Tools to succeed: A second job turned into a growing business
Thomas K. Baughman of York County is watching nervously as his daughter starts a consulting company with her husband in Michigan.
It’s not that he doesn’t believe in his daughter or his son-in-law, far from it. He just knows the perils, problems and pratfalls of starting a business, something he did in 1985.
“It’s a really hard thing to do,” said Baughman, founder and CEO of New Concept Technology Inc.
But if the recipe for entrepreneurial success is genetic, Baughman’s children shouldn’t have a problem. His 31-year-old company began as a side job he took on to make extra money to support his family, but has grown into a company with more than $30 million in annual sales and more than 400 employees in York County and at a production facility in Mexico that opened in 2011.
The contract manufacturer (“I don’t like that term,” Baughman said. “We’re working on coming up with a new one.”) supplies clients in the technology, automotive, medical and other industries with high-end equipment. New Concept, for example, designs, manufactures and installs automobile components for computerized engine systems, including throttle positioning sensors and integrated chassis control modules, that help lower tailpipe emissions and improve gas mileage.
New Concept adds components to equipment made by other companies, then, after adding its technology, ships the equipment to factories for final assembly.
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From basement to buyback
Baughman started the company in his basement in 1985 as New Concept Machine and Tool. He took it on as a second job to support his family but took off to the point that he went full-time.
Baughman brought in partners with experience in other facets of tool assembly, like molding and stamping. That step, he said, gave the company a leg up on competitors who couldn’t handle more than one facet of the business. New Concept could save time and shipping costs by performing more than one task, Baughman said.
Over time, the business moved to a building in Stewartstown, then to a bigger building on Queen Street in York in 1987. In 2001, Baughman sold the business to Connector Service Corp. of Illinois. He stayed on as an employee of Connector Services.
Connector, however, worked only in the telecommunications industry, leaving it vulnerable to an economic downturn in that sector — which came shortly after the purchase of New Concept. The company went out of business, but when it liquidated in 2004, it sold the former New Concept plant as a separate business entity.
“We made no bones about it, we wanted to buy the company back,” Baughman said. “And we got it back.”
In 2007, the company moved to its current, 200,000-square-foot location in Manchester Township.
What people don’t see from the company’s products or its growth, however, is the 5,000 square feet of space in New Concept’s facility that it dedicates to training.
“It’s all about the people. You can buy buildings, and you can buy equipment, but if your employees are complacent, it doesn’t work,” Baughman said. “To keep a company prosperous, you’ve got to keep your employees engaged.”
“It’s all about the people. You can buy buildings, and you can buy equipment, but if your employees are complacent, it doesn’t work. To keep a company prosperous, you’ve got to keep your employees engaged.”
Tom Baughman, New Concept Technology Inc.
But the training is not just for New Concept’s future employees — though it runs an apprenticeship program that’s almost as old as the company itself — the company donates the space to local manufacturing groups.
That means even workers from companies with which Baughman competes for qualified workers in York County often are trained at New Concept.
“It’s hundreds of different workers from dozens of different companies,” said John W. Lloyd, president at CEO at the nonprofit consulting firm Mantec in York. “It’s very unique and very innovative. I’d say it’s (New Concept’s) most distinctive feature. They’re enhancing their own business and enhancing the manufacturing industry in York County and beyond.”
“It’s extremely rare,” added Tom Palisin, executive director of The Manufacturers’ Association in York, the organization whose board is headed by Baughman. “The company is extremely generous for the community and the industry sector in southcentral Pennsylvania.”
New Concept continues to serve the telecommunications industry, which makes up about 40 percent of its business. But the automotive industry accounts for about 30 percent, while the medical industry accounts for about 10 percent. Diversification helped the company survive the recession in 2008, said Don Hubbard, New Concept’s senior operations manager.
Baughman, 62, remains active in the company, at least partially. But he is working on succession planning, with Hubbard in line to take over operations in 2020.
Before he leaves the CEO spot, however, Baughman wants to expand the company, particularly through acquisitions in the medical technology field.
When he does leave, Baughman isn’t planning to go far. Even though New Concept has an employee stock ownership plan, Baughman retained a 30 percent stake in the company.
“This will always be a piece of me,” he said.