Small Businesses Push into Big World

Whether you’re in Ponca City, Oklahoma or Sonoma, California, if you’re a small business in a small town, you know two things.

The first is you better stay lean and nimble. The second is you better hook up with people and places far beyond your backyard—like across an ocean beyond your backyard.

Those lessons keep coming up, and they may be the biggest lessons small businesses have learned and can teach out of the long economic drought.

It doesn’t matter whether you’re on one of the coasts or in the middle of the nation. If you’re running a small business, you’re hooked to the global economy.

That’s a lesson recounted by Tom Walker in today’s Daily Oklahoman. He spoke with Becky McCray of Alva, Oklahoma, an entrepreneur who points out just how inextricably linked small businesses in Midwestern small towns are to the global economy. She’s even writing a book on the subject.

“Every kind of business exists in rural and small town Oklahoma,” she said. “Ponca City has an attitude and openness to entrepreneurship and is known for recruiting entrepreneurs. Woodward, a town in cowboy country with a long history with energy production, has a major cluster of wind farms. Ditch Witch in Perry makes trenchers and earth moving equipment that are used all over the world."

That’s exactly the kind of thinking that I heard from entrepreneurs this spring hundreds of miles from Oklahoma, in the picturesque small town of Sonoma, California, about 40 miles north of San Francisco.

There, companies like Vode Lighting, housed in a metal building not far from Sonoma’s movie set of a town square, are doing business with the rest of the world very much in mind.

Tom Warton, George Mieling, and Scott Yu started Vode in 2005 to provide unique lighting solutions to businesses and public buildings—targeted to architects. “What we do is make an architectural modular lighting system using energy-efficient light sources. We call it a kind of lighting Lego set for designers,” Warton says.

That meant that from the beginning, its markets were far beyond the small town where they chose to locate. And despite the recession, business has taken off.

“We went black in the first 12 months,” said Warton, the company’s president. Vode will be “well into” $5 million to $10 million in revenue this year.

And it’s based on a business model thoroughly rooted in the global economy. Its headquarters in Sonoma houses lighting components, which are shipped to projects all over the world. Vode has had customers throughout the United States and has supplied lighting to the Harley-Davidson Museum and to clients in Saudi Arabia. Design work is done in Sonoma, while manufacturing takes place in China at a factory run by an American citizen.

And that kind of small business model, in both small towns and big cities, is going to grow in popularity, especially as nations like China and Brazil grow at a faster rate than those of the developed world.

Such thinking was reinforced by a survey released to Portfolio.com last week by Vistage International, a firm that helps CEOs of small and mid-sized companies run their businesses. Vistage’s survey showed a strong majority of small business owners expect this year to meet or exceed last year’s revenues and profits, despite deep concern over the overall economy, and the well-documented difficulties in obtaining credit.

Those difficulties led to a different conclusion than Vistage's in the latest survey by the National Federation of Independent Businesses. The NFIB monthly survey showed an index of small business optimism dropping 3.2 points to 89 in June.

Whether you take the glass half-full view of Vistage, or the half-empty conclusion of the NFIB, one of the keys to recovery is going to be small and mid-sized businesses' ability to change quickly, and take advantage of growth wherever in the world it's taking place.

Vistage CEO Rafael Pastor noted that one of the most striking things in his company’s survey of more than 1,500 small and mid-sized business CEOs was the fact that so many of them are looking abroad for business opportunities. Twenty-five percent of those surveyed are either already doing business in China, or plan to do business in China.

That’s a pretty hefty chunk of businesses. And the number doesn’t take into account whether businesses are looking to India, Brazil, the Middle East or Africa. It’s further evidence that you certainly don’t need to be a big business, in a big town, to go global.

“A very large number are doing business internationally. They’re going abroad to do business. The web enables them to do that,” Pastor said.

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Kent Bernhard Jr. is News Editor of Portfolio.com