Small businesses of the year 2020
It all started with a dog named Ruger.
Greenville resident Julie Linder adopted Ruger in 2014 as a buddy for her parents’ dog, Adam. It was a great fit, except for one major issue: Ruger had terrible separation anxiety. Left to his own devices while Linder worked occasional 12-hour shifts as a nurse, he would tear apart the house, chewing on furniture and ripping up blinds.
Linder knew she couldn’t be the only dog owner dealing with this issue. So it gave her an idea: Why not start her own doggy day care? She reached out to her friend Phyllis Manning who had recently retired from a customer care position in the boating industry, and together the two dog lovers formed Greenville’s Barking Buddies, a 2020 Small Business of the Year.
Barking Buddies offers day care from 6 a.m. to 8 p.m. Monday through Friday, overnight boarding, and a variety of add-on services such as individual cuddle time, paw massages, specialty treats and baths. Pricing ranges from $16 for a half-day of day care to $40 per night for boarding in the “family villa” for one pet. Linder, who still works full time in the health care industry, manages the business’ accounting while Manning handles day-to-day operations. More than three-fourths of the dogs that come through their doors are mixed breeds and rescue dogs, a higher percentage than for most operators, Manning says.
“We do a lot of sponsorships with animal organizations like the Humane Society in town because we feel like it’s our obligation to give back,” Linder adds. “The majority of the animals that we care for are rescue dogs, and so we try to help support those organizations to continue their work.”
Finding the right location that met city codes was a big initial challenge.
“Once we finally did find a place and rented [it], we were getting ready to get set up,” Linder says. “Phyllis’ niece was actually painting a mural on the wall of Ruger … and the county called us and said, ‘Oh, I’m sorry, we made this mistake. You can’t actually use that [building]. It won’t fit code.’”
Feeling defeated, the women started the search again. Four months later, they found a new home in a former retail fabric shop in south Greenville. They renovated the building, installing kennels, play yards and dog runs.
Over the next five years, Barking Buddies grew in size and reputation. Initially averaging 15 to 20 dogs per day with five employees, in 2017, the business added 14 more boarding lodges, installed turf, and added play yards and dog runs. By January 2020, Barking Buddies had 25 employees and averaged between 65 to 75 dogs daily.
Then the business was met with its second big challenge: the COVID-19 pandemic. Barking Buddies shut down in April for a month to “regroup and figure out our processes so that we could keep people safe,” Linder says. “We were worried about our team members coming into contact with our customers, many of whom work at the hospital.”
Linder and Manning say that they had about 826 boarding reservations canceled due to the coronavirus and were faced with an estimated revenue loss of more than $175,000. Due to statewide pandemic restrictions, many customers were quarantining at home and didn’t need to board their dogs. The owners were unsure if Barking Buddies would reopen.
But they recognized the important role their business played in the lives of the many dog-owning essential health care workers in Greenville, where one of the biggest employers is Vidant Health Care. Manning worked with her staff to come up with a COVID-19-safe plan, and Barking Buddies reopened May 4.
“We had a supply chain challenge with our cleaning supplies,” Linder says. “And we needed to increase cleaning because of COVID. So that was a little bit more of a challenge.”
But Linder and Manning were determined. They began making daily visits to local businesses for supplies, as customers were limited to amounts they could purchase due to shortages.
Another obstacle was figuring out how to reduce person-to-person contact when customers dropped off or picked up their dogs. Barking Buddies purchased slip lead leashes for each employee to use, eliminating the need to touch potentially contaminated personal collars, harnesses and leashes. New practices such as twice-daily cleanings and banning personal belongings and beds were put in place to keep employees safe. Barking Buddies has Kuranda beds for each kennel, which can be sanitized after each use.
“One of the things that we did with the drop offs and the pickups is making sure everybody’s wearing a mask — we asked our customers to wear masks — [and] making sure that people are physically distanced apart,” Linder says.
On the first day of reopening, Barking Buddies welcomed 36 dogs. As of early November, the day care was at about 75% of pre-COVID attendance. Though revenue hasn’t recovered to pre-pandemic levels, the business is continuing to profit and persevere through an unprecedented time.
Linder says Barking Buddies’ biggest challenge remains staffing. Operating in a college town with many transient students, it’s difficult to maintain workers who are the right “fit” for the job.
