Ascending musical scale

STEVENSVILLE, Md. -- It was one thing for Paul Reed Smith to see the wooden electric guitars he designed in the hands of rock icon Carlos Santana. It was another to see complete strangers wearing T-shirts with his logo.

But when fans started coming into his factory with tattoos of the initials "PRS," that was another level altogether.

"I have a hard time with that," he laughed. "That's just weird, you gotta understand."

Perhaps that goes with the territory when you run the third-largest U.S. maker of electric guitars, trailing only the rock-and-roll institutions of Fender and Gibson.

Lately, business for PRS Guitars has been taking off like a Santana solo. Despite the recession, sales increased from $14 million in 2000 to $21.5 million in 2001, a surge Smith attributes to the increasing use of his guitars by popular musicians and the resurgence of guitar-driven rock following a shift to more synthesized music in the 1990s.

That growth helped the 46-year-old entrepreneur become the 2002 Maryland Small Business Person of the Year.

"Paul's unique product, career achievements and entrepreneurial spirit set him apart from the crowd," said Allan Stephenson, district director of the U.S. Small Business Administration's Baltimore office.

Price of making music

PRS guitars sell for $500 to $20,000, with the average retailing around $3,200. Last year, he sold more than 19,500 -- and there is currently a 9-month waiting list for a new one. Export sales have increased by more than 70 percent over the last three years and the company is now looking to expand.

Smith, a slender man with wire-rim glasses and longish, curly hair, describes the music his guitars make as "powerful and clean sounding, with some vintage and some modern sound in it."

His devotees include band members from Creed, Barenaked Ladies and Matchbox 20.

"There's a reason these young bands are using these guitars," he said. "They think this is the guitar of their times."

Smith was born in Bethesda in 1956 and raised in Bowie, playing Beatles tunes on a Hi-Lo classical guitar when he was about 12. He built his first guitar in 1975 as an independent study project at St. Mary's College in southern Maryland (he got an A).

About then, he started frequenting the larger concert venues in Washington and Baltimore, persuading roadies to let him go backstage with his handmade guitars. His first big sale was to Ted Nugent in 1976.

In 1980, he persuaded Santana to give one a try when he was playing a gig at Merriweather Post Pavilion in Columbia. The rocker liked it, but was dubious of Smith's craftsmanship, calling the instrument an "accident of God," Smith recalled.

That's what Santana called the next two he bought too. By the fourth one, Smith said, he conceded, "well, maybe you're a guitar maker."

"He just didn't understand how somebody my age could make a guitar like that," Smith said.

In 1985, Smith founded PRS Guitars as a limited partnership, working in a small, dusty Annapolis workshop nicknamed "the dungeon." In 1996, Smith moved the business across the Chesapeake Bay to Kent Island, where there was more space. Now, 165 workers -- mostly from nearby Queen Anne's and Anne Arundel counties -- build guitars in the 25,000-square foot factory.

Converting rectangle blocks of mahogany and maple into electric guitars is a complicated process, including woodcutting, sanding, painting, staining and stringing.

As they dry between layers of polish, guitar bodies hang on hooks in rows that resemble sleek, multicolor meats. Humidifiers and thermostats at the high-tech facility keep it a constant 72 degrees and 50 percent humidity -- so the wood doesn't swell with the change in temperature.

On most, the natural tread of the wood is visible through different colored stains. The more expensive versions feature intricate fingerboard inlays in the shape of birds and dragons.

What's a common denominator of the people who work there?

Jack Higginbotham, the vice president of manufacturing who started with the company in 1985 as a wood-sander, puts it this way: "Most people play (guitar), or would like to."

That includes everyone from the janitor to Smith, who fronts a band called the PRS Dragons. Smith concedes his guitar-making connections have won him some opportunities on stage too.

During recent gigs, Creed and Vertical Horizon showed their gratitude by allowing him to sit in for a song or two. At a concert in Washington on April 1, Santana pulled him onstage.