In previous posts, I looked at the Ohio oil and Gas industry in general and the impact being made on employment and the economy. I also took an in depth look at a few business that are working directly with the oil and gas companies and shared valuable insights on how to get involved.
In my final post of the series, I’m going to be looking at businesses benefiting indirectly from the Ohio shale development. These are businesses that don’t work directly with the oil and gas companies, but either supports the companies that do or their workforce.
If you live, work or play in the eastern part of Ohio, it’s difficult to miss the increased activity related to the Ohio oil and gas industry. With the influx of new business and people to the area, the profound impact it’s having on area restaurants, gas stations, and grocery stores is recognizable. I’ve looked at three companies that are impacted indirectly, starting first with the lodging industry.
As the shale play takes root, many companies are coming to the area to either research areas to setup shop or provide a temporary workforce.
“Over the last 1-2 years, we have seen a number of major companies come to town for the first time,” says Jeff Hach, General Manager of the Courtyard by Marriott Canton. “The companies range from producers to ancillary type businesses such as law, insurance, and engineering firms,” he added.
He noted that business has softened from a couple years ago when land men were coming into to secure leases, but feels that it’s partly due to where the industry is at with respects to infrastructure.
“We are currently experiencing a lull, but feel exciting times are ahead,” Hach said.
For Courtyard, it’s more than just filling beds; it’s about providing additional services such as catering and meeting space. “We are very proactive in learning who is moving into town and making sales calls to determine their needs,” Hach said.
Familiarities of Home
It’s fairly common knowledge that Oil and Gas Industry workers and families move around quite a bit. One company that has provided familiarities of home for the spouses is Joie de Vivre Laser and Medical Spa.
“Many of our out of town clientele want to experience some familiarities of their hometown and have the disposable income to do it,” says Amy Gurney, Co-founder, Co-owner and Operator of Joie de Vivre Medical and Laser Spa. “We have been successful in reaching these individuals by aggressively marketing our business online. Once we get them in the door and they experience our quality care, word spreads.” Gurney added.
They have seen a 10% growth in their business from this market and just goes to show the reach this industry has on the local economy.
Poised for Growth
As I alluded to in my initial post, there are phases to any oil and gas play and it’s important to understand how you fit in as a business. Stark Metal Sales, Inc is a company that has not experienced a large amount of growth from the play to date, but is poised for growth once the midstream operations are more fully developed (which is currently taking place).
SMS is a full line steel service center that serves a wide variety of industries including many businesses supporting the oil and gas industry.
“We support the guys that are fixing equipment when it breaks in plants and mills to keep them operational,” says David Rownd, Vice President of Stark Metal Sales. “As the play evolves we are looking very hard at the companies that are moving in and how we can support them. Our sales force is very active in researching new potential customers” Rownd added. “We are very excited about the potential as this is a whole new economy. The biggest detriment to the development will be if government gets too involved,” Rownd said.
The two major take away points from talking to these companies is the reach this industry has and that these companies have a plan and are executing on it. They understand this new market, their target businesses, and the tactics needed to drive new sales.
As David Rownd said, this is a whole new economy for this area, so be proactive in getting your piece of the pie if it makes sense for your business.
Do you have any insights you’d like to share? If so, we’d love to hear it.