1998 Ad

Black Enterprise, Nov, 1998 by Gerda D. Gallop

These companies emerged as B.E.'s 1998 Small Business Entrepreneurs of the Year -- Emerging Company, Business Innovator, Rising Star and Kidpreneur

Despite a host of challenges, including lack of adequate start-up capital, competition from larger majority firms and an anti-affirmative action environment, African American business owners are forging ahead and succeeding as we stand on the threshold of the new millennium.

We are expanding our business ranks at nearly twice the rate of the overall business community, according to Aida Alvarez, administrator of the Small Business Administration. From 1987 to 1992, the Census Bureau estimates that black-owned businesses grew by 46%, from 424,000 to nearly 621,000. And, those black-owned businesses with revenues of over $1 million annually are growing the fastest.

But the real story isn't in the numbers. You have to look at the businesses themselves to understand what success is truly made of. At the Black Enterprise/NationsBank Entrepreneurs Conference last May in Orlando, Florida, five individuals who had embarked on the journey of entrepreneurship were honored as recipients of the Third Annual Black Enterprise Small Business Entrepreneurs Awards. Some of these businesses are on the cusp of becoming BE 100s firms; others are just out of the starting blocks. But all were recognized for their potential, innovation, perseverance and commitment to African American entrepreneurship.

EMERGING COMPANY OF THE YEAR

The Emerging Company Award recognizes businesses that are poised for future growth. They have adopted creative marketing techniques and carved out a niche for themselves.

Robert Luster President & CEO Luster Group Inc.

Robert A. Luster has built his company on three pillars -- integrity, client focus and social responsibility. As president and CEO of Luster Group Inc., this former Army officer believes that it's not what his company does that matters, but what it stands for.

Luster, 40, founded Luster Construction Management (CM) in 1990 in San Francisco to provide project and construction management services to the private and nonfederal public sector. In 1996, he established Luster Group Inc., comprising Luster CM Inc.; Luster National Inc., providing program and project management services to federal clients; and Schoenberg Design Associates Inc., providing landscape architecture, environmental and planning services. Luster also founded the Luster Fund, a nonprofit entity that provides education and training in various fields.

Prior to starting his own firm, he spent 10 years with the Army at the Department of Defense and co-founded another construction management firm. Luster says he found the transition from the Army to the private sector eye-opening. His first business, Athena Management Engineers, failed after only two years.

"I got a Ph.D. in the school of hard knocks," says Luster. "I learned how differently things are done. People have different objectives -- you have to interpret between the lines. In the Army, what you say is what you mean -- there's a high sense of integrity. It's not profit-oriented. In the private market there are more variables that go into the equation."

Determined to "own a piece of the rock" and work with family members, Luster started his second company with $50,000 from credit cards, despite being $35,000 in debt from his first company. "After working for the largest bureaucracy in the world," he says, "I thought there was a better way to run a business."

Taking no salary for 19 months, Luster worked days, nights and weekends for the first three years. He got his first client, O'Brien-Kreitzberg, a San Francisco-based construction management firm, before he had even hired a staff.

"I stuck my neck out and said I could have someone there the next day," recalls Luster. "Two weeks later, I got a call saying they needed someone the next morning. I had already screened about 25 people I'd like to have hired if I secured a job."

By 1992, Luster CM had $2 million in revenues and a staff of 17. In 1997, revenues were $8 million. This year, revenues for the 104-employee firm are expected to top $10 million. Clients include Dyncorp, the Department of Defense and the Department of justice.

The Luster Group has been recognized for its tremendous growth, which Luster credits to his use of technology and his innovative staff. "Technology has become an extension of ourselves, which has increased efficiency," he says. "You can't afford not to invest in technology today or you'll be left behind."

Luster says he was one of the first in his industry to have a Web page and an intranet system so all employees at the company's various offices could communicate with one another. But because he competes with companies that are up to 10 times as large as his, some prospective clients are skeptical about whether Luster has enough resources to get the job done.

"I will have clients say that my company is not a big house, and therefore doesn't have all the skills needed in-house," says Luster. "To counter that, I spend more time up front cultivating the relationship so the client is familiar with me and my company." Luster also teams up with other companies to jointly market to prospective clients, which ensures that all resources are available. To guarantee that his company continues to emerge as a professional service organization, Luster plans to acquire companies to grow his operation.