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Small Business Owner Receives 7(a) Loan for Start-up Capital, Starts Exporting
Did you ever wonder while sitting on an airliner at a boarding gate how the lights and air conditioning/heating system worked without those noisy jet engines running? Well, you can thank a small business located in Morgantown West Virginia that you have light to read your paper and are able to sit comfortably in a temperature-controlled environment.
FCX Systems, Inc. designs, manufactures and sells solid-state frequency converters for commercial and military aviation, shipping, utility, and electric train industries. What in the world is a frequency converter, you may wonder.
“It’s basically a unit that takes AC power, converts it to DC, then reconverts it back to AC power that is acceptable to equipment with unique power requirements,” said Don Gallion, Jr., president and CEO of FCX.
Gallion founded FCX Systems, Inc. in 1987 along with four other individuals, and has seen the company grow from seven employees then to over 90 now. But it wasn’t without occasional struggles.
“When we started out, we worked in shifts,” stated Gallion. “Not because we had lots of orders to fill, but due to the fact we had only one working computer, which we purchased with just about every cent we had.”
Since they were considered a “start-up” business with little assets and equity, they found that financing was another obstacle they needed to hurdle. While making the rounds to various area lenders looking for funding, it was suggested that they try the U.S. Small Business Administration’s for a 7(a) loan.
“The experience really wasn’t as bad as we first thought,” adds Gallion. “It was initially a little time consuming, but it eventually worked out.”
“The SBA loan we received made it possible for FCX to be where we are today,” said Gallion. “If it wasn’t for that initial loan, we wouldn’t be in business.”
In fact, FCX has turned to the SBA on several different occasions during the different stages of their growth. “It’s really a pretty easy process now,” added Gallion.
FCX recently moved to an ultra-modern facility just on the outskirts of Morgantown. The facility offers room for expansion and development into other aviation-related areas. In fact, FCX products can be found powering everything from the New York Subway System to the ultra sophisticated military F22 aircraft.
Not only does FCX deal with commercial and military sales, they are also big in the International market. They actually stumbled into it.
“As we marketed ourselves, we found that even though we designed and developed a niche product that we believed was the best solid state converter going, it was hard to convince the commercial aircraft industry that we would be around to service our product” said Gallion.
“We were contacted by representatives from the Chinese aviation market that had heard about our product,” said Gallion. “We were just starting out and wasn’t real sure we could afford the plane ticket to China to meet with them.”
They did scrape enough together, made the trip, and began the process that opened what is now one of their largest markets. Gallion has made numerous trips abroad and developed ties that now include 56 countries.
Gallion has been so successful in developing the exporting market that he was named SBA’s Exporter of the Year twice, received West Virginia’s Governor’s Export Award and the President’s “E” Award for Excellence in Exporting. He also serves as the president of the West Virginia District Export Council and as chairman of National District Export Council. He also finds time to serve on numerous boards in Monongalia County and in the Morgantown area. And, just because he has a few extra minutes to spare between his trips abroad, finds time to teach a class on International Management at West Virginia University that is geared for both students and small business owners.
“Exporting has grown tremendously the past several years,” said Gallion. “In fact, West Virginia as a state is ahead of the national average when it comes to exporting.”
It’s really easy to see why that statement is true. Gallion tirelessly and unselfishly advocates for West Virginia small business. He’s been the feature speaker at several business conferences and workshops on the virtues and opportunities exporting offers. He continues to be a role model for fledgling West Virginia companies and offers innovative encouragement on their products and services on ways to expand into the exporting arena.
For more information on the programs and services offered by the SBA, SBDC or SCORE, contact the West Virginia District Office at 304-623-5631 or via email at wvinfo@sba.gov, or visit their web site at www.sba.gov.
All SBA programs are extended to the public on a non-discriminatory basis.
SBDC Helps Small Business Owner Through Business Plan, Gain Access to 7(a) Loan
Edward “Beau” Necco is making a significant difference in the lives of hundreds children in Kentucky and Ohio, and soon, in West Virginia. And it all began with a U.S. Small Business Administration loan packaged by the Marshall University Small Business Development Center.
Beau with longtime friend and business partner, Stephen Mullins, operate Necco, a therapeutic foster care company that provides alternatives to detention services for children who are troubled.
It’s not as though Beau jumped into the business cold. His parents have been involved in the treatment of children for several years. His father, Dr. Edward Necco, began working with mentally and emotionally disturbed youth thirty-eight years ago and served as the coordinator of the Behavioral Disorders Program at Marshall University from 1972 until his recent retirement. His mother, Dorothy Necco, was a schoolteacher and actually helped write the model upon which Beau patterns his business philosophy.
Child development runs in the family. In addition to his parents, his wife, Deidra, and sister, Wendy is also deeply involved in Necco.
“We’ve been around kids our whole lives, it’s what we know and do,” said Beau. “We couldn’t be doing what we now do for kids without the help the SBA and the SBDC provided us in getting started.”
“Beau contacted me right after I took the job at the Marshall SBDC about putting together a loan package,” said Edna McClain, program director at the Marshall SBDC. “We put together a SBA loan package that got him rolling.”
With headquarters in South Point, Ohio and six offices in Kentucky, Beau has seen his company grow from two employees in 1997 to over 100 full-time employees and 200 contractors today. Necco specializes in providing therapeutic foster care services, electronic monitoring and independent living opportunities for children up to age 21. The average age of their clients is 16-21.
“Every kid needs a family,” said Beau. “We try to provide a family or try to work with families with troubled youths in order to keep them out of the court system.”
“We ease kids back into the community,” Beau adds. “If you keep them out of detention centers, provide them positive recognition and re-enforcement of good values, and build on that, you’ll create a successful and productive citizen.”
