Small Companies Making Big Gains

As the old saying goes, dynamite comes in small packages, and some businesses epitomize the adage by making explosive profits despite their tiny size. A business must have …

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As the old saying goes, dynamite comes in small packages, and some businesses epitomize the adage by making explosive profits despite their tiny size. A business must have 50 employees or fewer to be designated as “small” for ranking purposes, and by this measure there are five companies that are performing well beyond what is typically expected for companies of similar size in similar industries. These include Happy Family (organic baby food), Hint Water (all-natural flavored water), Axia Technology Partners (IP-based phone systems), BackJoy (back relief products) and Dancin’ Dogg Golf (gold shot simulators). For more on this continue reading the following article from TheStreet.

What do organic baby food, the relief of back ailments, nutritional water, IP-phone services and a golf simulator all have in common?

Companies with less than 50 employees figured out how to turn each of these niches into multi-million dollar revenue streams.

No easy task, and the secret of these successful entrepreneurs is to find where the opportunity is and make sure your product is one that consumers (or commercial customers) can’t live without. Though once the products gave these companies their start, they didn’t rest on their laurels. Staying focused on their industries and constantly considering new products or markets keeps these companies in growth mode. 

  • 1. Happy Family
  • 2011 revenue: $34.7 million
  • Employees: 32
  • Shazi Visram launched Happy Family on Mother’s Day in 2006 after being unable to find suitable home style healthy, organic baby food options.

    She started the company with the intentions of making the food for her friends’ babies and her own family, but the concept took off. Six years later, Happy Family products are available in more than 17,000 stores nationwide and on Amazon and Diapers.com.

    Last year, revenue totaled $34.7 million, up from $156,000 in 2006.

    What’s more impressive is that this is all done with a staff of just 32 full-time workers.

    Happy Family’s beginnings were very grassroots. After Visram’s company started selling at a New York City grocery chain, it hired part-time workers (called "Happy Mamas") to spread the word about their products by handing out coupons to moms in parks and playgrounds. The company now has more than 50 Happy Mamas across the U.S.

    Happy Family’s complete line of cereals, meals and snacks for ages from babies to toddlers and kids helps the company stand out in a crowded marketplace, Visram says. The products are certified organic and include nutrients that help brain and eye development, prebiotics and probiotics to support digestive health, as well as ingredients like Salba, kale and quinoa to make the products as nutritious as possible, she says.

    The company is continuing to launch new products, particularly as babies that have been eating Happy Family meals are growing up. Visram says parents are asking for products for their five- and six-year-olds and older.

    In March, Happy Family launched 15 new products, including a new line for preschool snack time and elementary school lunchboxes, pouches of nutritious drinkable snacks, and crunchy snacks in individual packets to teach self-feeding to toddlers, among other things.

    "As a mom, I believe that everything we feed our families should provide the best possible nutrients, whether your child is a newborn or ready for preschool. We want to continue growing with our families and engaging parents and kids alike in learning about how nutrient-rich ingredients can be combined to work together, while also training young palates to crave healthy foods," Visram says. 

  • 2. Hint Water
  • 2011 revenue: $30+ million
  • Employees: 20
  • Kara Goldin, founder of Hint Water, also noticed that there was an opportunity in the beverage market while trying to satisfy her family. As she began to encourage her four children to make healthier choices she noticed they preferred her pitchers of ice water with sliced fruit. It was then that she realized she was on to something.

    Goldin, a former vice president at AOL, decided to create the all-natural flavored water. Seven years later, her company has revenue of more than $30 million, with 20 employees and some big name investors like singer-songwriter and Grammy-winner John Legend.

    Despite the success, it’s still very much a family-run business. Kara and her husband Theo head up the company’s operations.

    The natural essence waters have zero calories, zero sugar and zero artificial flavors and preservatives and initially came in 10 flavors. The brand’s message of "Drink Water Not Sugar" has resonated with health conscious consumers. More than 30 nationwide retailers carry her beverage including Whole Foods, Starbucks and Amazon.

    Last year, Hint Water added Hint Fizz, a carbonated version of the beverage. 

  • 3. Axia Technology Partners
  • 2011 revenue: $8.2 million
  • Employees: 25
  • Thanks to the popularity of Internet Protocol (IP)-based phone systems, Axia Technology Partners is projecting sales of roughly $10 million for 2012, just four years after it was launched.

    While the product itself is growing in popularity, Josh Ross, who founded the company with his brother Jason, says it was important for Axia to set itself apart from the competition in order to succeed. He speaks of several key areas to the Axia business model that is driving the company’s growth.

