Dream Big

 

Not bad for a former Australian Special Forces officer turned steel salesman who stumbled into the promotion business after following his American wife to the U.S. Alexander soon found that success can bring its own challenges. His initial $15,000 investment provided adequate working capital for a slow-growing regional distributor. But as demand mushroomed to a million bobblehead orders a month, it fell short of what he needed.

Although most lenders he approached saw bobbleheads as a short-term fad, a regional bank was intrigued. "I sat down with the chairman and he saw the potential right off," says Alexander. Finding a manufacturer with spare capacity was just as frustrating until he heard about a Chinese factory three hours outside Hong Kong that was looking to replace some lost business. "We were a little bit lucky in our timing," says Alexander. "The American economy was slowing, so output from the factories in China was dropping."

Today, Alexander's challenge is maintaining the momentum. Two years ago he predicted that the life cycle of bobbleheads, which account for as much as 70% of the company's sales, would last about six years. Today he sounds more confident. "They have become part of the professional sports vernacular and teams will continue to distribute them," he says. He is also encouraged by growing demand overseas and for non sports retail figurines, from Mickey Mouse to Mick Jagger. "The only certainty," he says, "is that there's no certainty in business."

The Accidental Entrepreneur

How did this mom's home business morph into a fast-growing manufacturing company? Sometimes a business takes on a life of its own.

Lucie Voves and her husband, both Dartmouth grads, couldn't find a framable print of their alma mater. "We figured, surely there must be others who would like a picture of the school," she recalls. They decided to commission one and recoup the cost by selling copies on street corners near the campus.

That was in 1991. Today, that enterprise, now known as Church Hill Classics, is a leading maker of custom frames for college diplomas and corporate awards, with revenue approaching $3.8 million. And no one is more surprised than Voves, who shrugs, "I just kept running across opportunities."

The first came when the manager of an off- campus bookstore mentioned that parents were always looking for ways to display new diplomas. Voves mocked up a few sample frames, and before long was hiring neighborhood moms to help her fill orders. By 1998, with sales of $300,000, she had to come to grips with the fact that she had a real business on her hands. "I had eight employees and Roadway Express trucks lined up outside the door, which did not please our neighbors," she recalls. "I had to make a decision: Was I going to drift along as one-piece-at-a-time custom shop or get serious?" She went for it, creating a formal business plan, signing her first business lease, and getting a bank line of credit to buy inventory and equipment.

With revenues up more than ten-fold since then, Church Hill Classics is remaking itself yet again. With the help of her bank, Voves recently moved into larger quarters and overhauled the company's order tracking, shipping, and production systems. The latter, especially, means fewer artists and part-time moms building frames by hand and more workers with assembly line experience. "We are becoming a true manufacturing company," she says. "That requires a different operating mentality. But it's what we have to do to stay competitive."

An Empire on the Cheap

Do-it-yourself financing isn't the easiest route to success. But HomeRoute's Steve Nickerson makes it work.

Steve Nickerson vowed to spend as little as possible to launch his online real estate business, HomeRoute, back in 1996. Keeping his day job, he did his own Web design and recruited commission-only sales reps to man phones in a tiny office. It took him less than a month to realize that he was getting exactly what he was paying for. The website attracted little traffic, and the unpaid reps sold nothing. "I decided that the only way this would ever work is if I invested in it," Nickerson says.

He fired everyone, hired a salary-plus-commission sales force and an office manager, and brought in some professional programmers. The Howell, Mich., company became one of the first businesses to find a profitable niche on the Web. Today it generates $3 million-a-year in revenues and is growing at an annual rate of close to 100%.

HomeRoute's business model is simple. It attracts prospective home buyers and sellers to its sites by providing practical advice, worksheets, checklists, and community profiles. Then it steers them to some 3,000 affiliated real estate agents throughout the U.S. and Canada. These agents pay $895 a year and up for exclusive access to sales leads in their local markets. They also receive assistance on everything from setting up their own websites to writing press releases.

Nickerson's fiscal discipline has paid off. In the late 1990s, when the company needed cash to build a staff, retain programmers, and upgrade Web servers, he was tempted to take advantage of the investment capital then chasing dot-com opportunities. He turned down all offers, fearing that he would spend it foolishly. Except for occasional uses of a bank credit line to cover short-term cash needs, and a mortgage to finance a new office building, he has stayed away from debt, too. Financing growth out of revenues can be challenging, he says, "but it keeps me in touch with reality."

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