Profile in Business: Sean Cota: Doing it the Old Yankee Way

Profile in Business: Sean Cota: Doing it the Old Yankee Way

Marcel, Joyce

The movie “It’s a Wonderful Life” takes place in the small and snowy town of Bedford Falls. There, Jimmy Stewart as George Bailey reluctantly takes over his family’s savings and loan business, marries, has a family and devotes himself to improving his community, all the while fighting the evil banker Mr. Potter.

Change Bedford to Bellows, the savings and loan to a fuel oil business, add a predilection for bow ties, and you’ve got Sean O Cota.

But since life doesn’t exactly follow art, change the star, too. Cota, 39, tall, dark-haired, rangy and handsome, looks more like Gregory Peck than Jimmy Stewart.

Cota is the third generation of his family to run Cota & Cota, Inc of Bellows Falls, which sells heating oil, propane, kerosene, gasoline, diesel, oil and gas boilers, furnaces and water heaters, plumbing and HVAC equipment, low temperature alarms and radiant under-floor heating systems. It also services heating equipment and commercial vehicles.

Heating oil and kerosene sales in Vermont arc a $150 million business, according to the Vermont Fuel Dealers Association (VFDA). Propane sales run between $75 million and $100 million. About 300 million gallons of gasoline are sold each year, representing between $400 million and $500 million in sales. There are about 100 companies selling fuel oil today, down from 250 in the 1970s.

Cota & Cota is a privately held company; the stock is owned jointly by Cota, who is president, and his younger brother and vice president, Casey K Cota. Their uncle, Chris A Cota, is vice president and also secretary. Although Cota says “absolutely not” when it comes to revealing company financial information, he said that Cota & Cota is in the top 10 of family-owned Vermont fuel dealers, and definitely qualifies to be one of Vermont Business Magazine’s Top 100 companies.

Since its founding in 1941, the company has continually expanded, building plants, garages and offices and buying other companies. It bought the southern division of Cray Oil Co in Ludlow and North Walpole, NH, in 1982, Midway Oil in Springfield and Connelly Coal & Water Co in North Walpole in 1990, Charlestown Fuel Service of Charlestown, NH, in 1993, and Gay’s Fuel Service of Bellows Falls in 1996. That purchase gave Cota & Cota entry into the propane business.

Since Cota and his brother bought the business from their father, Hugh Prescott Cota in 1995, the company has grown by about a third.

“I don’t count customers on a daily or yearly basis,” Cota said. “I just know if we’re growing or declining. And we’re growing. Here’s our marketing secret: We answer the phone when it rings, with people, and we do what we say we’re going to do, for what we say we’re going to do it for, when we say we’re going to do it. And that’s it.”

With a strong reputation for customer service, Cota & Cota now has well over 6,000 customers, employs about 60 people, covers Windham County and southern Windsor County in Vermont plus communities in bordering New Hampshire, and operates 24 hours a day, 365 days a year. On cold days Cota is on call 24 hours a day and his wife makes him sleep on the couch.

“It’s probably a good idea,” Cota said in January. “Over the weekend I got ‘paged on 45 calls.”

Besides his bow ties, Cota is known for his wry sense of humor, drinking diet Mountain Dew by the case on long drives to Washington to lobby on behalf of his industry, the number of federal, state and local boards and committees he volunteers for, his willingness to speak his mind, his common sense approach to political issues, his far-sighted dedication to the community of Bellows Falls, and his habit of drinking two martinis before heading out on a five mile run because, “At that point I no longer care about the problems of work or the pain of running.”

Cota is also widely respected for making sure that in winter, even his poorer or less credit-worthy customers have heat.

To accomplish all this, Cota adheres to a family code of values called “The Old Yankee Way.” He was raised to understand risk, responsibility, and the importance of respecting other people, their property and their opinions:

“You are able to show courtesy and concern, compassion and caring,” says the code, which can be found on the company’s website (cotaoil.com). “It means volunteering within your community… treating our customers as we would want to be treated – with honesty and good value.”

Although he often grumbles about it, Cota enjoys life in a small community.

“The best part of living in a small town is that everyone knows what you do,” he said. “If I’m buying ice cream, my wife’s probably going to hear that I’m buying ice cream. As long as I should be buying ice cream, that’s fine. It also requires you to pay attention to your neighbors and have some decency. If every business ran with the expectation that everyone knew what they were doing, they might act differently.”

