HB Coatings -A Success Story
This year, Ashley Hunsaker had a baby.
But giving birth to a business months later proved to be her most arduous labor.
On July 31, two months after her third child was born, Ashley’s husband Jason lost his job at St. Louis Metallizing after 14 years. He had been promoted and named a vice president at the company on June 1.
Left scrambling to figure out what to do next, the couple teamed up with another couple to hatch a new business of their own. They spent the next three months securing a small business loan to open their own thermal metal-coating business.
But Ashley didn’t anticipate child birth to be the easier of these accomplishments.
“Because after 36 hours, it’s over,” Ashley said.
The Hunsakers joined forces with Duane and Jeannie Boehnke, after Duane also lost his job at the 60-year-old St. Louis company, where he had worked for 26 years. Jeannie Boehnke said her husband was tasked with informing the workers that they were being let go.
It is kind of heart breaking. And for this to happen, you just wonder, what are you going to do?
Jeannie Boehnke, co-owner, HB Coatings LLC in Madison
“It is kind of heart breaking,” Jeannie said. “And for this to happen, you just wonder, what are you going to do?”
Her husband was offered a job with the new owners, but Jeannie said he declined.
“He said I’m tired of making money for somebody else,” she said. “I want to start making money for myself.”
Besides, the sudden layoff gave Duane an opportunity he had been looking for. Anticipating that his employer was going to be sold, the two couples came together and decided to start their own business.
“At first, I might have been a little skeptical,” Jeannie said. “But after he showed me the plan, it was a no brainer. It’s something he’s always wanted to do. He’s always wanted to open his own shop, and he and Jason both have the clients and the customers. They have a good rapport with them.”
We had heard some rumors that our husbands’ company was going to be sold. So we actually had Duane come over and sit down at our kitchen table and say what are we going to do, if this is true? Of course, we didn’t know for sure. We had just heard rumors. So we said, why don’t we start our own business? We’ll just pick up where they left off. If they sell it, we’ll do what they can to start our own business.
Ashley Hunsaker, co-owner, HB Coatings LLC in Madison
“We had heard some rumors that our husbands’ company was going to be sold,” Ashley said. “So we actually had Duane come over and sit down at our kitchen table and say what are we going to do, if this is true? Of course, we didn’t know for sure. We had just heard rumors. So we said, why don’t we start our own business? We’ll just pick up where they left off. If they sell it, we’ll do what they can to start our own business.”
On June 25, the two couples registered as a limited liability company. HB Coating LLC, named for the initials from their last names, was born.
They then went to search for a loan. Not knowing exactly where to start, Ashley took to the Internet.
“I was just Googling ‘what is an SBA loan? How do we do this?,’” she said. “We really needed a business plan and were working on a business plan.”
That’s when she found the Metro East Small Business Development Center at Southern Illinois University Edwardsville, which has been helping small businesses get off the ground since 1984. She called director Patrick McKeehan and talked with him for the next 20 minutes.
“He said, ‘Let’s meet,’” Ashley said.
The two couples sat down with McKeehan to discuss their business and business plan. McKeehan saw that the enterprise had potential, given Duane and Jason’s experience and working relationships with local clients.
They had a very strong customer base in these Fortune 500-type companies that still needed these services that they provided through their old employer that was pretty unique. And they felt capable of trying to do it and had put the pieces together to transition from that.
Patrick McKeehan, director, Metro East Small Business Development Center at Southern Illinois University Edwardsville
“They had a very strong customer base in these Fortune 500-type companies that still needed these services that they provided through their old employer that was pretty unique,” McKeehan said. “And they felt capable of trying to do it and had put the pieces together to transition from that.”
Ashley said McKeehan’s advice and the small business development center’s resources helped the couples find a lender through the Small Business Administration, an attorney to provide legal counsel and further expertise from Tim Whitten, of St. Louis-based lender and nonprofit asset and development organization Justine Petersen.
