In 2014, an organization was formed. Its impact has been seen and felt throughout our state’s 100 counties. From an increasingly diverse workforce to a thriving tourism industry and a favorable business climate, the Economic Development Partnership of North Carolina is shaping the future of where we live, work, and play. Learn more at edpnc.com.
THANK YOU TO THE 2024 SPONSORS
PLATINUM SPONSOR:
Duke Energy
GOLD SPONSOR:
Economic Development Partnership of North Carolina
SILVER SPONSORS:
Small Business and Technology Development Center
Small Business Center Network
NC Bankers Association
NC Rural Center
State Employees Credit Union
BRONZE SPONSOR:
Hutch Ham Insurance
PLATINUM SPONSOR COMMENTS
Duke Energy Business Savings Store
Energy efficiency can help increase profitability, so why not improve your business using energy-efficient products? The Duke Energy Business Savings Store offers ways to help you save energy and money with instant rebates on a variety of energy-efficient products for your business.
Visit duke-energy.com/SmallBizDeal
SMALL
5
Raleigh, NC 27601
STATE
Byron Hicks
ASSOCIATE
Lisa Ruckdeschel
PUBLISHER
Ben Kinney
WRITER
Kathy
SPECIAL
Pete M. Anderson
CREATIVE
Cathy Swaney
GRAPHIC
Lauren Ellis
$1 BILLION OF TOTAL INVESTMENT INTO SMALL BUSINESSES
The NC Rural Center has proudly administered the State Small Business Credit Initiative since its establishment in 2010. Over that time, our initial investment of $34 million into loan participations has yielded $1 billion of total investment into small businesses and nonprofits in North Carolina while we’ve also supported technical assistance funding for community development financial institutions.
If you’re a small business or a lender who might be interested in working with us, contact us at ssbci@ncruralcenter.org. Learn more about our work at www.ncruralcenter.org/ssbci
SSBCI Clients: Innovation Brewing and Center for Homeownership
LETTER FROM BYRON HICKS
Executive State Director, Small Business and Technology Development Center
Dear Readers,
We are once again pleased to provide the North Carolina Small Business Handbook. This year’s edition features profiles of successful small businesses, highlights on topical areas of interest, and resources that can help small businesses navigate through business and economic changes.
Small businesses play a crucial role in driving economic growth and development especially in local communities. From job creation and innovation to community engagement, small businesses are the backbone of the state’s economy and a key reason that North Carolina has been named the “Best State for Business” by CNBC for 2022 and 2023. And in 2024 North Carolina was again in the top five states for business.
For the past 40 years the Small Business & Technology Development Center has been serving small businesses in our state with professional, no-cost advisory services.
Small businesses often must work twice as hard as Fortune 500 companies to build brand awareness, grow sales, obtain capital and remain resilient through adversity. This issue of the Small Business Handbook will highlight companies that have navigated these challenges by engaging resource providers in the state.
MARKETING & BRANDING
Marketing and branding can be an opportunity and challenge for small businesses. Without deep pockets to engage high level advertising firms, small businesses may find this task daunting. But breaking it down into two specific approaches can help. First, marketing is more than fancy commercials, tag lines or billboards. It begins with understanding your target customers. Determine where do you find them and how do you reach them. Are they other businesses in a supply chain, for example, or the end users of your product or service. An understanding of your customers’ needs, purchasing habits and willingness to buy from you determines your marketing and branding approach.
Branding is building awareness of your product or service with your potential customers. It is important to develop a brand that accurately reflects your business values and approach to meeting customer needs. Branding positions your business as top of mind for customers determining with whom they want to do business.
GROWING SALES
Growing sales is an important strategic concept for any business. Not all sales are the same. Do you want to grow sales to hit a certain sales threshold, or do want PROFITABLE sales to increase your bottom line? Is your “best” customer really your most profitable? Are you spending too much effort on unprofitable customers?
One approach to growing sales is by targeting the largest purchaser of goods and services in the world, the U.S. government. Growing your business through sales to federal, state and local governments is a strategic move that requires expertise and resources. Government contracting requires much more attention to processes, procedures and paperwork than serving most of your customers. Once the government is one of your customers, you must focus on delivery while navigating its overall requirements and payment schedules. However, done well, it can help significantly grow your business.
ACCESS TO CAPITAL
Finding capital as a small business owner is a critical part of growing and sustaining a business. This can be a challenge for a small business owner that wears numerous hats and does not have an accounting department with a finance director. It is critical for a small business owner to understand the financial statements of their business. Do the financial statements convey the same story that you tell about your business? Are changes in your financial statements easily explained and supported by economic trends, market changes or strategic decisions?
It is important to know that not all money is the same. Different providers of funds look at your business in different ways.
Bankers look at your past performance with business and personal credit. Investors look to the future opportunities of your business and attempt to determine if the projections are grounded in facts. All money to support your business is based on sound financial information, not just the goodness of hearts. Business is business and charity is charity.
RESILIENCY
Webster’s defines resiliency as “an ability to recover from or adjust easily to adversity or change.” While many small business owners are nimble and able to make decisions quickly, many are not resilient due to a variety of factors.
Many small businesses are run by the founder and may have a patriarchal structure. This may create a “do it the way it’s always been done” management approach. Also, many small businesses work on a very thin margin or pour all cash back into the business, not allowing for emergency funds. Most small businesses do not have the capacity for redundancy, so if a key employee leaves or is hurt, there is no one to step in.
