After our research department delivered the list of the fastest-growing Hispanic-owned companies in America, the question that arose was, what do all these success stories have in common? Is there a single, universal element of success they share? In search of an answer, we talked to six CEOs from some of the hottest companies, all in our top 20 list. Their firms ranged from IT suppliers, a power company, and a Web marketer to a red-hot travel bureau and an auto reseller. They come from all across the United States, yet they have one thing in common. They are all defying an unstable economy to produce skyrocketing profits. Here are the insights they shared with us. You may find some of them surprising.
'Success Begins With An Attitude'
Nowhere is that old adage more evident than in the culture and language of the CEOs we interviewed. While each developed unique strategies and best practices that are working in their respective industries, their attitudes toward their work and the general economy were strikingly similar. If there is one universal element of success, it is this overriding attitude of seeing growth opportunities where others see roadblocks.
Fernando Gonzalez, CEO and co-founder of the Los Angeles-based First in Service Travel Ltd., is a perfect example. When the bottom fell out of the travel industry a few years ago, many travel agencies went out of business. Those that survived are now facing more challenges in higher fuel costs and fragile economic times. But, Mr. Gonzalez not only refused to let his company die, he is steering an innovative course that is proving highly successful.
"Most companies are hurting because travel is down and fuel costs are up," said Mr. Gonzalez. "But, I don't see the current poor economic conditions as a disadvantage. I see them as opening doors for us. When everyone else is retreating, that's our time to move forward and capture the market. 2008 is going to be an incredible year, by far our best."
Rather than expanding traditional travel itineraries, Mr. Gonzalez, whose sister, Erika, helped found the company, added customized services. For example, for the fashion industry, a large client, Mr. Gonzalez developed turnkey services. "We now offer them everything, including scouting photographic site locations," he said. "If they want pink sand or palm trees flown in, we arrange it. We set up a division in the company that does nothing but cater to that industry. In tough times, it is critical to think creatively." In the past five years, the firm's revenues have jumped from $1.5 million to $15 million.
Preparing For Success
Larry Mercado, CEO and co-founder of Mercom Inc., our second-fastest growing company, watched many of his competitors fall away because they hadn't prepared or invested carefully in their own firms. "We spent two full years gaining our certifications as a minority-owned business," said Mr. Mercado, whose Pawley Island, South Carolina-based company sells information technology and services and was co-founded by Stella Colwell, Mr. Mercado's sister. "Other companies didn't put in that kind of energy and time," Mr. Mercado said. "Today, the economy is hitting them hard. Because we broadened our service capabilities, we are gaining additional large contacts. It is critical that you have an attitude that says 'We will grow,' regardless of the economic circumstances that surround you."
As a reseller, Mercom has taken full advantage of the certifications. At the same time, the company continually added services to grow horizontally. It now acts as a type of general contractor for IT products and services that a company or government agency might purchase, including providing price and quality optimization. "It's a matter of leveraging everything we can to offer as many services as possible at the highest possible level," said Mr. Mercado. "We see great growth opportunities ahead. As baby boomers retire from the civil service jobs, the government is going to have a hard time replacing them and will be doing a lot of outsourcing to companies like ours. We think that is the wave of the future, and we plan to be part of it."
Between 2003 and 2007, Mercom's sales jumped an explosive 3,257 percent, from $700,000 in revenues in 2003 (it operated at a loss that year) to $23.5 million last year.
'Big, Hairy, Audacious Goals'
VisionIT, an IT staffing and service firm in Detroit, Michigan, also "prepared" its way to success. "It would be hard to overestimate the amount of planning and structure we put into the organization to prepare for the growth we recently experienced," said CEO and founder David Segura. "Had we been frightened by the declining economy and prepared for a loss, we probably would have experienced a loss. Instead, we invested heavily in technology and in the culture and management of the company. Others cut back due to the economy, but that's where we broke through."
VisionIT acts as a type of IT general contractor, gathering suppliers together for major companies and government entities. Mr. Segura credits many of the concepts in the book, Built to Last, by Jim Collins and Jerry Porras, for helping him build a principle-based internal structure and the belief in what the authors called "big, hairy, audacious goals".
"We believe we will be a global company one day with 10,000 international IT members," said Mr. Segura. "Meanwhile, we're having a blast. This is as much fun now as it was the first day we set up our cubicles in our first small office."
Part of the reason for that, of course, is that Vision IT revenues soared from about $6 million in 2003 to $107 million in 2007. The company ranks 11th on the Top 100 list.
Beating The Trend Is A Gas
Perhaps the most surprising of the companies making the top ten is Pro Auto Dealers in El Paso, Texas. While many auto dealers nationwide are struggling due to the onslaught of higher gas prices, the Texas company, which specializes in used vehicles, has rocketed from $1.2 million in revenues in 2003 to nearly $23 million last year.
"The gas prices are actually helping us," said company founder and CEO Jorge Cuevas. "A lot of customers can't buy a new car because of the higher gas prices, so they are coming to us for less expensive vehicles. Right now, what is hurting everyone else is helping us." The company ranks ninth on the Top 100 list.
Mr. Cuevas said that while he currently does little business in "green" cars, he believes that's where the industry is headed. "Right now we're doing alright, but if gas prices keep going up, everyone will be looking for more fuel-efficiency, and we are all going to have to change."
Specializing In Multicultural Markets
The fastest-growing Hispanic-owned company in California also benefited from the bearish economy. "In hard times, advertisers tend to go with something that shows hard results," said Jose Villa, the CEO of Sensis, a Los Angeles-based online marketing, Web development, and advertising firm. "Companies are moving away from advertising in the print media that doesn't allow for a surety of results to online marketing where exact results are at their fingertips. We can tell exactly how many people saw our ads and how the traffic flows through each Web site."
Like most of the other 100 Fastest-Growing companies, Sensis prepared for success. "We recognized early that the Hispanic online market was going to be a viable, important market, when others didn't," said Mr. Villa. "In many areas, minorities are majorities now. We specialize in reaching multicultural, niche markets in a cost-effective way."
The U.S. Army and the California Lottery Commission are major clients of Sensis. "We do well with the younger demographic because they are more comfortable on the Internet," said Mr. Villa. "Our biggest challenge, and the biggest dollars, are in branding the products. We still have to prove ourselves in the branding issue."
Sensis grew from about $240,000 in revenue to nearly $3.4 million during the past five years. It ranks 13th on the Top 100 list.
Attitude, Innovation, And Preparation
The phenomenal growth of the top companies on the list belies the idea that the poor economy is making it impossible for businesses to thrive. The leadership of these companies has found ways to use conditions to their benefit. Yet, attitude is only part of it. Effective innovation, savvy preparations for success, and a willingness to invest in their companies, while others are contracting and retreating, are also critical common elements. "It isn't always easy and it takes some courage sometimes," said Mr. Segura, "but believing in your vision of the future and refusing to give in to outside conditions are the best ways to reach those big, hairy, audacious goals."
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