Innovation, perseverance, and resilience are some of the attributes entrepreneurs need to weather the current economic downturn. Couple this with the few business owners who aren’t looking to simply survive, but rather have challenged themselves to thrive and grow and it yielded our nominees for the 2009 Black Enterprise Small Business Awards. And from this unique group cull our winners.
Announced during the Small Business Awards Luncheon at the 14th Annual Black Enterprise Entrepreneurs Conference and Expo hosted by General Motors and ExxonMobil in Detroit, this year’s honorees prove that positive performance is possible even now. From a teenpreneur who’s found a small way to make a big impact to young entrepreneurs going globally green and from innovation at its best to a family-owned business bustling, we applaud their standout efforts and look toward them for inspiration and guidance.
Here, the 2009 Black Enterprise Small Business Award winners and first-ever Community Champion Award winner open up on how they’ve surpassed expectations, the challenges they face and what advice they can offer others also looking to win amidst this new business reality.
Small Business of the Year: The Phillips Co.
The Small Business of the Year Award is presented to the small business owner whose efforts and/or entrepreneurial pursuits exemplify the passion and commitment needed to overcome adversity as well as attain success.
Having realized a successful 25-year career in the management ranks at engine manufacturer Cummins Inc., Valerie Phillips had little left to accomplish in corporate America so she started thinking business ownership would be the logical next move. Around the same time, her father, Sam Phillips, co-founder of Columbus, Indiana-based assembly and warehousing company PDI, was thinking about retiring. Recognizing that their goals were complementary, the father and daughter agreed in 2006 that she would buy the company for $380,000.
“I didn’t have plans to take over the company in the beginning,†recalls the 50-year-old Phillips. “I thought at some point I might join the company but only if it made sense because I actually had a fairly decent job.†But the move ultimately paid off. After changing the name from PDI to The Phillips Co. Inc. (TPCI) and acquiring Edinburgh, Indiana-based manufacturing company Maximum Spindle Utilization Inc., Phillips saw TPCI increase revenues from $2.8 million in 2007 to $6 million in 2008.
Goal-oriented by nature, Phillips is looking toward the day when the company, which manufactures products for diesel engines, will boast $25 to $40 million in sales — and she’s currently looking to buy a company that will help her to achieve that. But for Phillips, it’s not just about the money. “It’s about being financially strong so that I can give to employees and give to the community,†she says. “I want to be able to help women, help people of color, and hire more folks that fit into those categories.â€
Why do you think The Phillips Co. is the best in its field?
We’re very geared to creating the right environment inside the workplace. We’ve spent a lot of time creating an employee handbook that we’re proud of. For a small business, we have, I believe, some nice benefits. We do bonuses, we do recognition, we have an annual family event every year. We go out of our way to make sure folks are happy. I believe that if employees are happy at work then they’re going to produce a quality product and in the end the customers are going to be happy with our service.
Do you have any advice or words of wisdom for other entrepreneurs?
You should not be afraid to take risks to achieve your dreams. Don’t be afraid of change. With what we’ve seen happen in the last ten months to a year, we’ve got to be open to change.
What can Black Enterprise readers learn from you?
Be ready to go when this economy turns back and put yourself in a position where you can take on new work. I think unfortunately there are some companies out there that either haven’t made it or won’t make it and that will allow me to grow the company. I plan to continue to grow by acquisition of complementary businesses.
What’s a recent challenge you’ve experienced?
We saw [the financial downturn] coming in November and then the orders kind of fell off in December and we quickly did the right things to get our costs in line.
How did you handle it? What did you do?
We cut work hours from 40 hours to 30 per week and in return the salaries were cut by 25 percent. I think the employees at first were kind of skeptical of the actions that we took, but they know that working 75 percent is better than not having a job at all. So I feel that I gained respect even though their personal finances are less. They’re looking across the nation and seeing large companies closing for up to nine weeks. Instead we took the approach that each and every employee would be impacted — even myself. That’s the kind of thing we try to do — if we implement something we do it across the board.
The Phillips Co. Inc.
Type of business: Machining, assembly, subassembly, warehousing, distribution
Owner/CEO: Valerie Phillips
Location: Columbus, IN
www.thephillipscompany.com
Innovator of the Year: Groups4 Labs Inc.
The Innovator of the Year Award is given to a business flourishing in an innovative industry or approaching business/entrepreneurship in a groundbreaking manner via their products and/or services.
Many people would call starting a business a risky proposition, but for Felix Ejeckam, co-founder of Group4Labs Inc., a Menlo Park, California-based company that builds energy-efficient diamond-based semiconductors for wireless products, becoming an entrepreneur was in his blood.
“You don’t have that sense of it being risky if your parents were already doing things like that,†Ejeckam explains. His father was a founder of Fidelity Bank PLC in Lagos, Nigeria, back in 1988, “and they’re now one of the largest banks in the region,†Ejeckam says.
