small
Wonders
HOMEGROWN PETIT INDUSTRIES PRIDES ITSELF ON INNOVATION
by Debra Levy
Left from center and clockwise, three generations of Petit’s: Rusell, Dennis, Matthew and
Mrs. Dennis Petit.
“Leaf peepers.”
That’s the term people here have for the annual group of visitors that congregate to admire the fall foliage and fallen leaves in late Autumn. Along with hard vowels, deep-sea fishing and Dunkin Donuts, “leaf peepers” are something of a local tradition in Northern New England.
On the surface, such a traditional and cornered area of the country might not seem the best place for a window manufacturer to grow and prosper. But homegrown manufacturer Petit Industries is doing just that—one unit at a time—from its headquarters just outside Portland, Maine. The company recently reached a number of milestones: it expanded its capacity, began exporting, inaugurated a new logo and this year will reach the $1 million in sales mark for the first time.
Petit’s products are placed in some of the most prestigious and historic locations in the country including the Marble House, Kingscote and the Elms in Newport, R.I., Historical Deerfield in Deerfield, Mass., Fort Scott in Kansas along with historically-preserved buildings in Allentown, Pa., and Charleston, W.V.
Manufacturing Capabilities
At first glance, the view from South Street in Biddeford, Maine, is deceiving. It shows what appears to be more of a house than a factory, but one walk around the corner and you’ll see the additional space used for manufacturing. Petit manufactures and distributes interior doors and moldings, magnetic interior insulating window systems and screens, exterior shutters and doors. This third-generation family-owned business has developed products for more than 54 years with an eye toward energy conservation and historical preservation.
Originally founded in 1947 as a heating and energy-conservation company, Petit has been an innovative product developer. “My father never pushed me,” says president Dennis Petit. “We always talked about things, but he never pushed me toward the business. He is a great inventor with a great knack for developing simple products that save energy. I think I got a lot of my inventiveness from him.”
“Pepére is probably one of the world’s greatest authorities on energy conservation,” says grandson Matthew Petit, also the company’s marketing manager, “but he’s very unassuming about it all.”
Product Innovations
Magnaseal is the name of the company’s signature product. It is a custom-manufactured insulating window that installs within or over the existing window cavity on the inside. Dennis Petit is quick to remind customers what the product is not. “It is not a storm window and not a prime replacement window,” he says.
Since the unit mounts from the inside, it is virtually invisible from the outside. It is also available in wood veneers or custom colors and, through a very innovative process, can be made for circle tops and bowed windows. The windows are made with acrylic rather than glass to keep the weight down. Proprietary bellows are built into the moldings to prevent “bowing” or “pop-off” conditions.
Large rolls of acrylic and cut lengths of vinyl and wood are brought into the shop, cut, trimmed and assembled. Bowed or circle tops are fabricated in a closed room and only a few employees know how the process is done. “Being able to offer curved radii products has been a great advancement for us,” says Dennis Petit.
Petit says a lot of the company’s inventions are a result of his tinkering. “We see a need and try to fill it,” he says. “Casement windows need screens, so we make them in season. We also make roll-up screens and a variety of other products as we see a need.”
The company sells those products to consumers, authorized dealers and authorized distributors throughout the United States and Canada. In Europe, Petit’s products are offered through a licensing agreement. Most products come with a lifetime guarantee—“almost unheard of in the industry,” adds Matthew. “This is because our system was designed to never break down.”
Financing Considerations
“Expanding nationally and internationally really helped us,” says Dennis. “When asked how a small company was able to finance such an expansion, he cites a solid working relationship with Fleet Bank. “We worked with them to get an SBA Export Working Capital Program loan” says Dennis, “and it’s really worked out well.”
(see related box below.)
Given his positive experience with the SBA, does he have any theories why there are so many negative stories about working with them? “You have to be straight-forward and honest with them,” says Dennis. “Don’t try and pull the wool over their eyes. They are trained to look for that. Show your frailties up front. Don’t hide them. We are not perfect,” he adds, “there have been plenty of times we’ve taken one step forward and two steps back, but this is part of business. They know that.”
Petit says he hopes eventually to have two manufacturing locations in the United States, but one is fine for now. When asked if has difficulty competing on projects in distant locations, Petit cites an Internet site that he says has helped reduce his shipping costs quite a bit. “We use our own trucks locally,” he said, “and we use freightquote.com,” he says
(see related story below). “It’s an excellent site that helps you find the low-cost way to get your freight where it’s going. I have only had one problem with them since we’ve been using them and they resolved it quite nicely.”
New Look
Matthew Petit has also been hard at work on the company’s expansion. He recently led efforts to change the company’s logo. The new modern look now appears everywhere, including on the company’s new truck. “I see their truck everywhere,” said Ed Brill of Biddeford. “You’d think they have fifty of ’em.” Petit is also testing some new methods of selling his product directly to consumers, ranging from being the featured company of the month at the local bank to selling the product from kiosks and carts at local malls.
