The Ups and Downs of Small Business
Kentucky entrepreneurs are yearning to seize opportunities, try new ideas and change the mainstream if possible. These are their stories.

Editor's Note:This month's cover story will be published in two installments. Next month's issue will profile entrepreneurs from Ashland, Louisville, Owensboro and Maysville.

The laments are now familiar. 'There are so many people with business vision out there in Kentucky, if only they had the capital.' 'We have to do more to fund technology start-ups.' 'What we need is more idea incubators, more training centers, more corporate and industrial parks to foster innovation.'

While many mull over the future however, there are a growing number of individuals out there making it happen. They're entrepreneurs of the first order, inclined to sniff out opportunities and act on them. The niche is their habitat. Service, quality and vision are their guidelines. And they're thriving in nooks and crannies all over the Commonwealth.

What follows is a random sampling of this breed of business person in today's Kentucky. Some had parents and grandparents with the same drive, others are striking out on their own for the first time. They are both young and old, male and female, high-tech and low-tech. What they possess in common is a fire to seize opportunities, try new ideas, change midstream if necessary. Their ways are varied, but they all seem to balance those constantly evolving visions with a healthy dose of common sense and a feel for how to treat people right. Now that's revolutionary.

CARROLLTON
Valco's Meats & Groceries

Every business along this stretch of the Ohio is peripheral to the river, but some get right out in the thick of it. One of those water-worthy enterprises is Gene Valco's Valco Meats and Groceries of Carrollton, which services the cooks and crews of about 25 rivergoing vessels per week. Staff stay tuned to the marine radio and fax machine 24 hours a day, and scoot the goods out to the passing barges in johnboats. Valco delivers an average of $900 of groceries per boat, where crews can range from seven to 12 people. Orders come in by fax, ideally 24 hours in advance, but that's sometimes wishful thinking.

As soon as they come in range, we talk to them. We go out when they're 20 minutes from town. Cans of soup, cleaning supplies, health and beauty aids, we put everything in there. Dairy products and meats are very important.

'The people on the boats like our service, quality and prices,' he explains. 'The people that cook on these vessels generally start from scratch,' says Valco. 'They make their own breads and rolls, cakes and pies. They're also really up on what's popular. The cooks know what they're doing, which makes us look better too.'

There's more than looks to Valco's success however. They move into action as swiftly as the current and deliver where they're needed. They're part of the river's fluid system of commerce.

'We have to be available 24 hours a day, seven days a week, because the river keeps flowing,' Valco points out. 'That window of opportunity is only there for a short time, from Markland Dam to Madison, Indiana. On Monday night after I went home, we got seven boat orders. A bunch of people came back in to load them up.

'We do occasionally go all the way to Cincinnati or Louisville, because they're our customers and it's important -- maybe that's why we've kept them,' says Valco. 'Other people have come and gone, but we're still here. The people that work on the river are like a family anyway, and in many cases they are literally family -- a father did it, and now his son does it. They appreciate what we do, and we appreciate their business.'

LEXINGTON
Sharp's Candies

For a lot of people, hand-dipped caramel apples are as sure a sign of autumn as migrating fowl and marching bands. For many Lexingtonians, the place they go to satisfy that craving is Sharp's Candies.

Sharp's makes over 100 different varieties of candy, all from family recipes and all but the chocolate made from scratch. The distinctive part of many of those 100 candies is the unique soft center. Without giving too much away, Rob Sharp says it has to do with the preparation of the ingredients, the use of invert sugar (a natural preservative) and the handling during the candymaking process.

'Nobody in the world makes soft centers the way we do,' he says. 'Most companies have a fondant-based center, which we find inferior. 'Our quality is superior because we make it all right here in this location. It's fresher because the kitchen is 30 feet away. We're constantly rotating our inventory in small batches -- that's the advantage of being a small company. With a large satellite operation, you have to make large batches and ship it to all your stores. That's why we haven't expanded: we haven't been able to keep the freshness. It's also why we don't sell wholesale -- I can't maintain the freshness I want. We could gain huge shelf-life if we used artificial preservatives, but we don't. The very thing that's so successful about our business is exactly the thing that keeps us from growing.'

