Interested in taking your business overseas?

Exporting is an important component of business growth

When people think of Kentucky being ranked number two in the nation, most think of basketball, not exports. However, Kentucky is number two in the nation in export growth for the first 10 months of 2013, leaving people across the country scratching their heads. How has Kentucky been successful in increasing exports so dramatically? The answer is simple; more Kentucky companies are being exposed to the virtues of exporting thanks to efforts from the Kentucky Export Initiative (KEI) partners. Created by Governor Steve Beshear in 2010, KEI brings together agencies and organizations to help facilitate international trade opportunities for Kentucky businesses. The KEI goal is simple: increase Kentucky exports, which will lead to new opportunities for businesses of all sizes and create diversified markets for Kentucky products. Kentucky is projected to shatter its export record this year by over $2 billion with totals projected to eclipse $24 billion. Most people think only large companies have the capacity to export, but actually over 80 percent of the 4,700 Kentucky companies that do export are small and medium-sized businesses. Here are the stories of two small Kentucky companies that recently found international success thanks to the efforts of the Kentucky Export Initiative. After twice declining a friends request to get involved, Whitley recalls, He came back a third time, accompanied by a minister, and that time I said yes. I figured this must be the right plan for me. Based in Mannsville, Ky. in Taylor County, Whitaker Tools was founded in 2008 by Whitaker, a veteran mechanic and engineer. The business started with a single tool designed by Whitaker to improve the efficiency in working on Fords 7.3 Powerstroke Diesel engines. Having experienced the laborious process of taking apart these engines by pulling each side of the 250-lb. engine heads off, he knew there must be an easier way. In all, he designed and engineered three of the most efficient tools available for the engines, enabling mechanics to save 80-85 percent in labor hours when working on fuel injector sleeves for the Ford truck. Our primary objective is to take care of our customers and anticipate their needs, Whitley said. Weve developed each of our tools just ahead of when it was needed. I believe that this has helped us succeed. The other significant factor Whitley credits for the business growth and success is the assistance received through the Cabinet for Economic Development and the KEI partners. In spring of 2013, I was referred to someone at the World Trade Center in Lexington and ultimately learned how KEI could help our small business export our products, said Whitley. Whitaker Tools was one of the 19 small companies that participated in the KEI Trade Mission to Canada in 2013 to begin building a network of people to help market the Powerstroke tools there. As a result of this trip, we now have one major distributor in Canada and another possible distributor. Were developing new tools for the big truck industry, based on the technology of the Powerstroke tools, Whitley said. Thanks to KEI, were starting to get recognized. Each year has gotten better and we are looking ahead to a bright future.

Steps to Starting a Business

Whitaker Tools For Charles Whitley, the decision to delay retirement plans to run Whitaker Tools was a case of the third time being the charm. A practicing minister, Whitley had started to prepare himself for a slower phase of life.

Stardust Cruisers Theres a popular saying that The best predictor of future behavior is past behavior. While this maxim applies well to human behavior, it may oversimplify the explanation for business success. Consider the non-linear path of Stardust Cruisers, a custom boat builder based in Monticello, Ky. in Wayne County. As the oldest continually operating houseboat company in the industry, Stardust has always prided itself on superior engineering and craftsmanship. The companys position as an industry leaderwith products resembling super yachts rather than typical houseboatsis a result of experience, design innovation and attention to detail. Stardust enjoyed success from its inception, selling awe-inspiring products to wealthy people all over the world, though no one predicted the economic tidal wave that washed over the region in 2008 and nearly drowned this leading boat builder and an entire industry. Following the financial crisis and economic downturn, the boat builder went from 70 employees to 15 and the Lake Cumberland areas houseboat manufacturers were reduced from about a dozen to four. Fortunately, with some quick assistance from the Cabinet for Economic Development and KEI partners, the tide began to turn. The assistance helped Stardust Cruisers travel to Dubai, where luxury houseboats are in high demand.

