Flights of fancy: a new owner wins over his craftsmen--and turns around our Small Business of the Year--with some skills of his own.

• Author: Martin, Edward

Metal buildings line Gribble Road in Matthews, east of Charlotte, housing a private garbage-collection service, car repair shops and other businesses. In one, Kevin Schoolcraft pushes through a door from offices into a shop that covers a quarter of an acre. It is filled with the smell of wood--Brazilian cherry, walnut, white oak--and the whine of saws. He sizes up a half-finished staircase that nearly reaches the ceiling, its curves as graceful as the treble clef on a score. If this were music, it might be Pachelbel or Vivaldi.

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Schoolcraft bought Masterpiece Staircase & Millwork Inc. 18 months ago. Staircases built here for luxury homes can cost $100,000 or more. But losses were mounting--$30,000 one month, $40,000 another--and workers were dispirited. "When you're constantly hearing, 'We need more, we need more,' it really brings down morale," says Aaron Hensley, who joined the company in 1999 after earning an art degree at UNC Charlotte. Schoolcraft opened the inner working of the business to its employees, artisans like Hensley. "Kevin lets us know if we're making money. It's nice to hear your hard work is paying off. I feel better about the future here than I ever have."

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Schoolcraft, 38, has worked with wood only enough to value the craft. He once bought a router, saw and other tools to make a swing set for his daughter, molding for his son's bedroom and a bar for his basement, but he is neither artist nor artisan. The renaissance of Masterpiece Staircase, BUSINESS NORTH CAROLINA'S Small Business of the Year, represents the triumph of the MBA. Weary of corporate life, Schoolcraft searched for a business where he could put to work the degree he had earned more than a decade before.

"I can appreciate quality. I can't tell guys like Aaron how to build a staircase, but I can use my financial skills to provide them the opportunities and the tools to do that." Since buying the company in June 2005, Schoolcraft has reversed its slide down the financial banister. He did it with business acumen, marketing and elbow grease, plus the belief that a good manager can make money doing almost anything: "The two we ran all the way down to the finish line were this one and a service that cleans corporate offices." He expects his business to earn 17% on sales in excess of $1.2 million this year.

He took on a bigger task than he admits. "It's harder to stop something from crashing and put it on an upward path than it is to start from scratch like I did," says Richard Yow, whose Rick's Auto Marketing Center in Carthage was last year's winner. "Kevin's company most likely wouldn't have made it if he hadn't stopped the downward spiral." Yow was one of three judges in this year's competition, sponsored by BB & T Corp. The others: Gail McDonald, the N.C. Commerce Department's small-business ombudsman, and David Kinney, BNC editor-in-chief.

Michael McGregor, a Charlotte business broker who arranged for Schoolcraft to buy the company--started by a homebuilder in 1987 as Masterpiece Woodworking--says it had stagnated. "You hear the phrase, 'redheaded stepchild.' The operation wasn't the builder's core business." Sales exceeded $1 million some years but had drooped to about $870,000 in 2004. The new owner has shimmed it up in other ways, including building its operating reserve from zero to about $100,000. "Kevin is more of an older Generation Xer than he is a baby boomer," says Griffin Bettencourt, his BB & T banker. "But he has the financially conservative baby-boomer mentality that says, I need to work and operate within my means.'"

The spiky-haired boss resembles a rock guitarist, which he is on Fridays when some of the guys in the shop knock off and crank up the amps. The route he took to get here was as roundabout as a Pete Townshend windmill riff. An Ohio native, Schoolcraft received a bachelor's in communications systems from Ohio University in 1990 and an MBA in finance and real estate from Ohio State in 1994. He went to work buying real estate for the Ohio Public Employees Retirement System and, two years later, joined Columbus, Ohio-based Glimcher Realty Trust to do similar work.

The twist that led him to Charlotte came in 1998, when he became a regional real-estate manager for Limited Brands, the Columbus-based retail conglomerate that includes such mall staples as Victoria's Secret, Bath & Body Works, Express and The Limited. Two years later, it transferred him to Charlotte and put him in charge of real estate in a six-state territory. He quit in 2004 to begin his search. Though in his mid-30s, he and wife Tracy, an executive with Bank of America, had socked away substantial savings. "We're savvy enough--cheap enough--that we knew we could live on one or the other's salary."

A triathlete, skydiver and mountain climber who has scaled the highest peaks in 21 states, he was not reluctant to take a...