Shhh! We have a secret

Fast 50 execs share how they've risen to the top

The 2006 Small Business Report

Small-business programs offer hope, but companies still struggle to find the best contracts, navigate procurement rules and break down barriers.


In this Special Report

  • In small-business IT contracting, the challenge is distinguishing which agencies have the dollars and a willingness to assist

  • Fast 50 execs share how they've risen to the top.

  • Making the team: What you need

  • Buy Lines: Narrow policy matters trip up small-business program
  • 2006 Top 25 8(a) Contractors

  • 2006 Fast 50 Government Contractors

  • Online forum featuring small business expert Guy Timberlake
  • Clockwise, from left: Rose Wang, Binary Consulting Inc.; Alfredo Casta, Cascades Technologies Inc.; William Loftus, Gestalt LLC; Olayinka Sage, e-Management Inc.

    Rick Steele

    They come from diverse backgrounds, these men and women, and from both the United States and abroad. Some are entrepreneurs who started their companies as one-person operations. Others joined established companies and took on leadership roles.

    Some served government clients from the start, while others came to this market from the commercial sector.

    Despite their differences, the executives who run the small businesses on Washington Technology's 2006 Fast 50 list have in common the success and profitability of their companies. Their experience has made them experts on how to grow organizations and survive the ups and downs of running a company.

    Hone your offerings

    A primary lesson learned, and one they have in common, is to determine early on what services to offer and what government agencies to target.

    "We made a conscious business decision, and then said 'This is what we're going to do,'" said Rose Wang, founder and CEO of Binary Consulting Inc.

    Wang worked in Silicon Valley for several years before moving east to launch her entrepreneurial career. At first, she had what she calls a "rent-a-CTO" practice, serving large and small companies. But that quickly changed after the terrorist attacks of Sept. 11, 2001.

    Wang reacted quickly, narrowing the company's offerings to strategic advisory services for government decision-makers and giving up pursuit of systems integration work.

    "I don't know how many times I've been told that's crazy, but the market has completely rewarded us," said Wang, a 37-year-old native of China who came to the United States when she was 21.

    The Bethesda, Md., company expects revenue of close to $20 million this year, compared to $13 million in 2005, Wang said. Its biggest clients are the Defense Department's Office of the CIO, Defense Information Security Agency, Navy and Office of the Assistant Secretary of Defense for Networks and Information Integration.

    The company anticipates new work from the Air Force soon, though Wang declined to name the contracts. Binary Consulting is No. 8 on the Fast 50 list, with a compound annual growth rate over five years of 125.2 percent.

    Alfredo Casta, a 39-year-old native of Puerto Rico who worked at the Labor Department for 10 years, started Cascades Technologies Inc. in 1998. Initially, he did Web design and hosting, software product sales and some systems development work for clients in both the government and commercial sectors.

    In 2002, when the Herndon, Va., company got its 8(a) certification and General Services Administration schedule, Casta consolidated its offerings to focus only on government clients. He sold off the Web design and hosting part of the business because, he said, other companies were doing it better.

    He also ditched product sales, because it required a different business model than what he had at the time.

    "The systems development and applications development areas were driving the business, so we consolidated efforts into one where we could grow a degree of expertise and compete well," Casta said.

    This year, Casta expects $7 million in revenue and net profit of between $350,000 and $490,000 for Cascades Technologies, which is No. 36 on the Fast 50 list with a five-year growth rate of 68.8 percent.

    The Labor Department accounts for 60 percent of the company's revenue, with the remainder coming from the Federal Bureau of Prisons, GSA's Office of Citizens Services and Communications, Justice Department and the National Institute of Allergy and Infectious Disease at the National Institutes of Health.

    Pick and choose

    Some Fast 50 executives warn their peers and aspirants to avoid taking every government job that comes along, especially those that don't fit within their areas of expertise and that have a low monetary value.

    For small businesses, "there's almost a desperate need to just accept any kind of business to stay afloat. Sometimes, that has short-term rewards, but long-term, it's just very difficult," said Olayinka Sage, 39, founder, present and CEO of e-Management Inc. of Silver Spring, Md. The company, ranked No. 28 with a five-year growth rate of 81.8 percent, provides IT strategic planning and management, information security, Web applications and services and managed network services to the government.

    "We don't chase work, even if it's easy to get or low-hanging fruit," said William Loftus, 42, co-founder, president and CEO of Gestalt LLC of Fairfax, Va. "We're extremely focused on the industries we're playing in, and we want to get deeper into those industries."

    Gestalt, which is No. 4 on the Fast 50 with 147 percent compound annual growth rate over five years, provides consulting services and technology solutions to the defense, energy and utility sectors. Its 2006 revenue likely will be $34 million with a profit of around $3.4 million, Loftus said.

    Stay focused

    Other Fast 50 executives stressed the necessity of maintaining a solid business focus. Merlin International Inc., the No. 1 company on the list for the second year in a row with a 232.5 percent, five-year compound annual growth rate, has a business philosophy of "staying focused on communications technology," said David Phelps, the company's 44-year-old founder, CEO and president. The Greenwood Village, Colo., company delivers IT solutions to the public and commercial sectors.

    The federal IT sector is "a huge market, and there's no sense for us trying to build sensors or satellites or hardware or things for tanks," said Phelps, who previously worked for aerospace companies before founding Merlin in 1997. The company is expected to deliver revenue of about $180 million this year, although Phelps declined to provide a net earnings figure.

    One for the money

    The Fast 50 executives also emphasized putting into place a good business development team and financing from the get-go.

    Cindy Breed, 46, president of Windward Consulting Group Inc., said that small companies overlook getting professional finance and legal help onboard early.

    "You really don't see this in too many startups, getting the finances in order to allow the company to grow properly," said Breed, who worked in senior finance positions in manufacturing, banking and technology before joining the year-old Windward Consulting in 1998.

    Windward Consulting, No. 14 on the Fast 50 list with a five-year compound annual growth rate of 108.9 percent, provides strategic management consulting and systems integration services to the government and commercial sectors. The company will likely hit $20 million in revenue for 2006 and $1.5 million in net profit, Breed said.

    Seek good advice

    Getting help and advice from those who've been in the same situation is another act of leaders of successful and profitable small businesses, the Fast 50 company executives said.

    To help him make the transition from a consultant to a CEO, Alfredo Casta joined a local chapter of Vistage International Inc., a company that facilitates monthly meetings of CEOs in different locations around the world. The executives advise their peers, share opinions and advice on business plans, talk about challenges they have faced and present solutions to problems.

    Being a member of Vistage "pays off, because it gives CEOs an opportunity to share experiences and bounce ideas off other CEOs on how to run a business," said Casta, who still attends meetings.

    Small companies also should solicit the advice of larger government contractors, whether informally or through the Small Business Administration's Mentor-Protégé program.

    Sage of e-Management started such a relationship with systems integrator Stanley Inc. of Arlington, Va., and later formalized it through SBA.

    She and her executive team talk with Stanley about business development and corporate issues. Stanley also is helping e-Management get a Defense Department facility security clearance, which will help the company move into the defense arena, she said.

    The relationship has "helped us in terms of understanding how to avoid land mines that we otherwise had not been aware of," Sage said.

    Staff Writer Roseanne Gerin can be reached at rgerin@postnewsweektech.com.

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