In business, finding the right opportunity is everything. In the case of C. Ray Kennedy, opportunity found him.

Kennedy is chairman of American Product Distributors Inc., a business he started in 1992 with $1,000. It had $130 million in sales last year.

Like its name implies, APD distributes products -- everything from office supplies to building materials. Clients include Bank of America, Johnson & Johnson, National Gypsum, the federal government, Charlotte-Mecklenburg Schools, Office Depot, Enterprise Rent-a-Car and more.

With the economy stalled and layoffs mounting, we asked Kennedy to offer advice to young entrepreneurs and those considering such a move. What follows is an edited transcript of that interview:

Q. Let’s start from the beginning. How did you get into this business?

I spent 25 years in banking. I was an executive with Southern National Bank. Southern National back in the early 1990s decided to merge with BB&T. I was executive vice president in charge of operations and automation. I knew the guy who ran the same area at BB&T. We had known each other for a long time and had joked that neither of us thought we could work for the other because we had held similar positions. But BB&T was the company doing the buying, and I knew that, so I decided to come out and fulfill a lifelong dream to start my own company.

I had been a fairly popular banker in the state, so when I decided to come out, word got around pretty fast. Folk at Bank of America, NationsBank back then, called. They asked me to come downtown. They told me about their aggressive plans to take this North Carolina bank and make it a nationwide bank. They said they would be on a fairly fast track in doing it.

There was one area in this whole thing that they had concerns about. They knew that when banks merged, regulators were really concerned about their diversity procurement record. So they had this idea about buying copy paper from a minority-owned paper merchant. The only problem was, they had looked all over the United States and could not find a minority-owned paper merchant. So they wanted to know if I wanted to sell paper to the bank. So I started American Product Distributors, and the only product we sold was paper.

We started out simply selling paper to Bank of America locally. You just don’t start a company and all of a sudden service a big corporation like that. So we started locally and then we expanded to the whole state and then we’d go to the next state as we gained experience. The first year we did $250,000 worth of business. That account eventually grew to $14 or $15 million worth of business annually.

Q. Now you distribute far more than paper.

Yes, we found out that companies needed more than just paper. Paper was a commodity with real low margins. It was tough to make it on that. Paper was big and bulky, hard to deliver, hard to transport, so we started selling other products as well. Today we sell the entire gamut of office supplies and products. We also sell promotional products, products you can put on apparel, mugs, trinkets -- those kinds of things. We also are an industrial products distributor. We sell plumbing supplies, HVAC, janitorial supplies, facilities maintenance and repair supplies.

Q. That’s a long way from paper.

What we found out was that our business model, the model we had created, it didn’t matter what we were selling. It could be applied across product lines. So we are a very unique distribution company, even today.

Q. In some ways it sounds like you almost stumbled upon this business.

(Laughter) It was not easy, I can tell you that. I did stumble into the opportunity to sell paper on a small basis to a major company. But after that we took advantage of bigger opportunities that where out there. I think that’s the key in business. Once you get into an area, you have to keep your eyes and ears open. You have to jump when you have opportunities to jump. You have to analyze it, make sure there is opportunity. That’s what we’ve done, and that’s why we are where we are today.

We decided early on that we would not last very long in the marketplace if we were simply selling to corporations so they could count those sales as diversity procurement. We knew we had to bring value other than that.

Q. What was the hardest part of going from a corporate job to running your own business?

First you have to get over the fear. I had a six-figure job in banking. And I didn’t have any salary when I started my own company. Actually, I went a number of years without getting paid at all. But you have to get over that fear, and you have to have determination and confidence that what you created or what you have will, in fact, work.

The other big obstacle is capital. Most small companies are undercapitalized, and we were, too. We were grossly undercapitalized. I think people getting out there today should try not to make those mistakes.

You have to go out and check the equity markets, get money from family and friends, investors, or if you’re fortunate enough to have save enough money on your own, put that money into the company.

It would be very difficult today for anybody to start a company with $1,000 and grow it to a $130 million company. It’s almost unheard of. I wouldn’t recommend anybody trying to do that. It’s just way too difficult.

But if you have a good idea and you think it’s sustainable and you can accumulate the capital, I would highly recommend that folks go out and start a business, see what they can do.

Q. What other mistakes do young entrepreneurs make?

I think a lot of entrepreneurs think they have to staff up. A good example are accountants. Or some take on legal folks or marketing or whatever. I think when you first start off, or at least I did, I was the marketing officer, I was the accountant, I was the lawyer. I was everything.

That was the way we had to operate. You just don’t have to have all that in place to open and run a business. I don’t want to be misunderstood. I’m not saying those things aren’t important. And if you have enough capital, I would highly recommend you do that. But normally, those kinds of funds can be used to do other things.

Q. How would you characterize today’s business climate in terms of opportunities?

Actually, I think there are more opportunities during the recession right now if you’re talking about selling to the government or selling to the customer base I have. A lot of companies are experiencing problems because credit is not flowing as normally as it would flow.

If you can find the right kinds of niche and you can get in there when other companies are having a bit of a problem operating, that’s a window of opportunity. That’s if you’re selling to the federal government. My company, when times are like they are right now and you have companies pulling back, then we shift gears and try to sell more to the government. The government is spending more, not less. But when it comes to selling to consumers, you may not have that luxury to switch from one to the other, so I think it’s a little more challenging.

Q. What personal characteristics helped you succeed?

I have an ability to be an eternal optimist. I’m an old athlete. I’ve always been a leader. I was the captain of the basketball team, the quarterback in football. And I always had the ability to influence people to follow, or go along with what I’m doing.

I remember when I was back in banking, anytime anybody would say something to me about sales I would say, ‘I don’t see how anybody can sell anything. I could never ever be a salesman.’ I just didn’t understand what selling was until I got into my own business. All selling is is influencing people to do what you want them to do.

I have the ability to do that. I think that’s why I’ve been able to have the degree of success that I’ve had. That and the ability to operate with honesty and integrity.

You have to be a visionary. You have to stay one step ahead of everybody. That’s my job. That’s my role. I don’t run things here day to day. I don’t run the sales department or the operations. My job is to make sure this company is being led right and is going in the right direction and that we are taking advantage of all the opportunities that are out there.”

Q. How do you think the election of Barack Obama will influence business opportunities for African Americans?

I think it’s going to open up the eyes and open up the opportunities that are out there for all Americans, regardless of race. It will allow America to use all of its human resources instead of just relegating that role to certain individuals or races. I think that eventually will open up opportunities to blacks.

When I first started this company, one of the first things I had to overcome was people automatically assuming we could not do the work, assuming we were so small we could not get it done. That has changed.

With things that are in place now and Obama being in the presidency, hopefully that will change for the better, so that if you present yourself as a company and you happen to be black, hopefully people won’t automatically look at your company or look at you and assume you cannot do the work. All we’ve ever asked for anyway was an opportunity to prove that we could do the work.

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