Rising stars: the 100 hottest new small businesses in America - Cover Story

Entrepreneur, June, 1996 by Debra Phillips, Lynn Beresford

Managing growth is a challenge, sure, but it's a challenge every start-up entrepreneur dreams of facing. The entrepreneurs on the following pages have handled it admirably--so well, in fact, that they've won coveted spots on Entrepreneurs list of the fastest-growing small businesses in America.

Indeed, small business isn't the only thing growing these days. You may remember that last year, when we introduced our first annual "Hottest Small Businesses in America," there were only 50 finalists in our listing. This year, there were so many worthy competitors, we had to increase that number to 100!

How do we select these hot candidates? Beginning with a list of the small companies started in 1993 or 1994 that exhibited the greatest sales growth, based on Dun:& Bradstreet Information Services data, we narrowed our list down to 100 finalists using these criteria:

* The founder must be actively involved in day-to-day operations and must control at least 51 percent of the business;

* sales must exceed $1 million: and

* companies must meet the Small Business Administration's definition of a small business, based on number of employees and sales figures.

From the large initial pool of companies, we determined the annualized growth rate of each. The top 100 are listed in order of annualized sales growth. If companies tied in ranking (for example, three businesses tied for number 39), the companies are listed alphabetically. Each listing contains the founders' names, a description of their business, the number of employees (initially and currently), initial investment, first-year sales and 1995 sates.

And to round out all these facts and figures, we also profile the number-one hottest small business--plus four others from a variety of industries--so you can learn from their success. Learn well, and who knows? Next year, your business might be the one in the spotlight!

Medical Alert

As our top-ranked small business, ShanJa Corp. is obviously doing well financially . . . but maybe that's beside the point. For the Ocala, Florida, medical equipment company isn't merely making money, it's changing people's lives.

"We offer relief to a [medical condition] that patients have lived with for years and years," says company founder Robert Lillard, 44. "We provide durable medical equipment for patients suffering from lymphedema."

Lymphedema--an affliction that often strikes senior citizens--is a disease in which body fluids accumulate, reading to swollen limbs. ShanJa Corp. sells pneumatic compressors which, when attached to either arms or legs, pump the excess fluid back into the body's venous system. "I've had patients call and thank me," says Lillard. "[They tell me] they can see their ankles again or they can walk again--whereas before, they were basically immobile."

Immobile is an adjective that clearly doesn't suit Lillard himself. Before launching ShanJa Corp. with $70,000 in start-up capital in 1994, he had worked as a pharmaceutical sales representative for more than a decade. When he happened upon lymphedema pumps, however, the enterprising Lillard was convinced he'd found a viable second source of income. Turns out, he found much more than that.

"I sold nine in the first week," Lillard recollects. "I thought, 'This is something else! I'll have to look into this a little deeper.' "

And so he did. Within about a month, Lillard moved his burgeoning business out of his home and into an office location. He began hiring sales representatives, and in August 1994, he incorporated his company as ShanJa Corp. (named after his two daughters, Shannon and Jamie).

Growing an average of 2,150 percent a year, ShanJa Corp. is projected to generate sales in excess of $5 million this year. Currently, the company sells its equipment to patients in 10 states. Asked to explain the success of ShanJa Corp., Lillard points to the company's strong emphasis on customer service. Not only does ShanJa typically deliver equipment and train patients on its use within 24 hours, but it also conducts careful follow-up monitoring.

The way Lillard figures it, the time he's invested in building ShanJa Corp. has more than justified the risk he took in starting his business. Indeed, there's a certain satisfaction in proving the naysayers wrong.

"Many people told me my business would never fly," he reflects. "'Be careful,' they said. 'You're pretty well set with what you're doing.' I didn't listen to them--obviously."

And ShanJa's patients are glad he didn't. --Debra Phillips

Getting Intimate

Everyone is glad Ann Deal's wholesale lingerie accessories business is growing so rapidly. Everyone, that is, except the tenant in the space adjacent to Ce Soir Lingerie Co. Inc.'s 7,000-square-foot Ventura, California, warehouse.

"We're about to pop out of [our space]," says Deal. "We either have to expand or move. I'm already harassing the poor guy next door, always asking him, 'Don't you want to move?'" Whatever Deal decides to do, there seems to be no stopping the phenomenal growth that landed her the 46th spot in our ranking.