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Young Millionaires Part I

How 30 super achievers grew their million-dollar businesses.
November 1, 1997
URL: http://www.entrepreneur.com/article/23102

Owners: David Gamperl, 30, & Mary Gamperl, 28
Year Started: 1995
Start-Up Costs: $250,000
1997 Projections: $3.2 million

Raised on his mother's authentic Italian sauces, David Gamperl never thought of touching bottled sauce. Ironically, the self-described "niche entrepreneur" found the perfect niche . . . in bottled pasta sauces. "I knew Americans weren't eating good Italian foods," says David. "They were eating whatever was on the shelves."

He started his Chicago-based pasta-sauce-of-the-month business with the blessing of his wife, Mary. "Usually I came up with ideas, and she'd say, 'That's OK.' But when she said, 'This might work,' I wrote the business plan."

The idea that hooked Mary was to gain exclusive rights to original recipes from the nation's top Italian restaurants. Each month, they mail two pasta sauces, along with recipes, a newsletter and two packages of imported Italian pasta, to 10,000 hungry subscribers. Within seven years, the couple plans to place their products in grocery stores and open stand-alone eateries. Pasta will be "the hamburger of the '90s," says David, if the Gamperls can help it.

AltiTunes Partners LP

Owner: Amy Nye, 29
Year Started: 1994
Start-Up Costs: About $100,000
1997 Projections: $2 million plus

Amy Nye is not into one-hit wonders.

Her company may have started small, but the airport-based music kiosks have struck a chord. Since we last wrote about Nye in 1995, AltiTunes has grown: She now has eight kiosks-plus 12 scheduled to open by year-end-selling 1,800 CD titles in northeastern U.S. airports.

Nye, a self-proclaimed music junkie, composed the idea in a European airport. "I saw a cassette tape stand-I was so excited to see it," she recalls. "Ten years later, I decided to start my own business; I thought [that concept] should be brought to the States."

Bring it she did-but only after a hard sell to management at LaGuardia Airport in New York City, where AltiTunes is based. Says Nye, "It's always tough to get spots in airports. That's the toughest part of my job."

Rumpus

Owner: Larry Schwarz, 27
Year Started: 1996
Start-Up Costs: $15,000
1997 Projections: $1.3 million

The story of how Larry Schwarz switched from the serious profession of law to the lighthearted world of toys is unusual. While he was attending law school, his mind would often wander in class, and he'd sketch ideas for cool toys on his notepads. When a Chinese manufacturer agreed to make them, Schwarz abandoned law, and his New York City toy company was born.

Like Schwarz's story, Rumpus' plush toys are atypical. There's Gus Gutz, a stuffed toy whose throat opens so kids can pull out his-you guessed it-guts, and Sy Klops, which has a removable rubber eyeball. Says Schwarz, "So many toys have movie tie-ins that don't focus on fun-I wanted to make toys that kids would want to play with."

Schwarz's business got a boost from FAO Schwarz, which agreed to carry the wacky toys, and from a mention on the "Live! With Regis & Kathie Lee" show. Today, his goods are sold via national toy stores and the Internet. Says Schwarz, "We want to keep having fun."

Anthony Mark Hankins, 28

Company: Anthony Mark Hankins Inc.
Year Started: 1994
Start-Up Costs: $200,000
1997 Projections: $40 million

"I always wanted to be a fashion designer," says Anthony Mark Hankins. "Since kindergarten, it was all I could think about."

Since kindergarten? Believe it-this is no idle boast. In fact, Hankins was no more than 7 years old when he created a suit for his mother to wear to a wedding. Naturally enough, the once-precocious designer has since gone on to fashion some $40 million in sales from the women's sportswear his Dallas company sells in department stores such as Sears, JC Penney and Nordstrom as well as on the Home Shopping Network.

"We go after customers who like fashion but can't afford designer-priced merchandise," explains the entrepreneur, whose pieces incorporate striking colors and vibrant patterns. "It's clothing for people who aren't afraid to express themselves."

And Hankins belongs in that category himself. When he's not pouring his creative energies into his company-steered by minority partner and longtime mentor Bruce Ackerman-Hankins moonlights as a host on a TV lifestyles program. He also recently introduced a line of décor products that sells in Sears stores. With that kind of success knocking at his door, it seems as though Hankins learned a thing or two in kindergarten.

