By John Eckberg
The Cincinnati Enquirer

When the transformer blew outside Williamsburg-based sign factory Dualite Inc. last week, power and production might have been down for most of the day.

Frank Schube, president of Dualite in Williamsburg, installed generators to power his company during an outage. (Meggan Booker photo)

But in November, Dualite President Frank W. Schube had spent more than $400,000 for electric generators for his Clermont County campus of two factories about 30 miles east of Cincinnati.

So his 300 employees were able to stay busy creating illuminated signs for companies such as Dollar General Corp., Subway Restaurants, Motel 6 and Shell Oil.

"It used to be that somebody hitting a telephone pole with their car or storm damage would shut down our office as well as production," said Schube, who recently bought Kohler generators, which include automatic power transfer switches and other Emerson gear, from Ohio-based Buckeye Power Sales.*

"The first thing I did was I installed one into our office to see what kind of results we got. It was excellent."

Generators and batteries used by big companies to safeguard power supplies are priced low enough for small businesses, and after last summer's crippling blackout, a growing number of local firms are spending freely for the back-up systems.

An industry leader in electrical supply gear, Emerson Electric Co. and its subsidiary Emerson Network Power commissioned a survey last month to find out whether small companies view access to back-up power as a critical safety-net issue or as a frill.

The industry titan found that while more than seven of 10 companies believe a back-up power supply is essential, only one in five companies can deal with an outage.

Schube said the system in place, which automatically begins to generate power when an outage occurs, brings him peace of mind that is, frankly, priceless.

"I've gotten calls at 2 a.m. that the power is down," he said. "Somebody would be asking 'what do we do?'

"We also use it as a selling tool to let customers know we'll never be down because of no power. They know they can count on us."

Losing contact

Power failure is no longer a worry at Kast-A-Way Swimwear of West Chester either.

Manager Chip Allen earlier this year agreed to lease an uninterrupted power supply system from Liebert, a division of Emerson.

"We generally lost power two to three times a year," Allen said. "When that happened, we temporarily lost the data base of our customers and our inventory.

"We couldn't authorize credit cards. We could tell if inventory was allocated to another order. This year we've had several brown-outs and had no interruption at all."

The Liebert system protects inventory data, ensures that cash registers will operate and keeps the company's telephone systems vital at three stores owned by Kast-A-Way: in Atlanta, Indianapolis and West Chester.

A severe power outage can do more than cripple a company.

In the worst case, it can send a vulnerable firm into bankruptcy, said James G. Berges, president of Emerson, which employs 106,000 people worldwide and has annual revenue of $14 billion.

Firms that lose power for any length of time usually lose access to data, phone lines, inventory, clients and, ultimately, cash.

"The lack of confidence in the power grid is huge," Berges said. "We tell people to walk around their company and think about what would happen if their company is down for three days.

"Spoilage of food, being unable to take orders, unable to transfer cash, unable to communicate with the sales force. For many companies, it's not a question of losing business. It's a question of going out of business."

Port in a storm

Providing an uninterrupted power supply to a big company is nothing new for Emerson, which has been in business for more than a century. The new initiative for small companies has to do with numbers, some pretty big numbers:

The company estimates that about 60 percent of the 23 million small businesses in the United States have no type of back-up power supply.

Today, Berges said, small companies also need back-up systems to safeguard Web sites. That is critical because smaller firms are increasingly relying on the Web to take orders from customers.

Local companies that provide generators also have seen an uptick in requests for information since August.

"The majority of what I've seen in the past six months is companies that want quotes," said Vic Spang, branch manager at Buckeye Power Sales, a West Chester-based provider of electrical equipment and a Kohler generator distributor.

"But we've seen some orders increase and I expect that to get better. A lot of it is economy related."

Procrastination may be the reason some companies are still shopping and not buying.

"The longer companies go without an outage after that initial inventory loss, the less important it becomes," Spang said.

Dualite's Schube, whose company generates $40 million in annual revenue, advises executives to act rather than debate.

"We like to know we can produce," he said.

"Employees are happy because they don't lose time. They know they'll get in their eight hours a day."

Small businesses most vulnerable

A national survey conducted in January by Decision Analysts Inc. for Emerson of 411 small business operators raises big questions about the ability of small companies to withstand a lengthy power outage.

The survey, which is accurate to plus or minus five percentage points, found:

• 80 percent of small businesses experienced an electrical power outage in 2003.

• 60 percent have no type of back-up power supply.

Also, a Small Business Power Poll released last month found that 75 percent of U.S. small businesses rate electrical power outages as only marginally less of a threat than competition (79 percent) and trauma from computer failure and a fire (77 percent).

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E-mail at jeckberg@enquirer.com

* The original version of this story incorrectly stated that Shube bought the generators from St. Louis-based Emerson Electric Co., which has a division called Fusite with 220 employees in Pleasant Ridge.