Gnarly, Dude

Gnarly, Dude

ENTREPRENEURS by Mark Gordon | Managing Editor

Business instincts and a surfer's laid-back attitude can co-exist, even thrive.

Handmade surfboard manufacturer Bob Smetts was living every entrepreneur's worst nightmare in the early 1980s by selling a product in a highly competitive and extremely fragmented market. Sales were low. Profits were even lower.

The stagnation forced Smetts to become ultra-frugal. At first, he worked out of his mom's shed. Then he moved to his dad's old barn in southern Sarasota County, where he used a gas generator for power. He kept receipts in a shoebox.

Then things got really bad: Smetts was approached by a vendor in the surfboard market who asked him to make a prototype for a skim board, a smaller and thinner version of a surfboard, where the ride starts in the sand, as opposed to the ocean.

Skim boards? To Smetts, a surfer's surfer who lived in Oahu, Hawaii for six years, going from surfboards to skim boards would be like asking Picasso to fill in a children's coloring book.

"I thought I was too good to be making skim boards," Smetts says. "I built it really quickly. I made this ugly nasty board and just kind of zapped spray paint on it."

But what Smetts thought was nothing more then a low-budget surfboard actually turned out to mark the beginnings of a gnarly 25-year business ride.

The company he founded, now based in Venice and aptly named Zap Skimboards for that early 1980s spray paint effort, has become one of the largest skim board manufacturers in the country. The 25-employee company made about 40,000 skim boards in 2007, and its annual revenues grew about 15% last year, to just under $4 million.

In the process of going from surfing to skimming, Smetts found his inner entrepreneur. Under his direction, Zap Skimboards became the first skim board company in the country to make the boards out of foam, instead of plywood. The difference, while costlier, provides a lighter and more buoyant board, Smetts says.

What's more, a few years ago, Smetts led what turned out to be an industry trend by retrofitting the boards for use in boat wakes - meaning users can go in lakes and rivers, not just oceans and gulfs. The new product, Phase Five, transformed the company from selling a product that could only be used on coastal shorelines to one that can be used in lakes, too. It now sells boards in dozens of states and in countries as far away as Portugal.

"I love building boards and I love surfing," says Smetts, an easy-going, smiling 53-year-old who still has a full head of surfer-quality blond, wavy hair. "That's why I got into this business."

An Hawaiian education

Not everything has been all surfs and giggles, though. Smetts and the skim board industry have essentially grown up together, so from the beginnings of the business on through today, a constant challenge has been balancing the need to market both the company and the industry. It's not the type of challenge a business in a more established industry, such as surfboards, might face.

Smetts has solved that issue by regularly increasing his promotional and advertising budget, to the point where it hit about $70,000 in 2007. The promotions run the marketing gamut, from advertising in glossy industry magazines aimed at skim boarders to sponsoring events such as the Florida Skimboarding Championships in Vilano Beach and the Zap Pro/Am, which hosts tournaments across the world.

Smetts is also a board member of the United Skim Tour, which serves as the sanctioning body for professional skimboarding events in the U.S. and abroad. The tour has been in existence since 2000, but the first six years were marred by infighting between two groups of skimboarders.

In 2006 though, Smetts joined together with the owners of the two other large skimboard manufacturers in the country, Exile and Victoria, to from a three-person board at the helm of the tour. The trio has since developed a system of running events and solving disputes that arise in competition. "Our goal," Smetts says, "is to turn this into a legitimate professional sport."

Meanwhile, in 1982, Smetts had to figure out how to turn Zap into a legitimate business. Smetts, born and raised in southern Sarasota County, had little formal business education, save for a high-school economics class and a short stint at Santa Fe Community College in Gainesville. He dropped out of Santa Fe in the late 1970s so he could move to Hawaii.

Smetts took to the Hawaiian lifestyle. He worked for a hand-made surfboard manufacturer, but made sure to leave plenty of time to test the product in what is considered by many surfers to be the sport's Mecca.

Smetts moved back to Florida in 1981 to start his local hand-made surfboard business. For about the first decade, he kept his hand in both the surf and skim waters, running both a skim board manaufacturing shop and Windflight Surf & Sail, small surf store in Nokomis, and later, Venice.

But by 1990, the skim board business was growing too rapidly to be part-time gig. So Smetts sold Windflight, which is still in operation today under other owners, to focus entirely on Zap.

"I never did get back to college," Smetts says of his Hawaiian experience, "but I did get an education."

Surfer dudes

Smetts' business education would continue as Zap grew. In addition to devoting time and money to marketing the sport, Smetts says he realized that to make a good board, he had to continuously refine the manufacturing process.

"It's not such an easy thing for a kid to make in his backyard or a guy to make in his garage," he says.

The current setup for Zap includes about $650,000 in equipment run in a 25,000-square-foot facility off Jacaranda Boulevard.

The process includes using computerized fabricated cutting machines, resin pumps and molding shells. The company makes boards in a variety of shapes and sizes, which it sells wholesale to a network of dealers. The boards range in retail price from just under $100 to more than $400.

As the business has grown, one challenge Smetts has regularly dealt with is something all small business owners and entrepreneur can relate to: Hiring the right, and the best, people.

The industry, which for better or worse tends to attract surfers as employees, has made Smetts' hiring challenge even tougher. For Smetts, this has mostly been for the worse, remembering that in the 1990s Zap's entire employee base was made up of laid-back surfers.

"That didn't work out too good," he says. "You never knew when they were going to show up or if they would show up."

The current employee base counts just a few surfers, Smetts says, and is now mostly made up of trained technicians. Still, hiring and retention issues remain a priority.

So much so that a few years ago, Smetts instituted a Fridays off policy, which was an immediate hit with the staff. The company now works 10-hour shifts, four days a week.

Closing on Fridays fits with the company's culture, as well as Smetts' business philosophy.

"I'm not as concerned about growth as I used to be," Smetts says. "Quality of life is more important to me now than trying to be big, big, big."

Troubled Times

Bob Smetts might run a successful, $4 million small business with a sterling national reputation in his industry, but he's also a classic example of the problems facing Gulf Coast manufacturing businesses.

First, there's the issue of property taxes. Smetts' property tax bill on a 25,000-square-foot building he owns in Venice went up more than 40% in 2007, from $19,000 in 2006 to $28,000. The late January passage of Amendment One, the state's property tax relief package, does little for commercial properties, points out Smetts, founder and president of Zap Skimboards, which manufactures a lighter and thinner version of a surfboard.

State incentives don't offer much relief to a business like Zap, says Smetts, as he's not looking to build a new plant or hire a lot of employees. And anti-growth legislation, such as the supermajority initiative approved by Sarasota County voters last November, only exacerbates the situation.

Says Smetts, echoing the thoughts of some other manufacturers, specifically in the Sarasota-Bradenton area: "This area isn't a friendly environment for manufacturers."

And finally, no story on a manufacturers' woes would be complete without mentioning international competion from companies that make products significantly cheaper. Read: China. Smetts calls it the "Asian invasion," and he considers it to be his biggest threat.

REVIEW SUMMARY

Business. Zap Skimboards, Venice

Industry. Surfing, Skimming

Key. Company is one of the largest skim board manufacturers in the country.