When L.J. Hughes came to West Virginia from Indiana, Pa. in 1942 to do an exploratory drilling project he probably never realized he was embarking on an entrepreneurial endeavor that would extend through four generations of the Hughes family.
L.J., who started his diamond core drilling business in the 1920s, discovered a great demand for his expertise in the state and decided to relocate his family to the Summersville, Nicholas County area. In 1946 he was joined in the business by his two sons, Robert and Charles, and his daughter and son-in-law Evelyn and Fletcher Herold joined in 1952.
As the company progressed, a third generation entered the business; Charles’ twin sons David M. (Mike) and John M. (Mick) Hughes in 1973, Fletcher Herold, Jr. in 1975 and Fletcher’s sister, Rebecca Adkins, in 1990. In 2006, a fourth generation came on board, nephew Jeffrey Lilly.
This year the company named for its founder, L.J. Hughes & Sons Inc., is being honored by the U.S. Small Business Administration as West Virginia’s 2010 Jeffrey Butland Family-Owned Small Business of the Year. The largest diamond-drilling contractor on the East Coast has also been selected as SBA’s Region III top Family-Owned Small Business. Region III includes Delaware, Maryland, Pennsylvania, Virginia, Washington D.C. and West Virginia.
As for how the company started, L.J.’s grandson, and company vice president Mick Hughes said, “Our grandfather, who was a driller for the Hoffman Brothers Drilling Co. in the early 1920’s, was out-producing most of the 50 or so core drillers they employed. As the story goes, he asked Mr. Hoffman for a raise and was turned down. So he promptly quit and purchased two steam powered core drills and went out on his own.”
After the company began and the family relocated to West Virginia, L.J.’s children had no intention of going into the drilling business. But as Mick said, “It happened!” The same can be said for the current owners. After all had graduated from college, they too had no intention of joining the business, but again Mick said, “Here we are!”
As for Mike’s interpretation, he added, “I remember growing up every family meal seemed to be interrupted by a drilling related phone call. It was an awful intrusion on the family and it sort of ticked me off. I thought at the time I didn’t ever want to do that. But, as Mick said, here we are.”
Mike, Mick and Fletcher all worked for the company during the summers while attending school, obtaining a good knowledge of how the business functions from the ground up. They all worked in the field as drillers helpers, helped out at the shop, and did anything that needed done.
“After graduating from college we each realized through our working at the company during the summers, the family business gets into your blood,” Mike said. “I came out of college and started right in as a driller’s helper in the field. This position was one of the lowest paid in the company and, as I like to tell it, made me one of the lowest paid college graduates ever.”
It’s a good thing they learned the business as they later found out. Their father, Charles, and his brother, Robert, who both ran the company at the time, each passed away suddenly over a two-year period. These events necessitated the need for Mike, Mick and Fletcher to immediately fill the role as company leaders, one they didn’t necessarily want at the time, but were glad to fulfill.
“We each grew up learning every aspect of the business, which was the most valuable education we could have ever received,” Mike said. “It really prepared us for our roles today. With the experience we obtained, we can relate to any problem or answer any question that pops up.”
They give several reasons how business has survived over the past 80 years, but the real backbone of their success is best relayed by Fletcher.
“What have truly made L.J. Hughes & Sons so successful are its employees. We’ve had our ups and downs over the years, but through it all it’s the employees that have carried the company,” Fletcher said.
The trio is also aware very few family businesses survive past the second generation. They credit their ability to work together and strive to make things as fair as possible. They realize they don’t always agree on everything but things always work out.
Another factor that keeps them coming to work every day is found in its name, L.J. Hughes & Sons Inc.
“It’s our grandfather’s name that hangs out on our shingle and every truck we have on the road and we take a great deal of pride in that,” they all agreed.
If the past 80 years are any indication, that pride will keep this family-owned business around for generations to come.
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.