When Vince Barreto started PowerPlus Cleaning Systems in 2014, he knew the market was hot for his industrial cleaning system.
He conceived the concept and collaborated on the development of the technology that cleans boiler tubes at coal-fired power plants without having to shut down. It uses a series of controlled pressure waves to proactively dislodge buildup from heat transfer surfaces. He celebrated profound success in his first year alone.
“It was like shooting fish in a barrel,” Barreto says.
He was so busy filling orders, which are custom-engineered projects, that it was difficult to keep up with sales. Each order can take 18 to 36 months before budget approval, project execution and final payment. Barreto brought on distributors to assist his three-person team but knew he needed help to scale further.
That’s when a business adviser suggested he try out ScaleUP! Kansas City.
ScaleUP! KC is a free program offered by the University of Missouri-Kansas City Innovation Center with support from the Ewing Marion Kauffman Foundation. The program includes classes, peer mentoring, professional guidance and more. It’s available to small businesses like PowerPlus Cleaning Systems that operate in a market capable of supporting more than $1 million in annual sales and that want to rapidly grow the business.
ScaleUP! drastically changed his business strategy.
“ScaleUP! provided me some really substantive and critical training and perspective that I really needed,” he says.
For starters, ScaleUP! experts urged Barreto to flip his thinking when it came to financially sizing up his business. It was eye-opening for the entrepreneur, who thought he knew his numbers inside and out.
For instance, each job at a power plant can take a year or more. Barreto never used to worry about the lag time it took for him to get paid for a project because he knew there was plenty of work and the profit margin was high.
“I may go months without a major deposit,” he says. “The banks don’t like that. They want to see regular receipts.”
That’s a critical lesson because Barreto will need a bank to help take on projects as he scales. Barreto needs to be able to buy materials should he land jobs in China, South America and several other places at once.
“I can’t write a check for a half-million dollars,” he says. “I could get too many orders and not be able to fund them.”
He needed to think about how every job affects his credit—which means he can’t take every job thrown his way.
Shifting the mindset
Part of the challenge was getting Barreto to think differently. Barreto, who has a minority business enterprise certificate, spent 25 years working in middle management, mainly for General Electric. In fact, he was named on the patent for the IMPULSE cleaning technology while working at GE. It allows coal plants to clean every 30 minutes during production instead of using erosive soot-blowing systems or shutting down the heating unit to clean manually. Barreto’s system is more energy-efficient and saves money.
But the technology was largely forgotten when GE sold the division to a new company. That’s when Barreto bought it, tweaked the product and started on his own.
The entrepreneur immediately called on $5 million in open proposals that nobody was calling on.
ScaleUP! experts praised that foundational work but pointed out that he needed to open his mind further. He couldn’t rely on the same strategies as GE because he was running a small business that wasn’t backed by a massive team from a multinational conglomerate.
It’s a blessing, they said, because it frees Barreto up to look at his customers differently.
Barreto had focused entirely on high-dollar, coal-fired power plants. ScaleUP! coaches asked him a critical question: Why limit your customers to power plants? Reaching new markets was essential for scaling, they said.
Barreto took their advice and was surprised at how many diverse industries needed his help. He expanded to industries like pulp and paper, and biomass-fired boilers.
He even found a group that burns chicken manure. That system was shut down every three weeks for thorough cleaning until Barreto found them and revolutionized their operation.
“I’m finding this all over the place,” he says.
That one ScaleUP! tip changed the course of his business almost overnight.
“I wouldn’t have turned my focus to these other industrial applications because my mindset was from GE,” he says.
The new opportunities improved his bottom line and proved ideal for banks.
“The buy cycle for these smaller industries may only be three months or six months,” he says. “The cash flow and ability to close a deal in a smaller time is huge.”
Setting a new course
ScaleUP! has proven to be one of the most valuable resources Barreto has encountered.
“It has changed the complexion of my business,” he says.
Barreto sheepishly admits that he initially rejected the program when a business adviser first suggested ScaleUP!
His immediate thought was “I don’t know that I have time,” he says.
What could other businesses teach him, he wondered? He was in a specialty market.
“I was blissfully confident of my success,” he says, laughing.
He quickly learned that other entrepreneurs had encountered the same challenges he has encountered or will face. The diverse lineup of entrepreneurs offered a wealth of resources and professional friendships. One entrepreneur suggested that Barreto hire an outside agency that specializes in making cold calls for businesses. Others told him about a customer relationship management tool and a new inventory system.
Those contacts will be essential as Barreto scales. He’s already hired more distributors and is working on a major agreement to collaborate with a competitor.
Barreto also was awarded funding from the Energy Sandbox, a division of the Digital Sandbox KC for a new patent he’s working on. The Sandbox provides proof-of-concept funding.
Barreto’s son, Jordan Barreto, who handles inventory and engineer drawings for the business, can easily see how ScaleUP! changed
his dad’s leadership perspective. Best of all, he knows that the company will continue to benefit from the rich network ScaleUP! offered.
“He knows what direction he wants to take the company now,” Jordan Barreto says. “Before, we were doing the same thing GE was doing.”