co-signer until 2020. Her company has recorded annual profits since its founding in 1989.
Suffering from nerves one morning last July, Cathy Koch ordered breakfast but couldn’t eat. So the president and CEO of K-Tec Systems Inc. in Ferndale fasted enroute to the United States Capitol.
Koch (pronounced “Cook”) had been tapped just two weeks prior to appear before the Senate Committee on Small Business and Entrepreneurship for a hearing called “Pathways to Women’s Entrepreneurship: Understanding Opportunities and Barriers.”
Leaving her hotel, her first stop was the office of Goldman Sachs & Co. on Constitution Avenue, where Koch met Jennifer Prosser, a regional director for the investment bank’s 10,000 Small Businesses “Voices” team. Koch herself is an alumna of the program that provides practical business education to enrollees; Prosser would serve as her guide through the D.C. labyrinth.
After a practice session at Goldman Sachs, Prosser and Koch walked up Constitution Avenue to the Russell Senate Office Building for preliminaries with representatives of the committee’s ranking member, Sen. Joni Ernst, R-Iowa. From there, they rode the elevator down to the basement and went through a tunnel that connects to the Dirksen Senate Office Building.
The tunnel was a hustling and bustling microcosm of Congressional staffers wending their way through a big cluster of kids from Future Farmers of America in hats, blazers, and boots. Arriving inside Room 106, Koch and Prosser found about 150 women from business centers across the country.
Starting with Sen. Ben Cardin, D-Maryland, the committee chairman, and with Sen. Ernst and 17 other senators, along with their attendants, Koch felt the power and energy inside the room. Added poignancy in the moment came from the fact it was the oneyear anniversary of her mother’s death.
When her time came to speak, Koch clattered along for five minutes of charm and passion in the vinegary rat-a-tat of her Cincinnati hometown. By the second sentence of her speech, she was talking about wire harnesses and temperature sensors.
She soon explained how she had launched K-Tec, which today has 18 employees. The “K” in “K-Tec” is not for “Koch,” but for degrees Kelvin, and refers to the low-temperature sensors and control systems the company produces for multiple industries.
“Let me start from the beginning of this journey,” Koch said. “The year was 1989. I had a 1-year-old daughter, I was a recently divorced single mother, and I was working in sales in the male-dominated automotive industry.”
After hitting a glass ceiling, she drafted a business plan for her own startup but was refused a loan and ended up borrowing $10,000 of capital against the equity in her house.
“In fact,” she continued, “I hadn’t been able to secure a loan without a co-signer until
three years ago, even though I have been profitable every year in business.”
Reduced to its essence, her message was this: If women are so good at entrepreneurship, why can’t federal and local officials help more with basic issues like child care, lending, mentoring, and government contracts?
“I thought no one heard me because I talked so fast,” Koch says. “As you know, I’m a fast speaker, especially being from Cincinnati.” She throws in a giggle. “And when I get nervous, it goes 10 times faster.”
Sen. Cardin had to tame the raucous crowd as Koch scored point after point, and the world felt the impact of her words.
“Cathy’s been a solid soldier,” says Melanie Duquesnel, CEO of the Better Business Bureau of Detroit and Eastern Michigan. “When she told me she was going in front of Congress, I was like, ‘W-h-a-t?’ ”Cathy told her, “Somehow, I landed in this seat. I’m running at it.”
“Go for it,” Duquesnel replied.
Women-owned businesses in the United States employ 9.4 million people and report $1.9 trillion in revenue, according to Duquesnel.
“So, this whole thing about women in business, and what they can and cannot do, has been unrestricted by less than a generation.”
There also are what she calls “kitchen-table-type businesses,” such as a child-care operation that takes on five or six kids.
“When you’re looking at that kind of contribution to the economy, we should be noticed.
We should be considered viable credit risks in a banking setting,” Duquesnel says.
Congress outlawed discriminatory practices with the Women’s Business Ownership Act of 1988. The act also created the National Women’s Business Council, and provided money for women’s business centers.
These centers provide training, technical assistance, and support for entrepreneurship.
Yet old biases are slow to fade away. Sharing another statistic, Duquesnel says 62 percent of women entrepreneurs report they’ve experienced gender bias during the funding process.
The mere fact K-Tec Systems survived COVID-19 so Koch could go to Washington, D.C., is something of a miracle. Koch majored in marketing at the University of Cincinnati before going to work at United States Shoe Corp.
“I was always inside sales,” she explains. “They wouldn’t put women in sales back
then, even selling shoes in the retail business. That’s just the way it was.”
Love and marriage brought her to Detroit, and she took a job in customer service with George Instrument Co., a seller of instrumentation that measures temperature, pressure, and flow rates. She worked there more than seven years.
During that time, she took maternity leave only to find, upon returning, that her position was no longer available. It may have been a bitter pill, but it also was a stroke of fortune. She went to work briefly for Industrial Temperature Control, then founded K-Tec Systems in August 1989.
“Without even knowing it, I had learned the business from the ground up — accounting, marketing, customer service, the works,” she says.