“It is physically exhausting and a physically demanding job,” Linder says. “[It’s about] finding someone that can work hard but also show compassion to the dogs and [pay] attention to detail. The attention to detail is important for the dog’s health. … Staffing is always a challenge because you have got to have the right person. A lot of times, we find that just because [they’ve] worked in another doggy day care boarding facility, [it] doesn’t mean you fit in well with ours.”
For the owners, running Barking Buddies is more than just a job: Taking care of dogs is a passion. Manning recalls a conversation with a girl who came for a job interview. The interviewee asked her, “How many dogs do you own?”
“Well, personally, at the time I owned three,” Manning says. “But every day, I own every dog out there in that facility — all these dogs belong to me.”
She laughs. “The good part about that is I don’t have to pay for the vet bills — or the food.” ■
Even in the middle of health and economic crises, business at Asheville’s Bolton Construction and Service of WNC has been booming. Some problems — including anything having to do with plumbing, electrical, or heating and air — won’t wait for a pandemic to pass.
But leaders at the family-run company, in business since 1925, recognized the stress the pandemic was putting on their 65 employees, who had been declared essential workers. “The real heroes in our business are the field staff who can’t do their jobs from home,” says Mark Bolton, a company vice president and part of the family business’ fourth generation.
But many western North Carolina businesses weren’t faring as well through the pandemic restrictions. A drop in tourism and state government-mandated shutdowns slammed area companies.
“By June, the economic situation began to look bleak for many local businesses that have trusted our services for years,” Bolton says. To support those companies and lift his own staff’s spirits, “we decided to give every team member an extra $250 to spend as they choose, but made a special request that the money be spent in support of other local businesses harmed by the extreme drop in western North Carolina tourism.”
Employees shopped at Well-Bred Bakery & Café in Weaverville; Second Gear, an Asheville outdoor equipment consignment store; Summit Building Supply in Burnsville; and several other businesses.
The Boltons have a reputation for treating employees, customers and the community like kin. Perhaps it’s because many members of the Bolton clan still play a large part in the business.
The company’s roots are in Wake County, where William Bolton Sr. started a business in 1925 to install coal-fired heating and refrigeration systems for dairies and meatpackers. The company expanded across the state and once employed nearly 500 people. It later reorganized into separate Asheville and Raleigh plumbing, heating and air conditioning enterprises with Mark’s brother, Will, running the Wake County operation.
Mark’s dad, William “Bill” Bolton III, is involved in an advisory capacity. Mark runs the day-to-day operation, describing his role as “always looking at what’s next.” His sister, Cathey, answers the phone after hours.
“I’ve got to hand it to my dad,” says Mark Bolton, who is 34. “He set my brother and me up to run two separate businesses.” The brothers share ideas and business insurance, but there’s no chance of a power struggle.
Mark Bolton never felt pressured to join the family business. “I grew up in Raleigh and wanted a change of scenery, to do something different, so I went to Wyoming for five years,” he says.
He earned a degree in mechanical systems engineering from the University of Wyoming.
There’s a fifth generation of Boltons — Mark’s nephews are N.C. State University students — who will have the option of joining one of the family businesses.
The pandemic caught many off guard, but Bolton Construction was as prepared as any business could be. “We’ve been very fortunate in that when this all started, we already had a warehouse stocked with protective gear — latex gloves, masks,” Bolton says. “Our guys in the field already had experience with having to wear masks. It’s just standard practice when you’re drilling and creating dust.”
While longevity counts, Bolton emphasizes that the company has had to evolve to better serve customers. “We’ve got to make sure we’re changing with the times, because the way we did business just five years ago is not the way we do business today,” he says.
Take marketing, for instance. “We noticed our business was getting left in the dust by new competitors entering the market,” he says. “Our 95-year-old business only had 30 or 40 Google reviews about a year ago, while Joe down the street who opened up shop last year had over 100.”
Bolton didn’t know until he started investigating that many businesses urge customers to post Google reviews. “Using a simple phone app, our technicians have been able to quickly and easily send a request for review and get feedback.” The company has added a blog with customer tips and a Facebook page.
The company also shifted recruiting strategies, including placing ads in larger cities rather than just local media. They figured that people might want to flee big cities and have a shorter commute and cheaper cost of living. “We’ve had more qualified applicants from other cities than we have locally,” he says.
Like many in the construction and trade industries, Bolton says that one of the company’s biggest challenges is recruiting qualified workers.
Bolton isn’t hoping for a pipeline of plumbers, electricians and HVAC techs to emerge from the ether. Seeking the next generation of workers, officials periodically visit local middle schools to talk about opportunities in the trades. “This is not a ‘dirty job,’” Bolton says. “It can be a career with great benefits.”