Stardust Cruisers Chairman Bruce Chesnut credits the Kentucky Export Initiative as being instrumental in reviving the industry. The trip to Dubai allowed us to make valuable contacts and set up a distributor list that has resulted in more than $3 million in boat sales, he said. With more than 50 employees and 2013 sales figures predicted to surpass $6 million (triple the sales figures from 2009), Chesnut is prepared for the business to set sail into steadier waters. This is an example of how the government can make a difference in the future livelihood of folks here, he said.

Have a great idea for a business, but dont know where to start? From planning and funding to marketing and nding the right employees, the Kentucky Cabinet for Economic Development is here to help you every step of the way. see page 3

Going Global

Kentucky is on the cutting-edge of todays global economy. Many local companies are expanding overseas and your business can too! see page 4

ENTREPRENEUR
So you want to run your own business, do you? Its no secret that a vision, lots of hard work and dedication are involved. But if youre passionate, resilient and a bit tenacious, that dream youve had of making it on your own can come true.
play a vital role in Kentuckys economic growth, so its important to nurture them and make sure they have access to the many resources available, said Cabinet Secretary Larry Hayes. We have established the Office of Entrepreneurship as the lead agency to draw on the plethora of resources available across the state and to expand the collaborative spirit among various agencies. The office oversees the Kentucky Innovation Network, which now includes 10 aybe your idea is still in the backof-a-napkin concept stage. Or maybe youve written a detailed business plan. Or perhaps your company has been operating for a while now but is in need of a change or boost. Whatever your situation, there are innumerable resources available to help you take your business to the next level. You dont have to take this journey alone. In July 2013, the Kentucky Cabinet for Economic Development created the Office of Entrepreneurship to enhance the states existing efforts to help businesses at every step of the growth cycle. The goals of the office are to develop an entrepreneurial climate for new talent in Kentucky; provide guidance and support to startup operations statewide; assist existing small businesses with growth opportunities; and create a pipeline of business activity that can be streamlined with the traditional growth opportunities the Cabinet already offers to encourage job creation and new investment in the Commonwealth. Entrepreneurs and small businesses

JOIN KENTUCKYS LARGEST BUSINESS SECTOR

become an

Prepared

Focused

Rose SideView
Top, Charles Whitley, president of Whitaker Tools, attends a Trade Mission to Canada hosted by the Kentucky Export Initiative and partners. Below, Stardust Cruisers unveils another beautifully renovated houseboat about to set sail for Dubai.

Small Business Partners Around the Bluegrass

Small Business Micro-lenders Kentucky Innovation Network Offices Small Business Development Centers Small Business Association Offices SCORE Centers

Tenacious

Innovation and Commercialization Centers (ICCs) and two satellite offices located strategically throughout the Commonwealth. The office also guides the Cabinets extensive resources for small and new businesses, as well as innovative and high-tech companies, through funding initiatives, marketing and sales assistance, small business advocacy and available resource referrals, along with a variety of financial and incentive programs to encourage new investment and job growth. Creative All services are provided free of charge. Small and young companies are vital to our economic health, not just in Kentucky, but across the United States, said Hayes. By helping entrepreneurs early and broadly, and by promoting innovation and entrepreneurial activity statewide, we can improve Kentuckys competitive position in the world and enhance job creation at the same time. This is a win for everyone Visionary involved. If youve been wanting to start on the path of entrepreneurial adventure, but have been uncertain about how to get the ball rolling, let us help guide you through the process. We want to assist those Kentucky visionariespeople who want to accomplish something greatto step up and say yes, I want to start or grow my own company right here in the Commonwealth. Do you feel it? That burning desire to take your idea and achieve great Decisive things? Lets make it happen, together. Contact the Office of Entrepreneurship (800) 626-2930 or visit www. ThinkKentucky.com/ Entrepreneurship.

