By Cheryl Hall
The Dallas Morning News
IDEAS AT WORK
1996 was another banner year for the Grand Idea.
People from all walks got off their duffs to pursue that gnawing thought or mental lightning bolt.
Couch-potato remorse of "I coulda done that" ran rampant among those of us who didn't.
Mark Gonzalez, a former DNA scientist, put a new face - and a major league license - on the generations-old, study-hall game of paper football, and is selling his "FlickBall" to retailers and corporate marketers.
Charles Ligon, a 30-year-old real estate appraiser, loaded Mapsco data on a CD-ROM to create highly detailed maps and marketing info with the press of a computer key.
Denie Schach, a 46-year-old beautician from Azle, whose ankles and wrists are giving out after 25 years on her feet, rode the wave of up-dos, selling millions of Hairdinis, a foam-and-wire gizmo that makes the French twist a snap. Thanks to Evita and a bun-sleek Madonna, Ms. Schach is closing out the year on an upswing.
But 1996 was also a year when many area entrepreneurs became more than one-hit wonders.
They found strength in numbers, adding siblings to their original brainchildren or staffing up ahead of growth to take advantage of opportunity when it knocked.
Their companies became For Real.
It's one thing to double sales one year over the next but quite another to create the sustainable energy needed to fuel several consecutive years of incremental growth.
Making the first million in sales, many successful entrepreneurs will tell you, may be the easy part.
Dallas has an amazing For Real role model in Southwest Airlines, which started on a wing and a prayer outlined on a slightly used cocktail napkin. It celebrated its 25th anniversary this year by adding its 50th destination, its 24,081st employee and an analyst-estimated $3 billionth dollar in revenue.
Most will never become household names like Southwest, but D-FW's abundance of businesses that have carved out mainstay niches is remarkable and the life-blood of this column.
Companies that turned brainstorms into staying power are as diverse as a mom-turned- manufacturer of kiddie props, a $100 million paper shuffler and a puveyor of nickle-and-dime widgets who did nearly a half-billion-dollars in sales this year.
Gail Frankel, who invented a stroller attachment to hold cups, purses and shopping bags a decade ago, now offers 25 kid- and parent-friendly products. She pulled in more than $3 million in 1996, three times what she did only a couple of years back.
With a slew of new products joining her existing line at Target, Toys 'R' Us and other retail outlets, Mrs. Frankel expects a 25 percent hike in Kel-Gar Inc. revenue in 1997. Not bad for a former teacher and mother of two.
Twenty-five years ago, Paul Andrews was a 28-year-old, laid-off General Dynamics parts buyer trying to make ends meet by brokering a few deals out of his home.
Today, he hawks billions and billions of electronic components that cost about 7 cents apiece to the tune of about $440 million in 1996. His private company, Fort Worth-based TTI, is the largest distributor of capacitors and resistors - brainless chips on circuit boards that run everything from mainframe computers to digital-readout bathroom scales.
He intends to double again by the year 2001 by providing just-in-time delivery to mega-customers like Richardson-based Alcatel. All he thinks about are these cheap electronic pieces - so his customers don't have to.
So far, Mr. Andrews' strategy has paid off, with sales growth of 30 percent for the past five years and pretax profits that are about twice the industry norm.
"We don't have anything here that's proprietary. There's absolutely nothing we sell that people can't get someplace else," he says."In a nutshell, we don't try to be everything to everybody. We just try to be world class in our little arena and do it better than anybody else."
The paper chase is going along nicely at Dallas-based Precept Inc., the nation's largest forms distributor.
Precept is the Wal-Mart of business forms, batching similar orders from different clients to get mega-quantity discounts from printers and form manufacturers.
CEO David Neely has another $65 million in acquisitions cooking as he continues to gobble up his forms-distribution brethren. If a few of those deals come through, he expects to sell $175 million in business forms, labels, computer supplies and advertising specialty products in fiscal 1997 - having started out with $55,000 in seed money eight years ago.
Impressive enough, he feels, to turn heads on Wall Street, where he wants to have Precept stock trading in the next six to nine months.