All these obstacles must be overcome to have a resilient business. But small businesses are strong, and they can be resilient, sustainable, and critically important to our economy.
WE ARE HERE TO HELP
Small businesses are undeniably the life force of North Carolina’s local economies. To help firms with both startup and ongoing business operations the state has two primary statewide resources available to help. They are:
• The Small Business & Technology Development Center (SBTDC) is a statewide business advisory service of The UNC System. It has offices hosted by the 16 university campuses through which SBTDC professional staff provide in-depth business counseling and specialized services to small and mid-size companies.
The NC Community College System’s Small Business Center Network (SBCN) has offices at each of the 58 Community College campuses across the state through which they provide training and business advice to startups and small businesses.
The expertise and support of these two leading state resources for small businesses are readily accessible. Services are confidential and most are free of charge. Further information about these and other resources in North Carolina are included in the Small Business Handbook.
MAKING Cheddar
Dairy farming is expensive, from animal procurement and care to processing milk, cream and other products for market. Financial planning helped this Triangle cheesemaker rise to the top.
A A
good Jersey cow, properly registered, cost about $1,000 two decades ago. The same quality cow without papers was $600. So, Portia McKnight and her partner, Flo Hawley, bought an expensive one and eight less-expensive pasture mates. The small herd soon started grazing on 50 acres about 5 miles outside of Chapel Hill, producing milk for cheese.
McKnight and Hawley own Chapel Hill Creamery, where they make more than a dozen varieties of cheese, including ricotta, New Moon, Calvander, Thunder Mountain Swiss and Hickory Grove, which makes an excellent grilled-cheese sandwich. They’re sold at farmers markets, local restaurants and retail outlets such as Whole Foods. Distributors ship them as far as Charlotte and Atlanta.
The pair quickly learned that cheesemaking takes deep pockets. There’s equipment to purchase, fix and upgrade; staff to pay; and veterinary care to cover. It takes a lot of knowledge, too, which they gleaned from how-to workshops, internships and coursework during their first years, and a Small Business and Technology Development Center representative, who meets with them quarterly and as needed. The women, who tinkered with stovetop cheesemaking decades ago, have created a profitable business since their initial purchase. “It’s modest,” McKnight says. “Particularly this year, when we’ve had some expensive repairs and replacements to do. The thing is, if you had to buy the land today, I don’t know how you’d do it. Land would be $10,000 an acre, and if I had to do it over
again, I’d want 100 acres. It would be a couple million dollars to do this today, and young folks don’t have that kind of money. Land is priced for developing not farming. And it’s going to be catastrophic for us in the long run if land is inaccessible to farmers.”
Searching for bargains makes fiscal sense for these cheesemakers. When a nearby farm went out of business, for example, they purchased its stainless steel milking equipment. “To get it moved and installed was $35,000, and that was a very good deal for us,” McKnight says. “Product-making equipment is more than the milking equipment, for sure. We did some research, for the main cheese vat and pasteurizer, and then there’s how you heat the milk and cool it, and that piece was probably $40,000, and it was too small, so we had to replace it. But if you had to do it now, it would be well over $100,000.”
Chapel Hill Creamery’s launch was financially doable in 2001. That’s when McKnight and Hawley started marketing to farmers markets, creating income. “Farmers and restaurant owners would come to us and ask to buy 5 pounds of this or 5 pounds of that, so we were in restaurants in Chapel Hill and Durham,” McKnight says. “And the SBTDC helped us figure out social media marketing, so that’s been good.”
But the story was different in 1999, when the creamery was still a dream. “We really didn’t have enough money to start up, and if you don’t have enough money, you pay for it for years and years,” McKnight says. “We started with the smallest possible building and
had to add on very quickly. Not including the land, it probably cost $150,000 to start up. And that’s nowhere near enough if we were to do it today.”
Managing growth is as much a part of running the creamery as tending the herd, which now numbers about 20 cows, including Alara, McKnight’s favorite gal. The staff has increased, too. “One of our neighbors was our first and still works with us, and it’s been 20 years now,” McKnight says. “We had to hire someone to help milk, and we gradually added people and have a staff of eight full-time, some part-time. We have a lead cheesemaking person in addition to our herd manager. There’s a small staff helping with the outdoors and three or four in the cheesemaking part. We are a certified member of [501 (c)3 nonprofit] Orange County Living Wage.”
SBTDC showed McKnight that dairy farms are eligible for grant funds, including money for equipment to make value-added products such as cheese, yogurt and ice cream. “It’s alarming how many dairy farms have disappeared, and there’s grant money available for supporting them,” she says. U.S. Department of Agriculture’s National Agricultural Statistics Service says North Carolina dairy farmers produced about 894 million pounds of milk in 2023, valued at almost $194 million. That’s down from more than 935 million pounds and more than $200 million a decade earlier. It says financial losses over the years have pushed dairy farms to find additional income through agritourism and product diversification.
SBTDC staff members have assisted in other ways. “We had some issues finding the expertise we needed, whether in sales and marketing or bookkeeping,” McKnight says. “And the SBTDC has been helpful with that kind of support and also just setting aside time to look at our quarterly financial situation and dig into it a little bit and figure out what our strategy should be to improve and grow and to cut back expenses.”