But he doesn't seem to mind. National surveys show that sales of high-quality boxed chocolates are at an all-time high. Among tourists, especially the Japanese, Sharp has found an attractive market. In the month of December alone, the company sells 17 tons of candy. Plans for the future include a website that's truly interactive (not just a catalog in cyberspace) and an updated showroom inside the landmark gingerbread house on Regency Road.

'People feel like they can come in, walk back while we're packaging their candy, talk to our people -- it's just a warm, cozy, fuzzy feeling. I don't ever want people to become a number here.' At Sharp's it's all about knowing the meaning of names -- both the one on the sign and the ones waiting in line. 'Sharp's Candies is owned by Rob Sharp, the candy is made by Rob Sharp, Rob Sharp wears an apron,' the owner says. 'I follow the candy from its beginning to its end, including being at the cash register. I think that's the most important part of being a small business -- opening the lines of communication with your customers. It's harder to do it that way, but it's worth it.'

MOREHEAD
Harold White Lumber

Five generations of the White family have made their living in the lumber business. Right in the middle of that continuum is 71-year-old Harold White, who founded Harold White Lumber in 1968 with five employees. Today that number has reached 100, with 100 more people as indirect associates in the supply and logging fields. Sales that totaled $300,000 in 1978 currently hover at $12 million, with lumber traveling all over the U.S. and Europe.

'We manufacture 96 percent of the lumber ourselves with a high-tech sawmill,' says White. 'We began kiln drying and exporting to Europe in 1978, and now those exports make up approximately 35 percent of our sales.' In fact, the U.S. Chamber of Commerce recognized the firm as Small Business Exporter of the Year a few years ago. Most of the wood that comes through the White facility eventually makes its way to cabinet and furniture makers, but some still serves the barn and fencing needs of farms in the Bluegrass -- including some farms that were served by White's father and grandfather before him. The company now makes its own moulding and flooring as well.

Today Harold and his wife Barb (office manager since 1974) are proud to say that their three sons, a daughter and a grandson are all in the business. Ray is the acting president of the company. Son Richard has his own entrepreneurial bug, running a timber business adjacent to the main White facility, while also operating Cliff View Resort near Natural Bridge. A complaint often heard in Kentucky's past is that children are leaving to go seek their fortunes elsewhere. But all of White's offspring have stayed in the family business.

'We're all enthusiastic and hope to retire in this business,' says Ray White, 'and we hope to afford our children the opportunity to follow in our footsteps. It's a great privilege for us to be in a family business. This is all we've ever known.'

It's also all his father ever knew he wanted to do. 'Even as a teenager during the Depression, it was always in my mind to work for myself,' says Harold White. 'There was no other way. As a child, I tried to make money out of the hills, gathering nuts, cutting kindling and stacking it up and selling it, pouring lemonade on a Sunday. It would have been difficult to work for someone else.'

'Personally, it would be hard to fathom working anywhere else,' adds Ray. 'It's something I know, love and enjoy. There's a joke we've been telling people for years -- when we get cut, we bleed sawdust.'

PIKEVILLE
Vantage Point Advertising

Fifteen years ago, Rhonda Kretzer was looking to put her degree in communications and advertising to work for somebody in the Pikeville-Floyd County area. Trouble was, there weren't any ad agencies to work for there. She figured if she was going to do it, she'd have to do it herself. Seven years in retail had fortified her with knowledge of everything from payroll to purchasing, taxes to customer service. But area banks didn't think it would fly, because the market was too small and nobody had been successful in that field there before.

So she did it anyway.

For this wife and mother of three, the business started on a freelance basis, stringing together one account after another from her dining room table. Now, with three employees besides herself, Kretzer's Vantage Point Advertising serves clients in five states from its little Pikeville office. But the business still comes the same way it used to -- by word of mouth. That business includes 16 Reno's Restaurants, Southeast Telephone, Mayo Drug Stores, and Prestonsburg Cycle Center.

