Business

Thursday, Nov 25 2010 10:00 AM

Strictly Business: Q&A with Garold Muth, president of Muth Pump

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    Garold Muth

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BY COURTENAY EDELHART, Californian staff writer cedelhart@bakersfield.com

At a time when many companies are struggling with reduced demand, Bakersfield-based Muth Pump LLC has landed some important new international accounts and is optimistic about the future. We asked the manufacturer of industrial plungers and pumps to talk to us about growing in a weak economy.

Answers have been edited for length and clarity.

NAME: Garold Muth

TITLE/OCCUPATION: President / Inventor.

AGE: 71

FAMILY: Married to Mandy Muth for 30 years. Six children.

Question: For readers who are unfamiliar with your company, describe, in layman's terms, what it is you make, exactly, and what the product is used for.

Answer: We design and manufacture down hole rod pump plungers (FARRTM Plunger) for the oil and gas industry, which is designed to pump sand and other solids that plague the industry. The typical pump plunger will get stuck in the pump barrel when any sand or solids (scale, coal fines, iron sulfide) are present in the well. The FARRTM Plunger eliminates this problem by preventing the solids from getting between the plunger and pump barrel wall.

Q: When was Muth Pump founded?

A: 1998

Q: How many employees do you have?

A: Currently we have three full-time and three part-time employees.

Q: Why was the company launched?

A: I took my idea to other industry engineers who basically debunked the idea and thought it wouldn't work. I knew the idea was sound and would help solve an age-old problem in the oil and gas industry of pumps failing due to sand and solids. When no one was interested in the idea I decided to start my own company and prove it does work.

Q: What were you doing before Muth Pump was founded?

A: I worked in the oil industry the previous 40 years, lastly as field production superintendent.

Q: Sometimes small companies limit their marketing to domestic clients. You're thinking bigger. Where are some of your international clients based and what's your advice to small businesses hoping to cultivate sales overseas?

A: We have clients in Germany, Indonesia, Columbia, Venezuela, Canada, Trinidad, Saudi Arabia, Bahrain, Kuwait, Qatar, United Arab of Emirates and Oman. As a small company it can be difficult to break into the international markets. The best initial low cost solution is to develop a website to advertise your products and make information available worldwide about your company. We got our first international customer through our website, www.muthpump.com. As we began to grow, we started attending a few of the smaller global trade shows for the oil and gas industry when they were held in the United States. Most recently, we attended a show in Canada that nearly doubled our international market and sales. Above all, establish your logo and brand name. Be consistent.

Q: What are some of the challenges of doing business internationally, and how are you overcoming those challenges?

A: Some countries require agents who are citizens of the particular country you are selling to. It can be difficult to find a reputable agent with good product knowledge who is willing to help market your product. It takes some time and research. You want to make sure they are with an established company and can properly represent your product in their country. Avoid long-term agency agreements until you know they can perform to your expectations.

Q: What are the advantages of doing business overseas?

A: A great advantage of dealing overseas is you open your business up to a more diverse worldwide economy. When things are slow in your local or domestic market you can often make up the difference in the other overseas markets where the economic climate may be better. Establishing your company as a worldwide company can also make your business and products more lucrative and reputable in the domestic market.

Q: When money is tight, research and development budgets often get slashed. You've obviously made the choice to market a technological improvement that you're hoping will give you an edge over competitors. Has that gamble paid off for you?

A: I never looked at my idea as a "gamble." I looked at it as a simple common sense approach to solving a problem. We have and will continue to do more research and development on new products that will technologically enhance oil and gas recovery in the world. For us it's really paid off. We have seen an average of 20 percent growth in sales each year for the past five years, and we are looking at a more significant increase in the next two years.

Q: Is it appropriate to cut your marketing budget in lean times? Why or why not?

A: I wouldn't say "cut" the budget all together. Maybe do some trimming and focus on those areas of marketing that have proven to be more successful for your business. You must do some marketing to expand and grow. If companies you want to do business with don't know about your product, they will not buy it.

Q: Do you have any advice for other family-run businesses as far as keeping business matters from intruding on family relationships?

A: Be open-minded to new ideas and thinking and give value to everyone's input in regard to the business.

Q: What's your advice for extracting sales out of potential buyers who are watching their spending?

A: With our product, although sometimes more expensive than the typical plunger, we sell on the basis of return on investment and overall benefits to the customer. Because the FARRTM Plunger lasts three to six times longer than other plungers, it is more efficient, increases production and can save customers tens of thousands of dollars. That's using a product that typically costs less than $1,000. Show your potential customers why your product is a good investment right now and the potential long-term savings.

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