Hotter Than Hot

This story appears in the June 2006 issue of Entrepreneur. Subscribe »

Editor's note: To view the entire listing, plus the methodology and a stats snapshot, visit our Hot 100 page. To view our slideshow of the top 10 Hot 100 companies, click here .

Keeping employees happy is high on the list of priorities for many American businesses, and the finalists in our 12th Annual Hot 100 listing are no exception. According to our annual listing of America's fastest-growing new entrepreneurial companies, a full 43 businesses offer flextime (up from 34 companies last year), and 33 offer opportunities for telecommuting, compared to just 28 last year. Whether improvements in technology or a greater emphasis on work-life balance are the cause, fast growth for many businesses is largely due to having the best staff on hand to manage it all.

Just ask Gary Holdren, 56, founder and CEO of Huron Consulting Group, ranked No. 1 on our Hot 100 list for the second year in a row. This financial and operational consulting company is set to grow from nearly 800 employees last year to almost 1,000 by the end of 2006--and it's Holdren's belief that these employees make the quick growth possible. "We have to have unbelievable people in our infrastructure, in our corporate office. I have to have an HR department that keeps on top of salaries; we have to have a recruiting department; we have to have the best benefits," says Holdren. "Don't try to do anything on the skinny. Surround yourself with the best people, build great infrastructures, and just go as fast as you can." Huron is certainly growing fast: Projected 2006 sales range from $247 million to $252 million, up from 2005's $207.2 million. (For more insight on Holdren's company's success, read last year's profile of Huron Consulting Group.)

Huron is not alone--total combined sales of this year's Hot 100 companies is an impressive $1.7 billion. Business services companies continued their solid showing, and staffing firms did exceptionally well, juming from four companies last year to 10 this year. Health-care and pharmaceutical-industry businesses also continued to be strong categories.

Technology businesses grew at a steady pace--22, up from 20 last year--with technology defense companies entering the milieu. E-commerce businesses also came on strong, with six spots in this year's Hot 100. Companies in industries across the board are raising the bar to reach new levels of success. Read on to learn the quick-growth secrets of a few of these Hot 100 all-stars.--Nichole L. Torres

#17 iSold It LLC
It's no secret--eBay has become tremendously popular, and strategically positioned right alongside the world-famous online auction site is eBay drop-off store iSold It LLC. Elise Wetzel and her husband, Rick, founded the Pasadena, California, business in December 2003 and started offering franchises just a few months later. They have already sold more than 800 units and expect 2006 gross sales to exceed $100 million. The numbers speak volumes; their story explains how they did it.

Elise was trying to raise money for her children's school by selling items on eBay when she was struck by what she calls "the big aha!" She had been buying on eBay for years, but soon realized that the process of selling an item was much more complex than buying. So she went in search of a business that would sell merchandise for her. When she came to a dead end, she knew she had stumbled on something big.

Selling other people's secondhand items for a fee is a golden idea with endless potential, but how this husband-and-wife team is managing the company's growth is what landed them on this year's Hot 100 list. Aware that the business could take off if given the chance, they knew when to step aside and pull in outside resources. "We needed somebody who knew how to run this [business] at the speed it could run at," explains Rick, 47, who already had extensive franchising experience as the founder of fast-growing pretzel franchise Wetzel's Pretzels. "You have to set your ego aside. [It was challenging] to sit there and say, 'This is too big for me; we need a stronger team.'" Rick singled out Ken Sully, former executive vice president of Mail Boxes Etc., for his impressive track record of building solid company infrastructures. Rick brought Sully onboard as iSold It's CEO in 2004. Thanks to this decision, the operation is running at top speed. A complex coding system for the stores is in place, and the build-out of each location is impressively standardized, enabling a store to be installed and set up in a mere 48 hours.

The company continues to grow strong with 3,000 franchise applications flooding in every month and recent international expansion to Australia, Canada, Ireland and the United Kingdom. The future promises limitless opportunities, and the Wetzels are ready for it. "We've created this brick-and-mortar interface to the internet," says Elise, 40. "E-commerce will continue to evolve, and I think our stores are in an excellent position to capitalize on that."--Sara Wilson

 

Kayak.com
It takes guts to jump into the swirling currents of the online travel industry. Your chances of staying afloat are a bit better, however, if you have a great concept and a top-notch team that includes co-founders of Expedia, Orbitz and Travelocity. The two entrepreneurs who founded Kayak.com in early 2004 were equipped with both--and their own determination and drive are ensuring that the Norwalk, Connecticut, company doesn't just stay afloat: It thrives.

It took CEO Steve Hafner, 37, and chief technology officer Paul English, 42, one hour-and-a-half lunch to decide to launch Kayak. They each kicked in $1.5 million of their own money to get the venture into the water. Hafner had been an executive vice president at travel site Orbitz and decided this new company would do things differently. Kayak is a travel search engine that doesn't actually sell any products--it just helps users get connected. Profits come from advertising as well as referral fees paid by the suppliers when Kayak's users click on their sites. "With Kayak, it's fun to use. It's very, very simple, and we'll search over 100 sites for you in real time," says English.

The founders raised more than $15 million in capital, with AOL getting onboard as an investor. "The concept was so strong, and the team was so strong, that getting capital wasn't all that difficult," says Hafner.

Kayak started with three employees and has since grown to 23. Sales jumped to nearly $3.6 million in 2005, up from $3,000 in 2004. But what the Kayak team is most proud of is their user growth. An intense focus on customer service and ease-of-use paired with an irreverently fun attitude have earned Kayak more than 5 million users per month--a number that's rising at a rapid rate. According to English, "I'm charting the course to when we get to 100 million searches a month. We're tiny right now, but we have pretty fast growth."