Getting established as a rep and a distributor, Koch worked toward the goal of manufacturing K-Tec’s own products. In 2015 and 2016, she went through the Goldman Sachs 10,000 Small Businesses program: a series of 12 classroom sessions with lectures, guest speakers, and simulations. Among other things, it emphasized creating a sound business plan.
“They call it the growth plan, which was spot-on to what we needed to have, and
we still revamp and use (it) to this day,” she says.
Offering K-Tec’s own line of products was a big step forward. Today, the company
makes, installs, and services an array of control devices. Applications range from
plant floors to brew tanks, and from test tracks to ice cream shops.
Thermocouples and resistance temperature detectors — or RTDs — produced
by K-Tec are used in medical and aerospace industries. The Ferndale factory has an
ISO 17025-certified lab for testing the accuracy of the RTDs.
With teamwork among the engineers, electricians, fabricators, assemblers, and the business and sales staff, and with Koch’s vision, K-Tec can design and bundle wiring harnesses for automotive engine-testing equipment or portable medical treatment devices.
As the manufacturing initiative was becoming well established, COVID-19 hit
with a splat and K-Tec’s future looked somewhat dubious. The staff of 15 trickled
away despite Koch’s efforts to provide health insurance and food relief. “I’ve been
through a lot of down times, but I think that was one of the worst,” she admits.
Through a partnership in Seattle, though, she found a key new employee and two associates, and moved them to Detroit. And then two miracles struck. No. 1: A bank had actually lent her money without a male co-signer. No. 2: K-Tec Systems landed the job of making the temperature sensor for the mRNA vaccine, a wondrous device that she says is capable of 196-degrees-below-zero-Centigrade performance.
“We were proven to be the most accurate in that temperature range, we could get it up and running, and we could build this temperature sensor,” she relays.
The next landing maneuver was the monitoring system for a new cancer drug to be stored at temperatures colder than any recorded, even in Antarctica.
“I wanted to show that manufacturing could be cool and innovative and creative instead of the dark, dirty word of MAN-u-facturing that everybody thinks it is, right?” she says.
“And we’re a Michigan manufacturer selling into the automotive space, which I think (I was) the only woman in that industry at the time. So, what we did, I wanted to have a
space that showed a lot of light, showed innovation, and showed clean.”
As Koch continued with her testimony, it resonated with Deana Neely, who has guided a smart idea into a trendy company, Detroit Voltage, located in Greektown. The company has seven employees, including administrative, and performs a range of electrical tasks. It’s
also been doing a lot of EV infrastructure lately, with prospects of nationwide expansion.
Along with classmates during the final session of her own Goldman Sachs program, Neely watched Koch testify before the Senate committee on a live stream.
“I’m like, my goodness. It was so good, it literally gave me goose bumps,” Neely recalls. “You could see, amongst all the women in the class, I think some might even have been teary-eyed. It was so good and relevant and necessary to advocate for women all across the country.”
Among the many parallels in the stories of Koch and Neely is being single moms.
“And the other thing is we both are in male-dominated industries,” Neely says.
And one might add a third parallel: namely, Detroit Voltage also is on the profitable side of the ledger.
Today, Neely is a mentor through the Great Lakes Women’s Business Council, which she calls “a wonderful opportunity to give back to other women business owners.” Meanwhile, she’s writing a book, to be called “Women in Construction Survival Guide,” and planning a digital program to go with it.
“The book I’m writing aims to support women in launching, expanding, and scaling businesses within the construction industry,” Neely says. “The digital program will offer startup strategies, expert insights, resources, and interactive learning to launch and grow
a business in the construction industry.”
During the testimony before the Senate, Koch made a point of saying she had overcome challenges.
“But those same challenges persist,” she told them, “and are a devastating detriment to a large number of female small-business owners.”
When Mariyah Saifuddin saw Koch’s social media post with the link to her testimony, she thought, “Fabulous.” The CEO and co-founder of Innovative Solution Partners in West Bloomfield had met Koch 10 years ago — “She was one of the first friendly faces (I
encountered)” — and the two reconnected during COVID-19. “She was rebuilding, I was rebuilding,” Saifuddin says.
With about 10 employees, Innovative Solution Partners is an SAP (Systems Applications and Products) services partner.
“Our role is to get data from where it’s being stored to those nice dashboards used by C-level executives,” Saifuddin says.
Applications are wide-ranging, but one example is the National Hockey League, which
uses SAP to analyze the massive amount of data that’s generated by the sport’s frenetic action and add tweaks to the game.
“The needs of women business owners are a little nuanced in their roles,” Saifuddin continues, citing the wide support for modernization at the U.S. Small Business Administration. “So, child care, elder care, and what resources are available to support our staff as well as ourselves in those arenas?”
maintaining quality and supporting a high level of productivity.
Like many other women in her position, Saifuddin brings up the mystifying process of government procurement, saying, “The barrier to entry is very high. For a small business to bid on a government contract, it’s a different skill set from a commercial business.”