For a while, the creamery had pigs, too, which weren’t named. A piglet costs about $100. They grow up drinking whey, a cheesemaking byproduct, and McKnight says they become “a marketable product” in about six months. “It’s not my favorite part of the business to send someone away, but it’s a fact of life,” she says. The farm has stopped raising pigs, at least for the time being. “That’s part of the potential retirement program we’re looking at,” she says.
Hindsight provides perspective. “If I were to give advice to someone starting a dairy, the first thing would be to look at the disappearing infrastructure of dairy farms,” McKnight says. “As farms disappear, it affects having people who know how to work
FINANCE FINANCIAL MANAGEMENT CHECKLIST
CASH MANAGEMENT
Prepare regular cash flow forecasts
Focus on receivables collection
Prioritize who to pay first
Ask vendors for longer payment terms or partial payment
Talk to lenders about renegotiating existing loan terms
Sell unproductive assets
COSTS & PRICING
Review personnel requirements
Reduce unnecessary expenses that don’t contribute to revenue generation
Review pricing and value — don’t cut prices in panic mode
Consider renting unused space to other businesses
CONTROL INVENTORY
Review inventory levels regularly
Get rid of slow moving or obsolete inventory
Negotiate deals with suppliers when possible
on the equipment, vets who know how to deal with cows; it affects everything. The second thing is, make sure you have a financial cushion, because there are going to be unexpected glitches. It’s not a get-rich-quick scheme. We didn’t start out big enough, so we had to put extra money into it as time went by. But it’s carried us 20 years, and hopefully it will carry somebody else 20 years if we decide to step back. We have a couple of people on staff who may want to continue it.”
Meanwhile, for McKnight, it’s a good profession, serving a purpose. “It’s not just a job, that’s for sure,” she says. “It’s fun, almost all the time. Occasionally there’s an uh-oh, but life’s like that.”
CHAPEL HILL CREAMERY
Wholesale orders: orders@chapelhillcreamery.com
All other inquiries: info@chapelhillcreamery.com chapelhillcreamery www.chapelhillcreamery.com
CAPITAL
How much of your own money do you have invested in the business?
COLLATERAL
What is the fair market value of the security that you are offering to guarantee repayment of the loan?
CHARACTER
What is your track record – personal and professional – in managing finances and paying credit obligations?
CONDITIONS
What are the economic, demographic and regulatory trends that impact your business?
CAPACITY TO REPAY
Will your cash flow provide you with enough money to cover repayment of the loan?
RIDINGthe Wave
Countless cool ideas have helped a pair of former high school classmates build a business that serves tacos, swag and plenty of good vibes. But it wasn’t all freestyle. They had help along the way.
n surfer speak, shaka is the hand gesture of closed fist with thumb and pinky finger extended. It means friendship, hang loose and things are great. The color shaka blue is a tranquil aqua, what peaceful waters might look like on a paint brush. “We made that up,” says Cody Leutgens of the tint used for his business and website.
What Leutgens and business partner, Steve Christian, haven’t concocted are the waves of success that wash over their Shaka Taco locations since the first opened in Surf City in 2017. “We’re pretty mellow guys and have the fun things,” Leutgens says. “We play the music we like outside. We decorated like what we thought would be cool. You can bring your dogs and bring your kids, and the food we serve and the atmosphere we provide is fun. People come back. We have thousands of reviews, and 99% of them are positive.”
The two owners started as Topsail High School classmates. Leutgens went on to earn degrees at UNC Wilmington and Chatham University. At age 22, he started a surf school in Surf City and side gigs freelancing content for social media and websites and writing for surfing magazines. Christian taught at Pender High School.
But the pair soon took a different tact. “We put our heads together and designed something Surf City needed — a restaurant that was fresh and simple, not fried like hamburgers, which is all there was at the time,” Leutgens says. “When we were designing the menu and the theme, we kept coming back to the school idea, and we were
calling it the Surf City School House. Our wives were like, ‘Just call it Shaka Taco,’ and I took out a napkin and drew it and said, ‘There’s the logo.’”
Shaka Taco and the pair’s Surf City Surf School share a building just one block beyond the beach. “It’s so tourist heavy, so we turned the inside [of the restaurant] into a merchandise site and put all the seats outside,” Leutgens says. “So, visually it looks like a giant food truck that doesn’t move. In summer, we get about 10,000 customers a week. Funny thing is a lot of people don’t go inside, and we have to put signs up that say ‘merchandise inside.’ At some point, something is going to have to happen … there’s only so many orders you can take. In summer, we can have 70 orders in 60 seconds. And we just started Door Dash.”
Hungry customers flock to the food window for tacos, wings and Shaka nachos. “I remember the first time I met with the [Small Business and Technology Development Center], and they asked a lot of questions and secondguessed some of my ideas,” Leutgens says.
“And a year later, they were like … ‘Wait, what?’ We set an example, and we’ve had a great working relationship. It’s a multimillion-dollar company now and has to be run a certain way. It has worked well. It wasn’t so much luck as it was that we’re creative dudes, and we did what people wanted.”
