Young Millionaires Part II
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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."
Michael Krause, 18, & Daniel Krause, 29
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."
John Schnatter, 35
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.
Andres Link, 30, & Richard Swerdlow, 33
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."
Frank Mercado-Valdes, 35
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.
Ken Wilson, 33
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.
David Morris, 30, & Chris Heyer, 22
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.
Margaret Langham, 36, & Cathy Langham, 39
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.
David Leib, 31, & Caren Schlom, 29
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.
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