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11. Parsons Technology Hiawatha, Iowa
Bob and Martha Parsons started their software company in the basement of their nine-room home in 1984. It was a family affair. Their 5-year-old daughter, affectionately nicknamed "the mailman," stacked envelopes while their 15-year-old son answered the phone. Back in the early 1980s Bob Parson's father joked that they should be sure to take a photograph of the basement brigade in case the company ever got big.
Eight years and 250 employees later the husband-and-wife team wish they had taken that picture. Known for its customer service, Parsons develops and sells affordable software used in small businesses, homes, and churches. MoneyCounts, still the company's premier product, grew out of a program Bob had originally developed to manage the family's finances.
So, is there anything to miss about those basement days? Bob Parsons says with a smile, "I miss the looks we'd get from our neighbors when the 18-wheeler pulled up to the front door."
35. Global Mail Sterling, Va.
If Fred Smith's Federal Express revolutionized mail delivery here at home, Harry Geller and Glenn Cafritz are taking the revolution abroad.
Their company, Global Mail, arranges delivery of business mail overseas in half the time and at half the cost of U.S. Postal Service delivery. "If the letter is late or lost, we refund the money or whatever the customer wants," Geller says. How does the company do all that? It shaves off 5% to 70% of typical labor costs by plugging into a network of private mail distributors.
Global Mail started life as a small, unprofitable division of the then-$50-million Sky Courier Network. When the division went on the block, in 1987, Geller and Cafritz, then Sky Courier employees, pooled their savings and bought it. Their dream is to see Global Mail outstrip its former parent in sales. At their present rate of growth, the partners think D-day is only five years away.
70. Educare Community Living Austin, Tex.
Whenever Richard Relyea feels weighed down by the pressures of running a fast-growth company, he closes his books and takes a drive to see his business at work. "It always lifts me up," he says. Which isn't surprising, since EduCare, started in 1986, moves the disabled from overcrowded, underfunded institutions and settles them into clean, spacious community housing.
Thanks to shrinking state budgets along with a shift away from institutional care, governments around the country are trying to place more patients back into the community, which is where EduCare comes in. Relyea outfits a home, puts a full-time staff in place, and cares for patients for 60% of what it costs a state to do so.
As for the payoff to the patients, Relyea says simply, "If you treat people as if they're different, they act different; but if you tell them they're better, they act better."
99. Center For Applied Psychology
King Of Prussia, Pa.
Larry Shapiro was a child psychologist frustrated by the limits of his sole practice. Working with emotionally disturbed children, he constantly felt overwhelmed by the vast number of children in need of help (7 million in this country) compared with the handful of trained therapists. Add to that the fact that most parents couldn't afford therapy.
So in 1985 Shapiro decided to build a business around an idea he used in his own practice: games. Selling to health professionals, institutions, and parents, Shapiro makes games, toys, and books, and distributes them through mail order. Although these tools don't replace therapy, at costs ranging from $10 for books to $50 for big board games, they make therapeutic approaches affordable and thus available to more children.
Shapiro says he's definitely happier as a businessman. "A therapist always has to keep his emotions in check. In business, I can yell whenever I want to."
163. McGinnis Farms Alpharetta, Ga.
Three years after Stanley Walker founded his nursery business, a tornado leveled his main office and warehouse. Today Walker calls the natural disaster a blessing. Not only did he post record sales that year, but the experience "created a bond and a sense of loyalty" among employer, employees, and customers. One customer even sent a check for $10,000 to help pay for the cleanup.
Before launching McGinnis Farms, in 1987, Walker had been the general manager for a variety of companies. Over and over, he learned that business is less about products than about people. Putting his theory into practice, he is an open-book manager, shares decision making, and offers 100% health coverage. Twice a year the company transforms itself for Customer Appreciation Day -- complete with big top, putting green, and dunking booth. "If customers don't like a price, they can ask salespeople to sit in the dunking chair." Walker jokes, "If someone gets real wet, I know I have to change some prices."
172. J. L. Honigberg & Associates Chicago
Janice Honigberg agrees with the old saying that God -- and success -- is in the details. "We don't do anything new here," she says. "We just do a lot of little things a little better than the rest do."
