Juan Mencia’s Cube Corp. is enjoying breakout success – and planning for more of the same.
The terrorist attacks in New York and Washington, D.C., affect few industries as much as federal service contractors. But Juan “Jack” Mencia, CEO of The Cube Corp., knows how to adapt. His business savvy and entrepreneurial drive have helped him build a $42 million company in just seven years. In recognition of his success, Mr. Mencia has won HISPANIC BUSINESS magazine’s Entrepreneur of the Year 2001 Award.
The Cube Corp. provides facility management services for the federal government – and thus is strongly affected by increased anti-terrorist security measures. The company’s clients include a large NASA base in California, the military, and office buildings inside the Beltway. Cube currently ranks number 105 on the HISPANIC BUSINESS 500. On the basis of existing contracts, the company anticipates more than doubling its annual revenue next year to break the $100 million mark.
That projection may sound high, especially in shaky economic times, but Mr. Mencia has proved skeptics wrong before. In 1994, for example, he parted ways with his former partners to form The Cube Corp. His business trajectory relies on a strategic long-term plan: The company first bids on small subcontracts to establish a relationship with procurement officers; over time the contracts grow larger, until Cube becomes a prime contractor; then it teams with other companies to handle the workload.
“What impressed me most about Cube Corp. is its ability to grow quickly and yet manageably,” says Jose Fourquet, one of this year’s EOY judges and a vice-president for Goldman Sachs. “The company is unquestionably expanding at a rapid rate, but it’s in no danger of growing out control.”
According to Mr. Fourquet, most business startup failures are attributable to run-away growth that complicates cash-flow management and leaves young firms vulnerable in the face of changing market conditions. He says Cube Corp. has thus far demonstrated “quality growth,” which is to say sustainable growth.
“His sales have just been phenomenal, and it’s particularly remarkable given the industry he’s in,” adds Robert Rivera, last year’s EOY winner and a judge in this year’s competition. He too was impressed by Mr. Mencia’s ability to grow quickly while maintaining tight control of Cube’s operations.
“It’s the money you keep, not the money you earn, that’s the measure of a company. Cube Corp has shown itself to be adept on that count,” he says.
Cube posted annual sales growth of 71 percent last year, and its return on equity exceeds 80 percent. Its net worth growth from 1999 to 2000 was nearly 68 percent.
“I view [Cube] as a well-managed, customer-focused company that goes out of its way to promote good employee relations, and I think Jack Mencia has a personal commitment to integrity and fair play that is unsurpassed in our industry,” says Chuck Ervin, chairman of the Contract Services Association of America. “I never hesitate to recommend Cube as a subcontractor.”
Integrity holds special importance in the service industry because companies often team up to win a contract, according to Mr. Ervin. “Today we’re competitors, tomorrow we’re team partners,” he says. “It all depends on the opportunity and the way the competitive landscape lines up. But it’s not a love affair – it’s business.”
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