“Energy efficiency is important everywhere,” Dennis adds, “it’s important to this area especially to have low-cost ways to keep people warm.”
Otherwise, of course, the leaf peepers would never come back.
Debra Levy is the publisher of USGlass, the sister magazine of Door & Window
Maker.
One the Move with Freightquote.com
Petit Industries has had great success using freightquote.com
to move its windows and products beyond its immediate shipping area.
Established in 1998, freightquote.com
offers a centralized directory where business-to-business customers can view the
offerings of multiple carriers. The site eliminates delays and the haggling of
the auction process by offering real-time instant rating with aggregated pricing
for less-than-truckload, truckload, expedited, local cartage and intermodal
freight.
Once the shipper enrolls he enters details including origin, destination, weight
and class. The system returns with all the options available and allows carrier
selection. The site further simplifies shipping by providing automated freight
documents, consolidating monthly billing and online record keeping.
Working
for You:
The Export Working Capital Program
In order to help finance the growth of his business, Dennis Petit took
advantage of an Export Working Capital Program (EWCP) loan through the Small
Business Administration (SBA), in combination with the import/export bank. The
loan program provides short-term working capital to small businesses that
export when that financing is not otherwise available on reasonable terms. The
program encourages lenders to offer export working capital loans by
guaranteeing repayment of up to $1 million or 90 percent of a loan amount,
whichever is less. Both term loans and revolving lines are available.
Application
The EWCP uses a one-page application form and streamlined documentation with
turnaround usually 10 days or less. A letter of pre-qualification is also
available from the SBA. The SBA guarantees EWCP loan requests of $1,111,111 or
less while loan requests over $1,111,111 may be processed through the
Export-Import Bank. When an EWCP loan is combined with an international trade
loan, the SBA’s exposure can go up to $1.25 million.
Eligibility
In addition to the eligibility standards listed below, an applicant generally
must be in business for a full year (not necessarily in exporting) at the time
of application. Eligibility is generally determined by the following four
factors:
Type
of business: Applicant businesses must operate for profit; be
engaged in, or propose to do business in, the United States or its
possessions; have reasonable owner equity to invest; and, use alternative
financial resources first, including personal assets.
Size
of business: The Small Business Act defines an eligible small
business as one that is independently-owned and operated and not dominant in
its field of operation. The SBA has developed standards by industry (using SIC
codes) to define the maximum size of an eligible small business.
When affiliations exist
with other companies (for example, through common ownership, directorships, or
by contractual arrangements), the primary business activity must be determined
both for the applicant business as well as for the entire affiliated group. In
order to be eligible for financial consideration, the applicant must meet the
size standard for its primary business activity, and the affiliated group must
meet the standard for its primary business activity.
Use
of the Loan
The proceeds of an EWCP loan must be used to finance the working capital needs
associated with a single or multiple transactions of the exporter. It may not
be used to finance professional export marketing advice or services, foreign
business travel, participating in trade shows or U.S. support staff in
overseas, except to the extent it relates directly to the transaction being
financed. In addition, proceeds may not be used to make payments to owners, to
pay delinquent withholding taxes, or to pay existing debt.
Maturities
SBA guarantees the short-term working capital loans made by participating
lenders to exporters. An export loan can be for a single or multiple
transactions. If the loan is for a single transaction, the maturity should
correspond to the length of the transaction cycle with a maximum maturity of
18 months. If the loan is for a revolving line of credit, the maturity is
typically twelve (12) months, with annual reissuances allowed two times, for a
maximum maturity of three years.
Interest
Rates
The SBA does not prescribe the interest rates for an EWCP loan. Interest rates
are negotiated between the applicant and the lender; however, SBA will monitor
those rates for reasonableness.
Fees
SBA charges lenders a guaranty fee for each loan approved which are passed on
to the borrower. For loans with a term of less than twelve (12) months, the
guaranty fee is one-quarter (1/4) percentage of the guaranteed portion of the
loan. For loans with a term greater than twelve (12) months, the SBA guaranty
fee is the same as for any standard loan program.
Unique
Requirements of the EWCP Loan
1. An
applicant must submit cash flow projections to support the need for the loan
and the ability to repay. After the loan is
made, the loan recipient must submit continual progress reports.
2. SBA does
not prescribe the Lender’s fees.
3. SBA does
not prescribe the interest rate for the EWCP.
4. SBA
guarantees up to ninety (90) percent of an EWCP loan amount up to $1 million.
Guaranty
SBA can guaranty up to 90 percent of loans (generally up to a
maximum guaranty amount of $1 million). A
borrower must give SBA a first security interest equal to 100 percent of the
EWCP guaranty amount. Collateral must be located in the United States.
DWM
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