Branding and marketing come easily to the duo. “We serve 2,000 people a day, and our advertising budget is $0,” Leutgens says. The guys designed T-shirts and hats for their staff. Customers asked to buy them. Now, they can purchase shirts — long sleeve, short sleeve, no sleeve. The Shaka logo has been affixed to dog bowls, coffee mugs and baby onesies. Dad hats recently were added. “I saw a guy on the beach yesterday wearing a T-shirt we made probably six years ago,” Leutgens says. “It’s the quality — super comfy, light weight.”
While customers are dining and shopping, they’re entertained by a unique mix of music. “Music is everything,” Leutgens says. “I had this one gentleman from Hampstead ask me, ‘How do you know who Sam Cooke is? I remember him from when I was 20 years old.’ I have people asking for my playlist.”
A host of other means to build and maintain Shaka Taco’s customer base have been employed, including:
• Electronic billboards: “(A company) puts a TV in our location and plays ads for local businesses, and in turn, we get to advertise with him,” Leutgens says.
• Radio: “We have an agreement with Penguin radio [WUIN 98.3 FM], where they have this online store and gift cards [to local businesses],” he says. “And depending on how many they sell, we get free radio ads.”
• Special events: “So, for September, we ramp up our Shaktoberfest,” he says. “We roll out breakfast, and for a couple months, we serve breakfast. It seems to be working.”
• Locally sourced food: “We have a fantastic relationship with the fish market,” he says. “We get tens of thousands of dollars of stuff from them a month.”
Leutgens and Christian opened a satellite Shaka Taco location at UNC Wilmington in 2022. It was the first privately owned food vendor on campus. They added a second location in Pender County that same year. “Our Hampstead location is a whole other animal,” Leutgens says. “It’s an entirely different demographic. The people live there year-round, and it’s a half-mile from [U.S.] 17, so we were upfitting a building and as time went on, it made more sense to buy into the golf course.”
The former Belvedere Country Club was reinvented as the nearly 200-acre Ironclad Golf & Beer Garden. Besides Shaka Taco,
there’s a 30,000-square-foot beer garden and pickleball courts. “We put in a coffee shop,” Leutgens says. “We put in an irrigation system and replaced the greens. On Thursday nights there’s a farmers market in the beer garden, a legit farmers market. There’s a kids zone. People hang out for hours.”
Leutgens and Christian have more than 200 employees in total. “Steve does payroll,” Leutgens says. “I don’t envy him.” You can count SBTDC has one of its helpers, too. Last summer, Leutgens and Christian in partnership with the SBTDC collaborated with UNC Wilmington’s Cameron School of Business Executive MBA program “to allow graduate students to evaluate Shaka Taco’s business and offer valuable advice to the founders,” according to a SBTDC post.
SHAKA TACO
107 N. Shore Drive, Surf City | 910.616.3118 2368 Country Club Drive, Hampstead | 910.274.9733 fresheats@shakataconc.com | ShakaTacoNC shaka_taco www.shakataconc.com
SMALL BUSINESS RESOURCES
MARKETING & BRANDING
10 BEST SOCIAL MEDIA PRACTICES
Research your customers and their online preferences
Build a presence on the right social media networks
Set goals and create a content strategy
Use analytics to audit your social media performance
Schedule your content calendar in advance
Follow the 80/20 rule – 80% of your content should be engaging, educational, or entertaining. Only 20% should be promotional.
Cross-post to different platforms, but adjust content accordingly
Practice “social listening” by scanning social media for company & product mentions
Ask your audience for feedback
Use social media as a customer service channel –70% prefer to solve issues online
Source: Hootsuite
RESOURCE: DIGITAL MARKETING GUIDE
BRAND RECOGNITION
It takes 5-7 impressions for people to remember a brand
COLOR IMPACT
Using a consistent color palette can improve brand recognition by up to 80%
CUSTOMER LOYALTY
KEY STATS BRANDING
89% of consumers stay loyal to brands that share their values; 73% love a brand with helpful customer service
DIGITAL PRESENCE
85% of consumers use social media to research new brands
EMOTIONAL CONNECTION
About 66% of consumers feel connected to a brand when they trust it
PERSONALIZATION
73% prefer personalized shopping experiences
VISUAL APPEAL
42% of online shoppers base their opinions of a website on its overall design alone
CONTENT CREATION
Brands that blog generate 62% more leads
The SBTDC’s Digital Marketing Guide is designed to help businesses get started with digital marketing. Topics include branding and messaging, websites, email marketing, social media and crafting a digital marketing plan. It also includes worksheets and other tools to help businesses through the process. Available at sbtdc.org/resources/publications/digital-marketing-guide
ASSEMBLING the Pieces
Natural disasters, especially hurricanes, tear apart homes, businesses and lives. After an introduction to securing federal and state help, a Clayton-based contractor is rebuilding them.
lorence smashed into North Carolina in September 2018. By the time the storm, which came ashore at Wrightsville Beach as a Category 1 hurricane, dissipated, more than $24.2 billion in damage was done from South Carolina to Maine, $17 billion in North Carolina alone.
The effects of Florence’s wicked wind and raging rain lingered for months and years in some places. Homes were damaged or demolished. Many residents were left in rough financial shape. “A reason I got into this specific business is that I see the trends,” says Kyle Aulet, owner and CEO of contracting and building services company Shepherd Response. “The lines of hurricanes hitting and the severity of them is going up. There are more of them, and they are of higher impact. What I can help a little bit with is reconstruction.”
