Young Millionaires Part II
How 30 super achievers grew their million-dollar businesses.
URL:
http://www.entrepreneur.com/magazine/entrepreneur/1997/november/23100.html
Company: New Image Media Inc.
Year Started: 1994
Start-Up Costs: $20,000
1997 Projections: $1.4 million
A passion for fashion-that's the inspiration behind a New
York City magazine publishing house, founded by John Pasmore and
Eddison Bramble. Pasmore, a magazine publisher, and Bramble, a
photographer, combined their talents to launch New Image Media.
Their magazines strive to uncover the chic and the vogue.
They've come a long way since their first release, a magazine
showcasing the work of professional hair stylists. Today, the
partners' smart, glossy mags include Elite Hair and Modern Hair
and Style, featuring hairstyles and ethnic beauty supplies, and
Oneworld, targeting multicultural Gen Xers with articles on art,
music and fashion. In the works: Silhouette, a beauty magazine for
black women.
With each publication exceeding 50,000 in circulation and
claiming a strong following in Europe, what's most rewarding
for these entrepreneurs? "The feeling that you're
controlling your own destiny," says Bramble. "You have
the ability to create your future."
Company: ExchangeNet
Year Started: 1994
Start-Up Costs: $20,000
1997 Projections: $1 million plus
Most teenagers work part-time jobs for minimum wage. Not Michael
Krause. He's busy at the helm of Cleveland's largest local
Internet service provider, a company he founded with older brother
Daniel.
"It was Michael's idea to start the business,"
Daniel says. "He approached me because he didn't have any
money-he was 14 at the time."
With his brother's support, Michael jumped into the game
before the Internet was popular. A smart move: ExchangeNet now
handles roughly 7,000 corporate and public accounts. But that's
hardly enough for the brothers, who have their eyes on the
future-and on the 2.2 million potential customers in the Cleveland
area.
These entrepreneurs relish their success-and attribute it in
part to their youth. Says Michael, "Clients are impressed when
they see [young people who know] what they're talking
about."
Company: Papa John's International Inc.
Year Started: 1984
Start-Up Costs: $1,600
1997 Projections: $840 million
John Schnatter's recipe for success is a textbook case of
good business management: Combine a large serving of
superior-quality ingredients with the right team of employees, bake
until cooked evenly and serve in a straightforward manner.
"What everybody else did was overlook the obvious. Back in
1984, the pizza segment [of the fast-food industry] amounted to
about $10 billion. Domino's, Pizza Hut and Little Caesars
controlled about $4.5 billion. So there was $5.5 billion that
little independents all over the country were getting," says
Schnatter, describing how his Louisville, Kentucky-based business
grew from the back of his father's tavern into a 1,376-store
pizza chain that holds its own with the industry giants.
Schnatter figured if he could develop a system that would
produce homestyle-quality pizza, he would achieve success. To do
that, his restaurants use better ingredients-high-protein flour,
lower-fat cheese and lean meats.
In an industry dominated by billion-dollar players, Papa
John's is pulling in $840 million in sales. In 1998, the
company will go international with locations in Puerto Rico, Mexico
and Canada. The concept has won over Frank Carney, the founder and
former owner of Pizza Hut Inc., who owns 48 Papa John's
restaurants and plans to open more.
Company: Cellular Works Inc.
Year Started: 1993
Start-Up Costs: $18,000
1997 Projections: $9 million
When Andres Link and Richard Swerdlow ventured into the cellular
phone business, they became a classic case of the "accidental
entrepreneur." Upon discovering that their cellular phone
kiosk was competing with another phone store against the policy of
the mall they were in, the partners didn't give up the cart.
Instead, they switched to cellular phone accessories. Since then,
Cellular Works has added mail order to the business.
The company's returned-merchandise policy and agreements
with cellular service providers nationwide have been key to ringing
up sales. This year the Hollywood, Florida-based company will mail
catalogs to more than 1.1 million consumers worldwide. The
partners' products are also available on the Internet and
through the in-flight catalog SkyMall.
The pair's formula for success? Combining America's
fastest-growing product category-wireless communications
equipment-with a fast-growing distribution channel-at-home
shopping. And, Link adds, "Stick-to-it-iveness."
Company: African Heritage Network
Year Started: 1993
Start-Up Costs: $375,000
1997 Projections: $10 million
It's official: Frank Mercado-Valdes is a media mogul. When
Universal Domestic Television sold Mercado-Valdes the weekend
syndication rights to its popular TV drama series "New York
Undercover," it became the first time in the history of
broadcasting that a minority-owned company purchased a network
series for syndication. "Rarely does a company like Universal
sell syndication rights to any third party," Mercado-Valdes
says. "This was a big company recognizing that a small
company's strength was ideally suited to help them maximize
revenues."
The strength Mercado-Valdes is speaking of is his New York City
company's focus: He licenses feature films with black actors
and themes and packages them for local TV stations, targeting the
black TV audience for advertisers.
Mercado-Valdes first became interested in media programming
while in college. He had started the Miss Collegiate
African-American Pageant, and someone suggested it had potential
for television. In 1990, the pageant became his first nationally
syndicated show. "Through this event," he says, "I
began to realize the economics of ethnic markets."
