Newer businesses fuel metro’s employment surge
Indianapolis, Ind. – November 29, 2006 – Jeffrey Beattey could have sold the family firm, bought the big boat, retired to a life on the water in Florida.
More than one Indianapolis company founder has cashed out, giving rise to the city’s reputation for a complacent business climate.
Instead, Beattey decided to stay on the job and expand Midwest Engineered Products.
What happened next sheds some light on how the city’s economy is being fired up by a new class of aggressive entrepreneurs.
Even though Indianapolis has lost major hometown banks to out-of-state acquirers, and its homegrown automobile, electronics, insurance and retail industries have faded, the area still prospers.
Home to only 26 percent of the state’s households, metro Indianapolis has become Indiana’s commercial engine. From 1993 to 2003, more than 11,000 enterprises opened throughout the state. More than 40 percent of those new endeavors originated in metro Indianapolis.
That has created jobs. In October, 901,000 jobs existed in the metro area, a gain of 123,100 in a decade, in part because of the growth of small businesses.
October’s jobs level was only 200 shy of the all-time peak recorded here in September 2005 by the U.S. Bureau of Labor Statistics.
“Clearly, in Indianapolis the growth of our economy is tied to small and medium-sized businesses, particularly nonpublic businesses,” said investment banker James Snyder of the investment firm Hammond Kennedy Whitney, in an interview earlier this year.
In an age when brawn no longer determines income, Indianapolis is rapidly leaving behind its industrial past. Of all Indiana adults 25 and older with college degrees, 36 percent reside in the metro area, along with 29 percent of the state’s business owners.
Their incomes have soared:
In 2004, business owners in metro Indy reported total personal income of $5.2 billion, or about $130,000 per owner.
What was remarkable was the metro area accounted for 37 percent of the total income earned by all business owners in the state.
In 1984, the metro area’s business owners accounted for only 23 percent of the income earned by business owners in the state, according to a County Business Patterns report by the U.S. Bureau of Economic Analysis.
For Beattey’s firm, the turning point was 2003: Trade journal Modern Metal had just reported Indianapolis jet-engine maker Rolls-Royce’s success with a centrifuge made by Midwest Engineered Products.
Alerted by the article, investors soon called the company’s Northeastside office to discuss buying Midwest.
Its centrifuges, sold under the name CentraSep, work like big, stainless-steel washing machines. Oily industrial waste poured into the centrifuge’s tank is spun at unusually high speed. This separates out lubricants for reuse in the factory and cleans industrial filters so they can be reused in factory machinery.
When the calls started, Jeff Beattey naturally thought of boats. Boats, Florida and retirement.
“We knew we had reached our entrepreneurial ceiling,” Beattey said in an interview earlier this year. “We asked ourselves, ‘How do we take it to the next step, two guys who had started the business with $1,000?’ We came to the conclusion we didn’t want to cash out and go float on a boat.”
Beattey and his father, Jim, a retired insurance executive, had started Midwest in 1991 in Jim’s garage. By 2003, the business had a handful of employees and a growing reputation.
Rather than sell the company, the Beatteys decided to bring in a financial partner, the New York investment firm Hammond Kennedy Whitney.
“They have a great product and have a unique way of doing liquid and solid separation,” said Hammond’s Snyder, former special counsel to Stephen Goldsmith when he was Indianapolis mayor.
A growing concern
While looking for a partner, Jim Beattey had come across a story about the New York firm, whose Indianapolis office is headed by attorney Joseph Scolnik, a former Indiana University football standout. The Beatteys met with Scolnik and liked the Hammond philosophy.
What the Beatteys knew they needed was a business pro for the home office. Hammond, which bought an equity stake in Midwest, steered the Beatteys to Joseph Muldoon, a former Brightpoint North American president. Muldoon had founded and sold FirstMile Technologies, and then consulted for Hammond and the Indiana Venture Club.
Muldoon joined in 2005 and serves as president, while Jeff Beattey, the executive vice president, handles sales. The senior Beattey has retired. Midwest has changed its name to CentraSep to match the brand name of its main product.
This year, CentraSep hired six sales and engineering employees, bringing employment to 15, and plans five more hires next year, including marketing personnel.
“We didn’t do this because we had to,” Beattey said. “We did it because we wanted to. We wanted to grow the company.”
About CentraSep Technologies
CentraSep Technologies develops, manufactures, sells and services the CentraSep liquid -solid separation centrifuge.
CentraSep is the gold standard for liquid-solid separating centrifuges, removing solids to the sub-micron level. CentraSep’s patented technology has made it the most RELIABLE and DURABLE high-efficiency, fully-automatic centrifuge available. The CentraSep performance superiority has been proven in the most demanding applications, in hundreds of installations across ten countries. CentraSep Technologies serves a variety of markets and a broad customer base that includes multinationals that have come to trust the company’s superior separation in production critical applications. The company’s greatest source of business continues to come from its already satisfied customer base & they invite you to learn why.