Selling premium fruits and vegetables to wholesalers and supermarkets since 1986, Honigberg has found her edge in the simple promises she makes and keeps every day. She has been known to drive where truckers refuse to go: when a blizzard shut down the mid-Atlantic market, for instance, she delivered the produce herself. To growers who are normally out of touch with their buyers, she feeds key facts about customer likes and dislikes.
Honigberg, like almost 90% of the Inc. 500 CEOs, spent years under the stewardship of others. At General Foods she learned consumer marketing; later at Phibro-Salomon and then Louis Dreyfus she immersed herself in international markets and sourcing abroad. She puts it quite simply: "In each position I learned one part of the puzzle."
211. Taggart Limited Cody, Wyo.
What do a fast-food restaurant, a gas station, a mining company, and a trucking company all have in common? Answer: one owner who gets bored easily.
James Taggart admits his is a motley collection, but points out that all his companies are in "basic industries -- low profile, low status, but profitable." An example: "A Kentucky Fried Chicken located in a small town outside the metro area," he says. "It's a deal with limited buyers, but that doesn't mean it's not profitable." Taggart confesses he relies heavily on great managers to hold his menagerie together. How does he find them? Heavy emphasis on a one-to two-hour psychological test for prospective hires. He adds, "Every time we've tried to discount the test, we end up regretting it."
Before launching his own company, in 1986, Taggart worked as an investment banker. Frankly, he says, "I got sick of doing deals for other people, and I hated wearing ties." As good a reason as any to start a company.
243. Ergodyne St. Paul, Minn.
Friends might have wondered if Tom Votel had lost his mind the day he agreed to take over his dad's company. Bankruptcy was a breath away, almost every employee had either quit or been fired, and after two years spent peddling its wares, Ergodyne still didn't have one customer. "All that was left was a stockroom clerk, a secretary, and me," Votel recalls. That was six years ago. Today Ergodyne nears sales of $30 million and is the largest producer of safety equipment for repetitive stress disorders such as carpal tunnel syndrome.
What shifted? Mostly the distribution strategy. At first Ergodyne marketed to insurance companies, hoping they'd recommend the product line to their customers. Far better has been the decision to sell directly to companies with employees at risk. It's not too hard a sell, either, when $56 billion is spent in this country on back injuries alone.
What does Dad think, watching his son breathe new life into his company? "He thinks it's real cool," says the younger Votel.
279. Lai, Venuti & Lai Santa Clara, Calif.
When Calbert Lai started his advertising agency, he had one unbendable rule: never hire anyone from the ad business. "Too many ad people are too arrogant to stick to a budget or a schedule," Lai says. "I look for people who know what it's like to have the shoe on the other foot."
Noted for fast turnarounds, Lai, Venuti & Lai turns out creative work in a week, whereas most agencies take three. And it's apparently not at the expense of creativity. Cal Lai guesses he turns away one client a week. Servicing Silicon Valley's high-tech stars, Lai specializes in making bits and bytes sizzle for the consumer.
And while most agencies on Madison Avenue claim that creativity can't be quantified, Lai insists it can. "We agree on measures from the start, and if we don't make them, I tell the client to fire me," he says. So far no one has.
336. Geerlings & Wade Canton, Mass.
Phillip Wade and Huib Geerlings were roommates and office mates, and each was frustrated with the life of a certified public accountant. They were delivered from their angst in 1986, when they decided to start a business long popular in Europe but rare in the United States -- selling premium wine via mail.
To 24,000 subscribers, Geerlings & Wade offers prices averaging 25% less than those of local liquor stores. Every three weeks customers receive a four-page brochure detailing the choice wine and giving tasting notes and tips on what to eat with that wine, along with a brief history of the vineyard. "We see education as part of our business," Wade says, adding that wine aficionados often hunger for more background than a neighborhood retailer can offer. As for the future, Geerlings insists he's with this company for the long haul, but just a few doors away, Wade outlines a thoughtful exit strategy, adding that he and his partner plan to be out of the business in two years. Who knows?
347. Touchstone Research Laboratory
Triadelphia, W. Va.
