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Upshur County’s Atlas Supply Company owner, KJ Woody, lives vacuum mogul James Dyson’s adage, “Business is constantly changing. Business is constantly evolving.” Woody, who has degrees in engineering and business, started his entrepreneurship career by owning a collision parts company.
The business grew quickly and was doing well, however through the work he was doing with collision parts, he saw a need in the chemical supply industry and was ready to evolve his company to meet that need. Woody knew this evolution would take capital to be successful. Having a good relationship with his local bank he didn’t anticipate any issues getting additional funds to evolve his business. He quickly found out that lending environment was changing. His company was viewed more as a start-up instead of an established business looking to evolve.
Woody reached out to Stephen Foster, the Executive Director of the Upshur County Development Authority for advice. Foster referred Woody to Robert Hinton with the Small Business Development Center, a resource partner of the SBA. Through counseling Woody received from the SBDC, he was connected with Tim James from First Microloan of West Virginia to discuss SBA’s microloan program.
James made the microloan process easy, taking time to walk Woody through everything and ensured that he understood it. However, Woody says the best part was… “I didn’t even have to leave my office. For a very busy small business there is value in that - I promise.”
James noted, “The microloan process requires a lot of information, but Woody was on top of it and had everything I asked for.”
Woody used the funds from the microloan as working capital and to increase his inventory. Receiving the loan allowed him to bring on another manufacturer, which is now used as the company’s primary supplier. The microloan also enabled the company to buy products in bulk and package the merchandise to the customer’s needs and requirements.
Now employing up to seven employees, Woody is evolving Atlas Supply Company once more to carry a full line of oil & gas products; although, he’ll continue the chemical supply operations. When asked if he would recommend the SBA microloan to others in similar situations, he says, “Absolutely! The programs and services being offered by the SBA are what keeps small businesses alive and operating.”
The mission of the SBA is to aid, counsel, assist and promote the interests of small businesses by providing financial, procurement and business development assistance and advocating on their behalf within the government. All SBA programs are extended to the public on a non-discriminatory basis. This article does not constitute or imply an endorsement by SBA of any opinions, products or services of any private individual or entity.
Midwestern Mechanical, Inc. is a plumbing, heating, HVAC and fire protection contracting firm with a reputation for providing quality work design and service in the region. The work performed includes new work, additions, alterations, maintenance and repairs. Midwestern Mechanical has offices in Sioux Falls and Rapid City in South Dakota, and Sioux City and Spencer in Iowa. In 1983 at the age of 23, Dwayne Klarenbeek established the business in Sioux Falls and has successfully grown the operation over the past 29 years. Throughout the years, the business has expanded from a start-up two-man shop to the current 125 employee operation it is today. Many of its employees have been with the company since its inception. Expansion began in 1998 whenDwayne opened the location in Sioux City. The business expanded again in 2009 to Spencer and then in 2010 a fourth location was opened in Rapid City. These expansions were made possible through guaranteed loans with the U.S. Small Business Administration. In 2012, Dwayne turned to Dakota BUSINESS Finance to assist him with obtaining an SBA 504 loan to refinance his existing building in Sioux Falls which was completed in 2008. While sales have steadily increased to a level of approximately $20 million per year, competition and the cost of materials have also continued to increase. In response to adversity and the changing economic climate, Dwayne implemented several significant changes to address the issues. Midwestern Mechanical has reportedly dramatically changed its focus and direction and now focuses on margins, profitability, efficiencies and relationship building. Dwayne also shows personal involvement in the day-to-day operations of the business. Monthly meetings are held with the foreman to discuss quality and performance issues such as job layout, manpower scheduling, material ordering, quality control and safety issues. These brainstorming sessions often include the owners and project managers. Dwayne has also started making regular brand and jobsite visits which have shown to boost employee morale and improve quality and efficiency. In addition to being an experienced businessman and successful entrepreneur, Dwayne understands the importance of community involvement as well as continued improved and innovative business ideas. Midwestern Mechanical is a member of the South Dakota Association of Plumbing – Heating – Cooling Contractors, Inc., which Dwayne has said has helped him develop important relationships with other contractors and supplies. He also supports the local Chambers of Commerce in the cities where his businesses are located. Dwayne was named the South Dakota Small Business Person of the Year for 2013.
What is this female, white-collar executive doing running an electrical contracting business in Omaha? Putting a valuable reputation built from 38 years of hard work serving neighbors, architects and builders in the area together with cutting-edge ideas in efficiency swiped from the button-down corporate world, that’s what.
And the result for D&J Electric?
“We punch above our weight class when it comes to large jobs,” agreed owner and operator Lori Buchanan.
'Does it feel right in our heads and our hearts?'
When Lori and her husband Jay searched a year ago for a small business to purchase, they discovered this small company tucked in a neighborhood southwest of 60th and L. Didn’t matter that they were a little out of the way; continual referrals from contractors and business owners familiar with the work of their skilled electricians filled D&J Electric’s schedule with remodel and restoration jobs, from multi-story office buildings, warehouses and restaurants to retail space and apartments.
Quite a bit to step into for Lori, a corporate human relations specialist, who left a leadership position with Mutual of Omaha in employee engagement and talent management for the challenge of running a small business. Jay left his job as director of global supply chain and logistics for Nebraska Furniture Mart to join her.
“Jay and I always have enjoyed talking about businesses, thinking about business and reading about business,” Buchanan said. “As we looked around for a business to buy, we sought one with a sustainable pipeline of work, asking ourselves, ‘are they in a good place, are they making money?’”