Cota grew up in the business, working the dirtiest jobs and learning how to get along with all kinds of people.

“We were the septic pumping business at that point, and I did the tanks,” Cota said. “One time a tank’s top started sinking in the septic tank. My father was on the job that day, and he sent me in to get it. It’s a great tale. Nobody believes it. But it teaches you several things. One is that all work has dignity; another is that I, as an owner of a business, should be willing to do anything anyone else in the company should be asked to do.”

Community service is an enormous part of Cota’s life; at one point he was on 20 boards and committees at the same time. He’s been president of the Great Falls Regional Chamber of Commerce twice, and he’s been the VFDA’s Legislative Committee chairman for over a decade. He’s been on the National Heating Oil Committee of the Petroleum Marketers Association of America. He’s served on the board of the New England Fuel Institute, which is largely seen as the national association for the industry, and helped create the Howard Dean Educational Center in Springfield. In fact, it was his idea to name the technical center after the former governor, because “he got the money, he deserved the recognition.”

Cota was on the Rockingham Area Community Land Trust board for about 10 years, helping it grow from a few properties to over 500 units of housing. His commitment to affordable housing came from his own experience with mill-town housing.

“First my next-door neighbor shot my cats, then he shot and killed his best friend over a girl, then he walked back from furlough six months later into his mom’s house across the street,” Cota said. “That was my impetus to say you need decent housing, affordable housing, and to hold people up to a higher standard. If you have bad housing, and you tolerate anything in that housing purely because you’re getting the rental money, that’s not good enough. That’s not going to make the community better. That’s not going to make people stay here.”

Cota & Cota sponsors all sorts of Bellows Falls events, from the local Chamber’s December holiday mixer, which raises money for needy local families, to the open mike night at the local bar.

“Sean has been supremely supportive even though it in no way benefits his company,” said music promoter Charlie Hunter. “For him to understand the necessity of having a healthy arts community in town is extraordinary.”

Cota’s employees tend to get involved in volunteer work, running Boy Scout troops, coaching dozens of teams, working on local boards and with local Rotaries. His wife, lawyer Leslie Hanafin Cota, is also active. “She was actually president of the Rockingham Land Trust for a number of years,” Cota said. “That was when I knew it was time for me to get out. She’s more to the left of the spectrum than I am. Now she’s an Act 250 commissioner, so we find it very difficult to talk about permitting. Communicating within the family is always more challenging than communicating with the public.”

Cota has no trouble communicating with the media; he has represented his industry with such venues as ABC News and on the front page of The Wall Street Journal. He also lobbies for the industry with lawmakers at the state and federal level.

“He’s a leader in the industry,” said Jack Sullivan, CEO of the New England Fuel Institute. “He’s a pretty special guy, a terrific guy. Not only is he a breath of fresh air, he’s bright, genuine and sincere. He’s a superb manager, and that flows not only directly to his customers but to the industry. He’s unselfish in his use of his time to bring creative ideas to the industry. Sometimes that means he’s got to travel to Washington or Boston or New York, but he takes the time. At his own expense, I might add.”

One of Cota’s close friends is longtime legislator and former Speaker of the Vermont House of Representatives Michael Obuchowski; sometimes they brew beer together. He calls Cota an “old-fashioned New Age business person.”

“I think that he is very dedicated, visionary public servant, and he views that as part of his responsibility to the business community,” Obuchowski said. “He takes a lot of the qualities of the past into his business: service, honesty and value. But at the same time, he realizes that there’s a public service role associated with being in business. For the Bellows Falls Union High School alumni dances, for example, he used to clean out the buses after they were used, sometimes singlehandedly, sometimes until 2 am. And he’s not even an alumni.”

Obuchowski observed that community movements happen in stages, with visionaries coming first, and then people who implement the visions. “When I look at the rebirth and renaissance occurring in Rockingham and downtown Bellows Falls right now, I remember Sean Cota when he was president of the Chamber,” Obuchowski said. “He was one of the visionaries who saw the potential and possibility and was willing to stick his neck out – in a time when it was just a potential.”

And that brings us back to “It’s a Wonderful Life.” Cota owns three copies.