Mercado-Valdes is currently negotiating to start his own cable
network and a studio that will produce black films and black
soundtracks. "I'm not at liberty to tell you [the details
about the deals]," he says, "but they're pretty
big." Spoken like a true media mogul.
Company: Gatorz LLC
Year Started: 1988
Start-Up Costs: $75
1997 Projections: $4 million plus
Ken Wilson never used to own sunglasses. Nonetheless, the
entrepreneur has built a shining business outfitting others in
shades that combine fashion with functionality. "Gatorz is a
very innovative company," Wilson says. "We [try] to come
out with something that no one else has."
As a former motocross racer, Wilson knows how to stay ahead of
the pack. Indeed, the San Diego entrepreneur draws upon his cycling
experience to design the sunglasses that attract the core of the
company's customer base-motorcyclists and hipsters.
Gatorz's claim to fame: Manufacturing its sunglasses out of
strong, lightweight aircraft aluminum.
"The only business background I had was selling vacuum
cleaners door-to-door," confesses Wilson, who didn't allow
his lack of training to stand in the way of his entrepreneurial
dream. Now, after nearly a decade in business and more than $15
million in sales, Wilson's future is so bright he's gotta
wear-well, you know.
Company: Dillanos Coffee Roasters
Year Started: 1990
Start-Up Costs: $35,000
1997 Projections: $2 million
In sumner, Washington, there seems to be an espresso bar or cart
on nearly every street corner. But David Morris and Chris Heyer
were determined not to let Dillanos Coffee Roasters get lost in the
crowd. Starting out with a small espresso cart, the partners made a
point of remembering their customers' names and orders. For
those with large-sized thirsts, they set aside the demitasse cups
and introduced a 32-ounce mug of Italy's favorite
pick-me-up.
"It doesn't matter what competition is around,"
says Morris. "If you have a unique selling point and you
position yourself in a way the other guy isn't, you [can]
succeed."
And succeed they did. In a small town, word of their
personalized approach spread fast, and in 1991 Morris and Heyer
were able to open a wholesale roasting location. Now, sans cart,
they distribute gourmet coffee blends to local espresso bars as
well as to restaurants and supermarkets.
Morris and Heyer's latest venture capitalizes on the cigar
craze. They created a blend of coffees specifically for cigar
smokers and are blending the trends-Dillanos now carries
hand-rolled cigars that complement its gourmet coffees.
Company: Langham Transport Services
Year Started: 1988
Start-Up Costs: $20,000
1997 Projections: $6 million
Kathy Langham knows there's a lot to be said for being in
the right place at the right time.
"I was at Indiana University majoring in marketing with a
minor in merchandising," says Langham. "I started to
interview to get into retail buying but realized I didn't want
to work nights and weekends."
So she went to work in sales and marketing for a trucking line
and within seven years had bought and sold a franchise and
co-founded her own Indianapolis-based trucking company with her
sister Margaret.
Langham knows she's a woman in a man's world, and
although early in the game it was tough, her family was also a big
help. "I just can't imagine not working with them,"
says Langham, whose brother John joined the business in 1991.
Margaret processes new accounts, and John takes care of
receivables, leaving Langham time to bring in the business.
Coupling a dedicated team of employees with an
attention-to-detail philosophy, Langham believes she's well on
the road to her goal of $30 million in sales.
Company: Siany Bag Co.
Year Started: 1991
Start-Up Costs: $5,000
1997 Projections: $1.6 million
While traveling in Europe, Caren Schlom stumbled upon the
discovery of a lifetime: Leather tote bags in Greece sold for
one-fourth the cost of their American counterparts. She purchased
two-and upon returning to the States was showered with
compliments.
Convinced they could turn a profit, her boyfriend, David Leib,
quit his mortgage banking job, maxed out his credit cards and
targeted California college campuses with merchandise the two
imported from Greece.
But that was six years ago. Today, the two are married, and Van
Nuys, California-based Siany Bag Co. has expanded from a tiny
apartment into a 2,000-square-foot office building. They've
even expanded the line to include name-brand briefcases, handbags,
belts and shoes. "Every day has been a learning
experience," Schlom says.
Success, it seems, is in the bag: Last year, the entrepreneurs
sold more than 18,000 leather accessories from their five retail
locations in Southern California.
Contact Sources
African Heritage Network, 295 Greenwich St., #368, New York, NY
10007, (212) 227-8391
Cellular Works Inc., (800) 235-5967, http://www.cellularworks.com
Dillanos, 15301 Main St., Sumner, WA 98390,
(800) 234-5282
Excel Professional Services Inc., 5600 S. Quebec St., #310-D,
Englewood, CO 80111, http://www.excelps.com
ExchangeNet, (216) 615-9400, http://www.en.com
Gatorz LLC, (800) 767-4287, http://www.gatorzusa.com
Langham Transport Services, 7136 Zionsville Rd., Indianapolis,
IN 46268, (800) 727-3962
New Image Media Inc., 73 Spring St., #501, New York, NY 10012,
(212) 941-0774
Papa John's International Inc., (502) 266-5200,
http://www.papajohns.com
Siany Bag Co., 8101 Orion Ave., #11, Van Nuys, CA 91406,
(818) 988-7650
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