The customers and the kudos are piling up. In April, Kayak came out on top in Entrepreneur's 2006 Business Travel Awards in the category of Best Site for Travel Deals. Hafner and English attribute their internet success to some decidedly old-fashioned business values. Says Hafner, "We're building the travel site we want to use and treating our customers the way we want to be treated. It's pretty simple, really."--Amanda C. Kooser

#16 Air Ambulance Specialists
If two's company and three's a crowd, then four makes a winning combination for the founders of Air Ambulance Specialists . Two married couples--Don and Kim Jones and George and Janet Borrego--are the founders behind this Englewood, Colorado, aero medical transportation business that has experienced stellar growth since its 2002 inception. What lies behind the company's success is the strength of both its founders and employees.

Don, who previously co-owned an air ambulance company, was persuaded by George, an employee, that they should pair up to launch a new venture. Instead of a dynamic duo, however, they opted to be a fantastic foursome. George, 42, focuses on operations, while Don, 46, tackles marketing; both handle sales. Janet's responsible for medical billing and contracting, while Kim, 44, an MBA who also holds a master's degree in accounting, is the CFO. "Working with your spouse is a learning experience," admits Janet, 42, but everyone agrees their different skills allow each person to excel in their individual roles.

"We strongly believe in supporting our employees and our crews," says Kim of their guiding philosophy. "We're very people-oriented." Their philosophy is certainly paying off: After nearly $5 million in sales its first year in business, the company grew to $22 million by 2005 and now projects $26 million in year-end sales. Air Ambulance Specialists' incredible growth is fueled by hard work and great employees, who generate repeat business by providing quality services to hospitals and insurance companies.

The company's attention to detail helps it stand apart from the competition, says Don, who points to their commitment to education and training as an example. Medical crews take a one-week in-house course before completing two weeks of flight training. The instruction doesn't end there, however-- mock drills are performed regularly, monthly education modules are available to employees through the company's website, and an annual three-day training course is mandatory for all employees. Says Don, "We make sure our crews and communications center are the elite in the industry."

Another factor contributing to the business's rising sales is an aging population that has disposable income and travels frequently, creating a need for aero medical services that transport ill patients to their local facilities. While matching the rate of growth "gets tougher each year because the numbers get higher," says Don, Air Ambulance Specialists is working toward establishing contracts with a number of health insurance companies nationwide. The founders are also looking to grow in international markets by obtaining more airplanes for long-range flights to Europe and Asia. With 2007 sales projected at $30 million, Air Ambulance Specialists' commitment and teamwork prove the sky's the limit.--April Y. Pennington

#79 Delivery Agent Inc.
Those coveting the latest fashions worn by the casts of Desperate Housewives or General Hospital need look no further than Delivery Agent Inc. Founder Mike Fitzsimmons saw a need for an easy way to sell products seen on TV, sports shows and films, so he built a business to do just that. Now, four years after its 2002 inception, sales are projected to reach $19.3 million for 2006.

Essentially, Delivery Agent enables TV show production crews like wardrobe and set designers to catalog the products used in shows. Delivery Agent then makes contact with the vendors of said products and provides the e-commerce platform to sell them through each show's official website. When viewers desire Martha Stewart's crocheted poncho or a particular Swarovski crystal ring worn by Teri Hatcher's Desperate Housewives character, the show, the vendor and Delivery Agent all profit. The company hopes to make it even easier for viewers to find on-screen fashions with the recent launch of its consumer brand, SeenOn .

Getting his foot into the entertainment universe, says Fitzsimmons, 32, was possible largely because he brought on team member Kim Marder, now chief marketing officer, who had an entertainment industry background and serious connections. Creating an advisory board full of entertainment industry veterans helped open even more doors. "We're sort of a slow-growth, high-growth story," says Fitzsimmons. "For the first three years, we got to $1 million in revenue on three full-time employees and six [contract workers]. The challenge in that phase was sticking with it--there were so many temptations to quit." The company secured a round of financing last year and has since grown the business to 44 employees.

Continuously adding to its already high-profile roster of 70 properties such as Will & Grace, The View and even Monday Night Football, Delivery Agent's big challenge now is training employees quickly enough to handle the growth. Says Fitzsimmons, "You need to [find] people who are self-sufficient and can hit the ground running."

Ever up for a challenge, Fitzsimmons and his crew are looking for even more growth and revenue opportunities. "We take a balanced, score card approach to how we set strategy and measure ourselves," he says. With plans to increase awareness of SeenOn shopping and roll out applications for the mobile market to allow consumers to purchase from their cell phones, Fitzsimmons sees a stellar future for Delivery Agent. Good thing--he's used to life among the stars.--N.L.T.

Making the Cut
This is how it all begins: Drawing on multiple sources, including the proprietary "MoneyTree Report" of VC investing by PricewaterhouseCoopers and the National Venture Capital Association with data from Thomson Financial, PricewaterhouseCoopers provides Entrepreneur with an initial list of fast-growing companies. Entrepreneur mails each company a questionnaire, which the entrepreneurs must complete and submit along with their current financial statements. We then measure each company's sales growth from the date of inception, listing the businesses in growth order.

To be considered for the list, businesses must meet the following criteria:

• Must have been founded no earlier than 2001
• Founder must be actively involved in daily operations and have a controlling interest in the business
• 2005 sales must be at least $1 million
• Must have fewer than 1,000 employees

Entrepreneur research conducted by Tracy Stapp with assistance from Alysia Kim.

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