“Sometimes I feel like George and I want to get out of town,” Cota said. “I just never seem to do it. There are the Bailey families and the Potter families in every community. You can make an impact. People remember things for generations. Our company still benefits from the goodwill generated by my grandfather.”

Cota recalled the time, just after he came back from college, when a stranger dropped in.

“He said, ‘You don’t know me,’ but years ago, in the 1950s, I was complaining that I didn’t have money for my family, and your grandfather heard me and gave me $100.'” Cota said. “A while later he tried to pay my grandfather back, and my grandfather said,’ Don’t pay me back. You have to do something for somebody else’.”

Telling the story, tears welled up in Cota’s eyes.

“It still trips me up,” he said. “That’s a tough tale, a true tale. So that’s where we came from. The goodwill we provide dayto-day is going to last longer than us.”

Family History

Cota is a seventh-generation Vermonter.

“The name Cota was originally a French Huguenot name,” he said. “The family lived in northeast France. When they had the Protestant Wars, the family got thrown out of France and went to Quebec. They didn’t like the Protestants there, either. So they got thrown out of Quebec and ended up in Vermont. By the 1770s there were Cotas in Putney. But we’re all-American mutt at this point.”

In 1941, Cota’s grandparents, Kenneth O’Brien Cota and Helen Prescott Cota, bought a Shell dealership and founded the company together. “My grandmother always said she was ‘a full partner and then some,'” Cota said. “They had a very good reputation and always had high expectations of everyone. My grandmother was a great one for the adage, ‘Idle hands do the devil’s work,’ so she kept everyone busy all of the time. Things we do today have links back to the things they’ve done.” At first the company sold kerosene for sidearm heaters and range oil. As it became more plentiful, fuel oil, also known as heating oil, replaced kerosene; it is a lower grade product with more energy input, but it needs to be burned with specialized equipment. It contains paraffin wax, so it congeals at 15 degrees; that is why heating oil tanks are usually placed in basements. Mobile homes, which have outside tanks, typically use kerosene. Kerosene doesn’t congeal until about minus 60 F. Since liquids were easier to transport and to

weigh on-site than coal, fuel oil became the preferred heating source in New England. “That’s because we’re so far from the natural gas sources,” Cota said. “If you get out of New England, the majority of heat sources are either electric or natural gas.”

In 1972, the Cotas turned control of the business over to their son, Hugh, who created a corporation, Cota & Cota Inc.; 100 percent of the capital stock was owned by him. Although Cota, who was born in 1963, grew up working in his father’s business, it was never clear that he would be the third generation.

“Throughout my life, my father and I never talked about whether there’d be a job for me,” Cota said. “Maybe he didn’t want to ask me because he didn’t want me to feet he was pushing me. And I didn’t want to ask, because I figured that if he didn’t mention it, he didn’t want me here. So we did this dance for several years.”

Cota went to grade school in Bellows Falls, and to BFUHS for one year before transferring to Kimball Union Academy in Meriden, N.H. Afterward, he went to Kalamazoo College in Michigan to study international business soon after, he convinced his wife to marry him. “She was going to go to New York City; big surprise for her,” he said. They have two children, a girl, 12, and a boy, 11.

“They’re great kids, and we stay busy,” Cota said. “We start at about five in the morning, and last night I got home at seven. My kids swim at night in the winter time at Dartmouth and get home at 10 p.m. It’s a long day, every day, and I do my grandmother Helen proud. There are no idle hands.”

After Cota joined the business in 1985, “my father gave me as much rope as I could take, and as long as I could justify what I was doing he supported me, and when I couldn’t, there was hell to pay.”

In 1995, when Cota was 34, his father sold the business to his sons and retired.

“My father was a very engaged business owner,” Cota said. “He was here every day and felt that he needed to know what everybody was doing all of the time. And when he’d show up on a job site, he’d work twice as fast as everybody else, and then leave. He was a great guy. But when he sold the business, he retired completely.”

The Oil Business

Cota works in an office that hasn’t changed much since it was built in the mid1950s. Other than a few family pictures tacked to the wall, it is bare of decoration. Shelves of industry regulations line one wall, and Cota’s main focus, a flat-screen computer hooked up to the world’s spot oil market, sits close on the side.

