Skyco Skylights Inc. is bucking the trend with its manufacturing operation in Orange County.
“We’ll make north of $10 million” in revenue by the end of the year, said Ryan Marshall, founder and chief executive of the startup company.
That’s about double last year’s total and more than 10 times its sales in 2014, when it launched in a 25,000-square-foot location in Costa Mesa.
The maker of skylights for commercial and residential buildings is doing more than simply keeping its plant here humming, despite all of the knocks on California’s business climate. Marshall decided to start Skyco here when the trend of basic manufacturing enterprises shifting to lower-cost states or countries already was long established.
It employs 26 locally and 37 companywide.
Skyco isn’t a producer of computer chips, medical devices, biotechnology compounds or other products usually associated with the 21st century economy.
It makes about 400 skylights daily for warehouses, office buildings, homes and shopping malls, heating sheets of polycarbonate material—the same stuff used in the plastic barrier that protects hockey fans from 120-mile-per-hour slap shots—shaping them into a variety of forms, building metal frames, and assembling skylights for delivery to customers.
Delivery Hub
The Inland Empire has about 494.6 million square feet of industrial space, according to Voit Real Estate Services, while Orange County has 234.8 million square feet. Those numbers are important for Skyco because industrial firms make up a big part of its clientele.
Marshall said he nevertheless decided to open in OC because the location complemented delivery schedules.
“I didn’t want my (delivery) trucks stuck in hours of traffic from the Inland Empire every day.”
He said he searched for five months prior to finding suitable warehouse space near John Wayne Airport.
The location offered a reasonable commute for employees, Marshall said.
“I also spent a lot of time mapping employees’ travel routes when I started looking for space.”
Marshall said he wanted employees to enjoy everything about working at his company.
He’s also optimistic about the “70 million square feet” of industrial space being constructed in the region.
About 65% of Skyco’s revenue comes from commercial operators that need replacement skylights or that are renovating warehouses.
Residential customers account for 25% of revenue, and the remainder of Skyco’s clients are retailers, such as shopping malls or big-box stores, which request custom orders for domed skylights for food courts or entryways.
Warehouses rely on skylights comprising 2% to 3% of the roof to save about 40% of the electricity cost to illuminate the buildings.
“More than 3% and the building is too bright,” Marshall said.
Too many skylights also can allow a lot of heat into a warehouse.
So “we can tweak the transparency of the skylights to lower the amount of heat allowed into the building,” said Ken Fournier, Skyco’s marketing manager.
The company also makes skylights that automatically open when a warehouse gets too hot.
“The skylights open to allow the heat to exit,” Marshall said, “and it allows the cooler air to flow into the building from the loading dock doors.”
Warehouses usually keep the doors open because of frequent deliveries.
“We also make security bars to prevent people from entering through a skylight,” Marshall said.
Modern Light
He said he decided to launch the company after talking with his father, who has about 50 years of experience in the skylight industry.
“The market was stale” and filled with older products that lacked the new plastic compounds and manufacturing technologies, Marshall said.
Many skylights were breaking down in California’s bright sunlight, turning yellow and diminishing the interior lighting at OC’s warehouses.
“In some instances, people were falling through the skylights,” Fournier said.
Marshall drafted a business plan in January 2014, self-funded the venture, and opened the business that August.
“I worked 16-hour days, seven days a week, had a lot of all-nighters, and performed a lot of different roles,” he said.
Marshall delivered his first order in October 2014.
The company has grown by word-of-mouth marketing, he said.
Its biggest challenge, besides finding warehouse space for itself in OC, is finding welders to cut and assemble the skylight frames.
Marshall’s solution was to purchase automated metal-cutting and welding machines. He also uses machines to form skylight shapes.
The mechanized process allows Skyco to fill custom orders in about three weeks, depending upon the complexity of the order.
It can take a few months to fill a custom order using traditional manufacturing methods, Marshall said.
He declined to provide price information but said Skyco’s products are about 10% to 15% less expensive than most skylight products, which range in price from $150 to $600.
Marshall said he revises the company’s business plan every year after listening to customers, sales staff and manufacturers.
“I’m always learning about new technology, new processes and new demands,” he said. “We have to adapt to remain competitive.”
