SBA Award Shines Light on M.S. Hi-Tech. The #1 Electronic Component & Parts Distributor

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Michael Montenes has quietly built his electronic component distribution company, M.S. Hi-Tech, under the radar.

But not anymore: Accolades from the U.S. Small Business Administration have put the Hauppauge-based distributor of electronic parts and components such as memory chips, connectors and diodes on the screen of contractors, large and small.

In August, M.S. Hi-Tech – which counts 3M, Samsung, Honeywell and Brookhaven National Laboratory as clients – was named the SBA’s 2013 subcontractor of the year for the Atlantic region, encompassing New York, New Jersey, Puerto Rico and the U.S. Virgin Islands. It beat out 700 other eligible companies.

Montenes almost didn’t enter the competi­tion, but when BNL nominated his company, he decided to go for it.

“My initial reaction was, ‘My father is dying, I don’t have time for this right now,”‘ Montenes said. “But they said I really should go for it, so I stayed up that night until 4 a.m. filling out all of the paperwork.”

Each year, the SBA recognizes one prime contractor and one subcontractor from each of six national regions as part of National Small Business Week, which occurs in mid-June.

Montenes, then 29, took some office space above a Hauppauge steakhouse and started M.S. Hi-Tech in November 1990 after working at an electronics component-manufacturing firm owned by his father. There were some dark days at first.

“I was putting all of the money back into the company, so eventually LILCO shut me down and I got home one day to find no water,” Montenes said. “My dog and I lived in a tent in my backyard for two weeks with a rabbit-ears TV. It took me eight months to fully get back up on my feet.”

Looking back, Montenes said he shouldn’t have been so scared to borrow money to get his business off the ground.

“I was concerned because I didn’t want that debt hanging over my head if the company didn’t work out,” Montenes said. “But I could have made things a lot easier by going to a bank and getting a loan, and it wouldn’t have taken me so long to get where I am.”

By 2007, Montenes was ready to go to the banks, working with the SBA’s 504 CDC loan program to borrow $870,000 to assist his purchase of a 3-story, 13,500-squa re-foot building M.S. Hi-Tech had been renting for several years.

But Montenes then ran into another prob­lem: finding the right people. While M.S. Hi­Tech used to employ 14, the firm currently counts only 10 among its staff. That’s not a result of the recession, but rather by choice.

“I had more employees, but more doesn’t necessarily mean better,” Montenes said. “Sometimes you just get dead weight.”

Prior to 2010, Montenes said he offered his sales force a high base salary in addition to commission, which he said resulted in some complacent individuals taking jobs in his sales department.

Realizing he needed to change the corpo­rate mentality, he cleaned house three years ago, and began offering sales staff lower base salaries and increased commissions. The new approach has been working so far, he said.

“As a small business owner, you have to rely on your employees to carry the ball and score touchdowns,” Montenes said. “Otherwise, you find yourself micromanaging rather than focus­ing on growth.”

Sales are going so well that Montenes said he’s looking to bring on another two or three salespeople in the coming weeks.

They’ll most likely be needed once the SBA officially sends out notice of its regional award winners – an announcement that’s been delayed by the partial shutdown of the federal government.

“We’re already being contacted by large distribution companies,” Montenes said. “I think this award is going to give us that com­petitive edge now.”

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