Shepherd Response is named for Aulet’s German shepherd and staff mascot, Charlie. “He’s been fired a few times for behavior,” he says. “But he always gets rehired.” The company is based in Clayton, about a 35-minute drive southeast from Research Triangle Park, and uses federal funds as a government contractor to help people affected by disasters and other circumstances remain in or return to their homes. “The majority of homeowners we serve are low to moderate income,” Aulet says. “They don’t make a lot of money, and they’re often in rural or poorer areas. And oftentimes they’re disabled or coping with a disability. We provide a service for people with the government.”
Aulet served as a Marine at Camp Lejeune from 2012 to 2018. He was an infantry and reconnaissance officer, gaining construction and operations experience, and continues to serve as a reservist. He brainstormed the idea for his company while a graduate student at UNC Chapel Hill’s Kenan-Flagler Business School in 2021. “We did a market study, and it looked like [home reconstruction] was a growing sector that wasn’t saturated, and I felt like I’d enjoy doing it,” he says. “I could use my other skills, such as calculus, and sit behind a desk or try this out. The market research was a class project that turned into a good opportunity, and I thought … we may have something here.”
When severe weather forces a government to designate a disaster area, because the extent of the emergency exceeds response or recovery capabilities without outside assistance, U.S. Department of Housing and Urban Development releases community block grants, which fund reconstruction, rapid response teams and other help. “[Shepherd Response is] in long-term disaster reconstruction for the government,” Aulet says. “This is funded by HUD, and it can be two to five years after the storm. Someone will assess the damage and see who is under insured or has low to moderate income, and
[HUD] contracts out to companies that do the construction.”
Aulet, whose company has 52 employees, one dog and satellite offices in Fort Myers, Florida, and Mobile, Alabama, also works with the state Office of Recovery and Resiliency — ReBuild NC. “They give us a contract that says, ‘Build 10 homes in these counties. Here’s the floor plan, and here’s what we’re going to pay you,” he says.
The Small Business and Technology Development Center helped Aulet learn the ins and outs of government contracting and register on sam.gov — System for Award Management — for work as a federal contractor and to receive business and nonprofit grants. “There’s a ton of information out there,” he says. “It’s like saying, ‘Here’s a library; go find a book.’ But [the SBTDC is] like navigating you through the Dewey Decimal System and telling you you’re looking for this kind of book.”
Aulet says building projects have multiple steps but one overriding goal. “The government agency will say, for instance, we’ll pay you $200,000 to build this three-bedroom, two-bath house,” he says. “Then you go out and build it and submit for reimbursement. It’s a flat rate. We build about halfway then put a bill in. Then when we’re finished, we put the other half of the bill in. The underlying mission is to help residents try to recover from an event that has negatively affected their lives. We let that drive a lot of decisions that we make.”
Shepherd Response’s work has touched homes in Bertie, Bladen, Columbus, Cumberland, Duplin, Edgecombe, Pamlico, Robeson and Sampson counties. Aulet says Florence-related devastation remains in eastern North Carolina, but there’s less of it every day. He hopes to eventually expand his business to include building affordable housing for people who need help for reasons other than those instigated by Mother Nature. “That would be a goal, to put in housing for people where it isn’t disaster-related,” he says.
SHEPHERD RESPONSE
401 E. Main St., Clayton office@shepherd-response.com
984.233.9583
ShepherdResponse
www.shepherd-response.com
SMALL BUSINESS RESOURCES
SMALL RESOURCES
GROWING SALES: GOVERNMENT CONTRACTING
BENEFITS OF GOVERNMENT CONTRACTING
The U.S. government is the largest customer in the world. It buys all types of products and services — in both large and small quantities — and it’s required by law to consider buying from small businesses.
Governments want to buy from small businesses for several reasons, including:
To ensure that large businesses don’t “muscle out” small businesses
To gain access to the new ideas that small businesses provide
To support small businesses as engines of economic development and job creation
To offer opportunities to disadvantaged socio-economic groups
WHAT MAKES A SUCCESSFUL CONTRACTOR?
The government prefers to work with established, reliable businesses. Do you have a track record of delivering quality goods and services on time and within budget?
Not only can it take a long time to win your first government contract, but it can also take a significant amount of money. Some businesses spend between $80,000 and $130,000 to earn their first contract.
Also, it could take up to two years to start making a return on your investment. You’ll need to have enough cash flow to sustain your business.
Being e-commerce savvy is very important in government contracting. For example, if you want to work with the Department of Defense, you must be able to invoice and receive payments electronically.
RESOURCE: The SBTDC’s government contracting counselors educate businesses on how to obtain contracts by providing comprehensive assistance in selling products and services to local, state and federal government agencies. See www.sbtdc.org/services/government-contracting for details.
Source: 2023 Small Business Credit Survey, Federal Reserve
ONWARDand Upward
When tragedy struck a business in western North Carolina, family members were forced to climb hills. But they made it to the top, thanks to internal and external help.
M M
urphy, a 2.6-square-mile town of about 1,600 people on the Hiwassee River, is Cherokee County’s seat.
Surrounded by the Blue Ridge Mountains, it has been home to bear and elk for centuries. More recently, it has welcomed innovation-oriented companies. Moog Components Group, which designs advanced motion control products for aerospace customers, invested $2.3 million to expand its local factory in 2020. SnapOn Tools has a factory here, too, and Siemens Government Technologies built a $2.4 million solar array for the Eastern Band of Cherokee Indians.