“He (McKeehan) just really walked us through it,” Ashley said. “He looked through our business plan. He actually took it and had a couple of his colleagues read over it, edit it, told us what to do.”
“We helped them through the process and helped them stay on track,” McKeehan said. “It was just something they had never done before. We were we just helping them through this process and giving them reassurances.”
Initially the couples hit a snag when they applied for a loan on their own. They waited four weeks only to find out that their application had been declined. In hindsight, Ashley said entrepreneurs should not limit their loan applications to just one lender.
“If you were to start your own business, I would say get four and five banks working on it at one time,” she said. “Get four and five banks quoting it out, getting it done for you because we wasted four weeks waiting for this lender.”
The small business development center was able to help the couples with this, too. Whitten recommended Adree Bele at Midwest Regional Bank in Festus, Mo., who has significant SBA loan experience.
Ashley said Bele was very enthusiastic about their enterprise from the beginning.
“She said, ‘I want to get in on this. I think this is a great opportunity,’” Ashley said. “We did not solicit her, she came to us. So that was great.”
They signed a lease on an existing 29,000-square-foot warehouse and office in Madison on Sept. 14. They had initially wanted to move to a 15,000-square-foot space on Empire Drive in Belleville, but their attorney said that building could not accommodate their electrical needs and advised them to look elsewhere.
When they moved into the Madison building, they found they had a lot of housekeeping to take care of.
“There were crop circles everywhere,” Ashley said. “It was a tire warehouse and there were these tires everywhere. Every single tile in the ceiling was sagging, and then when they pulled them down, there were hundreds of dead mice all over the floor.”
Their next move was to go back to Duane and Jason’s former employer, which had been sold and was being liquidated, and bid on the equipment at an auction. They couples proceeded to purchase 90 percent of the equipment.
“It’s the same exact equipment,” Ashley said. “They get on that grinder, and there it is. There’s no learning curve.”
They were also able to lure four of Duane and Jason’s former co-workers to their new business. Ashley said their staff of six has a combined 150 years of experience in thermal metal coating. Jeannie said the customers followed them.
“We’re here, because they wanted us here and they needed us here,” she said. “If it wasn’t for their support, we wouldn’t be here.”
HB Coatings LLC officially started production on Sept. 15 but did not close on their loan until three weeks later. Employees worked for three weeks without pay. Fortunately, the Duane and Jason’s track record and pre-existing clients carried them through.
“I think the integrity of both of our husbands just follows them and the customers,” Ashley said. “I cannot tell you how many customers have just said what can we do to help? What can we do to help you? We want you guys to succeed.”
HB Coatings LLC provides thermal coating for existing metal parts for oil refineries, printing plants, some glass manufacturers, mining companies and general industries.
“It’s basically spray painting with multi-medal,” Ashley said. “Once it gets coated, it’s ground and polished and sent to customers. What the customers like to do is instead of buying a new part, they send in their rusty or worn-out part to us, we recoat it, send it back to them and it’s better than new. So it lasts a lot longer, it’s harder and it’s very much more cost-effective for the customer.”
$4 million revenue for current fiscal year
$6 million projected revenue for next fiscal year
Ashley and Jeannie are co-owners of the company, while their husbands operate the shop. Ashley said the company is in line to generate $4 million in revenue during its first fiscal year, which began last month and runs through September 2016. The company is projecting $6 million in revenue by the following fiscal year.
The co-owners are grateful for the help and advice they found at and received from the small business development center. Now in its 31st year, the center is on pace to assist 400 small businesses throughout a nine-county area in southwestern Illinois, according to McKeehan, whose staff consists of one other full-time employee and a team of graduate students.
He said the swift work that went into creating the new thermal metal-coating plant in Madison has been one of the most memorable.
“I think it was a great experience for us to be a part of it,” he said. “They all worked very hard to make this happen. I think they are very, very pleased with the kind of support they received across the community, not just from the SBDC. It’s an exciting opportunity for the state of Illinois to retain those jobs in our region at the same time work with companies that have real growth potential.”