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An Eastern Shore Startup Success Story – Daystar Mfg

A call from the Eastern Shore Entrepreneurship Center (ESEC)  Executive Director, Mike Thielke, to Ed French, the Score Assistant Director for the Eastern Shore and certified mentor, began with a recommendation that Jay Hubbard, CEO of Daystar Manufacturing, Hurlock, MD, is a candidate for Score mentoring.   Jay, a capital client of ESEC, and his wife, Christie, had established Daystar about three years earlier to provide plastic injection molding manufacturing for clients.  Jay’s previous experience in injection molding processes gave him the technical knowledge needed.  In addition to injection molding using a number of composites, Daystar does assembly and packaging where products may include rubber and metal components.

At the time the business was built around a major potential client only to have the client direct business elsewhere and leaving Daystar with the building, equipment, and the-then-solo-client business prospect evaporate.  That was the first of many lessons the Hubbards learned about what it means being in business for yourself.  “No matter how much we trust others, we learned early how important non-competes, non-disclosure agreements, and solid contracts are essential in business”, observed Christie.   To hear the Hubbards describe the experience it was a “near death” experience because of its dependency on one client for start-up.

At the time of the ESEC referral Daystar had two injection molding equipment pieces in its approximate 7,000 square-foot space.  Today has five large molders and contemplates a 10,000 manufacturing and warehouse addition to accommodate current and future needs.   But getting from “there” to “here” is the story of faith and perseverance, according to the Hubbards.

As partners in working with new business start-up and helping established businesses grow, ESEC and Score support each other with client referrals.  In this case, as a capital partner for Daystar, Thielke saw an opportunity for Hubbard and Daystar to focus on business growth and planning that would strengthen its opportunity for success that might be better supported with a mentoring relationship with Score.  As small business capital lenders, “ESEC has a vested interest in the early success of its clients and knows the value of early planning and effective execution”, says Thielke, who, along with Mark Green has provided episodic support for Daystar.  As mentors to small business, “Score helps provide objective reviews and recommendations to business owners that includes everything from business, financial, and capital planning to marketing, sales, operations, and human resources management.  The specifics of each engagement are unique to the client”, according to French.  The ESEC and Score partnership provides the experience of others in business that small businesses are not likely to access or afford on their own.  The support from each is without cost to the client and completed through an all-volunteer cadre in the case of Score’s services.

The relationship between Daystar and Score was typical in that it involved several weekly meetings followed by monthly visits until Hubbard developed the momentum that gave him comfort.   Meetings were interspersed with phone calls when beneficial for episodic questions.

French and Jay focused on examining the business opportunities for growth because this was a growth story to unfold as compared to a cost-management and operations efficiency story.  Daystar manufacturing had the equipment, space, and capacity for growth.  Because there was volume in place that covered the fixed and direct overhead, any new business properly priced would yield incremental revenue and marginal cost benefits that would go for continued debt repayment and additional cash for hiring staff and profits for Daystar.  In commenting on the Score services, Jay said “The Score service was providing good advice and focus on the business plan, scheduling, and sales, and inspired me to think outside the box regarding marketing and sales.”  Christie commented that “ESEC was more personable than banks, available, worked with us and was flexible in the debt repayment.” She added that “If our example is an encouragement to others who want to start their own business, then I am glad to share our experiences in this process.” They both chimed that their early beginnings were attributable to support through Dorchester County, and support form Kesha Haythe, the then-director for County Economic Development, that provided the initial loan subsequently transferred to ESEC.

Hubbard is a self-starter with a passion for high quality and customer service.  As owner of a small business he knows that keeping a customer is vital and that once he gets a customer his relationships will likely continue.   Daystar three years ago was a struggling business that never stopped focusing on quick turn-around in manufacturing and top-quality, but with one full-time and one part-time employee.  Today, the business has 5 full-time and 4 part-time employees and another 5 available through a temporary labor source though they have been hand-picked and are like ‘family’ according to the Hubbards.  The business operates three shifts most days of the week and two shifts other days.  This year will see approximately 25% of the business from new customers and retention of all prior customers from last year.  Existing clients develop new products to add to existing lines, accounting for about 10% of the volume.  The growth has been pivotal, coming primarily from doing business for another manufacturing that could not meet its demand to national Web site marketing for referrals as well as networking referrals and repeat business.  Two of the full-time employees are Bryan, 24, and Chris, 21, who are learning all aspects of the business from the “ground up” according to Jay.  Their engagement, including managing all aspects of production on some shifts, makes this a family business.

When asked about the challenges of starting their own business, both the Hubbards are quick with advice for others based on their experience.  “It seems an insurmountable task”, says Jay, “where it is easy to under-estimate expenses and over-estimate income in the early days of the business”.  “The commitment to faith”, per Christie and echoed by Jay, “was important in giving us patience and perseverance, knowing if we did the right things, we would be successful, no matter the early challenges and the uncertainty.”   For sure, they are in agreement that working hard in the production area, staying close to all projects, training staff, and remaining focused on product quality are essential to keeping an eye on the business.  As an example of the commitment small business owners make, they recount the times when they would sleep on cots in the office to be available to make equipment and production changes in the middle of the nights to have quick product turn-around and could keep machines working but didn’t have staff to operate them around the clock.

According to French “Jay and Christie are the ideal Score candidates for mentoring.  They use initiative, work hard, are content experts in the business, and are open to new ways of approaching the sales and marketing area of his business and being prepared to meet production demands.  Their focus on customer satisfaction will sustain them in growing the business and their business growth will help them achieve increased profitability.”  The best testament to their success includes plans to get away for a few days to relax, a rarity in the early days of the business when it was always “hands-on”.

As to the assistant now provided to Hubbard from Score, French said “The great thing about our relationship is that Daystar doesn’t need any support now because Jay and Christie are accomplishing what they need to accomplish but they know we are always available if an opportunity presents itself where we can assist him”.