CASTING A WIDE NET
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Despite business ownership’s ever-growing challenges, small companies across the nation are succeeding. They’re growing revenues, expanding their customer bases, mastering their finances and staying ahead of the competition.
Here, they share their secrets.
1-10 Employees
NFIB Member: Margaret Fette, The Tailored FitLocation: Bloomington, Ind.
Employees: 4 part-time
ALWAYS THE LEARNER
When Margaret Fette opened her custom tailoring shop in 2006, the business broke even within its first year. But between 2007 and 2008, the shop lost a major client—a dry cleaner that accounted for 20 percent of Fette’s revenue—and began sinking into debt.
“I’m really good at what I do, but I wasn’t always good at business,” Fette says. “I didn’t understand how accounting was done or what kind of information we needed to keep records for.”
Recently, though, Fette has found success by continually educating herself on better business practices. “I had my accountant train me,” Fette says. “Now I know how to keep company books, so when accountants ask me questions, I understand what they’re talking about.”
Keeping a closer watch on expenses helped Fette pay off the company’s remaining debts last winter. “My biggest challenge was realizing how my own spending [especially on payroll and supplies] was cutting into my bottom line,” she says. “Now, when I look at my monthly expense sheet, I don’t have to worry about paying a bunch of interest.”
With a firmer grip on her books, Fette now understands how much money she can spend on advertising. When the budget is tight, she cultivates new business by attending chamber meetings with business cards, dressing in her own creations, and giving interviews to local media outlets.
In addition to receiving instruction from her accountant, Fette picks up business savvy from books (her favorite is Thou Shall Prosper by Rabbi Daniel Lapin) and podcasts, like Dave Ramsey’s EntreLeadership program. “I’m continuously learning about business, finances, cash flow and taking good care of my people.”
Fette’s self-education has served as training to be a better boss, she says. “I’ve learned that if you don’t have good employees, there’s nobody you can blame except yourself.” Fette has remodeled her hiring process to focus on self-sufficient candidates whose working styles are compatible with her own, which has allowed her to keep talented employees for longer.
Another of Fette’s business lessons informed her decision to relocate from the heart of downtown Bloomington to her home—a move that saves her $1,000 a month in rent and utilities. The savings allowed Fette to start a new branch of her business: wardrobe consultations in clients’ homes. “We expanded upon our ability to meet people’s needs in a much more creative way. That’s why we’re on the upswing,” says Fette, a former Broadway costume-maker.
These consultations now account for 10 to 15 percent of new business. Fette also maintains long-term clients, including trade shops and Indiana University’s athletic department, which recently sent her 160 pairs of shorts with pockets that needed to be removed.
“Sometimes customers just have normal, run-of-the-mill needs, but sometimes they have extreme problems,” Fette says. “I see the girl who’s 4-foot-8 and the man who’s 6-foot-2 and I want them all to feel like a million bucks.”
Long-time customer Lee Luskin has patronized the Tailored Fit since before its relocation and continues to see Fette for custom clothing and alterations. “I brought her a dress that I bought online that just wasn’t fitting right. Margaret picked up the shoulder of the dress and it instantly fit.” Luskin says she loves supporting The Tailored Fit, both as a testament to Margaret’s excellent service and as a show of support for local businesses.
Knowledge of Fette’s specialized customer service has spread through word of mouth, giving her recognition past the local level. “We get an awful lot of referrals,” Fette says. “From time to time, I’ll get customers from Louisville and Chicago just because they’ve heard our services are excellent.”
11-20 Employees
NFIB Member: Ted Daywalt, VetJobs
Location: Marietta, Ga.
Employees: 13
CASTING A WIDE NET
Ted Daywalt served in the U.S. Navy for 28 years. In 1999, he started VetJobs, an online jobs board that helps military veterans and their families find employment. The site has become the top in its field, with 650,000 visitors per month.
“VetJobs has been the leader in helping members of the National Guard and their spouses get good jobs while the brigades are gone,” Daywalt says.
One of the main proficiencies separating Daywalt’s employment website from the rest is its wide target audience. “One of the reasons we’ve outpaced all of our competitors like Military Hire and Hire Patriots is that we focus on more than one group of veterans,” he says. “When we first started, we asked, ‘Why would we work with only low bushes? Let’s go after the whole forest.’”
Instead of catering only to a specific branch of the armed services, Daywalt’s team decided to serve 10 uniformed services, including the Army, Navy and Marine Corps, plus military spouses and children. “We wanted a site that helped people from the lowest rank to the highest flag officer rank, and everybody in between. That’s why our traffic is more than double what any of our competitors have.”
Some of this traffic comes from Daywalt’s publicity efforts. “You get to this point in the marketplace by being active in organizations,” Daywalt says. Serving on the Small Business Council for the U.S. Chamber of Commerce, testifying in Congress and staying active with the U.S. Department of Labor has given VetJobs exposure on BBC, Fox News and NPR—“publicity that dollars can’t buy,” he says.