Necco has an outstanding track record in Kentucky. The incarceration rate in Kentucky for youthful offenders is less than three percent and less than one percent of kids under their program get in trouble.
Being involved with a family and responding to daily rituals and routines, children are re-educated on how to act appropriately. Children who are in detention centers often return to their old habits or pick up some new ones.
The work they do not only helps reform and re-educate the children, but it also saves the state and community thousands of dollars.
“It generally costs the state about $120 a day to keep an offender in a detention center,” said Beau. “Through the therapeutic foster care system, when all is said and done, costs run around $16 a day.”
Necco has used the SBA guaranty 7(a) loan program on three occasions. They went to the SBDC for help in putting the packages together each time.
“Edna McClain really helped us out by providing tremendous support and guidance for our company,” said Beau.
“They finally got to the point where they were over the small business size standards and we couldn’t help them any longer,” adds McClain. “I finally got to the point where I could quit worrying about them. They’re good, hard working people who made it. I’m really proud of what they accomplished in a relatively short period of time.”
For more information on the programs and services offered by the SBA, SBDC or SCORE, contact the West Virginia District Office at 304-623-5631 or via email at wvinfo@sba.gov, or visit their web site at www.sba.gov.
Woman-owned Business Receives Help from SBDC for Start-up, Growth
Robin Hildebrand, president of Blue Smoke Inc. in Ansted, is in many ways a typical West Virginia small business entrepreneur but in other ways quite unique.
Born in rural West Virginia, the 12th of 14 children, Robin’s family supplemented their food supply by processing fresh fruits and vegetables grown in their garden out of necessity, not as a hobby.
“Being from a large family, we sometimes didn’t have enough food to go around,” said Robin. “Raising a vegetable garden was just a way of life with each and every family member spending time working the garden and canning.”
Robin took the qualities and skills that she learned from gardening; hard work, perseverance, creativity, and enthusiasm to create Blue Smoke, Inc., a woman-owned small business that has grown by leaps and bounds, receiving state and national recognition.
Robin started the company in 1993 as a sole proprietorship out of a need to find a job where she could work at home and still care for her family. Drawing on the gardening and canning experience she obtained while growing up, she began making salsa for friends and co-workers from the basement of her home.
“Everyone liked the salsa and said I should be selling it, not giving it away as gifts,” said Robin.
“I really didn’t know much about starting and running a business, but I was willing to learn,” she continued. She made a few calls and found out about Jim Epling at the Small Business Development Center located just down the road in Oak Hill.
“Jim stressed every successful business began with a business plan,” stated Robin. “I spent several hours at my kitchen table writing and perfecting that plan.”
Once the business plan was set, the next step was to transform the dirt-floored basement of her home into a FDA-approved kitchen. This challenge demonstrated Robin’s tenacity and business savvy. After a preliminary inspection of the basement, which in addition to the dirt floor had no running water or ventilation, she was told that there was no feasible way it could meet the standards and be approved. That wasn’t about to stop Robin.
“In less than a year, my basement was approved as the first FDA commercial kitchen in a residence in West Virginia,” Robin proudly stated. This is a real example of Robin’s philosophy, ‘Women think differently than men when it comes to business. If you want something done right and quickly, let a woman do it’.”
Through mostly “word-of-mouth” advertising, Robin quickly outgrew her basement kitchen. Her husband Jeff was making deliveries of Blue Smoke products to ten local stores. That number soon increased to 25 and today her products are sold in over 460 locations across 15 states.
Blue Smoke incorporated in 1995 and moved into a leased building in the city of Ansted. A retail shop was opened to capture some of the local business and attract some of the tourists on their way to Hawk’s Nest State Park and other attractions.
As demand increased, so did the need for the automation of the manufacturing process. In 2002, Robin purchased a vacant 12,000 sq. ft. building in downtown Ansted and renovated it as a manufacturing facility and retail outlet.
“No matter how many people stop in the store or wherever I go, I’m always asked ‘How did you come up with the name Blue Smoke Salsa?’ said Robin.
It all started with a hot pepper and a childhood game. Being one of the youngest siblings, Robin had to work hard at defeating her 13 brothers and sisters when they played. One family favorite was an unusual game of tag that involved chasing each other around the garden with hot peppers.
“I knew that the hottest part of a fire was the blue flame, so armed with a pepper, I would chase my brothers around yelling ‘This one’s blue smoke!’” said Robin. “What I meant to say was ‘blue fire,’ but the phrase stuck. That’s how Blue Smoke got its name.”
Locating the business in downtown Ansted was not only a good business decision, it was good for the community as a whole. Before Blue Smoke located to Ansted, there was little to no business activity and a majority of the buildings were vacant. Now other businesses are renovating and moving into buildings that were once vacant. As Blue Smoke grows, so does the business community of Ansted.
As production and revenues increased, so did the recognition. She has received numerous honors, being named as Tamarack’s (a state artisan facility) vendor of the year in 1999, Ernst & Young’s emerging entrepreneur for 2000, and most recently named as Best Salsa in the Americas by the Americas Food and Beverage Show, beating out entries from even Mexico. Most recently, Blue Smoke Inc. was named West Virginia’s 2004 Small Business of the Year by the U.S. Small Business Administration.
And she’s not stopping there. Robin has plans for national distribution of her products, an organic product line, and a specialty food line for kids, “Jus Kiddin” which will debut this month.
“You know, it just goes to show that hard work, determination and perseverance really does pay off,” concluded Robin.
For additional information about the programs and services offered by the SBA and their resource partners, contact the West Virginia District Office at 1-800-767-8052 ext. 8 or by email at wvinfo@sba.gov, or visit our web site at www.sba.gov/wv.
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