Risk-Taker Resilient

Passionate Flexible

BROUGHT TO YOU BY THE KENTUCKY CABINET FOR ECONOMIC DEVELOPMENT

For more information on small business resources and companies featured in this publication, visit ThinkKentucky.com/Entrepreneurship

696,652

Old Capitol Annex 300 West Broadway Frankfort, KY 40601

ph. (502) 564-7140 (800) 626-2930

ThinkKentucky.com econdev@ky.gov

Small businesses employed 696,652 workers in 2010 with most of the employment coming from rms with 20-499 employees.

96.7%
Small businesses signicantly impact Kentuckys economy. They represent 96.7 percent of all employers.

339,703
As of 2010, Kentucky was home to 339,703 small businesses.

4,740
4,740 companies export from Kentucky locations. Of those, 80 percent were small and medium-sized businesses.

/ThinkKentucky

Kentucky entrepreneurs reinvent themselves in the face of change

Smart business people know they must be willing to go in new directions sometimes abruptly to adjust to changes in the marketplace or new opportunities. A photography lab that turns to language translation might sound odd, as does a satellite dish manufacturer that starts cooking up backyard grills and accessories until you understand the mind of an entrepreneur. worldwide millions of dollars. Senior Globalization Executive Scott Carothers sees the work Kinetic has done at an enterprise level for the past decade as a service that the marketplace needed. In an environment where translation services are considered a commodity, we applied innovation, he said. Our clients benefit from having their intellectual property in a centralized place, from being able to fully reuse their content and from having a process for holding vendors accountable for their performance. The Cabinet for Economic Development has been instrumental in the introduction of this software model to key customers abroad. After seeing Kinetics growth rate, the Cabinet awarded a $7,500 STEP grant to the company in 2012, enabling its participation in a key trade show in Germany. One year later, the STEP grant was reissued and Kinetic recently returned from its second trade show. The trade show has paved the way for gaining representation in Europe, securing additional contracts and enhancing our name recognition and credibility, Carothers said. He added that the Cabinet has been absolutely phenomenal in its support. It was an unbelievable discovery that the state would support companies in this way. couple chose to diversify in order to stay in business. Barbecue cookware became the companys new focus. Oscarware is now recognized as the inventor and worlds largest domestic manufacturer of outdoor grill toppers. We are Kentuckys best-kept secret as so many local residents and businesses dont know who we are or what we do. We are a homegrown business with products that are known internationally, said Debra Dudley. Located in Bonnieville, Ky., Oscarwares 64,000-square-foot factory houses the manufacturing, product development, sales, marketing and shipping operation for 17 different products, including disposable outdoor toppers, porcelain-coated gourmet grill topper, woks, griddles, park-style backyard grills, pizza on-the-grill toppers and the Trail Blazer outdoor portable camp fire ring. Oscarware products are sold at Walmart and many other retailers. Oscarware joined an elite group of Kentucky businesses when it was recognized as a 2008 Pacesetter at the Kentucky Celebrates Small Businesses event in Frankfort. The Pacesetter Business Recognition Program is an initiative that acknowledges high performing secondstage businesses that are changing the economic landscape of Kentucky. In 2008, the Kentucky Cabinet for Economic Development financed cash flow needs, allowing us to expand product distribution to 10,000 Dollar General Stores, Dudley said. Then, in 2013 the Cabinet worked with us to purchase the equipment and tooling needed to manufacture two new products. Since 2008, our sales have grown 40 percent and we now have 30 full-time employees. Dudley credits Oscarwares success to the hard work that she and her employees have invested and the outside support from the Cabinet for Economic Development and its partners. The resources provided to us through the Kentucky Small Business Development Center and the Cabinets direct loan we received have helped us not only survive, but thrive, she said.

