Not Business as Usual

Out with the same old. 

Businesses committed to surviving are expanding globally, tapping into the world of government contracts and seizing stimulus funds. It’s not business as usual, but a “new normal” way of generating clients that comes with a learning curve and a determination to succeed. 

“In this economy, you have to be creative. You always have to look for new opportunities,” says Mike Turner, president and CEO of Naples-based Air Technology Group. 

Regional companies that have taken one—or sometimes more than one—of these routes are replacing lost revenues and preparing for the economic rebound. 

“Surviving the economy doesn’t depend on the economy,” says Kim Lyons, owner of Fort Myers-based credit card equipment and supply company MerchantSource. “Surviving the economy depends on you.” 

These six companies are using the challenging times to sell their products and services in ways they hadn’t employed before. 

Going Global

Allyn International Services Inc. 
Fort Myers; 135 employees globally 

Services: Customs, logistics, tax management 

Doing business in: Czech Republic (regional office for Europe, Africa and the Middle East), China (regional office for Asia), Austria, Belgium, France, Germany, Mexico, Russia and Spain. “We’re definitely in places that we haven’t been in before, and without that, we certainly would be smaller than we are today,” CEO Allen R. Trevett says. “We’ve been able to acquire new clients and do different things for different clients internationally that’s helped us create stability.” 

International connection: Trevett estimates its business is 50-50 domestic and offshore. A significant presence in France has helped carry the company the past two years because the volume of project work there hasn’t dipped. “The diversity in terms of the locations and some of the clients we have has really taken some of the valleys out, or made them a lot less steep,” he says. The company is supporting projects in Russia with a new office in Moscow. It has seen an incremental growth in the past two to three years in jobs for a large U.S. company that does drilling and mining, and ships items to Russia, Africa, Australia and other remote areas. “We’re into a lot of areas that historically we haven’t been into,” Trevett says. 

Biggest challenges: Competitors haven’t pursued business in places like Moscow because they don’t want to deal with the bureaucracy, Trevett says. Allyn’s 10-year presence in the Czech Republic helped it establish a framework and foothold to move into Moscow (it also does work in cities such as Surgut and Shatura). But it wasn’t easy. “The first year we probably lost money, and we had struggles to find the right personnel,” he says. Another challenge is making one-time shipments for clients to new and remote locations, which require more research. “You just don’t open the phone book and find out who’s got the kind of rigs that can move stuff in,” he says. 

How to maintain—and grow—business: Remaining vigilant and having strong processes, procedures and accounting routines. The company can’t always have an Allyn employee on-site, but having processes in place ensures that other companies it’s working with are getting the job done well, Trevett says. 

HF Scientific Inc. 
Fort Myers; 38 employees 

Product: Instruments for water quality monitoring 

Doing business in: Worldwide, including Europe, Asia, South America, Canada, Australia and New Zealand. Revenues for 2009 appear to be flat compared with 2008. “That’s a real comfortable place to be,” says Rowan Connelly, general manager. “You look around you, and the guy to the left of you and the guy to the right of you are in bankruptcy. We’re pretty optimistic with our position.” Over the past five years, the company has had growth of 3 to 5 percent. 

International connection: The company, which is about 30 years old, works mostly with manufacturers and representatives in the United States and overseas who have exclusive contracts as well as original equipment manufacturer (OEM) accounts. “Usually we like to find somebody who can do the best job for us in a particular country and grant them an exclusivity agreement,” Connelly says. The international portion of its business has been steadily increasing, comprising 35 to 40 percent of its 2008 revenue. “Water quality has received much more focus on a global scale lately, especially with countries that are becoming industrialized at an accelerated rate,” he says. The company is doing more work in India, China and South Korea. It also is considering using different applications for existing products that the country needs, which Connelly says could boost sales around the world. 

Biggest challenges: Lack of regulation. Compliance is easy with countries that write their own rules or laws governing the quality standards that municipalities must meet, Connelly says. South Korea, for example, adopted regulations close to EPA standards. When that’s not the case, the key is to tap into the “new regime of environmentalism going on in those countries where people are finally waking up and saying, ‘All of this capitalism and the money we’re seeing is fantastic, but what price are we paying?’” 

How to win business: Find a partner rooted in the market, Connelly says. The company attends trade shows, which could mean investments from $10,000 to $100,000. “That’s where the big players are fishing for new products to distribute, fishing for new companies in a larger scale to be acquired,” says Connelly. For example, he went in May to a show in Germany that was focused on chemical engineering, environmental protection and biotechnology. “It can be a bit of a shopping mall for new products, new distribution channels, new partners and sometimes even companies themselves.” 

Gaining Government Work

Air Technology Group 
Naples; about 25 employees 

Products and services: Air Technology Inc. supplies parts; Air Technology Engines provides repair work for helicopter engines and components. 

Doing business with: Federal, state and local governments. It has multiyear contracts reaching millions of dollars to repair engines and provide parts. Air Technology Group, which was founded in 1974 and moved to Naples in 1991, also has work as a subcontractor. Non-government clients use helicopters for activities ranging from agricultural spraying to lifting equipment to logging. 

Government connection: About 70 percent of its revenue comes from government contracts, a figure that’s been increasing annually. As a result, the company plans to hire two technicians this year. “The government work is repeatable, long-term and as long as there’s good performance, it grows,” CEO Mike Turner says. The company needs the work as business from smaller operators and airlines dries up because they can’t get financing to purchase helicopters and parts, he says. 