Amy Scherber, 37

Company: Amy's Bread
Year Started: 1992
Start-Up Costs: $150,000
1997 Projections: $2 million

There's a risk, and an advantage, to opening a bread bakery in New York City. "People put you under a microscope when you open," says Scherber. "They were coming in to try our bread and critique us."

Obviously, they liked what they saw (and smelled and tasted). As she was busy baking her signature creations-semolina with golden raisins and fennel, black olive twists, and whole wheat with walnuts-the normally finicky New York City media hailed Amy's Bread. When New York Magazine ranked hers as one of the city's best bread bakeries in 1994, it was, says Scherber, a turning point: "It legitimized us with all the chefs and restaurants, and the business took off."

With her bread now available in 30 different stores throughout the city, her wholesale production is booming. Still, many devoted fans go out of their way to personally visit one of Scherber's two retail shops in Manhattan. "It's more tempting to come to the stores, because the counters are piled with goodies and there are windows, so people can see the bread being made by hand," says Scherber, a former chef. "Customers tell me what their favorite breads are, how they use them, how far they've driven."

Scherber can relate. Though she's written a cookbook, hosted a bread-baking series on the Food Network, and hopes to eventually open another store, what she loves best is baking. "Scoring the bread, shaping baguettes-seeing the bread going into the oven, coming out, smelling it, hearing the crust cracking," she says meditatively. "I find it soothing."

Jeff Haugen, 26, & Tim Cady, 28

Company: J.T. Tobacconists Inc.
Year Started: 1995
Start-Up Costs: $10,000 plus
1997 Projections: $2.2 million

As jeff haugen and Tim Cady peered into the window of a vacant store in Minnetonka, Minnesota, they saw more than just the hardwood floors, the tin ceiling and the antique detailing. They saw their future.

"We knew it would be the perfect place [to sell] retail cigars and accessories," says Haugen.

Not only were they in the right place-they were there at the right time. "We got [in the market] before all the cigar manufacturers cut off new accounts," says Haugen. "That enabled us to solidify relationships with those manufacturers and have more purchasing power."

Consequently, Haugen and Cady own what many consider the dream business of the '90s: a cigar establishment complete with deluxe indoor smoking lounges, cigar vaults for rent and walk-in humidors. But lest you accuse them of being trendy, Haugen claims, "We were cigar smokers at a young age."

Previously, Cady worked for an accounting firm and Haugen managed a hardware store; yet their most important qualification, says Haugen, is that they're true tobacco men. "We're searching for new products all the time," he says. "We're constantly doing taste tests. It's very important [that we] know the product inside out, and that's why we've tried everything that's been placed on our shelves."

Next on the agenda are three more retail stores, scheduled to open by year-end, and national distribution through their mail order catalog, J.T. Cullen. In the meantime, Haugen and Cady continue to enjoy their success. "Yes, there is time at the end of a long day when we will sit down and have a cognac and enjoy a fine cigar," says Cady, "just as we always have."

Marc Levy, 29; Spence Levy, 27; & Jay Abramowitz, 30

Company: SOMOJO (Spence-Owned, Marc-Owned, Jay-Owned) International LLC
Year Started: 1995
Start-Up Costs: $80,000
1997 Projections: $1 million

Pulling all-nighters during finals is the norm for most college students. But brothers Marc and Spence Levy and their buddy Jay Abramowitz, self-proclaimed "caffeine junkies," wouldn't just hit the books during late-night cram sessions-they'd also throw together homemade cola/coffee concoctions for the ultimate caffeine rush.

Once they graduated, the jolt became a booming beverage business for the trio. With the help of a flavorist and several months of trial-and-error testing, they created the winning recipe behind Cafe Cola, a soda that promises consumers a caffeine level equivalent to a cup of coffee.

Today, diet and regular versions of the carbonated drink can be found on the shelves of more than 240 stores in South Florida. Ninety percent of SOMOJO International's product, however, is exported to Argentina, Brazil and Russia.

It's all come full circle for these Miami Beach, Florida, entrepreneurs. Says Spence, "My brother and I always had a dream growing up that we were going to become millionaires together."

JoAnne Jonathan, 39

Company: Advanced Physical Therapy PC
Year Started: 1985
Start-Up Costs: $30,000
1997 Projections: $7 million

Joanne Jonathan was such a good physical therapist, people kept asking her to open a clinic. She did-and became one of the few women business owners in the industry.

While still working for another clinic, Jonathan was asked to do consulting work for local businesses who were impressed by her knowledge of typical industrial workers and their back problems. "They wanted someone who had a knack for recognizing the special needs of blue-collar employees who were returning to a very physical job," says Jonathan.

