Ready for Takeoff

What is an astronaut feeling as he’s sitting on the rocket launch pad strapped into his pod at the brink of takeoff? Determination, fear, and an immense sense of faith are among the emotions tangled in the moment. As the countdown begins–ten, nine, eight, seven–a shot of adrenaline from anxiety and excitement can make the coming explosion seem like the beginning of the rest of his life.

Sitting at the head of a business that’s about to take off can be just as euphoric. This year’s Freshman Class, the newbies to the BE 100S, are seeing all their risk, sacrifice, and vision realized with successful companies that are experiencing substantial revenue growth.

Daring entrepreneurs, such as Walter F. Johnson III, chairman and CEO of Eagle Group International Inc.; Clifford Franklin, CEO of Fuse Inc.; Carvel Simmons, owner and president of Trio Trucking Inc.; and Art Allen, principal and general manager of Coastal Motorcars, are dynamic strategists, laying the groundwork for success with detailed planning and a resolve to get their due recognition.

RISKING IT ALL
Eagle Group’s Johnson is no stranger to risk. In March 1995, when he and his wife, Doris, launched the technical services contracting business, Johnson cashed out his 401(k) and the couple took out two mortgages on their house to cover the startup costs, which ran a few hundred thousand dollars.

When costs continued to soar and several banks refused to give them a line of credit, the Johnsons sold their yacht and the house Walter inherited from his parents. “I had a lot of assets,” explains Johnson. “They were not liquid assets, but I had to turn them into liquid assets as we progressed, first to keep the company going without any contracts and second, once we got the contracts, to pay the bills.”

For nearly a year and a half the company made no serious money, recalls Johnson, who had quit his $200,000-a-year job with the American Hospital Association and brought in three partners, some out of retirement, to form his company. Eagle Group (No. 36 on the BE INDUSTRIAL/SERVICE 100 list with $98 million in sales) got its lucky break in October 1997 when it received its first big contract with the federal government for logistics work, handling and maintaining equipment and supplies for the U.S. Army. Subsequent Army contracts helped the company grow and increase its services to include maintenance, information technology, administration, health services, facilities planning, and construction.

Though contracts were rolling in–despite formidable competition from major government contractors like Raytheon and Lockheed Martin–Johnson established conservative financial goals, aiming to meet $50 million in revenues by the year 2000. The company is now approaching the $150 million mark in revenues.

One strategy that helped Johnson was to surround himself with the right people. Not only do five of his six children work for the company, including son T. Fitz Johnson, who is president, but the number of employees has increased exponentially from the original five to 1,518. The Atlanta-based firm also expanded to include locations in 38 states and eight foreign countries.

The younger Johnson has also laid out a sound strategy for obtaining the company’s goals. “If we can take care of two objectives, which are quality service to your customer and taking care of people, then we feel that $200 million is within our grasp by 2007.” As a team, Eagle Group employees can manage large, complicated contracts, and the company is currently diversifying its customer base beyond the military to include civilian agencies such as the Department of Labor and the Centers for Disease Control. As a first step in this initiative, Eagle Group recently won a $70 million contract to operate a Job Corps Center, which will allow Johnson to build his business and give back to the community by serving at-risk youth. The company hopes to attract more work with Job Corps Centers, which help young people between 17 and 24 obtain GEDs, training skills, and job placement.

A BOLD VISION
Like the astronaut strapped to a hunk of metal traveling many times the speed of sound, it takes some audacity to burst on the scene with the intention of changing an industry.

Which was exactly what the founders of Fuse Inc. (No. 7 on the BE ADVERTISING AGENCIES list with $53.4 million in billings) planned to do, and achieved, when they took on the advertising industry. When CEO Clifford Franklin started the full-service advertising agency in 1997 with his wife, Sharilyn, and his brother Mike, the plan was to change the face of advertising.

“We never got into this to be just an ad agency,” states Clifford Franklin. “We felt like the whole premise of general-market advertising was waning and that this is truly a multicultural society. It was our hope and our focus to be that one agency that consistently produced work that transcended race.”

The mission of merging general-market advertising and African American advertising led to the company’s name, Fuse Inc. The St. Louis-based agency, with only a handful of employees in the first year, boldly took the industry by surprise when it introduced its “Fuse Manifesto” campaign, which detailed the company’s view of the current state of the industry and the direction in which Fuse wanted it to go.