When the couple checked out D&J Electric, they found the company fit another of their personal criteria: “Does it feel right in our heads and our hearts? Does it feel like the business would be interesting and fun? You have to go a little bit on your gut instinct. And D&J had a healthy company culture, one certainly built by the owners but also by their long-term employees, too. This company has deep talent with tremendous capabilities.
Turning to the SBA to guarantee the deal
With D&J Electric’s owners ready to sell, Lori and Jay met with Omaha State Bank to lay the groundwork for a deal involving the purchase of the business’ three buildings, equipment, lift truck–and the considerable worth of the future cash flow the business could expect to generate. Then the deal hit a snag.
While the two were attracted to Omaha State Bank’s strong reputation and focus on investment in the local community’s small businesses, they were disappointed to learn the purchase would be held up temporarily as Omaha State Bank completed its merger with Centennial Bank, another locally-focused institution and the SBA’s Nebraska Small Lender of the Year for 2010, to form Core Bank. With the entire management team at Core Bank backing the purchase, all the way up to the bank’s CEO and president, they did suggest restructuring the deal under an SBA guarantee to manage around the banks’ merger activities.
Jay attended an SBA loan presentation seminar in Elkhorn to learn about the application process, and “put things in perspective.”
“We’re not a wholesaler, retailer or manufacturer, we’re in the service industry, so we didn’t have a lot of asset collateral,” he said.
“We negotiated hard on the property price,” Lori added.
Patience paid off, as the couple was approved for a 7(a) loan in August 2013 to purchase the business.
Common name at sites all over downtown Omaha
“We’re looking to be the “go-to” mid-tier contractor in the area,” Lori said. And the immediate future looks bright; in 2013, D&J Electric will report its biggest annual revenue in company history this year and recently brought five new employees on board, bringing the staff up to 40.
The company also specializes in upgrading electrical service for new equipment, often requiring advanced tech skills to improve the electrical service capacity for an entire building or that serve a single piece of equipment. They also do the brainy stuff for their clients, including job cost analysis and turning out detailed electrical drawings for design and build services.
D&J Electric is a common name at construction sites all over downtown Omaha; the biggest job for the company is found at the former Northwestern Bell Building, a multi-million job at 19th and Dodge converting the long-vacant 12-story, 380,000 square foot structure into modern, must-have apartments. Plans for the project, dubbed “The Wire,” for the 60-year old building’s history as a regional telephone headquarters, also call for commercial retail outlets on its first floor.
Then there’s similar electrical renovation work the company is doing for the four-story Fairbanks Building, the former Antiquarium, on Jackson right next to the Old Market, and a million-plus job on a renovation for a new apartment complex at 13th and Jones nearby. Add up work the company does with retail, office and large-scale apartment complexes, fast food and strip mall developers; like the “four retail stores” at the new Nebraska Crossing mall in Gretna. These are examples of our team’s deep “sense of purpose, intense focus, and performance that our customers have come to expect from D & J Electric” Jay said.
Message to their team: 'we have your back'
For D&J Electric, according to Lori, it’s the relationship the new owners have with their employees and clients which matters most of all.
“We don’t have the experience that our employees have in performing this specialized work,” Lori said, “so we do everything we can to support them so they are successful, which, in turn, will pay dividends for our client.”
Jay agreed: “Our message to our team is that “we have your back, and we support them.”
Upon taking over, they kept on the former owner as a key employee, depending on his years of experience deciding which contracts to take and which to take a pass; moreover, he provides much-needed and trusted continuity on current and future electrical contract jobs.
Then the couple met with each employee to discuss the core values and direction of the company. “Most businesses struggle without real buy-in from the employees,” Jay explained.
“We wanted to understand our employees’ capabilities and matching them with the jobs that fit,” Lori said. “There’s a real value in cross training and rounding out this talented team, because our future growth is based on the knowledge, skills and experience of our employees.”
That’s not a commitment they take lightly.
Take those five new employees. Three of them are first-year apprentices who are required to begin the educational process to become licensed electricians, and as long as those new hires keep their attendance and grades on track, the company will support these tuition expenses. Wellness and employee assistance plans are next.
There’s also a plan to put the seasoned employees in leadership positions on jobs to mentor the apprentices, giving the journeymen “ownership on a project, and real sense of challenge and responsibility,” Lori added. But there can be a problem with relying on a few key people.
“When it comes to putting people on a job, we often get ‘oh, put so-and-so on that job, he’s great at it,” she said. “That’s great, because that shows a lot of pride in the work to be the go-to expert. But we need those guys to be mentors, to bring along the whole team to learn that work, too, because we’ll need the depth. People can’t be all places at all times. If we are stronger all around, we’ll deepen our bench strength, improve our capabilities and performance. We believe the work at cross training will drive the sense of teamwork. We expect this to prove itself through the eyes of our clients and partners.”
Lori and Jay figure if they build a sense of teamwork, a culture of cross training, and bring their industry experience to guide more efficient ways of performing the company’s already strong reputation for quality work, D&J Electric will become not only a preferred employer for talented electricians in the area, but continue to improve its reputation as a high performance, quality driven organization.
After all, that reputation was a big part of the value of the business in the first place.
“At the end of the day our biggest concern is our reputation,” Jay explained. “If we’re going to have sustainable business model, you can’t live off it, you have to improve it while building that deep trust.”