After earning a master’s and doctorate in electrical engineering from Cornell University, Ejeckam, 38, worked for global consulting firm McKinsey & Company, “with the full knowledge that I would leave shortly to start a company,†he says.
He made good on that plan in 2003 when Group4Labs was born. Clients immediately bought into the idea, with funding coming from corporate and government clients such as the Department of Defense and the National Institutes of Health. The company also received grants ranging from $100,000 to $750,000 through the Small Business Administration’s Small Business Innovation Research Program, which rewards businesses with grants for innovative business ideas. In 2008, the 12-person firm had revenues of $1.25 million, and while Ejeckam dues not rule out raising money through venture capital in the future, he credits the company’s ability to grow organically as a testament to its strong business model. “The nature of our growth has been entirely about money made the old-fashioned way,†he says.
Why is Group4Labs the best company in its field?
We have amazingly talented people. Everyone in the company is the best in the world at what they do. We’re extremely selective about who we hire. As a result, our turnover is almost nil. That’s something I think that helps us.
Do you have any words of advice for people who are also thinking about starting businesses?
Know what your customers want. Make sure your revenues are higher than your costs and define your objectives as clearly and as early as possible and don’t waver from it.
What can Black Enterprise readers learn from you?
The importance of perseverance — sticking to it. You’ve got to hang in there. Don’t be drowned by other people’s dogma but be a very good listener.
What recent challenges have you faced and how did they tackle them?
We were trying to decide on which one of two product ideas to exclusively focus on in the company. Developing both technologies at the same time was too expensive, inefficient, and unsustainable for a very tiny startup of five. We elected to undertake the arduous process of a six-month long due diligence process. Essentially, we needed to step back and re-build the core elements of our business plan. Along the way, we found out that [one idea] lacked one key ingredient that the other did have: a sustainable cash-flow positive business model for a small company. We elected to leave that product idea for another larger company that might find a self-sustainable business model. Had we not invested in the strategic planning process early on, we would have learned some very expensive lessons rather late.
Group4Labs Inc.
Type of Business: Semiconductor manufacturer
Co-Founder/CEO: Felix Ejeckam
Location: Menlo Park, CA
www.group4labs.com
B.E. Next of the Year: Heritage Link Brands
The B.E. Next Award is presented to the fearless young entrepreneur age 21-35 tapped to be a future business leader.
Heritage Link Brands LLC’s mission is “to showcase the very best wines from Africa and the African Diaspora in terms of the finished product, the sustainability of the value chain, and how the environment and employees are treated throughout the harvesting process,” says Selena Cuffe, co-founder and CEO. And this isn’t a cursory nod to going green, but a deeply held commitment to helping indigenous African vintners market quality wines abroad. The company’s direct and indirect efforts have certainly paid off.
With the U.S. economy in a slump, the Los Angeles, California-based Heritage Link Brands LLC still raked in revenues of $1.2 million in 2008, up from just $42,000 the year before. With $1.6 million in sales projected for this year, the African wine importer with just eight employees is poised to turn a profit well ahead of the six-year wine industry standard. Cuffe, 33–who runs the business alongside her husband Khary, 30–credits its African connection, respect for nature and humanity, and the audacity of hope with fueling its success. “Don’t think small,” she advises, “because if you don’t think small you’ll wake up one day and you’ll be big.”
And let’s not forget taste. Cuffe says environmentally friendly farming methods allow the wines she imports to retain more of the distinctive qualities of the soil where the grapes were grown. With the Cuffes’ help, black-owned, family-owned wine producers that struggle to gain wide distribution in post-apartheid South Africa can export its wine. In the U.S., retailers such as Whole Foods, Albertsons and Jewel Osco, and restaurants at Disneyland carry some of these brands.
Surprisingly, Cuffe doesn’t refer to Heritage Link Brands as a social enterprise. “That’s a label that others place on what we do,” she explains. “It’s not a thought that comes across our minds. My training is really about how to run a successful business and how to get the most profit you can out of something. People label the tenets upon which I live my life ‘socially conscious’ but it’s just the core of who I am. I want to do things that are taking things to the next level in a way that touches me.”
Why is Heritage Links the best company in its field?
We don’t look at the company as a wine importer and distributor. It’s about more than the wine; [it’s about] the brands, the families, and the people.
In these trying times, what do you think sets Heritage Links apart from competitors?
Our business is a family business so whatever decisions we make have to be made with the best interest of my family and those we work with. What we’re able to do and how we’re able to make an impact with this business only matters in as much as the people here and on the continent are able to be successful and thrive. It’s about the people and telling their stories to the masses.
Do you have any words of advice for people who are also thinking about starting businesses?
If you’re not happy and it’s not driving you, you owe it yourself to find out what that is that does drive you so that you can be happy.
What can Black Enterprise readers learn from you?
Any good wine has to be pruned–planted in rocky soil, the vine struggles to survive and create a beautiful grape that makes great wine. So, when there is an obstacle placed in front of you, know that if you look at these challenges as you being pruned you’ll become a stronger, better company.