“We sent that out to 45 of what we deemed the top creative shops in the country,” explains Franklin, 40. “We

received 23 calls from 25 different agencies basically saying, ‘Wow, who is Fuse? Is this a black-owned agency? I’ve never seen anybody execute like this before.’ So for us it was very important to come out of the gate showing that we could produce work that was comparable or better than the so-called great general-market agencies.”

At that particular time, no black-owned agency had ever been recognized for winning national creative awards. Fuse resolved to win one. In 1999, employing a very methodical approach and creative vision, Fuse created a groundbreaking campaign for the St. Louis Cardinals that garnered it “Best of Show”–the equivalent of a Grammy in the ad business. “That was a coup because I cannot recall a black agency ever winning ‘Best of Show’ in their respective ad market,” says Franklin.

“We really try to sell a vision that changes the face of minority advertising and subsequently will change everything. We have a huge responsibility in being able to shape the images of African Americans across the country,” Franklin adds. “We’ve got to do it right. Our work has to be inspirational enough to make a difference, not only a difference with our target, which may be black, but also a difference for white people who see these ads and go, ‘Oh, I didn’t know that.'”

With industry recognition, the company grew to 22 employees and secured top radio, television, print, alternative media, and short-film accounts with Gillette, Anheuser-Busch, IBM, the Missouri Division of Tourism, and comedian Cedric the Entertainer. These accounts make up 60% of Fuse’s business.

DELIVERING THE GOODS
A legitimate shot in a white-bastion industry was also Carvel Simmons’ aspiration in 1982 when he started Cincinnati-based Trio Trucking Inc. While operating his own insurance agency, which often insured truck drivers, Simmons saw a niche business opportunity: starting his own trucking company employing minority truckers.

Simmons recalls, “I looked around the city and said I don’t really think there’s that many, if any, minority truckers. So I wanted to find a niche in something that I could get into that was not overrun with a lot of different people, and trucking seemed to fit that niche.”

With a $500 investment, two partners who gave him a foot into the industry, and strong business savvy and drive, Simmons raced onto the scene. Trio (No. 89 on the BE INDUSTRI
AL/SER

The mission of merging general-market advertising and African American advertising led to the company’s name, Fuse Inc.

VICE 100 list with $34.8 million in sales) started out with a rented lot, three drivers, and one person for billings. And the company shot up from there. Simmons, 60, was eventually able to buy out his partners,

and in 1994 he purchased his own seven-acre terminal for $500,000, which is now worth almost $2.5 million. From his terminal headquarters, Simmons oversees his entire operation, including 120 employees and another two lots. In addition to trucking, Trio now provides intermodal service with trucking routes between Georgia and Pennsylvania, and as far west as Mississippi, and rail shipments to 48 states, Mexico, and Canada. The truck fleet has also grown, swelling to 110 tractors and 450 trailers.

By introducing intermodal service, which provides shipping through different types of transportation, Trio gained contracts with all the major rails, which helped secure clients such as Procter & Gamble and Avon Products. “We serve a niche market doing a lot of things that other companies won’t, like short-haul business, which is [transporting] within a 300-mile radius,” explains Simmons, who delivers products to retail outlets. “So with the trucking and the intermodal business, we feel that the company is well on its way to a very, very rapid growth span. We’re anticipating revenues in excess of $50 million this coming year.”

Over the next three years, Simmons hopes to grow Trio into a $100 million business by enlarging its intermodal division. With smarter cost ratios, which are currently a little better than average, and timely deliveries, Trio has every intention of meeting its goals. “These are aggressive goals,” admits Simmons. “But my philosophy on that is, nothing ventured is nothing gained. I think you have to be like the turtle. The turtle makes no progress until he sticks his neck out. You have to have stick-to-it-ness. I realize that’s not a Webster’s word, but you must hang in there if it’s something you believe in to achieve the end result that you’re looking for. You just have to have faith.”

THE TURNAROUND GUY
Successful entrepreneurs must not only have faith but often must also make great sacrifices, says Art Allen, owner and general manager of Coastal Motorcars (No. 93 on the BE AUTO DEALER 100 list with $25.6 million in sales). The Houston native and veteran car salesman purchased a new and pre-owned BMW, Porsche, and Volkswagen service dealership in 1999, and Coastal Motorcars was born. As the only single partner, Allen was willing to relocate the 222 miles from Houston to Corpus Christi, Texas, to run the business, while his five partners, all family men who weren’t willing to make the sacrifice, were reluctant to move. He agreed on two conditions. “Number one, I run it the way I want to run it; and, number two, that I have a right to buy you guys out at a certain point in time,” Allen, 49, stipulated to his partners.