From his desk, Cota tracks the fluctuating price of crude oil on the spot market, world events which will inevitably effect the price of oil, and whether an old lady living in the backwoods of Saxtons River has enough oil in her tank to make it through the week.

All energy is interconnected, Cota said, and what happens in the Persian Gulf will have a serious impact in Bellows Falls.

“It’s like a big balloon – you push in one spot and its going to have an effect on the rest of the balloon,” he said. “In the energy business, you’re always pricing based on replacement costs, not actual costs. So something serious happening in North Korea, Venezuela, Iraq or Saudi Arabia could easily raise the price of energy here, That’s why I’m a news junkie. I’m always looking at what’s happening in the world.” Drastic world events have already shaped the course of the company’s history. Before the 1973 Arab oil embargo, distributors like Cota & Cota were connected with one single large oil company, like Shell, Esso – which became Exxon – or Arco. But during that crisis, Shell reneged on its contracts.

“We’d signed an agreement guaranteeing we’d buy all our product from them, and they’d say, ‘We don’t have enough, sorry. Go find it someplace else,'” Cota said. “We learned that independent suppliers of product are more reliable than major oil companies. The larger the companies are, the more attorneys they have, and the less reliable they are as suppliers.”

After the crisis, the major oil companies pulled out of the distribution business and sold their terminals to independent companies. Cota & Cota developed deep and long-lasting relationships with independent distributors; it also painted out the word “Shell” on its buildings. But it kept Shell’s distinctive yellow-ochre color.

“The best thing Shell did for us was give us great colors,” Cota said. Oil ‘is bought in two ways. One way is by buying futures contracts, called “paper contracts,” which are traded on the New York Mercantile Exchange. The other way is by buying real barrels of black liquid from the spot market. Paper contracts are theoretical; they’re financial instruments. If you buy one in August for January at one price, and in December, when you must close your contract, the price has increased, you make a profit. But that profit would probably go to pay off your purchases on the spot oil market, where prices have also increased.

“If you want to make sure a commodity is actually there, you want to enter into contracts that actually deliver the stuff so you can deliver it to your customers,” Cota said. “A financial instrument may pay back money, and that’s nice, but it dosn’t provide product, so you’re going to be out of business.”

The retail oil business becomes more complicated when you consider that most heating oil companies offer fixed-price contracts for the coming winter to their customers – in summer.

“We have to blend groups of contracts together, because when the consumer buys from us, they’re not saying they want a fixed price for January and a fixed price for February,” Cota said. “They want a fixed price for the winter, Right now we’re looking at next year. We start looking in February and want to have our program in place by May.” Cota & Cota trucks travel to major storage ports – New York, Hartford, Albany, Boston and Portland, Maine – and bring back oil. Storage is a real issue. The ports store, at the most, a four-month supply. The average dealer in Vermont keeps about a two-day supply. Cota & Cota is an anomaly in that it keeps about a week’s supply on hand.

“It’s all stored outside New England, so if our supplier knows I’ve got a contract, they’re in turn going to buy a contract from the refiner, and the refiner in turn is going to buy a crude contract to make sure he’s got the product coming,” Cota said. “So even with a small company, you have to have a fair amount of wits about you when it comes to knowing what you’re buying and how you’re buying it, and be sure you can live up to your commitments to your customers by having those items in place.” There are real consequences if Cota misplays the market; people can freeze.

“Some companies have no hedges at all, whether it be paper or liquid,” Cota said. “They say, ‘Oh, the market’s going to go down.’ Well, that’s gambling, folks. And it’s fine to gamble, but if you’re going to be taking money from a customer, you’ve got a fiduciary responsibility to that customer. Youve got to live up to that.”

Industry Regulations

Cota calls the fuel oil industry “the most regulated unregulated industry there is.” He deals with Vermont and New Hampshire regulations on such things as hazardous materials, air quality, underground tanks, above ground tanks, motor vehicle permits, excise taxes and much more, plus all the federal regulations.

“We have to implement all of the same federal and state regulations that a multinational corporation like Exxon or Mobil does, only without the staff,” Cota said.

Failure to keep up with changing regulations can cause serious problems.