    Customers of the company’s systems range from municipalities to hospitals, power companies and corporations ranging from five to 2,500 employees across the country. So far, the company has more than $6.8 million in contract revenue booked for 2012, it says.

    Ross says it was imperative to focus on specific opportunities in the IP-service market, meaning where could they sell their product that others weren’t. Second, Ross says by offering customers tailored IP-services instead of a one-size-fits-all product and excellent service, Axia stands out.

    "While it is understood that revenue drives direction, consumers should not be pitched products or services that only benefit the salesmen and the selling corporation," he says. "When this happens, a sale occurs, but is a short lived relationship. At Axia, we are all about long term solutions and relationships. We are building customers for life and ensuring we are the resource that they turn to when they need anything IP."

    Businesses should know their competition. Axia’s competitors include Cisco, Avaya, Interactive Intelligence and ShoreTel on the product side. On the service side, it’s AT&T and Verizon.

    "While thousands of companies provide phone systems, internet, co-location, and phone service independently, an almost non-existent few provide a total solution that covers all of these spectrums," Ross says. "This is the niche that has become a huge part of our success story. Not only do we provide tailored business solutions, we provide an all-encompassing approach to ensuring the best results for customers by becoming their phone company, internet and co-location provider, as well as their phone system and software manufacturer."

    Axia is positioning itself for even further growth. As part of that growth, the company is moving its corporate headquarters in October to a larger, more cohesive space in downtown Indianapolis. Ross expects the employee count to double and the company to continue to invest in its operational network and back office for equipment upgrades and to expand the services to other areas of the country.

    "We are focused on providing a professional and [consultative] buying experience and look forward to attracting more corporations in the $25-$100 million in revenue range over the next year," he says. 

  • 4. BackJoy
  • 2011 revenue: approximately $8 million
  • Employees: 18
  • Why do all mothers tell their kids to sit up straight? They must be on to something.

    Indeed they are.

    Back pain is the second most common reason why people visit the doctor, according to BackJoy. The company, a maker of products that improves posture, was founded in 2005 to offer products that alleviate back ailments.

    It’s mission: to change the way the world "sits, stands and sleeps."

    The products are sold directly through BackJoy’s website and through retailers like Bed, Bath and Beyond and specialty medical merchants. In the last year, it started distribution in 29 countries.

    In December, BackJoy introduced Posture+ (shown above), a seat enhancement that helps consumers sit more comfortably and correctly, improving posture, strengthening core muscles to prevent back problems, it says.

    The company is launching a new pillow for sleeping that shares similar characteristics to the sitting products, but concentrates on a person’s head and neck as opposed to the spine and pelvis.

    By the end of the second quarter, BackJoy will have three product lines — Sit, Stand, and Sleep — with multiple products in each category. The company plans to continue expanding product lines and distribution opportunities globally.

    BackJoy founder and CEO Bing Howstein says success has been a combination of the company’s clear mission, consumer-centric focus and a management team that previously worked for Crocs and has experience with global brands.

    "Our products are simple and our customers are fanatical," he says. "We provide a timely solution that is a no-nonsense, non-pseudoscience ticket to personal wellness through better posture." 

  • 5. Dancin’ Dogg Golf
  • 2011 revenue: $4.8 million
  • Employees: 13
  • Dancin’ Dogg Golf is the maker of OptiShot, a virtual in-home golf simulator. The company launched an initial simulator prior to its launching of OptiShot in 2010 but it’s with the newer version that sales took off. In 2011, the company more than doubled its sales.

    Dancin’ Dogg Golf expects to do the same this year. So far, sales year-to-date are up 35% over the same period last year, the company says, and peak selling season starts late in the third quarter and lasts through the end of the year.

    OptiShot is sold online and at more than 1,500 major sporting goods retailers including Dick’s Sporting Goods and Sports Authority, Amazon and golf retailers.

    The company recently hired two employees to help them expand into international sales.

    "OptiShot allows users to watch (PGA) Tour stars compete on TV, then immediately test their skills on the same course, from the comfort of home," says Brandon Theophilus, CEO of Dancin’ Dogg Golf. "We are selling and shipping product literally as fast as we’re having them made."

    Product popularity aside, Theophilus says hiring a "smart team" and not being a micro-manager allows employees to succeed. The fact that the company is small also allows it to be nimble and to quickly change directions to beat the competition, he says.

    "We’ve succeeded by delivering an amazingly affordable simulator with precise shot feedback to a truly underserved segment of golfers who can’t afford $25,000-plus on an in-home system," Theophilus says.

    This article was republished with permission from TheStreet.

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