The Real Deal

... Surpass Your Competition
When the SARS epidemic hit in early 2003, Jeremy Shepherd, founder of online pearl retailer PearlParadise.com, was suddenly inundated with e-mails, faxes and phone calls from Asian pearl farmers offering great prices on shipped pearls. Shepherd, who traveled to Asia monthly to purchase pearls, suspected--correctly--that the prices were due to the SARS scare and travel-reluctant pearl buyers. SARS did give Shepherd pause, but ultimately, he decided the deep discounts were worth the risk: "It was a chance I couldn't pass up."

Shepherd, 31, speaks Mandarin and knew pearl farmers from his buying trips, so he felt completely comfortable venturing into southern China, where SARS had hit hardest. "There was no competition at that point," Shepherd recounts. "Not only did I get great prices, but I was able to secure future harvests as well." PearlParadise.com could now offer pearls at prices far below its competitors'.

Shepherd returned to southern China on a regular basis and saw no competitors there until the following fall. Because he developed deeper relationships and negotiated well with the farmers during that time, Shepherd maintains he still pays "astronomically different" prices than his competitors. With no advertising, PearlParadise.com experienced a 1,000 percent increase in sales for 2004 and projects 2005 sales of over $7 million.--April Y. Pennington

... Get on the Today Show
Andy Schamisso, founder of Inko's White Iced Tea, sent cases of tea to various shows and newspapers in the New York City area in the spring of 2003 to attract attention to his product. But he was in for a surprise when, with no prior notification, the Today show aired a segment in August 2003 on white tea. Lo and behold, the Inko's bottle was among the white tea products displayed while their health benefits were touted on-air. Instantly, phone calls from around the country flooded Inko's lines, and e-mails poured in for a week inquiring about the tea, all saying they had seen the Today show segment. Schamisso, 42, was stunned. "We got a tremendous response without our name being mentioned!" he says.

Offering the ready-to-drink white tea since February 2003, when there were few competitors, Schamisso projects 2005 sales of $2.5 million and now faces heavy competition. If he hadn't taken the marketing gamble and sent his product to the Today show, his business might never have taken off. He credits the show with creating a broader awareness of his New York City-based company. "It helped our expansion and paved the way to where we are today."--A.P.

... Get Embezzled
Jay Myers was reading an article about embezzlement in April 2003 when his antennae went up. He wondered, Could an employee do that to my company? He looked into the payroll records of Interactive Solutions Inc., the Memphis-based videoconferencing/audiovisual systems integration company he founded in 1996, to investigate his gut feeling. "I thought about the fact that we might have a weakness," recalls Myers, 48. He was chilled to the bone when he saw what he'd feared: His trusted accounting manager had been paying herself unauthorized commissions, almost since the day she started.

Outraged, Myers called the police and a friend who was a fraud investigator. They discovered the employee had embezzled a total of $255,000. While building a case against her, they learned that she'd stolen over $2 million from other companies in the past. The ordeal lasted nearly a year while she awaited trial, recalls Myers. "It was driving me crazy," he says. "I was able to convince a federal judge after putting all her other thefts together and testifying about how badly she hurt my business." The employee was sentenced to eight years in prison in 2004.

Even with the embezzler incarcerated, Myers admits his ability to trust will never be the same. He now keeps payroll records under lock and key and looks over every paycheck himself. And though he received some restitution from insurance and his bank, it was his forthright attitude with his other employees about the situation that inspired them to double the company's business in 2004-to the tune of over $10 million in sales.--Nichole L. Torres

... Lobby for Small Business
Sandra Abalos does it all: She runs her accounting services firm, Abalos & Associates, out of Phoenix and lobbies in Washington, DC, as an advocate for small business. Starting as an accountant in 1978, Abalos became a partner in her accounting firm in 1981 and took over in 1988 after her partner retired. Though she loved accounting, she hated the 1986 Tax Reform Act, which she believed unfairly penalized entrepreneurs.

Her other cause has been codifying independent contractor classification so businesses won't incur hefty penalties for misclassifying an employee. "I was so angry, and that's what got me interested in public policy," says Abalos.

She's since sat on numerous committees, most notably a 1995 conference on small business with then-President Clinton-all while building her business to over $1 million in sales. Abalos, 48, says, "If you come forward, not complaining but with a solution, [the government] will listen."--N.L.T.

This article was originally published in the September 2005 print edition of Entrepreneur with the headline: The Real Deal.