petre’s dad, who describes himself as semi-retired, also helps out in the mill from time to time.
It’s been a lot of learning, a lot of crawling, but we’ve really fell in love with the reclaimed wood. It just has a look that can’t be matched with anything else,” Petre said.
Though he and his brother are no longer involved in the demolition end of the business, as his brother has since relocated to Idaho, Petre acknowledges his experience in that field has helped create the reputable relationships he has today.
“There are so many people in the wood demolition business, some of which are a little shady,” he said. “You tend to learn who you can do business with and who you can’t. And if you treat people right, it generally works out in your favor.”
Renick Millwork’s customer base extends throughout the country but is mainly focused along the East and West Coasts.
“The flooring we manufacture appeals more to higher income households due to its uniqueness, although we are now developing a product for medium income households,” Petre said. “It’s a half inch engineered product that uses the reclaimed wood on the surface. It looks the same but is more cost effective.”
Petre’s company has been fortunate to count among their projects somewhat of a “Who’s Who” of the business world, providing their product to companies like LL Bean, Club Monaco and New Balance.
The company is also doing its part to help the environment as they are Forest Stewardship Council (FSC) certified, a member of the Green Building Council, Leadership in Energy and Environmental Design (LEED) and the National Wood Flooring Association (NWFA).
As for being considered a success in the business sense, Petre said, “I feel I’ve been lucky, blessed or whatever you want to call it as far as having a business sense. I didn’t go to college, going to work right out of high school and as far as marketing, it’s always come naturally.”
If the past five years are any indication, the sky’s the limit for this young entrepreneur.
“It was a pretty typical, grim startup,” said Hartzell, who jokingly refers to himself as Serial Number 001, as Azimuth’s first employee. “I was doing everything but painting yellow lines on the parking lot to keep the lights on.”
But as time passed, Hartzell’s persistence and leadership abilities have grown Azimuth into a company of nearly 100 employees and to be considered among the leading small businesses in the eastern half of the U.S. when it comes to fulfilling military contract obligations.
It is these qualities and experiences that have led Hartzell to being named West Virginia’s 2010 Small Business Person of the Year by the U.S. Small Business Administration.
Azimuth was founded by Hartzell’s desire to remain in West Virginia and to create a company that could successfully compete for, and win, Department of Defense contracts. Being a U.S. Army Special Forces veteran, he was very aware of the business opportunities that could be generated through support of the military. But, he also knew as a one-person operation, he couldn’t do it alone.
“Early on there were a lot of people who either took pity on us or, for their own amusement, helped us out,” Hartzell said. “It was tough being a company trying to break into the government contracting arena in West Virginia in the early 1990’s. The focus was on natural resources and the high-technology ‘push’ hadn’t evolved.”
Hartzell can recall a few incidents where he received assistance, one being the time his insurance agent loaned him funds out of his own pocket to pay for a liability policy to enable him to obtain a contract. Another was when a lender pushed Hartzell’s small loan request through his loan committee when he didn’t have hard assets to secure it.
Another early key to success was the arrival of Electronic Warfare Associates (EWA), a large prime contractor for the Department of Defense, in the state. EWA identified Azimuth as a company they could work with and subsequently provided Hartzell a $79,000 sub-contract enabling him to hire his first full-time and part-time employees.
“That was really the start of Azimuth,” Hartzell said. “Through that relationship, we obtained the necessary clearances for secure high-level government contracting. This was also about the time the West Virginia High Technology Consortium was formed. With the support of Congressman Alan Mollohan, the Consortium was the impetus behind the creation of the I-79 high-technology corridor. His goal was to lay the groundwork for mature companies like EWA to come to West Virginia to act as mentors for our small businesses.”
Hartzell believes the mentoring aspect of this initiative was one of the most significant and valuable events in the history of Azimuth.
It was during this period the Department of Defense created a pilot Mentor/Protégé program under which Azimuth/EWA team was accepted.
“The experience under the DoD Mentor/Protégé Program really set us up for growth and how to perform properly on government contracts,” Hartzell said. “If you don’t perform well on government contracts, you aren’t going to make it.”
The contracting and sub-contracting opportunities obtained through the Mentor/Protégé Program made Hartzell realize he was in need “a very large stack of financial assistance” if he was to perform.
“We obtained two large SBA guaranteed loans which allowed us to purchase the equipment, software and tools we needed to successfully perform on those sub-contracts,” Hartzell said. “Through experience I’ve discovered without proper tools and test equipment, you can’t perform successfully.”