Aegis Power Systems also calls Murphy home. Founded in 1995, it makes switch mode power supplies and power converters for several markets, including defense, industry, aviation, electric vehicle and telecommunications, and is a leading supplier of AC-DC and DC-DC power supplies for custom and special applications. It had 14 employees and a 15,000-square-foot complex of engineering labs, manufacturing and production floor, and administration offices nearly a decade ago.
Life was good at Aegis until it wasn’t. A past medical condition resurfaced in its founder, Bill Dockery, almost nine years ago, and necessary treatment would take him from his company. “Here’s a brilliant engineer, then suddenly … ,” says his daughter Arlissa Vaughn. At the time, she was living on the other side of North Carolina in her husband’s hometown — New Bern — happy in her marketing career. They had a 6-month-old baby girl and a 3-year-old daughter.
But Dockery’s situation forced the family to make a choice: sell the company or let Vaughn take the helm. She and her husband, Alan, discussed the options. They chose to move to Murphy. She would work at Aegis and Alan would be a stay-at-home dad. “We did a complete role reversal,” she says.
If Aegis was going to continue, Vaughn needed professional instruction to make it work. So, a family business consultant specializing in second-generation changes was hired to get them started. Following the consultant’s advice, she went back to school. She pursued an executive MBA at the University of Michigan, spending one weekend monthly and one month annually in Ann Arbor. “It had a pull on my time commitment, and again my husband really supported me to make that happen,” she says. “I can’t say enough about having a support background.”
But a formal education was just the start. “You can’t just bring in a new person to run a small business,” Vaughn says. “There was some deep effort toward gaining trust [from the employees] and showing I was committed to the business’s success and not my own success. They didn’t know me that well. Now, I just have to give so much thanks to the team.”
Aegis recently had separated from its Boston-based parent company when Vaughn arrived and was developing its own sales pipeline and marketing plan along with developing new technology. “I had to push us to go in a new technical direction, and we had to really find what were the new areas for power conversion,” she says. “So, we had to hire some additional engineers and sent some of our current employees for various training and growth, and we took on more challenging stuff as a result.”
Vaughn had to learn the language of complex power supply systems, too. It has a specialized dictionary with entries such as VME backplanes and SWaP optimization and 12C chips with ethernet. You don’t casually start a conversation about MIL-STD-810 supply requirements in the supermarket checkout line. “The technical side was unfamiliar, so I took electrical engineering classes at Craven Community College,” she says. “I’m very thankful for the team. They knew I didn’t fully understand everything they were designing, so I took classes, so I could understand and speak the language. There were a number of years when my husband and I were barely swimming at the edge of the water. He felt that while I may not have had every capability, I could put in the effort and find ways to make it work.”
SBTDC was one of her early supporters. “It was a mentoring and business counseling opportunity,” Vaughn says. “We weren’t aware of what they could do until we changed ownership. They guided us on some human resourses considerations as we expanded our personnel count and guided us on strategy and some related funding.”
The company has grown to 36 employees. “We grew the revenue probably three times or more in the first five years, and we’re still in a growth spurt right now,” Vaughn says. “We do the designing side not
the [maintenance, repair and operations] side,” she says. “We have long-term employees. They join for more than just the career aspect. They want this lifestyle, the freedom of this place and nature and the outdoors. There’s a lot here that you can’t get elsewhere.”
Aegis has clients nationwide. They work in a variety of markets, including military and aircraft industries; embedded technologies using microprocessors and microcontrollers; rackmount power supply units for industrial, military, communication and test equipment; shipboard power supplies for marine and amphibious vessels; and specialty products for defense systems, unmanned vehicles, mobile satellites and radar.
Vaughn’s father, a U.S. Air Force veteran, engineer and entrepreneur, passed away in April. He had a favorite saying — onward and upward. “That, subtly, is the driving motto for the team,” Vaughn says. “The big thing I’ve learned on this eight-and-a-half-year journey is you can’t do it alone. You have to have the support system at the personal level and the institutional level. If you’re not willing to get help from others, it’s going to be a harder journey. We keep moving forward with the business and ourselves. Have a positive outlook, and you can move onward and upward. It’s a place in your mind, where you can see yourself being.”
Build up cash reserves and consider a line of credit
Set up systems to routinely back up all your files
Diversify operations and income streams to help reduce the potential impact of upheaval
Anticipate trends before they happen
Document your procedures and roles
Focus on what you can control
Build resiliency by pausing regularly to evaluate what’s working, what’s not working
Stay aware and respond quickly to changing customer needs
Collaborate and learn from mistakes quickly
What is resilience?
Business resilience is the ability to recover from setbacks, adapt well to change, and keep going in the face of adversity while safeguarding people, assets and overall brand equity.
PREPARING FOR A POTENTIAL DISASTER
Establish an emergency response plan ahead of time.
Determine what and how you will communicate with employees, customers, and others.
Compile a business continuity plan to manage a business disruption.
Develop technology recovery strategies to restore hardware, applications and data in time to meet the needs of the business recovery.
The Small Business and Technology Development Center (SBTDC) is a business advisory service of the UNC System. With 16 offices across the state, business counselors help entrepreneurs make better business decisions, create and retain jobs, and improve the economy of North Carolina. The SBTDC offers specialized assistance in exporting, technology commercialization, and government contracting. For more information, visit sbtdc.org.
