Working
Harder
by
Bridget McCrea
Three minority-owned companies plow through the tough times
and look forward to national recovery.
SALES
ARE DOWN ALL OVER AND THE drought hasn't escaped Tampa Bay's
minority-owned businesses. Sun State International LLC.is
working harder than ever to sell its big trucks to area
businesses; Electric Machinery Enterprises Inc. faces stiff
competition on domestic electrical projects; and Agora Leather
Products' Fortune 500 customers have pulled back on spending,
leaving company sales stagnant.
 |
| As
owner of Sun State International Trucks LLC, Oscar Horton
says his customers only want good trucks. It doesnšt
matter that the govern-ment rates his enterprise minority-owned. |
But
the slowdown hasn't kept these business people from pressing
on, grabbing more market share even if it means going
overseas to get it and keeping their employees, well,
employed.
Two
of the three business owners have been through the recession
drill multiple times before .All agree that the recent business
climate has forced them to work smarter, better and faster.
They also all say that being minority-owned neither helps
nor hampers their business success or failures. Here are
their stories:
Rebuilding
the Ranks Oscar Horton has a big problem. The bulk of his
business is big truck sales, and customers aren't buying
right now. Capital expenditures have been down for nearly
two years now, and Sun State International Trucks, LLC's
numbers prove it.
The
Tampa-based company has watched sales spiral downward since
2000, when it posted a record $46 million in revenues. The
following year, sales fell to $43 million and this year
Horton, company president, is hoping for about $38.9 million.
With
locations in Tampa and Sarasota, Sun State's 140 full-time
employees sell and service International trucks, mainly
medium-duty vehicles like delivery trucks and school buses
that fetch $80,000 to $100,000 each.
This
isn't the first time Horton has faced a major business challenge.
Two years ago, after working for International for 25 years,
he bought an 18- year-old franchise location that had been
sold back to International. Plagued by dwindling profits,
poor management decisions and low employee morale, the company
was a diamond in the rough for Horton. "I had practice at
running a business on someone else's time and money, but
was tired of traveling," says Horton. "I wanted to get out
on my own."
Raising
employee morale and getting his new acquisition on the road
to profitability were Horton's early goals, though the previous
owner didn't make either one easy to accomplish.
"We
came in, created a plan to re-capitalize the entire business
from buying new tools and parts for the shop to putting
in new light bulbs," says Horton.
Horton
also sat down with the company's 130 employees and worked
to convince them that with their help, Sun State International
would make it. It was a slow process, but one that paid
off within a few months. "We went from pretty healthy losses
to break even that year," says Horton. "We went on to make
money in the last two years."
Horton
says his position as an African-American business owner
has played a minimal role in his company's success, mainly
because his customers just want a good truck at a good price
and backed up by excellent service.
"We
haven't won or lost business because of our minority-owned
status," says Horton. "We simply provide the products that
customers want, and then help them keep their trucks on
the road."
Horton,
who hasn't laid off any employees despite faltering sales,
is bullish on the future and already seeing signs of recovery.
"Sales
are coming back in first-class and medium-duty trucks,"
says Horton, who plans to open another location in the Tampa
Bay area in the next year or so. Sun State International
will venture into the manufacturing side of the truck business
when it begins installing air conditioners in school buses.
For
Better or Worse
Thirty-one years at the helm of Electric Machinery Enterprises
Inc. has taught Jaime Jurado a thing or two about surviving
economic downturns. He's learned that when business is good,
the executive staff should be rewarded handsomely. But when
business is down, keep those bonuses at bay and offer job
security instead.
"Everyone
at Electric Machinery, including myself, works for very
fair wages. During very good years, we all get large bonuses,"
says Jurado, president and CEO of the Tampa-based electrical
subcontractor. "We've been through a number of recessions,
but never had to lay off management. In fact, there are
20 of us who have been together for 30 years."
So
while Electric Machinery's full-time, hourly staff fluctuates
from 400 to 600 people sometimes reaching as high as 900
its core remains intact.