Hartzell is proud of the fact he never missed a loan payment and jokes when networking with SBA officials, “These guys were foolish enough to loan me half a million dollars and the punch line is ‘I paid them back!’”
Guaranteed lending was only one of SBA’s programs utilized by Azimuth.
“Barbara Weaver, SBA’s small business contracting specialist, played a very key role in our survival, like she has and continues to do for so many other West Virginia small businesses,” Hartzell said. “Her contracting expertise and guidance has led to increased contracting opportunities in the state.”
Another factor is an alliance that evolved among businesses in the high-tech corridor that led to the success of not only Azimuth, but of those businesses as well.
“We helped each other succeed,” Hartzell said. “We cooperated and helped each other right down the line. We competed against each other, and still do, but we’ve always helped each other. Those relationships were and are still very powerful.”
West Virginia’s work ethic and values are looked to by Hartzell as the real key to Azimuth’s success.
“We’re able to recruit and retain very talented and loyal people,” Hartzell said. “When asked by others about our success I say, ‘I could not have done this anywhere else in the country. The West Virginia values are what make Azimuth the company it is today.’ There are no doubt bigger and more profitable companies, but no one works harder or has more fun than we do.”
As a veteran and successful entrepreneur, Hartzell is always willing to provide advice to younger companies on the nuances of small business ownership.
“I’ve provided advice to many companies, not only here, but all over the country,” Hartzell said. “I tell them to know their goals and motives. Find your local small business development center, your procurement technical assistance center, and your local SBA. Seek out those individuals who can help fulfill your objectives.”
Hartzell is very happy to be selected as West Virginia’s top entrepreneur for 2010 stating he “accepts the award on behalf of the individuals at Azimuth and all those out there who have helped us over the years.” ARC loans are deferred-payment, SBA guaranteed loans, which can be up to $35,000. They are intended for established, viable, for-profit small businesses in need of short-term help to make their principal and interest payments on existing qualifying debt. ARC loans are interest-free to the borrower, 100 percent guaranteed by the SBA, and have no SBA fees associated with them.
ARC loans are made by commercial lenders, not SBA directly. For more information on ARC loans and the Recovery Act, visit the SBA’s web site at www.sba.gov/recovery or contact the West Virginia District Office (304) 623-5631.
One West Virginia lender has taken the American Recovery & Reinvestment Act (ARRA) charge of “helping to unlock the small business lending market to get capital flowing” very seriously. Main Street Bank, headquartered in Wheeling, W.Va., is responsible for over 21 percent of the total ARRA loans made in West Virginia since the inception of the program.
With 40 SBA-backed loan approvals totaling $2,728,100 as of January 13, 2010, Main Street Bank has stepped to the forefront and made a huge difference for each and every one of those small businesses. In fact, the 40 loans are responsible for creating and/or retaining 237 jobs in the northern panhandle region of West Virginia.
The ARRA, signed into law by President Obama on February 17, 2009, is making a difference for West Virginia’s small businesses. Since its signing, the U.S. Small Business Administration (SBA) has provided loan guaranties to 186 West Virginia small businesses through lending institutions for a total of $33.9 million.
Stimulus Retail Solutions is one small business which has benefited from SBA’s America’s Recovery Capital (ARC) loan program through Main Street Bank. This small independent software vendor located in Wheeling was experiencing cash flow issues due to the amount of time which lapsed between the completion of an installation and the actual receipt of payment. This created a situation where the company was spending more time trying to raise capital to pay creditors than on sales and marketing.
Benjamin Seidler, president of the company, approached Main Street Bank representatives Jim Croft and Todd Cover with his cash flow issues. They immediately thought of the interest-free, deferred payment ARC loan which was used to prepay creditors and solve the cash flow issue.
Another Wheeling company, Wilson Auto Glass, was facing the dilemma of having to reduce its staff as a result of the economic slowdown which also caused cash flow issues. The mild winter last year that reduced the need for windshield replacements, caused owner Paul Beck to seek financial assistance through an ARC loan, again through Main Street Bank.
After receiving a $35,000 ARC loan, the maximum available under the program, Beck was able to satisfy his creditors, retain his employee level, and keep his business viable.
“The ARC loan provides critical capital and support small businesses need to make it through the tough economic times,” said Judy McCauley, director of SBA’s West Virginia District Office. “Together with the other provisions of the Recovery Act, ARC loans are designed to free up capital and puts more money in the hands of West Virginia’s small businesses. I congratulate Main Street Bank on stepping up to help small businesses under the Recovery Act.”