They used to set up at high school career fairs but found that most teens had already ruled out working in the field. “There are still preconceived notions — although that’s changing — and still a stigma,” Bolton says. “It’s like when you were in high school and your teachers would try to push you to do better by saying, ‘You don’t want to end up being the fry guy for the next 30 years.’ I think somehow the trades have been put into that category.”
Bolton Construction’s work is evident all over North Carolina including new classroom buildings at university campuses and Asheville-area breweries. “To see those buildings being used — something physical you can touch — it’s very gratifying,” Bolton says. “We’ve worked on buildings at N.C. State, Duke, Chapel Hill and at hospitals around the state. We help people solve problems.” ■
Media Two was born in 1998 in a small office space above an Ace Hardware store in Minnesota, proclaiming to be a digital media-buying agency back when some weren’t sure this newfangled internet thing had legs. “It all kind of happened from that old school in a bar, with a beverage napkin and a buddy drawing out a business plan,” CEO and founder Michael Hubbard says. More than two decades and 14 employees later, Media Two’s tagline “Ad Boldly” is still ringing true, prompting inclusion as one of our 2020 Small Businesses of the Year.
“I went to school for what I would call a soccer degree, and I learned that I really wasn’t as good at sports as I had thought I was,” Hubbard says. Instead, he stumbled upon statistics, numbers and marketing during his junior and senior years at the University of St. Thomas in St. Paul, Minn. After graduation, Hubbard joined an agency that handled direct responses, which deepened his passion for all things data.
Hubbard later sold ads for the Investor’s Business Daily newspaper, and he found himself fielding many calls from companies interested in investing in lead-generation tools. “I kept talking to them about this new thing called the internet and how they should really get involved with it,” Hubbard says. “At some point, one of my clients finally said, ‘Look, I’ll pay you millions of dollars to just go off and do this for us.’”
The millions never materialized, but it prompted him to start his business just as digital marketing was accelerating. Hubbard moved the business, which then had four employees, to the Triangle in 2003 after visiting a college friend in Durham. “One day we went down to the beach and then the next day we drove up to the mountains,” he says. “My wife and I looked at each other and said, ‘Why in the world do we not live in North Carolina?’”
Two decades later, Media Two has tried its hand in most anything related to the web. It served as a beta tester for Google’s AdWords service launched in 2000, managed social-media campaigns and designed websites. Nixing the allure to chase the next trend, Hubbard decided 11 years ago to specialize in media buying because of its potential, which he says proved to be a wise decision.
“[Media buying] is understanding your audience and optimizing your data so that the right message gets placed in front of the right person at the right price and at the right time.”
Like many small-business owners, Hubbard says his purpose shifted significantly in 2020, thanks to COVID-19. “My role started to transition into focusing on developing new business about a year ago. So essentially, this year, with no new business, I really became useless,” he jokes. Instead, he says he’s added the designation of top cheerleader for his staff.
Media Two moved to its downtown Blount Street offices in 2017 with the owners investing in a snack bar with a beer tap, a fitness room, showers, custom decks and conference tables designed by Raleigh Reclaimed, and tree swings. But the look is very different today than in the past. “I am the only one currently sitting in an 8,000-square-foot office space,” Hubbard said in late October. Management proactively sent employees to work from home in early March, for safety and family reasons. “Employees at Media Two now became full-time parents, teachers, health care providers, and so many more important roles than just a marketer in a cool space,” company officials noted.
Being in a downtown Raleigh storefront meant Media Two was one of many small businesses physically impacted by the May 31 protests over the death of George Floyd and other social justice issues. The company’s employees rallied together in the early morning hours to repair broken windows and other damage to their building while also looking to help others.
Despite challenges of 2020, Media Two has expanded over the last eight months. “We did actually hire three new people this year, which was beyond my wildest expectations to be hiring in this kind of environment,” Hubbard says.
An immediate effect of the pandemic was less revenue from Media Two’s travel and tourism clients, which have included the Downtown Raleigh Alliance and the Caribbean’s Curaçao Tourist Board. “In the marketing business, when things go bad, the first thing to happen is that marketing gets cut from the budget, so [Media Two] just stopped worrying about that side of things,” Hubbard says. “We decided instead to really hyper-focus on our current accounts and how we can get them through this process.”
The organization also decided to give bonuses to every employee, despite the pandemic’s initial shock and widespread layoffs among many rival marketers. The catch was that employees were encouraged to share a portion of the money with someone who was more greatly impacted by the unexpected crisis.
