TAKE A BOW.

• Author: Gray, Tim
• Position: Small Business of the Year Regulator Marine Inc. - Company Profile

Our Small Business of the Year did just that to build a reputation as the Lexus of center-console fishing boats.

Owen Maxwell proposed to Joan 14 years ago on a Phoenix 29 anchored in the shadow of the Cape Lookout lighthouse. The late afternoon sunlight twinkled on the water like a thousand tiny diamonds. "He got down on his knee right there on the deck. We had been talking about how, when we built boats, we'd do it better than the Phoenix. He said, 'I think there's something we have to do first.'" He took her hands in his -- but offered no ring. He had stowed it in the cabin, worried that, in the nervousness of the moment, she might drop it overboard.

That proposal led to another one three years later, when he told her he was ready to realize the dream they had talked about on the Phoenix and hundreds of other times -- in the kitchen drinking coffee, in the car on the way to work, on the deck on lazy Sunday afternoons. The one he'd been making sketches for as far back as college, when he doodled in his notebooks when he should've been listening to lectures. He saw a niche for a high-quality, center-console fishing boat: a craft for aficionados, with more room for fish boxes than it had for seats, one small enough to tow but tough and powerful enough to reach big water where marlin and swordfish swim.

The boat they built on that dream a decade ago still floats their fortunes. In the last two years, Edenton-based Regulator Marine Inc. has doubled the size of its work force, growing from 34 to 76, and its plant, adding 25,000 square feet and two production lines. Things are running wide open, with employees working Saturdays to meet the demand. The company is on track to build 200 boats and haul in $10.8 million, both records, this year. Hewing to the course it first charted -- building center-console sportsfishermen -- Regulator has managed to maneuver around every obstacle, making the right moves even when it was just the Maxwells, a high-school kid and a college dropout working out of an abandoned A&P building.

The company has made a name for itself among the state's best boat builders, whose brands -- Hatteras, Fountain, Grady White, among others -- are synonymous with quality and craftsmanship, the top tier in an industry that pays 2,700 Tar Heels $71.6 million a year in wages. The nearly decade-long economic expansion and bull market have put Regulator's midsize boats, priced between $37,000 and $120,000, within range of more people. (As with boats, so it is with boat builders: A rising tide lifts all). What's more, Owen, who's president, is a trust baby -- his family owned and ran the Georgia-based Maxwell Furniture chain -- so they didn't have to grovel to investors and had collateral for loans when they weren't turning a profit. But, as Joan, who's vice president, notes, "We could've squandered the money, spending it on big houses and boats."

That's not the only thing the Maxwells have done right. "Their boat is the Lexus of its field," says an editor with a national boating magazine. "They got a top designer, their materials are good, and their construction, careful." Since the early days, they kept workers on the payroll even in slack times. That way, they figured, they would attract and keep better craftsmen. Sometimes it meant paying shipwrights to wash windows and build cabinets when there were no orders for boats. As the company grew, they added benefits that line workers at many small manufacturers don't get, such as a 401(k) plan.

That's just smart business. But for many small companies, the gulf between knowing what's smart and doing it can be as wide as Pamlico Sound. It's why Regulator Marine is BUSINESS NORTH CAROLINA'S 1999. Small Business of the Year. Judging this year's competition, again sponsored by United HealthCare of North Carolina, were Martha Hayes, head of Charlotte-based First Union Corp.'s small-business banking division; Mike Watson, president of Control Automation Technologies Corp. in Kernersville, last year's winner; and BNC Editor and Publisher David Kinney.

In a way, Regulator began in a garage in Augusta, Ga. Owen, who's now 41, was a teen-ager with a yen for the water, and a neighbor, Rowland Dye, was a hunter, fisherman and woodworker. "I think he practiced law to pay for his hobbies," Owen says. On weekends, Owen would slip over to Dye's and learn how to shape wood into small, water-worthy craft. Together, they built half a dozen johnboats, selling most of them. Owen kept one, which sits on a shelf in the room where he stores the fiberglass molds for his boats.

His father bought a 17-foot Boston Whaler and docked it at Hilton Head, S.C. "I spent summers down there. I became the pilot of that boat. I fished it. I took care of it." That led him to start a business when he was 12, the dockside equivalent of mowing lawns. When boats arrived at the marina, he'd offer to wash and polish them. Owners would invite him back the next day to help with other chores and repairs.

Owen came into his trust at 18 and got a bachelor's in agriculture from the University of Georgia in 1981. Already eyeing coastal North Carolina, he figured farm management was a way to live near the water. After graduation, he spent six months as a boat bum -- he was a delivery captain for a yacht company -- then signed on with Edenton-based Rich Agricultural Management Co., managing farmland in Hyde County. He had met the owner through a family friend one Christmas during college.

Joan, who's 39, grew up in the tiny Hyde town of Fairfield on Lake Mattamuskeet. Even today, life there revolves around the fields and, in hunting season, the fowl. It's sound country, with rivers and...