by Kim North Shine
Neuvokas Corp., a manufacturer in Ahmeek, Mich., a village with a population of about 200 in the Upper Peninsula, could have been among the more than half of manufacturing startups that fail in Michigan.
But with its forward-looking leadership and the support of the Economic Growth Institute at the University of Michigan, its sales increased from less than $5,000 to more than $1 million in five years.
Neuvokas went into business in 2013. It had a needed and innovative product to sell in Gatorbar, a fiber-reinforced polymer rebar used to strengthen concrete in buildings, roads and bridges, but its small staff and lack of industry connections kept it from taking a bigger bite out of the road-building market. And as a fledgling business, it needed more marketing expertise and business strategy to really build upon its technical and production capabilities—standard expertise for large companies with more resources.
After connecting with the Small Business Development Corporation, Neuvokas was able to tap into a grant from the Michigan Strategic Fund administered by the Michigan Economic Development Corporation. More than half of all new manufacturing startups fail. The goal of all parties involved was to help Neuvokas beat the odds by heading off the risks that come with being a small startup.
The state grants supported a business development plan designed at U-M’s Economic Growth Institute in partnership with Neuvokas, one of 100-plus small businesses that have worked and are working with EGI’s First Customer Program.
The First Customer Program identifies and addresses critical gaps in business development, marketing and sales in advanced technology companies, and it’s one of several programs that target and support various industries in the state in cities such as Ann Arbor, metro Detroit, Grand Rapids, Houghton, Hancock and Newaygo.
It was the job of Vikesh Chandrashekar, project manager at EGI, to guide Neuvokas and connect it with institute staff, U-M students and consultants to help Neuvokas get established and grow. They provided research, strategic guidance and a plan that allowed Neuvokas to make business system improvements and find the best ways to market Gatorbar to customers.
“We saw that Neuvokas had the potential to disrupt a billion-dollar industry by solving a real need,” Chandrashekar said.
With much work going into executing the plan, business picked up and hasn’t slowed down since, said Neuvokas CEO Erik Kiilunen.
“We’ve been able to work with the University of Michigan to provide us that kind of jumpstart we needed to get it going and I believe we’ve leveraged it very well,” Kiilunen said.
In a year, Neuvokas has grown from a staff of 10 to 23 and is building a new production facility to open next year. The company now has enough orders to run a 24-hour, 7-days a week operation. Sales of Gatobar, a non-corrosive rebar that is seven times lighter and two times stronger than steel and can extend the lifetime of a roadbed from five to 20 years, increased from $4,400 to $1 million in five years. By year’s end sales are projected to reach $4 million.
EGI helped by:
- Providing knowledgeable staff expertise to assist with small businesses.
- Evaluating operations and determining strengths and weaknesses.
- Designing a plan to help the firm identify and prioritize goals.
- Connecting the company with resources and private sector consultants to assist with work together to implementing their plan.
The company’s goal is to produce a lower-cost steel, and Kiilunen said he’s confident the latest iteration of the business will achieve that goal and let Neuvokas be a contributor to the local economy and jobs creator.
“Developing something we can actually manufacture in this area and actually export is really what we bring to it,” Kiilunen said. “The University of Michigan helped us out on that front immensely.”