The N.C. Small Business Center Network, operated through the N.C. Community College System, is the largest state-supported small business assistance program, serving more than 70,000 North Carolinians each year. The 61 centers located at community colleges throughout the state are aligned with the state’s eight Prosperity Zones. Potential or current business owners can take advantage of high-quality, readily accessible assistance that includes resource and referral information for a variety of business needs; free confidential one-on-one business counseling services; and high-impact seminars and classes available.
Anne Shaw, State Director N.C. Community Colleges 910-938-6319 shawa@nccommunitycolleges.edu
Mark Hagenbuch, Deputy Director Guilford Technical Community College 984-249-1409 hagenbuchm@nccommunitycolleges.edu
828-827-6111 (Hickory)
2 SBTDC at Western Carolina University 828-227-3504 (Cullowhee) 828-251-6025 (Asheville)
3 SBTDC at UNC Charlotte 704-687-0440 (Charlotte)
4 SBTDC at Winston-Salem State University 336-750-2030 (Winston-Salem)
5 SBTDC at N.C. A&T State University 336-256-9300 (Greensboro)
6 SBTDC at UNC Chapel Hill, N.C. Central University 919-962-0389 (Chapel Hill) 919-530-7386 (Durham)
7 SBTDC at N.C. State University 919-513-1500 (Raleigh)
8 SBTDC at Fayetteville State University, UNC Pembroke 910-672-1727 (Fayetteville) 910-775-4000 (Pembroke)
9 SBTDC at UNC Wilmington 910-962-3744 (Wilmington)
10 SBTDC at East Carolina University 252-737-1385 (Greenville)
11 SBTDC at Elizabeth City State University 252-335-3247 (Elizabeth City) 252-335-3334 (Kill Devil Hills)
WEST REGION
Jill Sparks, Regional Director Asheville-Buncombe Technical Community College 828-398-7949 jillmsparks@abtech.edu
NORTHWEST REGION
Morgan Wood, Regional Director Mayland Community College 828-766-1295 mwood@mayland.edu
SOUTHWEST REGION
Renee Hode, Regional Director Central Piedmont Community College 704-290-5218 renee.hode@cpcc.edu
PIEDMONT/TRIAD REGION
Martha Larson, Regional Director Forsyth Technical Community College 336-757-3804 mlarson@forsythtech.edu
NORTH CENTRAL REGION
Suzanne Ross, Regional Director Johnston Community College 919-209-2224 smross@johnstoncc.edu
SANDHILLS REGION
Pamela Young-Jacobs, Regional Director Southeastern Community College 910-788-6419 pamela.jacobs@sccnc.edu
SOUTHEAST REGION
Jerry Coleman, Regional Director Cape Fear Community College 910-362-7469 jdcoleman338@mail.cfcc.edu
NORTHEAST REGION
Holly Staples, Regional Director College of the Albemarle 252-335-0821 x2370 holly_staples72@albemarle.edu
N.C. DEPARTMENT OF ADMINISTRATION OFFICE FOR HISTORICALLY UNDERUTILIZED BUSINESSES
The HUB Office was established to promote economic opportunities and eliminate barriers for historically underutilized businesses in state government contracting and procurement. HUB’s primary mission is to educate HUB firms and certify them to do business with the state of North Carolina.
N.C. DEPARTMENT OF AGRICULTURE & CONSUMER SERVICES
The N.C. Department of Agriculture & Consumer Services can assist business owners in planning, expanding or financing new or existing agribusiness-related industries. The Marketing Division leads the Got To Be NC campaign, which promotes North Carolina-made products across the state. The department also oversees the issuance and regulation of licenses and permits for a wide variety of industries.
919-707-3002
ncagr.gov
N.C. DEPARTMENT OF COMMERCE
The N.C. Department of Commerce is the state’s lead agency for economic, community and workforce development. NCDOC works with local, regional, national and international organizations to fulfill its mission to improve the economic well-being and quality of life for all North Carolinians. It provides local communities with grants and planning services to spur infrastructure development and economic growth and administers the state’s economic incentive programs.
919-814-4600
nccommerce.com
N.C. DEPARTMENT OF LABOR
The N.C. Department of Labor is charged with promoting the health, safety and general well-being of more than 4 million workers in the state. The department administers the state’s workplace safety program and enforces employment discrimination and wage legislation.
800-625-2267 labor.nc.gov
N.C. DEPARTMENT OF REVENUE
The Department of Revenue oversees collection of state business taxes and provides information on changes to tax laws that concern business owners. DOR offers online filing and payment services, as well as an online business registration, which allows business owners to electronically register for an account ID number for income tax withholding, sales and use tax, and machinery and equipment tax.
877-252-3052 ncdor.gov
N.C. DIVISION OF EMPLOYMENT SECURITY
The duty of the Secretary of State is to ensure uniform compliance with the statutes governing the creation of business entities, record the information required to be kept as a public record, and provide that information to the public. The Business Registration Division acts in an administrative capacity only and cannot give legal advice.
888-737-0259 des.nc.gov
N.C. STATE INDUSTRY EXPANSION SOLUTIONS
Industry Expansion Solutions, an outreach and extension organization affiliated with the N.C. State College of Engineering, was established in 1955 to help North Carolina industries grow and prosper. IES’ tailored solutions, university and community connections, and engineering know-how help companies stay abreast of the latest technologies and best practices in engineering and business management.
