Quick Change How fast can you make a million? For these companies, the answer was one year. But who knows? Maybe <i>you</i> could do it in less.

Despite what you may have read in Get Rich Quick! Volume33, there's no foolproof plan for making $1 million in yourfirst year. Most start-ups never make that kind of annual revenueat all. "People are running away from the big splashes,"says Robert Lattimore, president of CCSBI (Contra Costa SoftwareBusiness Incubator), a Concord, California-based incubator fortechnology companies. "A year ago, the discussion was macro,not micro, but now people are interested in consistent growth,results and profit."

But that focus on the long term can yield results in the shortterm. Start-ups that stuck to business basics during the dotcomhysteria of the past few years are now reaping the benefits.Consider these fledgling firms:

• MyPrimeTime Inc. focused onprofitability, not valuation, and grossed more than $1 million inits first year.
• Shunra Software Ltd. mademore than $1 million despite the fact that it received no outsidefunding and was run out of a garage.
• Pacific Coast Reprographicsmade more than $1 million while competing against the largestreprographics conglomerate in the nation.

While these companies' owners all took different paths totheir first million, they share one common thread: an intense focuson sustainable growth and profitability.

Get Your Motor Running

While most start-ups slowly work their way toward the $1 millionplateau, others are built for speed. MyPrimeTime, a digital mediacompany that produces success-oriented TV programming and asimilarly oriented Web site, was founded by movers and shakers inthe broadcast media world who knew how to get to $1million-fast.

"Throughout the company, there was a sense ofurgency," says Craig Forman, 39, co-founder and CEO of the SanFrancisco-based start-up. "We had deadlines before we started,and we hired for speed. That's the only way you can get to $1million in the first year."

MyPrimeTime's founders were focused on the bottom line."We come from the old world [i.e., companies including AOL andCNN], so we're geared toward profitability," says HelenWhelan, 46, co-founder and president. "We always look atthings from a cost-benefit analysis."

Giving employees the freedom to communicate and make their owndecisions was a big part of MyPrimeTime's first-year ascent."We couldn't have moved so quickly if everyone internallywasn't empowered to run their own group," says Forman."If you create an environment of mutual respect andcommunication, you get more out of the team."

Forman and Whelan's extensive experience in broadcast mediakept MyPrimeTime growing while many Internet start-ups were hittingthe skids. In January, by making the most of their industryconnections, they launched Great Entrepreneurs, a weekly half-hourPBS show that profiles famous entrepreneurs of the past century."Television is considered very sexy, and people want to bearound it," says Whelan. "Plus, with our background inbroadcasting, we could immediately go in as a partner with PBS andcreate a TV show."

Their partnership with PBS also gave MyPrimeTime a nationalplatform from which to reach its target audience: baby boomers."PBS is perfect for our demographic," says Whelan."It's classy, and it's for people who want to educatethemselves and get better at what they do. The show dovetailsperfectly with the message on our Web site."

Forman and Whelan struggled with personnel decisions duringtheir first year. "There was a time when we thought weweren't hiring big enough or fast enough, but then we had tolay off 30 people," says Whelan. "It's easy to getahead of yourself and spend a lot of money when you'regrowing."

"The nuance here is, you have to be fast, but you'vegot to stick to your plan," says Forman. "Our mantra is,'We don't do frantic well.' Speed is important, butyou must have your eye on the long term, not the short term.Especially now, growth must be evolutionary, notrevolutionary."

Garage Geeks

"Everyone in our company is focused on profitgeneration," says Benny Daon, 31, founder of Shunra SoftwareLtd., a $1 million software development firm based in Paramus, NewJersey. "We are very conscious of the bottom line."

Daon used his own savings to pay for start-up costs. He movedoperations from Israel to New Jersey in 1999 and spent much of hisfirst year there running the company out of a garage. By the end of2000, the company's first full year of business, Shunra hadmade well over $1 million.

Shunra wasn't just a job; it was Daon's life. "If Itook home a salary, it wasn't a CEO's salary," hesays. "I was working hard-16-hour days-and it got reallycrazy. At one stage, my wife said, 'That's enough,'and we made an arrangement where I would work from sunrise until 11p.m., and I'd take a half-day off."

Shunra's first sale was to Royal Philips Electronics, whichgave the company an immediate international presence. "Ifyou're going to be able to scale your business to a $1 millionstart-up, you really have to be global," says CCSBI'sLattimore. "You have to be able to access and execute inglobal markets."

As a high-tech start-up, Shunra also had to deal with someunexpected legal issues. "The thing that surprised me most ishow important it is to get good legal advice," Daon says."In high-tech, everything you have is intellectual property.Agreements you have in writing with your customers and employeesare as important as the product you develop. You have to understandthe legal side of your business, because you can't always trustlawyers to do it for you."

