Market Research Eases Expansion for Midtown Atlanta Industrial Firm
Dhiren Patel is a seasoned business owner. An electrical engineer who started his career in the innovative AT&T Bell Labs, his first solo venture was AmTech Electronics India Limited, which he launched in India in 1991.
When he decided to expand into the U.S. market, he and his family moved to Atlanta and opened an Atlanta Bread Company, funding their new company off the profits. They opened AmTech Drives in 2007. “We slowly got started with no additional funding,” he says.
AmTech Drives provides the major control systems for manufacturing automation. “These motors are fundamental for all industries. They increase automation and help the U.S. compete with the world market,” says Patel.
However, the company also competes against major suppliers. “It’s difficult for our small business to compete with giants like Siemens, Rockwell, etc. Major companies say they have the complete line of products. We have only a few, so we were having a difficult time keeping our contacts within the industries,” says Patel.
They decided to expand vertically as an industrial supply house that provides multiple components. “When we go to sell our product, they don’t need drives every day. But they do need parts.”
Patel drew up a business plan and took it to his lender, Mona Jadav, at SunTrust Bank. He needed a $550,000 line of credit to expand into a larger facility. She recommended he contact the UGA Small Business Development Center in Gwinnett for guidance and support.
“Dhiren and I first met in May of 2015,” says Mark Butler, Area Director of the Gwinnett office. “He needed help in validating market potential, assessing competition, choosing new software and confirming his financial projections. He had already written a formal business plan but wanted to go through the process again.
“His differentiator in the market is his knowledge of the pieces and the parts he sources. But he needed more information on the wholesale and retail sides of the business,” Butler continues. “We looked at the industry, major players and other market intelligence.”
“We’ve been in the business 30 years, so we understand how to manage our financials and how to start and grow the business,” says Patel. “At the same time, we wanted to minimize our risks. I wanted Mark to assist with the marketing study, using his experience and information to assess our idea and our plan.
“Mark confirmed the market potential, that we were going in the right direction, and that our approach in going to the market was right. We were able to get the SBA funding through SunTrust because the UGA SBDC’s third-party business plan and marketing information helped the bank have more confidence in our plan.”
[tweetthis display_mode=”box”]”We got #SBA funding because the #UGASBDC’s #bizplan and assistance gave the bank more confidence.”[/tweetthis]
AmTech Industrial Supply LLC launched in August 2015. By October, Patel had moved both companies from 3,000 square feet of leased space in Doraville to a 40,000-square-foot building the company now owns near Georgia Tech.
“We have doubled our employment, and will continue to hire staff as we go,” he says. “We have a very aggressive goal of expanding in this business nationwide, in multiple locations.”
In September, AmTech Industrial added $35,000 in sales, which grew to $45,000 a month later. By January 2016 they are projected to jump to $200,000.
“Working with Mark is a great experience. He gives us honest feedback rather than what we like to hear,” says Patel. “In business, we need valid data and feedback. Mark’s knowledge helped him visualize the market, and his tech background helped him understand and grasp quickly what we were doing and what we needed.
“As a small business owner, I think the UGA SBDC is an excellent partnership between industry and the university. It helps small businesses survive and grow.”
“Dhiren wasn’t going to make a bad decision,” says Butler. “He knows how to make a business work.”
And there is more work to do. “The distribution channel growing the most for firms in Dhiren’s space is the online channel,” says Butler. “Three to five years from now, that’s where his sales will be coming from. So we are working more on the marketing side with him.”