• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Partners Learn the Ropes, Start Water-Testing Business

Posted on: Sunday, 11 December 2005, 12:00 CST

By Kevin G. DeMarrais, The Record, Hackensack, N.J.

Dec. 11--Five years ago, Andy Carmichael and Beverly Preast had an idea for a company but little idea how to make it happen.

Today, thanks to a new state law and guidance from the state's small-business development centers, the two entrepreneurs have a business with revenues nearing $1 million and bright prospects for growth.

The story of pCi/Labs Inc., a Dumont-based company that analyzes drinking water for radioactivity, began in 2000, when their employer -- a division of Teledyne Technologies Co. -- picked up stakes in Westwood and moved to Tennessee.

Faced with unemployment, the two decided to strike out on their own. But they quickly discovered that even with expertise in water-testing, they knew little about running a business.

But a small notice in The Record about a public forum in Teaneck for people interested in starting their own businesses caught Carmichael's eye. That led to what became a critical relationship with the New Jersey Small Business Development Center at Bergen Community College and Vincent D'Elia, its director, and a crash course in business management.

Carmichael's background was in geology and physics; Preast's was in quality control.

"I felt very comfortable from a technical standpoint, but my schooling was technical, not business," he said.

"Vince gave us very savvy advice: Pay your taxes, pay your employees, pay your bills," Carmichael said. "You have to do those three things and you have to do them in that order, even if you don't pay yourself."

They learned their lessons well. Ten days ago, in recognition of the company's growth, pCi/Labs received the regional development center's 2005 Success Award.

The center at Bergen Community College is one of 11 regional centers around New Jersey.

D'Elia also taught the two to be realistic. When they began, the two had a business plan that ran 200 pages, including details for every possible contingency, and they estimated they'd need to borrow $4 million to $4.5 million to get up and running.

"That's what happens on the scientific side," he said. "You have supporting documentation for everything."

After meetings with D'Elia, however, the budget was reduced to $200,000 and the business plan was a mere three pages, Preast said.

Even with the reduced budget, lenders were hesitant to put up money for an enterprise that would need as much as a year to secure regulatory approval. So it was launched mostly with a $150,000 mortgage on Carmichael's home and a $40,000 loan from a friend.

"Everyone we took our business plan to liked it, but they wouldn't lend us money," he said. "State and federal certification is needed before you can start your business, so we were paying for costs without bringing in a dime."

Total revenues the first year were about $25,000, but that has grown steadily, thanks partially to New Jersey's private well testing act that mandates that before any home with a private well can be sold, its well must be tested for a variety of substances.

In 12 of the state's 21 counties -- mostly from Cape May to Monmouth -- private-well tests must check radioactivity.

"The southern half of the state has a lot of natural radium in aquifers, Carmichael said. "In the northern half there is different geology, and radium is not a concern."

In addition, in 2003 the federal Environmental Protection Agency mandated that every drinking water purveyor had to be tested for radioactivity.

Most of the work is done as a subcontractor for chemistry labs that are equipped to test for arsenic, mercury, volatile organic compounds and other contaminants, but not radioactivity.

Even major utilities, such as United Water, farm out testing for radioactivity because of the special nature of the work and licensing that is required.

Carmichael and Preast decided to set up shop in Dumont, with their lab just across the state border in Orangeburg, N.Y., even with well testing centered in the southern half of the state.

"We tried to hire people we knew from Teledyne," Preast said.

Besides, with overnight delivery services, there was no need for a physical relationship with the labs, even though testing must be done within 48 hours of a sample being drawn, she said.

Carmichael is quick to note that having a lab test for radioactivity does not present an environmental risk.

"It's drinking water we get, what they get out of the tap," he said. "From a radioactive standpoint, we're not an Indian Point. We're completely different."

-----

To see more of The Record, or to subscribe to the newspaper, go to http://www.NorthJersey.com.

Copyright (c) 2005, The Record, Hackensack, N.J.

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

Source: The Record - Hackensack, New Jersey

More News in this Category