Biggest challenges: Waiting for a contract and maneuvering through the bidding process. “We have followed contracts in the past that went three, four, five years before it became a contract. It takes patience, it takes time,” Turner says. “[There’s] a lot of paperwork, a lot of regulations, but the rewards are there because it’s long-term, multiyear and repeatable.” 

How to win contracts: Turner emphasizes the importance of personal contact. “Even with the best service, you still need the relationship with people,” he says. “After 10 years [of receiving government contracts], there are still people that I am trying to meet personally. It’s not easy.” 

MerchantSource 
Fort Myers; two employees 

Product: Credit-card equipment and supplies 

Doing business with: Small- and medium-sized U.S. businesses, states including Iowa and cities including High Springs, Fla. 

Government connection: MerchantSource, which was founded about 15 years ago, took a hit after owner Kim Lyons moved it from Indiana to Florida six years ago. “There’s absolutely no way your business cannot take some type of an impact from that geographical move,” she says. She sought help from the Small Business Development Center at Florida Gulf Coast University and learned about opportunities, including government contracts. “Putting your name out there and making your business more viable and accessible to government contracts can ultimately make you or break you,” she says. MerchantSource’s clients include 167 farmers in Iowa who use wireless technology to process debit, credit and EBT (electronic benefit transfer) cards. That comprises about 75 percent of MerchantSource’s partnership with Colorado-based Total Merchant Services. Its revenue has tripled since the move to Fort Myers. 

Biggest challenges: “It’s not easy trying to work with government entities,” Lyons says. “If this is a venue that you wish to approach as a business owner, you have to have patience, you have to have accuracy and you have to absolutely know your product and service—what you can and cannot do.” 

How to win contracts: Be willing to provide more, although it might feel as though you are pushing the envelope, Lyons says. Once she started a relationship with the state of Iowa, Lyons realized that other state departments used different equipment and printer paper. “If you already have a contract in place, it’s easier [for them] to negotiate with you than to do another request for proposal,” she says. “We said, ‘By the way, there is other related equipment and technology that correlates in the same category that we provide.’” The state agreed to amend the agreement to open it up to other state departments, and the Iowa work accounts for about 25 percent of that side of her business. 

Stimulating the Economy

Gartner Inc. 
Stamford, Conn.; more than 4,000 associates, with 346 in its Fort Myers offices 

Services: Information technology research and advisory services 

Type of funds: Gartner was the first recipient, in late April, of funding from a $25 million incentive program from the Lee County Office of Economic Development. The $1.85 million in grant money includes $800,000 in Qualified Tax Incentive from the state, which provides 80 percent, and the county. The remaining $1.05 million consists of $700,000 from the state and $350,000 from the county. The Lee County EDO estimates the local economic impact will total $134.2 million over five years. Gartner’s Fort Myers office, which is its third-largest location, was established in 1998. 

Why it’s needed: The stimulus money will allow Gartner to add 200 new jobs over the next five years and start construction in 2010 on a $13.5 million, 70,000-square-foot, class-A office building (depending on economic conditions, according to a spokesman). “We can help [clients] when they’re growing and we can help when they’re trying to cut back. In tougher times those guys still need to determine what their strategy needs to be to survive,” says Chris Thomas, Gartner’s vice president of sales in Fort Myers. Most of the new jobs will be in sales, with commission-based salaries starting around $60,000 and reaching well into the six figures. The sales team in Fort Myers targets small- and medium-sized businesses, pursuing client leads typically by phone or e-mail. Fort Myers also is home to a client services group and finance group. 

Why it could help local folks: Thomas estimates that 65 percent to 70 percent of new hires last year were from the region. He’s hired people from all backgrounds, including construction, catering and the real estate and mortgage industries, and with all levels of experience. Thomas says he seeks candidates with drive, confidence and competitiveness. “There are a lot of places we could invest and we could grow,” he says. “It’s great to get the support locally to maintain our office here, and not just maintain it, but expand it.” 

Storm Smart Industries 
Fort Myers; about 120 employees 

Product: Hurricane protection screens, shutters, doors and windows. Clients include small franchise hardware stores, homeowners, garage door, aluminum and window installation businesses and other regional hurricane protection companies in eight Southeast states as well as Mexico, the Caribbean islands and Guam. 

Type of funds: Federal stimulus grant of $71,500 through the Southwest Florida Workforce Development Board, financed by the American Recovery and Reinvestment Act of 2009 

Why it’s needed: The company, which was founded in 1996 and is the state’s largest manufacturer of products to protect against hurricanes, wanted to train its workers on the concept of “lean manufacturing,” which implements processes to eliminate waste, resulting in improved quality and reduced production time and cost. The funds will pay to train about half its workforce. “It would be difficult to present this level of education to our employees without this funding because it’s fairly expensive,” says John McEnroe, business development director. The company’s objective is to increase its productivity, especially as it looks to introduce a new solar shade that is expected to substantially increase its business. “It’s about job creation and keeping manufacturing here locally,” says Trent Dunn, director of marketing. “Once we get through this grant, we anticipate increased volume and productivity. That will allow us to bring more people on.” 

What it took to get it: Time-wise, about a month, McEnroe says. He learned about the opportunity from the Southwest Regional Manufacturers Association. The grant application included answering questions about the company, its products and its use of the funds. “Quite honestly, it is a process,” McEnroe says. “Like any government grant program, there are a lot of hoops you have to jump through. You’ve got to lay out the curriculum and all the class work and line up the instructors.” The money is available one year from the date of being awarded. The company will be reimbursed for training based upon employees’ satisfactory completion of the course. “It’s a process, but it’s well worth it,” McEnroe says.