Many nancing options for Kentuckys Small Businesses

Small businesses employ nearly offered by banks, credit unions, micro700,000 Kentucky workers. According to lenders and Certified Development the Small Business Associations (SBA) Companies. Both SBA and USDA work Small Business with lenders to Profile for Kentucky, stimulate more the Commonwealths lending by offering 339,703 small loan guarantees. Looking for more businesses represent High-tech firms information? 96.7 percent of all could be eligible employers, and they for Small Business employ 47.8 percent Innovation Research Find small business loan of the private-sector (SBIR) grants to programs, including labor force. support highTo combat higher tech research and specic loan programs, unemployment development while interest rates, lenders rates, it continues investment financing and partners in Kentucky to be imperative for high-tech startthat small business ups is also available at these websites: owners have access from venture to the capital capital firms, angel www.sba.gov/ky they need to grow investors and even their businesses crowd funding. www.rurdev.usda.gov/rbs/ and increase Another busp/b&i_gar.htm employment. innovative financing www.thinkkentucky.com/ Since the height of option that works smallbizlending the Great Recession in partnership in 2010, SBA has with lenders is experienced some the Kentucky of the highest Small Business loan volume ever Credit Initiative. in Kentucky. SBA The initiative, lending in Kentucky made possible by covers many price a $15.4 million points for many allocation from U.S. different kinds of entrepreneurs. Loans Treasury, consists of three unique credit can range from $500 to $5.5 million, and enhancement options that lenders can the loan proceeds can be used for real use to strengthen loan requests that estate purchases, business acquisition, are credit-worthy in nature but fall inventory, equipment, operating capital just outside acceptable underwriting and much more. standards. The credit initiative bridges There are many options available for the gap, making it possible for lenders to Kentucky entrepreneurs. Financing is finance more small businesses.

START A BUSINESS
IN THE

BLUEGRASS
RESEARCH YOUR IDEA
Make sure theres a market for the idea/ product/service youre selling. How much capital will you need to start? Draft a general business plan to guide you.

Kinetic the Technology Agency With a camera in hand and a passion for digital imaging, Ray Schuhmann founded Kinetic four decades ago, poised for the kind of unpredictable journey that tends to accompany an entrepreneurial spirit. While Schumanns innovative energy has been steadfast since day one, the expression of this to the Louisville companys clients has changed dramatically over time. The company, which serves as the official archivist for the Kentucky Derby, ranked among the Top 5 information technology service firms in a 2013 Business First list and was a 2013 recipient of the prestigious Martha Layne Collins Award from the World Trade Center Kentucky. What started as a laboratory for film processing and a commercial studio, and evolved to provide cloud computing and digital and marketing asset management, has expanded recently to include a specialized software system for language translation management. The two-yearold globalization platform, called SaaS or software as a service, provides a centralized system for capturing translation memory or language pairs for customers in 40 different nations, saving companies

locate a mentor
A mentor or business advisor is highly recommended. A mentor gives business advice and guidance; statesponsored organizations, trade groups and personal networks are venues in which to identify a mentor.

discover funding
Most new businesses start with friends and family. Bootstrapping in business means starting a business without external help or capital. Businesses fund the development of their company through internal cash flow and are cautious with their expenses. Other sources: angel investors, venture capital firms, banks, crowd-funding and micro-loans.

eXplore location
Whether your business is online or brick-and-mortar, location is key. Do you need delivery space, a lobby, office space or pedestrian traffic for your business?

Oscarware Debra Dudley and her late husband, Reg, founded Oscarware in 1989 as a satellite dish manufacturing company. An overnight shift in the business, caused by the scrambling of satellite signals, nearly drove them out of business in the early days. Like many entrepreneurs, the resilient

Top, Ray Schuhmann, president and CEO of Kinetic Corp, has expanded his companys reach to include providing integrated marketing communications platform for language translation management. Below, Oscarware, a former satellite dish manufacturer, now produces a wide range of barbecue cookware available at major retail outlets.

legal structure
With the variety of ways to structure your business, research which is best for you. Consult an attorney regarding sole proprietorship, partnership, cooperation, S corp, Limited Liability Company (LLC), non-profit or cooperative.

