Quick Change

Garage Geeks

"Everyone in our company is focused on profit generation," says Benny Daon, 31, founder of Shunra Software Ltd., a $1 million software development firm based in Paramus, New Jersey. "We are very conscious of the bottom line."

Daon used his own savings to pay for start-up costs. He moved operations from Israel to New Jersey in 1999 and spent much of his first year there running the company out of a garage. By the end of 2000, the company's first full year of business, Shunra had made well over $1 million.

"If you're going to be able to scale your business to a $1 million start-up, you really have to be global."

Shunra wasn't just a job; it was Daon's life. "If I took home a salary, it wasn't a CEO's salary," he says. "I was working hard-16-hour days-and it got really crazy. At one stage, my wife said, 'That's enough,' and we made an arrangement where I would work from sunrise until 11 p.m., and I'd take a half-day off."

Shunra's first sale was to Royal Philips Electronics, which gave the company an immediate international presence. "If you're going to be able to scale your business to a $1 million start-up, you really have to be global," says CCSBI's Lattimore. "You have to be able to access and execute in global markets."

As a high-tech start-up, Shunra also had to deal with some unexpected legal issues. "The thing that surprised me most is how important it is to get good legal advice," Daon says. "In high-tech, everything you have is intellectual property. Agreements you have in writing with your customers and employees are as important as the product you develop. You have to understand the legal side of your business, because you can't always trust lawyers to do it for you."

average number of hours worked daily by owners of Entrepreneur's Hot 100 fastest-growing companies
SOURCE: Dun & Bradstreet and Entrepreneur

Because Daon didn't seek venture capital, he was able to concentrate on profitability from Day One. "When you bring VC [firms] on board, their concern is valuation for the next round of financing," he says. "They're not always interested in revenue. VCs can really make you lose touch with reality."

Shunra kept growing without outside money because Daon continually reinvested his profits in the company. "Being a bootstrapped company, it's important to invest our revenue in places we can generate more money," he says. "Sales was our first priority. Once we got a little bigger, we moved to things like marketing."

Daon's focus has shifted now that Shunra is an international company (its 30 employees are split between Israel and New Jersey). "I still work a lot of hours," he says. "But I found it easy to let go of the business and transition into looking at things from a CEO's point of view. I look at expenses and work on recruiting good people."

Now that Shunra has made its first $1 million, Daon can relax and enjoy his success, right? "It never ends," he says. "You never quite know you're there. There's always so much to do, even after you make $1 million. That's our focus now: to sustain our success and continue growing."

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This article was originally published in the July 2001 print edition of Entrepreneur with the headline: Quick Change.

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