Oil and gas experts school small business owners

April 09--SAN ANGELO, Texas -- No oil and gas company is an island -- their employees need food, health care, entertainment, office supplies, ice, housing and gobs of other goods and services.

"San Angelo is in a unique position to sort of be a hub for the region," said Luke Legate, industry consultant with the Joint Association of Oil and Natural Gas Education Initiative. "You've got great schools, entertainment ... people need good quality places to live."

Legate and four other industry experts spoke on small business in the oil field at Tuesday's conference hosted by the Angelo State University Small Business Development Center. More than 130 attendees, from business executives to landowners, traveled from as far as Bronte, Mertzon and Brownwood to hear the experts' advice and to network with the business community.

"You have to persist, you have to stick with it ... you have to own it," said Randy Gill, area manager for FIML Natural Resources -- an independent oil company out of Denver.

Speakers noted how similar their speeches were, because their key messages to small businesses looking to work in the oil industry were the same.

HAVE A GOOD TRACK RECORD

"Safety is the No. 1 things we talk about in this industry," Gill said. "We want you to go home with all the appendages you arrived with."

In an industry that takes safety records and drug-free zones seriously, experts said it is critical for companies wanting to work with the industry to feel the same way.

"You can't have drug use in your company. Everything from roughnecks to assistants in your office," Legate said. "Have a good track record."

In a typical job fair for the oil and gas industry, Legate said, about 40 percent of applicants fail the drug test.

James Jones, an adviser at the Del Mar College Small Business Development Center in Corpus Christi, also walked the audience through a Master Service Agreement -- or MSA -- saying it needs to outline a procedure for reporting accidents, a drug-free policy and a workplace policy.

"If you're good at what you do, they know it," Jones said. " ... Your reputation goes well before you."

Businesses looking to work with the oil industry need to have detailed procedures regarding safety, drug use and environmental protection.

"If you don't have any records, you may have problems too," Jones said. "It's worth it to them, you have it in your mentality that safety is important. If you don't, the phone's not going to ring."

DO YOUR HOMEWORK

"There's a lot of opportunity, but you've got to know where you can plug in," said Gil Gonzales, director of the Rural Business Program at the University of Texas in San Antonio.

Gonzales told small business owners to get connected with their local SBDC office, for resources as well as for contacts.

"Most of these people have been in the business a long, long time and they see through the smoke screens," Gill said. " ... In my world, there's not much emotion, it's all about the numbers."

The experts also agreed that building a network of references was important to making it as a small business contractor in the oil and gas industry.

"You've got to start small somewhere," Legate said.

Giving examples of how small businesses could enter the industry, he said companies need to find ways to meet the needs of oil companies and their employees.

"Security is a huge one," Legate said. "And catering is a huge business right now. Their companies are feeding them right there on site."

In Dimmit County, Legate said, a company grew its business by delivering water and ice out to the drilling sites.

In another example, Jones said an oil company asked a doctor to move his practice from San Antonio to Carrizo Springs to serve its 8,000 employees.

Many of the speakers, however, cautioned small business owners from "putting all your eggs in one basket."

"If you get in on the first try somewhere, don't stop," Gill said.

Jeff Johnson, the chief executive officer of Dixie Electric, echoed this by saying it would be unwise for 80 to 90 percent of a contractor's revenue to come from one customer.

"All it takes is a management change," Johnson said. "It could be devastating for that customer."

ATTITUDE OVER APTITUDE

"The type of people we hire is as important as the money," Gill said. "Be aware that what you do today can possibly follow you the rest of your life."

Going through some of the hiring criteria the industry looks at, Gill noted he also considered a person's ability to manage his or her emotions and ability to get along with others.

"We are looking for attitude at the company I work for a much as experience," he said.

Even as a company, Gonzales said, it is important for businesses to be welcoming toward the oil companies.

"Treat them like you'd treat them in any small town," Gonzales said. "Welcome them and go where they are."

Ultimately, all five experts urged patience and continued hard work.

"There is no magic to doing business with the oil and gas business," Legate said. "There is persistence, relationship-building, paperwork, insurance, a little bit of luck, a lot of prayer and a desire to build your business and provide for your family."

ADDITIONAL RESOURCES

Institute of Economic Development, University of Texas at San Antonio: www.iedtexas.org

Angelo State University Small Business Development Center: www.sbdc.angelo.edu

FIML Natural Resources: www.fimlnr.com

Contractors Safety Council, out of Corpus Christi: www.csccb.org

Oil and gas reports and information: www.oginfo.com

Railroad Commission of Texas: www.rrc.state.tx.us

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