Daywalt has found that high traffic numbers grant his company a cashflow advantage over other online job boards, as they attract steady and lucrative advertising. Another key to the company’s cashflow is its cash reserves. “I’ve watched several of our competitors disappear because they have serious cashflow problems and have to lay off employees,” he says. On the other hand, VetJobs’ self-banking methods allow the company to offer better employee benefits than competitors, such as paid sick and vacation days.
Indeed, such working conditions have contributed to a remarkably low turnover rate at the company—two workers in 13 years—which helps keep customers who might otherwise have left when new employees were hired. Daywalt handpicked the team using behavioral interviewing. Each of his 13 employees has served in the military or is a spouse or child of the military. “We have people here with solid military-type values” and experience, Daywalt says, giving rise to efficiency, resourcefulness and a prioritization of the family.
“The integrity that this company offers is the best part of working here,” says Anna Cox, VetJobs’ vice president, who has been with the company since 2001.
Annual bonuses, flexible scheduling and a culture of transparency also encourage employees to stick around, Daywalt says. “Many of the other [employees] have been with us since 1999, which makes for a great cohesive working group.”
And for Daywalt, that’s what success is about. “It all comes back to your people,” he says. “One person doesn’t make a successful business. The team does.”
RELATED: 5 Elements of Successful Small Businesses
21-40 Employees
NFIB Member: Greg McAfee, McAfee Heating & Air Conditioning
Location: Dayton, Ohio
Employees: 38
STAY UP-TO-DATE TO STAY ON TOP
Since losing employment powerhouses NCR Corporation and General Motors, Dayton, Ohio, has been named one of the worst cities in which to do business. Yet that’s exactly where Greg McAfee, president and founder of McAfee Heating & Air Conditioning, has built an empire.
“I thought my dream was to work where my dad and grandfather worked, which was Firestone,” McAfee says. At age 19, McAfee indeed began working at Firestone in Dayton. But upon returning from a four-year stint in the Marine Corps, where he took a refrigeration class, McAfee realized he could help people by providing them with warm or cool homes when they needed them.
“In 1990, I started my own business with $274 and a used truck,” McAfee says. Working from his garage and selling his services door-to-door, McAfee watched his business take off. Soon, he was performing $5,000 installations.
Even while averaging large profits, McAfee made a point of living within his means by investing “every penny” back into the company and keeping his workspace in the garage.
In 1997, the company relocated to a new facility and hired one new employee per year until 2005, when McAfee began hiring three to five employees each year. The company has grown an average of 20 percent annually. The slow economy hasn’t hurt growth. “In 2010, when other HVAC companies were down, we grew by 46 percent,” McAfee says.
A major component of McAfee’s success is the extra business he’s received from his service policy, he says. “In our industry, any service call after 5 p.m. requires overtime. I once asked customers, ‘What do you want from your HVAC company?’ Everyone said they wanted after-hours service.” So, he determined how to offer services before 9 a.m. and after 5 p.m., Monday through Friday, at no extra cost. “It’s really set us apart,” he says. Sales have also increased as a result: The company receives more business during these “after hours” than regular hours.
The company has also created opportunities to extend its brand. Each year, the company donates between $20,000 and $50,000 to The Children’s Medical Center of Dayton pulmonary division and sponsors a number of children’s sports teams. McAfee has also set the company apart from his competition by privately labeling the appliances he sells.
Eager to share his wisdom, McAfee has even created his own consultation company for small business owners outside of his competitive region.
When considering the shaky economy, McAfee’s success is all the more remarkable. “We think outside the box,” he says. “We even have pins that say, ‘We choose not to participate in the recession.’ When everyone is hunkering down, laying off and not buying anything, we do the opposite.”
41-100 Employees
NFIB Member: Lois Griggs, Courtesy Ambulance Inc.
Location: Newark, Ohio
Employees: 48
DREAMING BIG IN A SMALL TOWN
Lois Griggs’ family-run, private ambulance company has grown significantly since it began in 1971. Now the largest private ambulance provider in Licking County, Ohio, Griggs employs 48 professionals to perform basic, advanced and paramedic life support through eight ambulances and five wheelchair-accessible vehicles.
Griggs attributes much of her business success to communication with state and federal officials about patient legislation. When necessary, she tells patients up front about the costs that Medicare and Medicaid will cover. Plus, having the most up-to-date equipment and the latest knowledge of government rules is how Griggs, formerly president of the Ohio Ambulance and Medical Transportation Association, aims to best take care of patients.
For more than 40 years, Griggs has consistently hired from within, starting her employees as ambulance technicians and allowing them to work their way up to higher positions. Some employees have been with the company for as long as 15 years. “I’ve also got a couple of new people who came from another ambulance company and are so pleased to be here,” she says. “At larger companies, they’re treated like numbers. But here, they’re like family.”
Along with her accountant, Griggs also keeps a close watch on the company’s finances. She assigns payroll duties to her daughter. As a private company owner lacking the taxpayer support extended to her competitors, like the local firehouse, Griggs has found that carefully monitoring the company’s expenses is crucial for stability and good management. “Cash flow is important because if I want to keep my employees, I’ve got to pay them,” she says.
Taking care of patients is just as important as taking care of employees for Griggs. “I believe the motto on the side of my van says it all: ‘Let my family take care of yours.’”