As stories go, Elizabeth Kraftician and Brian Joseph have a doozy. Armed only with a dusty secondhand microscope, the two launched their research-and-development company in the basement of a former monastery in 1980. Six years later the two decided to take their partnership one step further -- to the altar. And three years later, while recuperating from surgery, Kraftician crafted a high-stakes NASA contract with her husband from her hospital bed.
While American industry divests itself of costly R&D departments, Kraftician and Joseph offer cost-efficient, fast-turnaround R&D for hire. Touchstone services everyone from lone inventors to Fortune 500 companies, and its employee roster reads like a Who's Who in engineering and industrial problem solving -- many employees have decades of previous experience. Kraftician admits she tries "to tease" great minds out of retirement. Says this CEO: "I'm confident these people could rebuild the universe if they needed to."
377. Genesis Automation Shelton, Conn.
Next time you order a soft drink to go at your local Roy Rogers, don't be surprised if Genny fills your cup. Not your average blond, bopping teenager, Genny is a robot. And her creators, Richard Casler and Sal Brogna, are betting she'll be a boon to the fast-food business.
Tired of watching their margins shrink thanks to increased competition and high turnover, fast-food czars -- like Burger King and McDonald's -- are looking to Genny to speed service, pump more customers through, and make good on their promise of "fast." Typically, Genny shaves a third off the average order time. Speedier lines mean fewer hungry patrons taking their business elsewhere because of the wait, as well as the chance to serve 10 to 15 more customers a day.
As space-age as all this sounds, the cofounders agree their greatest challenge is extremely earthbound. Building the robots is easy, they say. What's hard is uncovering what the customers' needs really are.
411. Gulf Coast Hair Care Panama City, Fla.
Four months ago Mary Easom found herself short on money to pay her home mortgage. Three days later her boss, David Flaat, lent her the money. Two months ago Dorothy Haw's car-repair bill caught her off guard. Five days later her boss, Dave Flaat, paid the bill. While Flaat insists he's in the hair business, not the banking business, he says it's his job to be there for his employees.
And the numbers prove he's right. The owner of 11 Cost Cutter franchises, Flaat typically reports weekly sales of $8,000 for each, compared with the average Cost Cutter franchise's $3,500. Catering to a walk-in $7.95 snip-'n'-go clientele, his salons sell almost twice the high-margin shampoos and conditioners that most of his fellow franchisees' do. From tying salary to salon performance to biweekly drawings for prizes like VCRs and movie passes -- to extending personal loans -- Flaat is always searching for new ways to keep employees happy and on their toes.
461. Humanix Temporary Services Spokane, Wash.
Talk about a twist of fate. For 20 years Julie Prafke was a secretary to some of the biggest executives in town; today some of those same execs are turning to her for a job. Her company, Humanix, is a temporary-placement agency, and, about the turn of events, Prafke calls it the ultimate compliment: "It says volumes about our reputation."
Prafke's foray into temp services appeared doomed when the company she worked for went belly-up after seven months. But an investor eager to recoup the $100,000 he'd pumped into the failed agency offered Prafke the client list and enough backing to start her own company in 1986. Within a year the investor had made back his money, and in two and a half years Prafke bought him out.
As for those early days, she calls them her training ground. "Who knows better than a secretary what it takes to make an employee happy?" Testifying to that, Prafke's turnover rate is about 30% lower than the industry norm.
494. Reunion Time Tinton Falls, N.J.
Some would say David Fiore goes to absurd lengths to ensure his class reunions are well attended, whether it means scouting out a monk secluded in the hills of Italy or passing the invitation on to a U.S. marine while he's dropping bombs on Libya. But then that's Reunion Time's business.
Organizing class galas used to fall on the shoulders of homemakers, but as more women enter the work force, fewer have the time and energy. Recognizing this need, Fiore quit his job at Prudential Insurance in 1986 and started crashing reunions and asking questions. Now the largest player in the business, Reunion Time promises customers 90% attendance, whereas the average class committee gets 65%. Orchestrating everything from invitations to entertainment to catering, Fiore pulls an event off for the same price a class committee doing its own affair would pay. How? Sheer volume. This Thanksgiving, while Fiore sits down to a turkey dinner, his company will be throwing 50 reunions in five states.