The deal was cut

and Allen was off to turn around a floundering dealership. The previous owner, an Italian national, had not mastered the art of running an American auto dealership, though he was a skilled international corporate executive, Allen explains. Allen’s goal was to figure out what internal stresses were holding back the company’s growth.

“Every day I would go to lunch with an employee and [assess what] I perceived their value was to the organization,” says Allen. After a few months, all 40 employees had attended at least one free lunch to exchange information on the state of current business operations. “If you were the general manager here, who is the one guy you’d want out of here and who is the one person you’d absolutely keep?” Allen asked the employees. “When the same variety of names come up, then you start to identify who the keepers are, as opposed to the people who are not part of the solution,” says Allen.

By 2001, revenues were on an upswing and Allen had built up

While operating his own insurance agency, which often insured truck drivers, Simmons saw a niche business opportunity: starting his own trucking company employing minority truckers.

enough equity in the company to exercise his buyout option. The company, which generated $13 million in revenues in 1999, grossed $20.5 million by 2001. Coastal Motorcars also grew to 50 talented employees, says Allen, whom he credits with the company’s success. “I would suggest that you always try to build consensus with people because it doesn’t matter how talented you are, you never rise unless you can convince other people that they should be on your team. And through their efforts, you all rise collectively.”

In 2005, Allen is looking to make strategic acquisitions to expand his company. He’s in the process of acquiring a new location nearby where he plans to move his Volkswagen franchise and increase his pre-owned operation. Allen also plans to purchase a Hyundai dealership in the Houston area with his good friend Clyde Drexler, the basketball Hall-of-Famer.

But Allen recognizes that reaching his goal requires him to make more sacrifices. “I’m not going to be able to be there for a [family] birthday or baptism or even a wedding sometimes,” he says. “I think that’s nothing different from anybody who has tried to gain success in the business world.”
   Industrial/Service Companies

COMPANY	TYPE OF BUSINESS	 LOCATION	RANKING	SALES*
Eagle Group International Inc.	Technical services contractor for government agencies	Atlanta, GA	36	98.000
Campbell Roofing & Construction Inc.	Commercial and industrial roofing, maintenance, and construction	Byron, GA	70	53.703
Advanced Concepts Inc.	Provider of information technology services and telecommunications solutions	Columbia, MD	84	35.059
Trio Trucking Inc.	Truckload transportation services	Cincinnati, OH	89	34.800
Parrish McDonald’s Restaurants	Manager of McDonald’s restaurants	Dallas, TX	93	30.978
Marc Wear	Manufacturer and seller of women’s casual apparel	Los Angeles, CA	94	30.716
Jackmont Hospitality Inc.	Manager of TGIF restaurants	Atlanta, GA	98	26.362
On-Target Supplies & Logistics	Logistics, supply chain management, outsourcing, and consulting	Dallas, TX	100	24.991

Auto Dealerships

Superstition Springs Lexus	Lexus dealer	>Mesa, AZ	53	50.600
Phil Waterford’s Manteca Ford Mercury	Ford, Mercury dealer	Manteca, CA	60	46.775
Superstition Springs Chrysler Jeep	Chrylser, Jeep dealer	Mesa, AZ	64	42.184
Forest Lake Ford	Ford dealer	Forest Lake, MN	86	29.944
Hunterdon BMW	BMW dealer	Lebanon, NJ	88	28.300
Coastal Motorcars	BMW, Porsche, Volkswagen dealer	Corpus Christi, TX	93	25.618
Gresham Chrysler Jeep Inc.	Chrysler, Jeep, Suzuki dealer	Gresham, OR	95	23.422
Gorman McCracken VW Mazda	Volkswagen, Mazda dealer	Longview, TX	97	23.185
Paris Ford Lincoln Mercury Inc.	Ford, Lincoln-Mercury dealer	Paris, TX	98	23.077
Freedom Ford Lincoln Mercury Inc.	Ford, Lincoln-Mercury dealer	Wise, VA	100	22.400

 

Banks

COMPANY	LOCATION	RANKING	ASSETS*
Advance Bank	Baltimore, MD	21	74.036

 

Advertising Agencies

COMPANY	LOCATION	RANKING	ASSETS*
Fuse, Inc.	 St. Louis, MO	7	53.396

 

Private Equity Firms

COMPANY	LOCATION	RANKING	CAPTIAL UNDER MANAGEMENT*
United Enterprise Fund L.P.	New York, NY	10	41