By Andrea Calcagno
November 17, 2008
This is the first of a three part series profiling businesses owned by young entrepreneurs.
ASHLAND, Ore. -- Rogue Biofuels was started by three friends with three different degrees.
"We first started planning to open a business shortly after we graduated school in 2007, and this Rogue Biofuels is the culmination of several ideas," says President of Rogue Biofuels Chris Benware.
Benware, along with Rogue Biofuels Vice Presidents Gabe Rowland and Jordan Beck, are well under the age of 30.
Rogue Biofuels takes used vegetable oil from restaurants in the area and produces biodiesel, a cleaner burning fuel that runs in any diesel vehicle. They pay restaurants for their used vegetable oil, and give each business a blue oil bin to keep it until pickup. Before, most of these restaurants had to pay someone to pick up used oil to dispose or recycle it.
"It has a substantial reduction in emissions out of the tail pipe, so it's a lot better for the environment and keeps our air cleaner around the Rogue Valley. It's manufactured here in the United States, which decreases our dependence on foreign oil and increases our energy security here," says Benware.
But the road to turning a good idea into a working business hasn't been easy. Like many young entrepreneurs, getting start up funds was Rogue Biofuels biggest challenge.
"I came out of school thinking... everybody knows that there's an energy crisis and that there's money to be made in energy. And I imagined it would be fairly easy to find an investor. And it was little bit tougher than I thought, I mean, we had some pretty difficult months," says Rowland.
The company was unable to get a bank loan, but they eventually found angel investors through a process of networking.
"The biggest challenge is going to be the financing... With bank loans and tighter credit right now, if you don't have good credit or a substantial backup to start a business, you're going to be really in tight strains," says Small Business Consultant David Tally.
Banks are critically assessing their risk in giving large loans,.
"People are scared about where they are putting their money right now," says Rowland.
Experts say around 80 percent of small businesses fail within the first year due to under capitalization.
"When people go into business... being very cash poor, some are able to squeak by that first year, but a lot of them don't, and that's where that failure rate comes in, that first year," says Tally.
Living on limited funds has been a challenge for Rogue Biofuels.
"Its been pretty tough, we've basically learned to live on such a little amount of money. I mean, just eating a very little amount, and getting bread, beans, that kind of stuff. Had to give up the girlfriend because I can't afford one of those," says Rowland.
Since money is scarce, each person in the business has learned to take on different tasks.
"We are all very skilled, but our skills are in different areas, so we were able to pick up on the different areas that we were lacking. I became a welder, Gabe became somewhat of an electrician, and Chris is definitely been the mastermind behind the science of the whole thing," says Beck.
Rogue Biofuels has contracted over 100 restaurants for their used vegetable oil and look forward to opening their fueling station in Ashland.
"We recently contracted all the McDonalds and Burger Kings in the area, which is really good for our business," says Benware.
Rogue Biofuels advise to other young entrepreneurs?
"Keep your head up. Make sure you heed people's warnings about permitting and just getting a business started. What people say is true...it's really difficult," says Beck.