“Here’s a great example,” Cota said. “In the 1980s, Vermont adopted an underground storage program for large tanks, and they defined heating oil as anything use for on-premise heating purposes. Historically, we started with kerosene, so we always keep a kerosene dispenser for people who want it for lamps or space heaters. It’s a 250 gallon tank. Because it was less than 1,100 gallons, at first we didn’t have to register it. But the rule changed in 1989, with an annual registration fee of $250.” Unaware of the change, Cota complied with the state’s other regulations for underground storage tanks and in 1993, certain he had done a good job, he asked for a voluntary inspection.

“They came down, saw the dispenser, pointed out that the law had changed, and told us we should have registered the tank and gotten it permitted with annual fees,” Cota said. “I apologized. I said we’d do a full site environmental closure within the week, pay all the past registration fees, do the permit application and pay back the interest. And we did, within a week. My reward for my aggressive efforts was to be Docket No. 1 in the Environmental Court, where we had a summary judgment against us for failing to abide by the regulations.”

After that experience, Cota became something of an expert on changing regulations.

“This guy knows everything you’d want to know about filled out federal excise, diesel excise tax forms, whatever,” said VFDA head Shane Sweet. “Sometimes it’s overwhelming, what he knows.”

Collections

When he first joined the business, Cota’s father sent him door to door, making collections. That’s where he learned his most important business lessons. He saw people struggling to live with limited resources, and he learned that rich people could be deadbeats. “It really doesn’t matter what you’ve got, it matters how you live,” Cota said. “I learned I could trust maybe the single parent who was working, and the kids maybe had a Nintendo. But the house where you had two parents, and an ATV on the porch, and two snowmobiles, three big dogs and all the extra cable access stuff, was not going to be a good risk. You could probably trust a single Mom better than the couple who was living for the moment.”

In the fuel oil business, some credit decisions have to be made rapidly.

“If somebody runs out of fuel, and it’s below zero, and they don’t have enough resources, we have to provide those resources either by giving them, essentially, an extension of credit, or we have to find state resources or local charities to help out,” Cota said. “And if it’s below zero, you only have about six hours before the house starts to freeze and the pipes start to pop. So for me, collections were important. You learned that needs may be immediate, and you need to give folks who have the least amount of resources the most financial tools to manage those resources.” This experience made Cota an early critic of the way the state provided fuel assistance money. At the time, the program pegged fuel money to income and doled it out by the month.

“The state liked to give everyone the maximum amount of money,” Cota said. “Great idea. But we can’t economically deliver 25 gallons of heating oil. We have to deliver 100 or 150 gallons, or the cost is going to be more than we’ll ever make. So the state would send out these small checks, and never tell the recipient how much they were going to get. If you don’t have a lot of resources to begin with, and you know you’re getting a check of some sort at some time, you’re going to deal with whatever the immediate need is. That might be food for the week or gas money to get to work, or maybe heating oil.”

So even though the state was providing enough total money, people were running out of fuel. Cota, along with Sweet and the VFDA, started lobbying to change the system.

“I was always telling the state and the community action programs, don’t treat people like they’re low income,” Cota said. “If you’re going to provide assistance, you want them to act like regular homeowners. Homeowners know they have to heat the house. If it’s oil or propane, they know they need to find a supplier. So encourage these people to find a supplier in the summer instead of when they run out in the middle of the winter. That way they’re known to the oil companies ahead of time. Then teach them how to budget and plan. If you treat people that way, they are going to be warmer, you’ll have less crises, there will be less stress on the families and on the agencies trying to help, and things will run smoother. The state finally adopted that plan, but it took six years. If I hadn’t done collections, I wouldn’t have known about the need for the change.”

The Bush Administration is currently talking about cutting the federal fuel assistance program from $1.7 billion to $1.3 billion; there will be an adverse effect, Cota said.

“From a fuel assistance perspective, they’re always late in reacting to the market,” Cota said. “They’re always reacting to the last season. They’re reacting to tight fiscal times, and that the energy business was not as volatile last year as it is this year. They don’t know who’s going to run out from lack of funds until the winter’s over. Meanwhile, the budget process is already done. The fuel assistance program is actually one of the most efficient government programs that I see. When you take a very well-run program that doesn’t have a lot of fluff to cut out, it’s going to have a direct impact.”

Small Business State

Vermont is a small-business state. The median business has 3.75 employees, Cota said, and the average, including IBM, the University of Vermont and the state itself, is six employees. Frustrated with what he believes is a lack of common sense at the state level, Cota wants Vermont to adapt its thinking to the right scale.