Founded
by Jurado's father-in-law, James V. Leto, in 1930, Electric
Machinery Enterprises started out as an electrical motor
rewind company. After a brief shutdown for the war effort,
the company reopened and in the 1950s expanded its focus
into electrical subcontracting. Jurado joined the firm in
1954 and moved into his current role in 1971.
Electric
Machinery Enterprises, which also owns EME Modular Structures
Inc., of Haines City, handles a wide variety of electrical
construction projects, from single-family homes to Tampa's
TECO Plaza. The company works primarily in Florida, but
has also completed a number of projects worldwide.
Electrical
Machinery Enterprises completed about $72 million in those
projects in 2000. Last year that number dropped to $63 million.
For 2002, Jurado expects $50 million and attributes the
slide not only to the economy, but also to the fact that
large construction projects can often take years to develop.
"Most
of our volume comes from construction, some of it from overseas,"
says Jurado. "Those overseas jobs can take two to three
years to develop, and you never know what year they're going
to hit you."
As
for Electrical Machinery Enterprises' position as a minority-owned
enterprise, Jurado says it can sometimes help the company
win bids that contractors or construction managers might
otherwise want to shop around for a lower price. Other than
that, he says "being the low, reputable bidder" is the best
way to win contracts and bids.
The
strategy appears to be working. Right now the company is
finishing up work on the Orlando Convention Center and has
recently worked with the Moffitt Cancer Center, St. Joseph's
Hospital and the Tampa Marriott.
"We're
solid, so when the industry turns around we'll be ready
to go," says Jurado. "The future looks very bright for us,
especially when it comes to our overseas work."
Sewing
the Seeds
Agora Leather Products didn't lose any customers to the
recession, but it did watch most of them cut back on their
spending. With customers like FEDEX, bar coding manufacturer
Symbol Technologies and several Fortune 500 firms, the St.
Petersburg firm watched it sales flourish during the economic
boom, topping out at $11.5 million in 2000.
Last
year told a different story at Agora and 2002 doesn't look
much better. Agora, which designs and manufacturers sewn
and fabricated custom cases, stock cases and components,
posted $9.5 million in sales last year and may top that
number this year, depending on how the rest of the year
goes.
"The
economy really slowed everyone down, including all of our
major customers," says Subash A. Davé, president of the
200-employee firm. "We felt it pretty hard because many
of our customers are in the telecommunications business,
and they all dropped off."
To
deal with the changing business climate, Davé relies heavily
on automation of processes and cross training of employees
two strategies that he says have helped the company stay
agile, despite the sales drops. "We're always looking for
ways to do things more efficiently," says Davé. "Every year
we invest more money into machines, computer and networking."
Born
in India, Davé came to the U.S. when he was 21. Armed with
a bachelor's degree in mechanical engineering, he earned
his masters degree in engineering and worked for a firm
that made products similar to Agora's. When the opportunity
came to buy the assets of the New Jersey firm, Davé grabbed
it and opened his own firm.
With
the help of a Small Business Administration loan and assistance
from the city of St. Petersburg, he set up shop there in
1986. He hired a dozen employees, and racked up about $400,000
in sales that first year.
During
his 16 years as a business owner, Davé says he's never fixated
on Agora's minority-owned status, and doesn't see it as
a competitive advantage or disadvantage.
"We're
quality, global manufacturers of U.S.-made products, plain
and simple," says Davé. "The fact that we're minority-owned
does make us unique, but it hasn't affected our business
much."
Looking
ahead, Davé predicts more company growth as the nation's
economy eases out of its doldrums and companies start spending
money again. He prefers slow, manageable growth to the rapid
climbs his company saw in the late-1990s, and says staying
flexible and nimble will help Agora get there.
"We'd
like to see a steady pace that we can live with that's
number one," says Davé. "We have an excellent group of topnotch
folks here and we plan to capitalize as we go forward."