Pursuing RFPs (Requests for Proposals) for government contracts is often time-consuming and expensive. Saifuddin says she knows of a small business owner who spent $100,000 to open an office in Washington, D.C. “I’m looking at where I’m going to invest my time and resources — where’s my return?”
Upon her own return to Detroit, Koch looked forward to fine-tuning her staff at K-Tec.
“We’re in the hiring process,” she says. While the Michigan minimum wage is $10.10 per hour, K-Tec starts employees at $18 per hour with full health benefits and two weeks’
vacation. “That’s with no experience,” she adds.
Still, in finding employees, there are issues: transportation, housing, and, of course, child care.
“The neighborhood we’re in is great — livable, walkable. But the housing has gone through the roof. This used to be an inexpensive place to live. It’s crazy.”
K-Tec is several blocks off the transit line, which adds another degree of difficulty. “We had one young lady working for us who would try to take a bus, and she would Uber. We paid for her Uber between home and work. Now she’s working on getting her driver’s license.”
To help give back, K-Tec has partnered with COTS, founded in Detroit in 1983, to provide emergency shelter and transitional housing to men, women, and children experiencing homelessness.
“We’re teaching them how to strip wire and make harnesses because, when we lost our staff, we thought, ‘Well, we’re going to have to train and teach our own.’ But it’s hard to find women to really get into the program because they find out, when they get a real job, they’re going to lose a lot of those resources, and it’s just a spiral.”
In the course of its 34 years, K-Tec has grown and reconstituted itself, always looking to be part of the solution. Koch also is involved in the MentorWE program at the Great Lakes Women’s Business Council and other volunteering activities.
Then, Koch admits, there’s always the nagging thought: “What am I going to do next?” She thinks of starting another company or taking a consulting role.
“What’s my next move? I don’t think I’ll stop. I don’t know what to do.”
So she goes forth, holding her lantern against the darkness.
______________________________________________________________________
The Golden Touch (Sidebar)
AN INCIDENTAL TAKE-AWAY from Cathy Koch’s story is about the efforts to continue her education. Some programs short of an MBA are designed to fine-tune entrepreneurial skills.
When preparing in 2015 to start manufacturing at K-Tec Systems in Ferndale, Koch went
through an executive growth program at Dartmouth University’s Tuck School of Business.
The intensive, week-long course is a way to “level up your leadership skills,” according to one graduate.
The current Leadership and Strategic Impact program is offered twice a year, with the
next course set for May 5-10, 2024. The $14,000 tuition fee includes program materials,
most meals, and hospitality accommodations.
“After that I went to the Goldman Sachs program, which was helpful for me to get into my manufacturing space that I’m in today,” Koch says.
The Goldman Sachs 10,000 Small Businesses program represents a $750-million investment by the company in the name of small-business growth. At no cost at all to
participants, 10,000 Small Businesses offers 19 regional education programs in the
United States, including Wayne State University in Detroit, with a curriculum designed by Babson College in Wellesley, Mass.
The next Detroit “cohort,” as Goldman Sachs calls it, starts Jan. 25, 2024, and ends on
April 19. It includes an orientation and reception, followed by 11 learning sessions
at Wayne State University.
The sessions cover such topics as growth assessments, financial statements, human resources, and marketing skills. Two sessions are devoted to negotiation techniques. There
also are multiple simulations during sessions titled “You Are the Lender” and “You Are the
Leader.”
Overall, studies show graduates of the 10,000 Small Businesses program grew revenue
and added jobs in their businesses at a rate that more than outpaced the national economy.
— Ronald Aherns
National Reach (Sidebar)
THE WOMEN’S BUSINESS ENTERPRISE National Council blankets the United States with 14 regional chapters. One of its functions is to certify women-owned businesses.
“We actually go out and kick the tires, interview the owners, make sure they understand,
and really educate the site visitor on what the business is all about (and) who does what,”
says Melanie Duquesnel, CEO of the Better Business Bureau of Detroit and Eastern Michigan, and a former banker. “I used to do that for the local chapter, known as the Great Lakes Women’s Business Council.”
One role for the council, the Great Lakes Women’s Business Council is located in Livonia, is providing instructions on how to write proposals to large corporations where diversity investment and spending goals include a certain percentage of womenowned companies.
“So that certification through the WBENC is vital to them at least clearing one of the first hurdles for consideration in applying for contracts,” Duquesnel says. “They also do financial
training, training on leadership, on staffing, legal issues, and contract issues.”
A modest amount of lending is another function. Loans up to $75,000 are available for entrepreneurs in southeast Michigan — even higher in specific areas. But Duquesnel asks, once again, if that’s enough.
“From Cathy Koch’s perspective, that’s not near what she would need to fulfill a large-scale contract if she needs to build up equipment or infrastructure, or hire additional staff over and above what she’s already got. She’s going to need $1 million or $2 million.”
Duquesnel calls the council’s lending “stopgaps.” She adds: “It’s not the be-all, end-all. It’s not the solution, just part of the solution.”
— Ronald Aherns