“The state has lost the Vermont perspective,” Cota said. “They need a litmus test for any new regulation or administrative procedure. If they’re going to have a regulation or tax program that’s so cumbersome that it’s going to be difficult for a small business to implement, it doesn’t make sense for Vermont.”

Cota found a perfect example of this problem when Obuchowski appointed him to the Small Business Hazardous Waste Compliance Board at the Vermont Agency of Natural Resources.

“They had an ombudsman for small business,” Cota said. “I asked how it worked, and he said, ‘People call in and I try to point them to the various departments that pertain to them, because the rules are complex and I don’t have a grasp of it all.’ And I said, ‘Don’t you understand the conflict of what you just said? Your only job is to assist small business in hazardous waste, hazardous material regulation and implementing the rules. You have a staff of, think, 300 people in the agency who are going to work with you to provide that information. Yet you’re saying it’s too complex for you to understand? Small business has to understand it all in order to implement it. So maybe your regulations need to be tailored differently.’ And now I’m on the National Ombudsman Committee for the Environmental Protection Agency.”

Cota also finds himself frustrated with the way federal child labor laws are implemented in Vermont.

“You can’t hire anyone to do real work,” he said. “For example, if you’re under 14, you can’t work with hazardous material, you can’t work with power equipment, you can’t be on any ladders. That’s unless you’re in an apprenticeship program. And that apprenticeship program has to be affiliated with a school, in order to review that the employer isn’t taking advantage and the operations are safe.”

Summer and vacation times are the main opportunities for young people to work, but schools are not in session then and no apprenticeship programs are running.

“It’s a Catch-22 where nothing actually happens,” Cota said. “The kids who need the experience the most, the kids with the lowest incomes who don’t have the opportunities of a family business, who have really have limited opportunities, can’t work. Bellows Falls is an at-risk community; there’s federal money available to pay the kids. All you need is an apprenticeship program. I say that with this criteria, Tom Sawyer couldn’t whitewash Aunt Polly’s fence without being in violation of Vermont’s labor laws.”

In terms of environmental regulations, Cota does not see Act 250 as a problem.

“In some environmental regulations, New Hampshire is more strenuous than Vermont,” he said. “But they’re more expedient in how they do it, and they do it with less staffing and in a more businesslike manner. Also, they don’t have any taxes in New Hampshire, but they have fees, and everything is fee’d to death.”

There are systemic problems throughout Vermont’s permitting system, Cota said.

“For example, Bellows Falls is an old town, and our water system is one of the oldest in the state,” Cota said. “We have a very high water capacity because it was designed for the paper industry.

But there’s a little-known regulation, a water and wastewater certification, for business activity on a municipal system. You have to engineer how much water capacity and sewer capacity you’re going to take up. The rationale behind it is well-intentioned. If someone is going to make a large impact, they can calculate it and the state can ask them to contribute to the expansion. But we had a hot dog stand that wanted to open, Frank’s Franks. And in order to get an occupancy permit, Frank’s Franks needed to know how much water capacity it would use to steam its hot dogs. That’s a well-intentioned law, but when you bring the Vermont scale to it, it makes no sense.”

Timeliness in permitting is critical, Cota said.

“When a person with a new business idea goes to a bank for financing, they usually get a letter of commitment with an expiration date, generally between two and 10 months,” Cota said. “If the permit process, whether its Labor and Industry or ANR, or Act 250, or the Dept. of Health, takes longer than the bank letter of credit, people who won’t do business, even if they have a viable idea. You’ve turned off the spigot.”

Redoing the permit process so it’s more timely and predictable would change the whole nature of Vermont and give young people new opportunities, Cota said.

“In manufacturing especially, you need to get your permits very quickly for expansion,” Cota said. “When time is a factor, you’re going to do it someplace else. Whitney Blake, in our industrial park, had a chance to buy the patents for a computer company that was going out of business. They needed to get up and running in six months for it to work. They knew they were not going to get through the Vermont permit system in that time. They went – literally – one air mile away to North Walpole in New Hampshire, put in a multi-million dollar facility, and were up and running and producing within four months. They could never do that here. I applaud them for doing it locally; it’s just as easy, if you’re going to move, to move to Mexico or Singapore or Peru.”

