Fast lane

Entrepreneur, June, 1998

It's an Ed-McMahon-at-the-door kind of moment for us. This is the time, every year - the fourth in a row, for those keeping track - when we announce the 100 hottest new small businesses in the country. With help from Dun & Bradstreet (D&B), the world's leading research-based business information provider, we comb the national commercial landscape to determine the entrepreneurial equivalents of sweepstakes winners.

Or maybe not, on second thought. For while sweepstakes winners depend on pure, unadulterated luck, successful entrepreneurs realize that luck is only a byproduct of pure, unadulterated hard work. Factor in pure, unadulterated passion, and you've got as near a formula as exists for running a thriving business.

"Small-business owners really have a passion for what they do," says William F. Doescher, senior vice president and chief communications officer for D&B. "Every one of these hot 100 [companies' owners] have this type of attitude - or they wouldn't be successful."

Not that we measure attitude in this listing. What we do measure - based on D&B's mammoth database - is company sales growth from the year of inception. The criteria we use includes the following:

* The founder must be actively involved in daily operations and must control at least 51 percent of the business.

* The business must have been founded no earlier than 1995.

* Annual sales must have exceeded $1 million in 1997.

* Companies must meet the SBA's definition of a small business, based on the number of employees and sales figures. (These numbers vary according to industry.)

Of special interest this year is the presence of Internet firms in our ranking. "This is the first year our list has included small businesses making a living off the Internet," observes Doescher. "It's just further evidence that small businesses [and consumers] are migrating to the Internet. [In fact,] 47 percent of small-business owners now have access to the Internet."

Access to a booming economy is obviously another plus for our entrepreneurial sweepstakes winners. Consumer confidence is high; small-business confidence is even higher. Ironically, however, the latter situation may be more a reflection of the participants themselves than of any economic indicators. "I'm not sure [entrepreneurs] pay an awful lot of attention to whether the stock market continues to grow or whether the economy is in good shape," Doescher says. "They just want to start their own businesses. They want to be owners of their own destiny."

On that note, prepare to meet a few of these owners of their own destinies in the profiles included on the following pages. These are people for whom pure, unadulterated hard work and luck aren't just concepts - they're a way of life. These are people whose entrepreneurial dreams were not only realized, but were realized at a speed that probably even took them by surprise.

But such is the nature of dreams, we suppose. They can - and often do - come true. "The great American dream today is [to launch] your own business," says Doescher. "And the wide variety of companies in the Hot 100 underscores the fact that anyone can pursue this dream."

And that just reaffirms our initial feelings: This is an Ed-McMahon-at-the-door kind of moment.

Debra Phillips

DRESSED FOR SUCCESS

John Paul Beltran and Richard Hirsh have shown both entrepreneurial and fashion flair with John Paul Richard Inc., their Chatsworth, California, women's apparel company - so much flair, in fact, that they landed the No. 1 spot in Entrepreneur's Hot 100 ranking with revenues of $46.5 million in 1997, their first full year in business.

The founders joined forces after working together at Melrose, a women's apparel manufacturing company Hirsh had founded in 1974. Hirsh sold the company in 1986 and, after spending 10 years working for the new owner, he and Beltran found the corporate life less than fulfilling. "We decided we'd had enough of the corporate environment," recalls Hirsh. "We wanted to get out and start our own business."

Their experience in the apparel industry proved to be their key to success. With $1 million in start-up capital culled from personal savings, they secured $1.6 million in loans and created a relationship with Heller Financial Inc., a Chicago-based international commercial finance company. This helped them garner $25 million in factor loans (loans backed by outstanding invoices and current orders) last year to purchase raw materials and keep the company above water while it grew. "[Heller] was the financial engine behind our colossal growth," says Hirsh. "It was critical in making [funding] available."

"Heller took a big chance on us because of our extensive industry experience," says Beltran. With these resources, the partners had no problem gathering an experienced staff from industry contacts. They were also able to land accounts with such national retailers as Macy's, Mervyn's and Sears almost immediately.

"Giving a start-up company like John Paul Richard [space] in the stores was not so far-fetched because these were people we'd had tremendous experience with over the years," Hirsh explains.