May 16, 2005
A chat with Garry Glatz, owner of Independence Fuel in Durham.
By Erview By Rebecca Lamet
Founded: July 2004
Employees: One
Startup costs: $40,000
Revenues, 2004: $187,000
Projected revenues, 2005: $500,000
Contact: 800-228-1883
361 Cedar Pond Rd., Durham
Tell me about Independence Fuel.
I distribute biofuel as home heating oil and diesel. Biofuel is a replacement or alternative for diesel fuel or traditional home heating oil. It can be made from any oil [such as] rapeseed or canola. In the United States it's almost all made from soy, because that's what we have a glut of.
I sell biofuel two ways, B5, which means five percent biofuel, 95% petroleum, and B20, which is 20% and 80%.
When did you first get the idea for the company?
My brother Joel owns [biofuel distributor] Frontier Energy [in South China], and he brought me in with bio. We've been talking for a couple of years about my getting into this [business] as well, but we needed the visibility of the product and his business to be at a certain point before we could justify having a separate entity in a market like Portland.
Who is your target consumer?
This is a very "green" business, so "green" people tend to come to it ˆ which means there's a choir out there and it's easy to get their attention. But I'm looking for everyday people. The fact that every drop of biofuel that's mixed with oil is not imported and can be produced from any animal or vegetable fat or oil source [is appealing to some]. My little tagline is "Your fuel alternative," but it's definitely also a red, white and blue product all the way.
What is the downside to using biofuel?
One hundred percent biofuel or very high-level blends, like 70% or over, degrade natural rubber. But in vehicles built since 1990, almost none have any natural rubber in the fuel system.
The other downside [is that] 100% biofuel gels somewhere between 35-40 degrees. But at 20% blend or less, it's not an issue because the biofuel takes on the properties of whatever it's [mixed] with.
How did you finance the launch of your business?
I used savings and a home equity loan, the basics. Just stick your neck out there as far as you can.
What kind of equipment and resources do you need to operate?
I have two trucks, one I own and one that's my brother's [that] I use as a backup. It's impossible to be in this business without a backup vehicle because in the middle of the winter if your truck dies, you've got orders up the ying and you just have to deliver them or people will freeze. If you leave them in the lurch they go to somebody else.
What kind of marketing have you done?
My website [www.biofuelme.com] is being built and I'm gearing up so that everything is driven to my website ˆ all my advertising, everything. It's something I intended to do all along, but when you are a one-man show you're trying to wear six hats, so it's one of those things that got put to the side.
I've also done fliers in the parking lot; it's very basic but it does work. I've done newspaper [advertising], I've done radio [ads], and they're all necessary. It's hard to say which one is the most effective.
Who is your competition and how are you different?
My competition is the same as any other fuel company ˆ regular petroleum dealers. Biofuel is more expensive [than regular oil], but the two are coming closer together. The fact is, my B20 is right around the price my competitors are charging for regular old heating oil. And my B5 is priced in the middle of the pack. You can buy heating oil for $1.70 a gallon. At the upper end of the market the big boys are selling at $2.15 to $2.19 a gallon. I'm selling B5 for $1.899.
What are your plans for growth?
This coming season I'm going to need another driver. The borrowed backup truck will turn into a full-time vehicle.
What do you think is one of the most astonishing facts about biofuel?
This stuff is more biodegradable than table salt and less toxic than sugar. That's a nifty little fact ˆ look how much salt people eat.
New Entrepreneurs profiles young businesses, 6-18 months old. Send your suggestions and contact information to editorial@mainebiz.biz.
Employees: One
Startup costs: $40,000
Revenues, 2004: $187,000
Projected revenues, 2005: $500,000
Contact: 800-228-1883
361 Cedar Pond Rd., Durham
Tell me about Independence Fuel.
I distribute biofuel as home heating oil and diesel. Biofuel is a replacement or alternative for diesel fuel or traditional home heating oil. It can be made from any oil [such as] rapeseed or canola. In the United States it's almost all made from soy, because that's what we have a glut of.
I sell biofuel two ways, B5, which means five percent biofuel, 95% petroleum, and B20, which is 20% and 80%.
When did you first get the idea for the company?
My brother Joel owns [biofuel distributor] Frontier Energy [in South China], and he brought me in with bio. We've been talking for a couple of years about my getting into this [business] as well, but we needed the visibility of the product and his business to be at a certain point before we could justify having a separate entity in a market like Portland.
Who is your target consumer?
This is a very "green" business, so "green" people tend to come to it ˆ which means there's a choir out there and it's easy to get their attention. But I'm looking for everyday people. The fact that every drop of biofuel that's mixed with oil is not imported and can be produced from any animal or vegetable fat or oil source [is appealing to some]. My little tagline is "Your fuel alternative," but it's definitely also a red, white and blue product all the way.
What is the downside to using biofuel?
One hundred percent biofuel or very high-level blends, like 70% or over, degrade natural rubber. But in vehicles built since 1990, almost none have any natural rubber in the fuel system.
The other downside [is that] 100% biofuel gels somewhere between 35-40 degrees. But at 20% blend or less, it's not an issue because the biofuel takes on the properties of whatever it's [mixed] with.
How did you finance the launch of your business?
I used savings and a home equity loan, the basics. Just stick your neck out there as far as you can.
What kind of equipment and resources do you need to operate?
I have two trucks, one I own and one that's my brother's [that] I use as a backup. It's impossible to be in this business without a backup vehicle because in the middle of the winter if your truck dies, you've got orders up the ying and you just have to deliver them or people will freeze. If you leave them in the lurch they go to somebody else.
What kind of marketing have you done?
My website [www.biofuelme.com] is being built and I'm gearing up so that everything is driven to my website ˆ all my advertising, everything. It's something I intended to do all along, but when you are a one-man show you're trying to wear six hats, so it's one of those things that got put to the side.
I've also done fliers in the parking lot; it's very basic but it does work. I've done newspaper [advertising], I've done radio [ads], and they're all necessary. It's hard to say which one is the most effective.
Who is your competition and how are you different?
My competition is the same as any other fuel company ˆ regular petroleum dealers. Biofuel is more expensive [than regular oil], but the two are coming closer together. The fact is, my B20 is right around the price my competitors are charging for regular old heating oil. And my B5 is priced in the middle of the pack. You can buy heating oil for $1.70 a gallon. At the upper end of the market the big boys are selling at $2.15 to $2.19 a gallon. I'm selling B5 for $1.899.
What are your plans for growth?
This coming season I'm going to need another driver. The borrowed backup truck will turn into a full-time vehicle.
What do you think is one of the most astonishing facts about biofuel?
This stuff is more biodegradable than table salt and less toxic than sugar. That's a nifty little fact ˆ look how much salt people eat.
New Entrepreneurs profiles young businesses, 6-18 months old. Send your suggestions and contact information to editorial@mainebiz.biz.
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