“We were starting to see success, and we knew that there were other people around us who weren’t,” says Hubbard in a thick voice, clearly moved even months later. “The stories that came back were just amazing.” Overall, Media Two’s 14 employees shared more than $20,000 with coaches, hairdressers, grocery and restaurant workers, and others.
Hubbard says the organization also redoubled its efforts to focus on human factors rather than just normal day-to-day business activities. “A lot of the conversations I am having [with Media Two employees] are focused on mental health, asking them how they are doing and if they can do this for another year if we have to continue working remotely,” says Hubbard about his weekly one-on-one meetings.
Through late October, Media Two was on pace for a 30% increase in annual profit versus 2018 and a record year for revenue. Asked about plans for 2021, Hubbard says, “I think if there’s anything we take away from this year, it’s that we need to plan for upping the human element in every aspect of our lives.” ■
While growing up in his ancestral home in Scotland, Iain Fergusson remembers spending time repairing its slate roof. He enjoyed the work, learning that preventing leaks requires good, honest effort.
Decades later in 2005 at age 30 and living in Wilmington, Fergusson started Highland Roofing, the name a nod to his Scottish roots. He has built it into a $20 million revenue business with more than 50 employees, earning judge’s votes as a winner in Business North Carolina’s annual Small Businesses of the Year competition.
Fergusson came to the U.S. in the late 1990s after dropping out of the University of Glasgow, joining his former wife, Rebecca; they met while she was in Scotland on a study-abroad program. He found work doing shingle and tile projects for a residential roofing contractor for about nine months. “I just remembered I loved being up high on the roof.”
Not ready to settle down, the couple spent a few years adventuring around the world, traveling through Europe and the U.S. They planted roots in January 2000 after cutting short plans for a road trip through North Carolina that started and ended in Wilmington. The decision came after enjoying a lunch outdoors during a beautiful, sunny day. “We never finished the road trip; it was just too nice,” he says.
For the first five years in the coastal city, Fergusson worked odd jobs, including teaching tennis through a friendship with a local pro. After their twins were born, Fergusson got serious about finding a steady job to provide for his family.
“Because I dropped out of college, the only thing I knew was roofing,” Fergusson says. He decided to join a local roofing company, gaining knowledge needed to start his own business.
After a few months on the job, he broke off and founded Highland Roofing.
“I started the business without a whole lot of knowledge,” Fergusson says. “It’s kind of like what I did when I took a job teaching tennis, even though I did not know how to play tennis. I found myself with a roofing company, not knowing enough about roofing. But I was aware of it and careful with it. I was successful because I learned on the job.”
The business, which is co-owned by Fergusson and Rebecca, specializes in commercial roofing projects, including repairs, replacements and restoration. In 2015, Highland Roofing moved away from residential roofing after acquiring a local competitor, Hanover Iron Works, a year earlier. Hanover had revenue of about $2.5 million annually and provided an established commercial customer base.
Revenue has increased from $8.5 million in 2017, $13.7 million in 2018 and $21.1 million in 2019. Customers include some high-profile Wilmington employers such as Live Oak Bank and fintech company nCino. Separately, Fergusson owns Coastal Fabrication, a sheet metal business that gets most of its revenue from making metal flashings and trim for Highland.
A key factor in Highland’s growth was the creation in 2017 of a division that applies a GE Silicone sealant. “The materials can be applied on top of the existing roof, and the membrane is essentially created onsite using a fluid-applied process resulting in a monolithic and lightweight system,” Fergusson says. “It saves on landfill materials, helps businesses be more energy efficient and saves on long-term energy costs.”
Some of the revenue growth also stems from repairs related to widespread damage caused by Hurricanes Florence and Dorian in 2018 and 2019. But Fergusson says the ultimate source is a team of talented and dedicated employees.
“Wilmington is a really good-sized town. If you do good work, if you treat people well and get a good reputation, your reputation will spread quite quickly,” he says.
Highland expanded to Myrtle Beach four years ago and added a Raleigh location in 2018. Growth at the beach has slowed this year because of the hospitality industry’s pandemic troubles, while the company has intentionally grown its Triangle-area business at a slow pace. “Now we are starting to put more boots on the ground and take on some larger projects,” he says.
Plans call for an expansion into Charlotte, but Fergusson says he’s more focused on expanding at the current locations and improving internal processes.