Because Daon didn't seek venture capital, he was able toconcentrate on profitability from Day One. "When you bring VC[firms] on board, their concern is valuation for the next round offinancing," he says. "They're not always interestedin revenue. VCs can really make you lose touch withreality."

Shunra kept growing without outside money because Daoncontinually reinvested his profits in the company. "Being abootstrapped company, it's important to invest our revenue inplaces we can generate more money," he says. "Sales wasour first priority. Once we got a little bigger, we moved to thingslike marketing."

Daon's focus has shifted now that Shunra is an internationalcompany (its 30 employees are split between Israel and New Jersey)."I still work a lot of hours," he says. "But I foundit easy to let go of the business and transition into looking atthings from a CEO's point of view. I look at expenses and workon recruiting good people."

Now that Shunra has made its first $1 million, Daon can relaxand enjoy his success, right? "It never ends," he says."You never quite know you're there. There's always somuch to do, even after you make $1 million. That's our focusnow: to sustain our success and continue growing."

Repro Men

Did you ever think you could run the company you worked forbetter than your boss? If you're a true entrepreneur, youprobably think it every day. In 1998, Zack DaFaallah, 41, and AlexTorres, 30, made that thought a reality when they quit their jobsat a large Southern California reprographics firm and startedPacific Coast Reprographics (PCR). By the end of its first year,the Irvine, California-based start-up had made $1.2 million.

"We wanted to strive for something better," saysTorres. "There was nowhere else for us to go at our oldcompany."

DaFaallah and Torres, who specialize in digital reprographics,felt their old company wasn't keeping up technologically.DaFaallah even wanted to train salespeople in digital output, buthis employers weren't interested.

"A part of our customer-service model is to educateemployees and clients," says DaFaallah. "By showing themhow to send us better images faster, we can deliver earlier withhigher quality."

When DaFaallah and Torres first opened PCR, a number of previouscustomers sought them out. Unfortunately, that led the duo'sformer employers to accuse them of tampering with clients.

"They didn't really have a case, but our old companythought that by dragging us down with legal costs, they could shutus down before we even got started," says DaFaallah."Instead of putting our resources into the business, we had topay our lawyer a very precious $10,000 to $15,000."

Once they overcame their legal issues, DaFaallah and Torres werefinally able to put all their energy and money into PCR. Eventhough they were able to hire a salesperson and pay her salary,they themselves didn't take salaries for the first six months."We had to watch everything we spent in order to make aprofit," remembers Torres. "I ate a lot of peanut butterand jelly sandwiches that first year."

Fortunately, DaFaallah and Torres had immaculate credit, whichenabled them to fund the start-up not only with their savings, butwith their personal credit cards as well. "Banks don'tlend you money unless you're in business for two to threeyears," says Torres. "We had to focus on keepingcustomers so we could make a profit and continue growing."

"When we started, we would tell people we were open from 7a.m. until the work is done," says DaFaallah. "That wasour motto. [Customers knew] that the work would get done, and theycame back because we did a good job."

Eventually, DaFaallah and Torres came toe-to-toe with theirformer employer again, this time outside the courtroom, when twopotential clients asked each company to provide samples of theirwork. "Our [former employers] knew they had to do their bestto compete with us," says DaFaallah. "But their best workwasn't even qualified to stand next to ours. Getting thoseclients was one of the defining moments of our firstyear."

As PCR took on more clients, DaFaallah and Torres were forced tohire more employees, which proved to be one of the biggestchallenges of their first year. "PCR was our baby," saysDaFaallah. "I used to look at every job, take work orders homeand spend three hours making sure we were doing the work correctly.It was difficult to let go. After a while, you have to trust youremployees are doing things the right way."

DaFaallah and Torres are currently setting up a network ofreprographics firms in an attempt to fend off an impending monopolyby their former employer. The Network of Affiliated ReprographicCompanies (NOARC) already has nearly 30 members nationwide, and PCRhas set up a training facility in Irvine that equips smallerreprographics firms with the technology and skills to staycompetitive on their own.

"We don't want anything to do with their finances; wejust want to give them the tools to remain independent," saysDaFaallah. "We're solidifying our place in the market byhelping smaller companies stay put. In the end, it's about faircompetition and sound business practices."

Contact Sources

• Contra CostaSoftware Business Incubator
  (925) 681-1855

• MyPrimeTime Inc.
  (415) 932-3900
  contact@myprimetime.com

• PacificCoast Reprographics
  (949) 474-9793

• ShunraSoftware Ltd.