Companies also wanted someone undeterred by the less-than-glamorous world of industrial physical therapy. Jonathan was just what the doctor ordered: She responded to the appeal by opening her first freestanding clinic in a heavily industrial area of Indianapolis. One location quickly grew to nine, in addition to six on-site locations at local companies. Recently she formed a joint venture with four physicians to open an occupational heath clinic.

While she initially laughed at people when they predicted she would one day own seven clinics, the physical therapist is comfortable with her leadership role because, she says, she's always liked to organize and run things.

Jonathan's future plans include creating an industrial prevention and wellness program, a natural next step. After all, in the order of things, prevention comes before-and after-treatment.

Lisa and Randy Carson, both 37

Company: DirectConnect Inc.
Year Started: 1996
Start-Up Costs: $5,000
1997 Projections: $2.4 million

The motivation to quit their corporate jobs was overwhelming. Lisa, a former hotel administrative assistant, wanted to be home with the kids; Randy, a computer training center manager, was just plain burnt out. "It was a personal lifestyle choice," says Randy. "I was mentally and emotionally ready for the change."

Change is exactly what the Carsons got. Since starting DirectConnect, which provides computer trainers for educational centers, from their Gaithersburg, Maryland, home, Lisa and Randy have managed to gain 150 clients and earn more than $2 million in annual sales . . . all while caring for their three children under the age of 5. "After [doing] this for a year and a half, I don't think a lot about it," says Randy, "but it's probably pretty radical compared to the way a lot of people work every day."

One thing the Carsons do think about is the overwhelming demand among education centers for licensed computer trainers. "I used to be one of the people I'm selling to," says Randy. "It's a huge field."

Their long-term plan is to blend family and business. "I'd like to see the children grow into the business," says Randy. "Maybe 10 years from now, our oldest will be able to start making telemarketing calls."

But there's a lot for the Carsons to consider between now and then. They recently hired two employees and started Birthday USA, a mail order birthday party supply company. Says Randy, "I think we need a bigger house."

Greg Maples, 34

Company: High Tech Burrito Corp.
Year Started: 1986
Start-Up Costs: $80,000
1997 Projections: $10 million plus

Before the wrap, there was High Tech Burrito, back when launching a gourmet burrito business meant years of hard work without a vacation. But the hectic pace was no sweat for Greg Maples, then fresh out of the U.S. Marine Corps. "I was used to a grueling regimen," says Maples. Armed with an inheritance, Maples found the inspiration for his business in memories of his high school hangout-popular for its tasty burritos but with one unpleasant catch: "We called them 'gut bombs' because you'd eat them and then feel bad," Maples says.

Determined to create a burrito that would satisfy taste buds and tummy alike, Maples began serving international-style burritos using low-fat ingredients. "It's been neat to see an industry [of wrap burritos] created from a part of my menu," says Maples. Today, his San Rafael, California-based High Tech Burrito boasts 275 employees in 15 locations throughout the Bay Area and a menu-topping Godzilla Burrito that weighs in at 11¦2 pounds.

Rounding out Maples' winning approach? It's all in the details. "I tell my managers, 'Take baby steps and you'll get there,' " he says. With 2 million High Tech burritos consumed last year, it appears Maples has arrived.

Contact Sources

Advanced Physical Therapy PC, 5949 W. Raymond St., Indianapolis, IN 46241, (317) 843-1270

AltiTunes Partners LP, 740 Broadway, 2nd Fl., New York, NY 10003, (212) 228-5110

America's Finest Pasta Sauces Inc., 930 W. Huron St., Chicago, IL 60622, (800) 55-SAUCE

Amy's Breads, (212) 462-4338, fax: (212) 462-4323

Anthony Mark Hankins Inc., 3913 Prescott Ave., Dallas, TX 75219, (800) 789-4AMH

DirectConnect Inc., (301) 330-1221, http://www.birthdayusa.com

High Tech Burrito Corp., (800) 2-BURRITO, hightech@well.com

J.T. Tobacconists Inc., 17613 Minnetonka Blvd., Minnetonka, MN 55391, (612) 475-3131

Rumpus, 19 W. 24th St., 4th Fl., New York, NY 10010, (212) 463-9869

SOMOJO International LLC, 545 Michigan Ave., #2, Miami Beach, FL 33139, (305) 672-4923.