“I am going to grow, in terms of revenue, less than I probably could in order to grow right — to be able to continue to refine the internal processes, to continue to improve our culture, even more so, and to get the team that I do have really gelling.” ■
START TO FINISH
Scott Daugherty is stepping aside after leading the state’s small business development effort for 36 years.
By Edward Martin
It’s odd that Scott Daugherty’s career would end this way. After a couple of years at Wake Forest University and earning a law degree from the University of Florida in 1972, he worked for a wealthy Palm Beach heir of The Great Atlantic & Pacific Tea Co. supermarket family, creating nonprofits and “becoming an expert on charitable giving.”
Along the way, he would spend two years in the Army during the Vietnam War, much of it counseling amputees as a psychiatric technician or helping inner-city teens. He worked for a community-development organization and a commercial developer in the Mississippi Delta and was a deputy legal counsel for the Federal Home Loan Mortgage Corp., better known as Freddie Mac.
Small businesses? Not much pointed that way, but Daugherty landed in Raleigh in 1984 when state officials were toying with a center that would help them get started, grow and thrive. The program would also pave the way for technology to make the leap from campus to commercialization.
Congress had created a national Small Business Development Center program in partnership with the Small Business Administration and universities. Daugherty helped University of North Carolina System President Bill Friday develop North Carolina’s program, then was then hired as its first director.
Daugherty, 77, will retire in January as director, the only one the N.C. Small Business and Technology Development Center has ever had. Its record of success over the last decade, only about the last third of his career there, speaks to his impact. During that time, the center helped N.C. small businesses increase sales by more than $1 billion, grow their capitalization by more than $1.3 billion, and create 36,000 jobs.
“About a third of our clients have fewer than 10 employees, and 45% have 10 to 50,” he says. “But it’s in the aggregate that small businesses are so important.”
The U.S. Small Business Administration says North Carolina has 1.6 million workers in businesses of fewer than 100 employees, approaching half of the workforce.
Daugherty has built the organization that has helped create many of those businesses and jobs into a force of its own, with 16 offices and about 75 employees. Part of the UNC System, it works with more than 500 business owners, offering counseling and other assistance in specialties such as exporting, market research, accessing private equity, technology development and communications.
“Scott and the SBTDC have been invaluable partners in supporting the creation, retention and growth of small businesses in the state,” says Christopher Chung, CEO of the Economic Development Partnership of North Carolina. “Scott has dedicated himself to helping small businesses, which employ nearly 45% of the state’s private-sector workforce, and his work these past 36 years no doubt leaves a lasting impact on North Carolina’s economic prosperity.”
N.C. Commerce Secretary Tony Copeland says that Daugherty has been an effective and reliable champion of the state’s small-business community for decades. His accessible brand of leadership won’t be easy to replace, he adds. As of mid-November, a successor had not been chosen.
A veteran, Daugherty cites the center’s support for what it calls its Boots to Business program, helping former service members set up businesses. More than 12% of center clients are veterans.
“The fundamentals of building a company and struggling to break even haven’t changed much, though, of course, the business environment has,” he says. “The foundation underpinnings of finding capital and successfully launching have not changed a lot, though the shelf life of businesses seems a little shorter than it used to be.”
Attitudes have shifted, say Daugherty and other workforce experts. Today’s small-business owner is more likely to choose to be one. “A lot of people in the 1980s were looking at small businesses as an alternative to job loss,” he says. Now, they’re showing more confidence in their ideas and products. “There’s a strong, broader interest in the possibility of a small business than there might have been 35 years ago.”
Another change strikes Daugherty. “There are more women and minority entrepreneurs than in 1984,” he says. The SBA says the state is seventh nationally in the growth of women-owned businesses. There are about 333,000 that employ more than 300,000, with sales that top $39 billion a year.
Daugherty’s first taste of North Carolina came more than 40 years ago. His grandfather relocated from Michigan to Statesville to work for Kewaunee Scientific, which still makes specialized laboratory cabinets and furniture for hospitals and universities.
“I wanted an away experience in college but wasn’t completely stupid,” he says. “I found Wake Forest — the best two years of my life — and my grandparents were 30 miles away in Statesville and not too obtrusive.”
In retirement, he’ll consult and make speeches and expects to travel with his wife. While that plan is dampened by the pandemic, his enthusiasm for his life’s work hasn’t waned.
“Small businesses are impressive because of the large number of people they employ,” he says. “Interestingly, for many people — the high school senior working as a bagger at the grocery store or flower shop or others with similar jobs — a small business remains their introduction to the workplace.” ■