800-227-0264
ies.ncsu.edu
N.C. SECRETARY OF STATE’S OFFICE BUSINESS REGISTRATION DIVISION
The Business Registration Division is responsible for the examination, custody and maintenance of the legal documents filed by more than 400,000 corporations, limited partnerships and limited liability companies. The office ensures uniform compliance with the statutes governing the creation of business entities, records the information required to be kept as a public record and provides that information to the public.
919-814-5400
sosnc.gov/divisions/business_registration
NCWORKS ONLINE
NCWorks Online is a powerful online job seeker/workforce services system, designed specifically for job seekers, students, employers and job trainers. The system provides fast access to a complete set of employment tools in one website. Business owners can use the site to post jobs, recruit employees, research salaries and labor market information, and communicate with job trainers. ncworks.gov
COUNCIL FOR ENTREPRENEURIAL DEVELOPMENT
The CED provides education, mentoring and capital formation resources to new and existing high-growth entrepreneurs through annual conferences, forums, workshops and programs on entrepreneurial management and finance.
919-549-7500
cednc.org
ECONOMIC DEVELOPMENT PARTNERSHIP OF NORTH CAROLINA
In October 2014, the N.C. Department of Commerce entered a contract with a new public-private organization, EDPNC, to take the lead in recruiting and marketing functions. EDPNC oversees the state’s efforts in business and job recruitment and retention, international trade, and tourism, film and sports development. The partnership fosters collaborations between business and government, and provides a robust analysis of facilities and sites available for relocation.
919-447-7777
edpnc.com
NATIONAL INSTITUTE OF MINORITY ECONOMIC DEVELOPMENT
Formerly known as North Carolina Institute of Minority Economic Development, the Institute has 35 years of experience helping clients harness the power of diversity to achieve business and economic objectives. It brings deep industry knowledge of how to help business owners turn barriers of race, gender and disability into opportunity; companies diversify their supply chains; and communities broaden their business base.
NCIMED helps clients focus on three core elements — money, markets and management — to create diverse, globally competitive companies.
919-956-8889
theinstitutenc.org
NORTH CAROLINA BIOTECHNOLOGY CENTER
The North Carolina Biotechnology Center is a private, nonprofit corporation established in 1981 as the United States’ first statewide initiative in biotechnology. The center’s primary focus is to strengthen the biotechnology research capabilities of the state’s universities; assist biotechnology business development; educate the public about the science, issues and application of biotechnology; encourage collaborations among the state’s universities, industry and government; and strengthen North Carolina’s national and international leadership in biotechnology.
919-541-9366
ncbiotech.org
NORTH CAROLINA BAR FOUNDATION ENTREPRENEURS ASSISTANCE PROGRAM
NC EAP provides pro bono legal services to low-wealth entrepreneurs who are starting or expanding their businesses in North Carolina. Through one-on-one representation, community education and self-help materials, NC EAP empowers low-wealth business owners to build businesses in North Carolina that create jobs, improve communities and boost participants out of the poverty cycle. Services range from basic transactional legal needs as struggling entrepreneurs strive to establish their businesses and create jobs, to potential long-term client-counselor relations as their businesses grow.
NCMBC was created to leverage military and other federal business opportunities to expand the economy, grow jobs and improve quality of life in North Carolina. NCMBC’s Business Development Team includes 12 experienced business development and procurement specialists operating from 10 community colleges across the state to identify lucrative federal contract opportunities, notify firms of specific opportunities and help businesses prepare winning proposals. NCMBC also administers the state’s official web portal for federal contracting www. MatchForce.org.
877-245-5520
ncmbc.us
N.C. RURAL ECONOMIC DEVELOPMENT CENTER
The Rural Center’s mission is to develop, promote and implement economic development strategies that improve the quality of life of North Carolinians in the state’s 85 rural counties, with a special focus on individuals with low to moderate incomes and communities with limited resources. Key programs include capital access and microenterprise funding initiatives, entrepreneur and youth business counseling and a leadership development institute.
919-250-4314
ncruralcenter.org
SERVICE CORPS OF RETIRED EXECUTIVES
SCORE is a national nonprofit dedicated to helping businesses get started and grow, supported by the U.S. Small Business Administration. Retired business executives provide mentoring, counseling, local workshops and online webinars to business owners.
800-634-0245
score.org
VETERAN’S BUSINESS OUTREACH CENTER
The Veterans Business Outreach Center Program is designed to provide entrepreneurial development services, such as business training, counseling and resource partner referrals to transitioning service members, veterans, National Guard & Reserve members and military spouses interested in starting or growing a small business. Located at Fayetteville State University, it serves all of North Carolina.
910-672-2683
fsuvboc.com
WOMEN’S BUSINESS CENTERS IN NORTH CAROLINA
The U.S. Small Business Administration provides funding for five WBCs in North Carolina in conjunction with local partners including NCIMED, The Support Center and the N.C. Center for Economic Empowerment and Development. WBCs seek to level the playing field for women entrepreneurs, who still face unique obstacles in the business world. They provide entrepreneurs, especially women who are economically or socially disadvantaged, comprehensive training and counseling on a variety of topics. sba.gov/local-assistance/resource-partners/ womens-business-centers