Getting the state to recognize the problems of small businesses has been Cota’s chief motivation for his political involvement. “It’s Democratic or Republican or the Progressive coalition or Liberty Union or whatever,” Cota said. “It’s how do you allow small businesses to grow and employ people. No big business is going to stick around here. You’re not coming to Vermont because you want low regulation. You’re not coming because you want easy development. You’re not coming because you want low personal income tax. You’re coming for other reasons. And if you’re in Vermont, you want to expand in Vermont. Take away the politics. The main issue is timeliness. The business world never moves slower. It’s always moving faster. You’ve got more to do in less time all the time. We need to have a top-to-bottom review and figure out how to enable these small business to do their expansion and continue to hire people. Or else they’ll have to get out, or sell.”

Lessons

Running a family business has taught Cota many lessons.

“In terms of making mistakes, international economics was a poor choice in college,” Cota said wryly. “Going to a school that required me to be fluent in French for work in Bellows Falls was another mistake. Working in a family business where you have to work 12 hours a day – there’s a cost in your family. I trusted people who exuded affluence and assumed they had money. That turned out to be expensive in a couple of accounts; it’s hard to repossess oil after it’s been burned. And I learned not to trust the government. The example of asking for a voluntary inspection, thinking I knew the rules and being the first docket in the Environmental Court from trying to do the right thing. You make lots of mistakes in business. Every day is a learning experience.”

His father’s experience during the Arab oil embargo gave Cota a lifelong distrust of large businesses and an appreciation for the value of firm, long-standing relationships with many independent suppliers. He relearned that lesson between January and mid-February 2000, during a severe cold spike.

“We had had fixed-price commitments to our customers, but we were unable to pick up any of our futures contracts because there was no product in southern New England,” Cota said. “We felt we had increased our margin enough for our nonfixed price customers to cover for the loss of contracts, but financially, we missed the numbers. We were at the mercy of suppliers who had sold all their products, and the fresh supplies never arrived in time. It reinforces why you want to have liquid contracts from a variety of suppliers and a variety of ports.”

An unfortunate experience with a large manufacturer reinforced Cota’s belief in the value of his company’s relationships with residential consumers.

“We were fixing the steam heating for a larger manufacturer,” Cota said. “We asked them to buy their oil from us, and to invest about $8,000 in equipment and labor. And we reduced their fuel consumption from about 40,000 gallons per year to 18,000 gallons per year. Pretty good savings, and things worked well, and the next year we lost them for a penny a gallon. That was a lesson for me, that the relationships I make with residential consumers are going to be a lot more important. If I did a favor for Mrs. Stewart in Grafton 20 years ago, she’s going to remember it, and those memories will pay off in the long term.”

In terms of management, Cota learned that some people don’t Eke to learn.

“It requires a level of excitement and purpose behind education for people to want to do it,” he said. “We had some older employees quit rather than go through gas certification school. It was fairly technical, but it was knowledge-based, which I liked. The mechanical world has traditionally been an apprenticeship world, where you do X amount of time, and after a certain period, they’re going to assume you’re smart enough, whether you are or not. And if you’re really smart, they’re going to assume that you have to put in enough time as the dumbest guy on the planet to get to the same level of recognition. To me, this makes no sense.”

Future

Outside of current events, two aspects of the future loom large; the first is the danger Cota sees in attracting the attention of a larger oil company which might want to buy his company or shut him down with unfair competition; the second, further down the road, is whether there will be a fourth generation in the business.

“All the major companies always want to know who the players are,” Cota said. “They will always put out feelers, We’ve always been polite and neighborly in our chats, but that’s as far as we’ve talked about it.” Having the larger companies hovering around making offers works well for family businesses when the next generation is uninterested in taking over. As to whether Cota’s children will be interested, it is too early to tell.

“They’ve been working part time,” Cota said. “My daughter would like to start at the executive level. I put them on clean jobs after school, like shredding. They complain; they say it’s incredibly boring. I say that’s fine, I’m giving you the boring clean work now, I’ll give you the boring and nasty work later, then we’ll give you the hard work, and if you’re really good, and want to come back, then we’ll give you some other work I think it’s important for them to have the experiences I had, because that’s what makes small family businesses successful: the chance to have business experiences early.”

Copyright Boutin-McQuiston, Inc. Feb 01, 2003

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