ONES TO WATCH

FERM SOLUTIONS

GUN MEDIA HOLDINGS

FLAVORCRAFT, LLC

HIGHLANDS DIVERSIFIED SERVICES, INC.

know your market

Analyze your market. Who are your customers? Understand trends and forecasts within your market. Identify your competition and assess strengths and weakness for both your business and your competitors.

operational awareness
Determine location needs, obtain necessary permits and licenses, explore business insurance options and examine personnel needs.

Theres always something brewing at Ferm Solutions

Shane Baker and Dr. Patrick Heist got to know each other while attending college and playing in a rock band together. When they graduated from the University of Kentucky, they went on to their respective careers Baker as a business executive in engineering and Heist as a microbiology professor. As the years passed, they reconnected, and in 2006, decided to apply their combined scientific expertise toward a new endeavor, Ferm Solutions Inc. The Danville company provides research, product development, engineering, manufacturing and technical services to the fuel and potable ethanol industries. Annual revenue is approaching $10 million. The company now makes its own whiskey, rum and vodka.

Gun shoots to the top, thanks to solid advice, investments

Once an in-demand consultant on video-games, mobile apps and marketing techniques to reach the youthful demographic that grew up on computers and portable devices, Wes Keltner now runs Gun, a videogame design and publishing company based in Lexington. The companys first release, the military-themed Breach & Clear, has proven to be a big hit. Breach & Clear launched on iPhone and iPad July 17 and quickly shot up the charts to become the #2 most popular app in the App Store. It settled in the top 10 games throughout July. A month later Gun Media Holdings launched B&C on Android devices, and it was selected as the IGN game of the month for October.

Businessman from the real South supplies food, drink to global market
Based in Louisville, the company he was interested in was already called Southern Dream Foods, but Johan Venter has grown its southern roots even further. Hailing from what he jokingly calls the real south, the South African native bought the assets, partial inventory and customer base of Southern Dream Foods to create the all-new Flavorcraft, LLC in 2006. The company has managed to nearly triple its sales in that time, closing in on $2.3 million this year. The contract food and beverage manufacturer produces sauces, syrups, teas and energy drinks for brands ranging from multinational name brands to obscure startups. The company also bottles Pure Tap water for the Louisville Water Co.

Diversied is London companys middle name

Highlands Diversified Services, Inc. started out in 1994 providing contract metal stamping. With an eye to the future, Highlands reinvented themselves and their business from one that made brackets for the automotive industry into a facility that provides products used in aerospace, telecommunications, homeland security, wireless technologies, military, all and utility terrain vehicles, lawn & garden equipment sectors in addition to automotive. In one of those sectors the London, Ky.-based company currently makes over three million satellite dishes a year for 70 percent of the market share. Highlands Diversified Services has grown to 260 employees, about 80 more than two years ago, and continues to pursue new opportunities into untapped business segments.

Find Great People

Interview and hire employees, establish independent contractor agreements, seek help finding a quality workforce and education and training for employees.

marketing strategy
Determine path to market, launch communications strategy and execute a sales strategy. Establish and build on strategic partnerships. Utilize social media.

ferm-solutions.net
For more information on Ferm Solutions, visit www.ThinkKentucky.com/Entrepreneurship

breachandclear.com/gun/
For more information on Gun Media Holdings, visit www.ThinkKentucky.com/Entrepreneurship

avorcraftllc.com
For more information on Flavorcraft, LLC, visit www.ThinkKentucky.com/Entrepreneurship

hds-usa.com
For more information on Highlands Diversified Services, Inc., visit www.ThinkKentucky.com/Entrepreneurship

reflect and perfect

Identify what is working by monitoring financial performance. Correct your trajectory by making adjustments and planning for growth. Lastly, seek help when needed.