Heritage Link Brands LLC
Type of business: Wine importer and distributor
Co-founder/CEO: Selena Cuffe
Co-founder/CFO: Khary Cuffe
Location: Los Angeles
www.heritagelinkbrands.com
Teenpreneur of the Year: Buttons By Jordan
The Teenpreneur Award recognizes a young entrepreneur or group, age 19 or younger, committed to advancing at young age the rich tradition of black business achievement.
Unlike his peers who depended upon an allowance for spending money, 13-year-old Jordan Culpepper decided he’d start a business instead. So in 2006, armed with a $500 loan from his parents, Culpepper launched Buttons By Jordan, a company based in Hazel Crest, Illinois, that sells customized promotional buttons. The venture was a perfect fit for Culpepper because the buttons would feature some of his artwork. “We had an African-American art contest here in Chicago and I’ve been the first place winner three times running,†he says. Promotional buttons seemed a natural extension of his talent.
Before starting the business, Culpepper did his homework, making sure the business would be feasible. “A business of buttons is a recession-proof business,†he says. Unlike promotional items such as t-shirts, which come in various sizes and may vary in popularity based on the weather and the seasons, “I can sell buttons year around without having to spend extra money on supplies to change their size,†Culpepper adds.
Culpepper credits his parents for suggesting some designs and helping him identify different markets to sell his buttons to, particularly one of his biggest clients to date — author and broadcaster Tavis Smiley. “My dad heard a radio announcement for Tavis Smiley’s new book so we looked up his office in Los Angeles and sent some samples,†Culpepper recalls. “A week later, he called and ordered 500 buttons.†Culpepper’s product impressed Smiley so much that he later ordered 5,000 more buttons to give out at his State of the Black Union conference in 2008.
Culpepper’s buttons have been featured at political functions, celebrations, and school activities. Businesses have also used them for advertising. Despite his success — in 2008, he grossed $7,000 in revenues — Culpepper is looking ahead to high school and eventually college, where he wants to explore a career in the field of science.
Having achieved his goal of making extra money, Culpepper is now most focused on helping customers express themselves. “When you do buttons you can tie into customers’ personal feelings and then they can wear [their feelings] on a button and everyone’s happy,†he says.Why is your promotional buttons company the best company out there?
Because I can identify more markets than people who make, say, t-shirts. And it would cost them more money to change their designs. I can just go into the computer and change the design for no extra money and still please the customer.
What do you think sets you apart from competitors?
Age. Most people say it’s a cute business just because I’m a kid. But once they’ve seen the people I’ve sold to they address me in adult terms.
Do you have any words of advice for people who are also thinking about starting businesses?
Try to reach people where they are.
What can Black Enterprise readers learn from you?
I’d say follow what you know best. Whatever you like to do, you can make money with it.
What’s a recent challenge you’ve faced?
Because of the economy there have been fewer customers. Before the stock market crash, there were more customers because people could spend more money but now money’s tight and they have to worry about staples instead of buttons.
How have you dealt with that?
Because the business is supply and demand, we lowered our prices and gave certain people like friends and family members discounts so they may be able to buy more buttons and support a cause that they may be trying to raise money for.
Buttons By Jordan
Type of Business: Promotional buttons and badges manufacturer
Founder/CEO: Jordan Culpepper
Location: Hazel Crest, IL
www.buttonsbyjordan.com
Community Champion Award: Jalen Rose
In recognition of his philanthropy and charitable sponsorship, Jalen Rose, ESPN analyst and 13-year NBA veteran, received the first-ever Black Enterprise Community Champion Award.
“I have won community awards before, but this one is especially humbling since it came after my NBA career and is being presented by Black Enterprise,†says Rose.
The award recognizes individuals working to promote and encourage volunteerism, business development, minority empowerment, education, wealth preservation and leadership in their hometowns.
Rose, who was also listed as one of “America’s Leading Black Philanthropist†by BE in 2005 founded The Jalen Rose Foundation in 2000, which aims to create life-changing opportunities for underserved youth through the development of unique programs and the distribution of grants to qualified nonprofit organizations. The grants focus on sports and education and are distributed in Rose’s hometown of Detroit and other communities in need.
The foundation has distributed nearly $1 million to charities including support for the Biamba Marie Mutombo Hospital and Research Center in the Democratic Republic of the Congo, victim’s assistance programs for those affected by Hurricane Katrina and the 2004 tsunami disaster in Asia, an endowment for a scholarship at the University of Michigan, and five four-year scholarships annually to Detroit high school seniors based on academic achievement, goals, extracurricular and community activities, and financial need. Each year one of the scholars is selected from Southwestern high school, Rose’s alma mater.
“It’s important that people with influential roles in society take the initiative to help others in need. I hope that my charity efforts motivate others to get more actively involved in their communities,†he says. “Let’s make philanthropy a chain reaction and everyone start to pay it forward.â€
— Tamara E. Holmes, Maya Payne Smart, LaToya Smith, and Tennille M. Robinson contributed to this article.