Local start-up thriving in spite of slowed economy
By Paul Peirce
Published: Sunday, Feb. 28, 2010
Despite one of the worst business climates in memory, Adeodato Vigano found a niche in the business of making printed circuit boards — dominated by Asian companies — and took a shot at opening his own company.
A year ago, Vigano began renovating a 50,000-square-foot former metal fabrication shop off Route 22 in Murrysville. Today, Vigano's company, Circuits LLC, employs 12 people.
"Starting a new manufacturing business in Western Pennsylvania during a recession may sound far fetched to a lot of people. It sure got me a few raised eyebrows and polite smiles," said Vigano. His company, which opened in September, manufactures "built to spec," flexible printed circuit boards used in electronic equipment in aerospace, defense, manufacturing and medical industries.
Unlike many other start-ups, Vigano was able to use his own resources to open. Overall, small business loan activity in the Pittsburgh region fell sharply last year.
Loans guaranteed by Small Business Administration here dropped by about half, to 356 in 2009 compared with 720 the year before. And times are still tough, experts said.
"It's horrible, and I believe it's getting worse," said Ron Morris, director of the entrepreneurial studies program at Duquesne University.
"Businesses today can't get money, are taxed too much and the regulations are obscene. Recently, my assistant and I were completing forms for a new business and it took two days," said Morris, who started eight technology companies between 1973 and 1999 before moving to higher education. "When I started in the 1970s, all I had to do was basically file a fictitious name notice in Harrisburg," he said.
Today, a successful entrepreneur must find "the biggest, smallest niche" possible in a particular area, Morris said. "And it's got to be something you are very passionate about."
After graduating from the University of Milan, Italy, in the mid-1980s, Vigano took an entry-level position with Compunetics Inc., a Monroeville manufacturer of printed circuit boards, and worked his way up to management.
"I was fascinated with technology and the challenges of the industry. I like to be involved in all the aspects of the life cycle of our products, from the contact with the customers to engineering and manufacturing of our products," Vigano said. "I believe that there is a need in the marketplace for our products and ... I believe there was a way to fulfill that need profitably.
"Time will tell, but I am convinced it was the right decision," he said.
Lori Vidra, vice president of sales and marketing with Circuits LLC, said, "I'm sure you are familiar with printed circuit boards, crack open any electronic device such as a calculator, cell phone, printer and computer, and you'll see a hard, green board with electronic components soldered all over it."
The flexible boards that Circuits LLC makes are the same concept except that they are constructed of a specialized board designed for use in applications where the end product has space constraints or the circuit board must bend, Vidra said.
Vidra added that starting a business in this economy has had its challenges, but some advantages as well.
"We have been able to purchase high-end equipment at very reasonable prices and take advantage of some government grant money for things such as training," Vidra said.
Sharon Starr, spokeswoman for IPC, a Bannockburn, Ill.-based trade association for electronics manufacturers, said the flexible circuit board market is extremely competitive, and more than 89 percent of flexible boards are manufactured in Asia.
"Flexible circuit demand is more volatile than demand for rigid PCBs, but flexible circuit sales have grown at a faster rate than rigid PCB sales over the last decade. Its growth is associated with the high growth cell phone, camera and personal computer markets," Starr said.
Ann Dugan, founder and associate dean of the Institute for Entrepreneurial Excellence at the University of Pittsburgh, believes this year will be better than 2009 for start-up businesses.
"It definitely was a bad year, as all the indicators demonstrate. People were cautious ... even if they had a good idea ... waiting to see what would happen with the economy," Dugan said.
She believes banks will soon begin loosen the purse strings on lending requirements.
"Loans will be much more accessible, but I've got to emphasize entrepreneurs will have to have very good business plans. Lending institutions really scrutinize management teams. And in this market, nothing will be financed 100 percent anymore --- borrowers will need to have other extensive financial resources in place," Dugan added.
John Skiavo, president of Economic Growth Connection of Westmoreland County, said an economic recovery will be the result of small businesses and service industries.
"We're just now seeing federal stimulus dollars hitting the ground, and there will be a lot of dollars targeting in this region in energy-related projects. I believe that will have an impact over the next six months," Skiavo said.
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