'I do have trouble saying no,' she admits. 'Things are on deadline, and when people want something now, you'd better do it now, or it might be a lost opportunity. No matter what your investments may be in facilities, products or services, your customers are your greatest assets.'

Just as important are her relationships with her colleagues. 'When I first started, I did everything myself -- I changed jobs a hundred times a day,' she remembers. 'As I could hire people, I was determined to find people better than I was in every area.' That includes her best friend Kitty Pauley, now executive director of the Pike County Chamber of Commerce, and nine-year veteran Chad Varney, whose graphic art skills and intuition still amaze Kretzer.She still finds herself as the first one in and the last one to leave, but these days Kretzer is finding some balance to her life and career.

'I'm doing a better job of blending now than I did for a long time,' she says. 'Before, if I didn't do it, it didn't get done. I had a 'whatever it takes' attitude. Now, I have more flexibility with my own time, but it's still very demanding.'

RICHMOND
Specialized Technical Services, Inc.

At Specialized Technical Services, Inc. in Richmond, 33-year old CEO Ken Fountain is anxious. The company is moving into a brand new building across town, and with the growth the company is experiencing, that move couldn't come at a better time.

'We've doubled our size every year since we went into business in 1993,' he says. 'It took us five years to reach 50 employees, and then we reached 100 employees a few months after that. We hope to do $4 to 5 million in service work next year.' That service work began as meter reading services for utilities like Kentucky Utilities and rural electric cooperatives. Today, not only does the company read 23,000 meters a day, but it also offers a host of complementary services to clients looking to outsource certain tasks and increase their efficiency and competitiveness.

Fountain started the business with his brother Jeff and their father, Glenn, a 40-year industry veteran. The elder Fountain knew there were a lot of people in the field looking for help, and while he is no longer active day-to-day in the business, his accumulated wealth of experience, knowledge and contacts assisted in that crucial entrepreneurial task of identifying a niche.

'We basically started from nothing, and have evolved in a manner that's appropriate,' says Ken Fountain. 'Very few companies are putting all the services together for that integrated package. The idea is to help the utility to get from where they are to where they want to be using common sense. That's our strength.'

The contract meter reading business has been an ideal base from which to launch into other services, Fountain says. 'With that under our belt, we marketed ourselves into AMR (automated meter-reading), retrofitting and installing devices into meters, with the ability to test and calibrate, and to do project management of these programs," he explains. "That's the fastest-growing part of the industry. There are probably at least 10 areas we could be going into right now, but we're waiting for the timing to be right. We don't just want to grow the volume of services we offer, but offer services that complement all of those. Who knows what options will be out there in the future?"

Ken Fountain is emblematic of the general move away from large corporations in this 'custom work' economy. 'I worked with Westinghouse for a while and saw the interactions of a big corporation,' he recounts. 'I then ended the chain of 113 years of Fountain family service to Westinghouse. The agendas were so vast and separate from common sense in my mind, and it was time to return to common sense. I truly believe you have to operate in a manner where everyone who works with you has the opportunity to grow and expand -- you need that in today's world.'

'This is a concept that will grow,' says Fountain. 'We can go anywhere and create these types of regional service centers. We thrive on word of mouth and reputation. We gain our knowledge by staying abreast of the issues, going out and talking to customers. Then we take that information and try to enhance our service.'

Conclusion

So it goes in the state of Kentucky, as visionaries of every size, age and stripe put their shoulders to the wheel of a wildly diversifying economy. Oddly enough, several business owners, both large and small, declined to be featured in this story. Some claimed they liked to avoid the spotlight, others didn't want to toot their own horns too loudly. For them it seems, success and good fortune don't need touting, and the best way to keep things chugging along is to stay behind the scenes and not make any waves. But as so many companies have found, telling stories is also a great way to forge connections and sustain a culture. In many cases, we might go searching far and wide for solutions and partners that were under our noses -- or around the corner -- all the time.

Adam Bruns is a staff writer for The Lane Report

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