"In the past, we'd make a few million, and then go spend it buying a company in California or somewhere else," the 51-year-old Precept chairman says."We can grow a great deal faster if we have public currency to make that happen.
" It's been a busy few months, as the company tries to get its initial public offering set up.
"While we're doing this, we're trying to maintain an internal rate of growth of 20 percent and keep looking at acquisitions," Mr. Neely says."You can't let that pipeline go dead."
Fort Worth's Charles Moore, creator of Lemon Chill and other Chill flavors, found redemption in his frozen-fruit concoctions sold in nearly 100 theme parks, zoos and stadiums around the country, including Six Flags and the Ballpark in Arlington, as well as grocery and convenience stores.
He knows the firsthand pain of letting the Grand Idea get away.
Back in the '70s, he crunched up Oreos into homemade vanilla for his specialty ice cream stores to rave reviews and out-the-door lines. But he never took the sweet sensation further than that.
Every time he sees a half-gallon of Blue Bell Cookies 'n Cream, he kicks himself.
"I had inner blockages that prevented me from saying, 'I'd like to take this as far as I can go with it,'V" says Mr. Moore, who doesn't exactly thrive on taking risks.
He's motivated by the dread of seeing someone else cash in on his failure to act."Then you have to say, 'Dad gum, why didn't I do it? Why didn't I take a chance?' I don't ever want to feel that again. That's even more painful than taking the chance and not making it."
Grounding youthful entrepreneurial zest in solid, realistic organization is crucial for companies that want to be around five years from now.
Just ask Bradley Schlachter and Marc Andres.
This time last year, the thirty-something entrepreneurs and childhood chums figured they held a lay-down hand that would land them on Easy Street.
They'd quietly amassed licenses with the national football, basketball and hockey leagues, and a 100 major colleges for computer-related products. Their final card, an agreement with Major League Baseball, was about to be put into place.
The five members of the Team Mouse Products team tripped over each other in cramped offices as they scurried to fulfill an initial half-million-dollar order from retailing giant CompUSA for sporty mouse pads, monitor memo frames and wrist pads.
Today, 23 employees amble around 20,000 square feet of headquarters and warehouse space near Bachman Lake, where a growing line of office paraphernalia is shipped to customers from coast to coast.
From the look of newfound prosperity at Team Mouse, 1996 turned out pretty much as planned.
But Mr. Schlachter and Mr. Andres will attest to the fact that appearances deceive.
Happy headquarters hubbub these days gives no clue to months of angst created by a big-league problem.
"Our first customer was CompUSA," explains Mr. Schlachter."Looking back, that's probably the best thing - and the worst - that can happen to an embryonic company. It's very hard to work out your kinks on your largest customer."
By making a simple misstep - putting game schedules on the monitor frames - the partners nearly forfeited their game.
After the Super Bowl, the Dallas-based computer superstore chain wanted to ship back the dated merchandise that didn't sell. And it wouldn't pay for the stuff that did sell until the issue was resolved.
Talk about your serious crimp in cash flow.
"Our first order was for $500,000," says Mr. Schlachter,"so we thought, 'We've got $6 million with Comp alone.' Well, it wasn't that easy. Someone once told me that, no matter what, business will make you earn every penny. We have."
The saving grace was the product itself. CompUSA really liked the mouse pads that looked like the playing fields, courts or rinks with the logos of America's teams. And the leagues stuck with the fledgling Dallas company.
A deal was worked out to swap out-of-date stuff with fresh merchandise, and Team Mouse is ending the year with a bang.
Even with the four-month hiatus that pretty well killed Team Mouse's Christmas stock-up sales, the company did about $2 million in 1996, with projections of $7 million to $9 million for next.
November sales weighed in with $400,000, and December is coming in at close to that. A stack of new orders await computer entry, and each day's FedEx brings another $1,500 in Spiegel catalog sales.
A wallsize dry-erase board in Team Mouse command center shows the status of major accounts. Another lists the stadium shops around the country. A green check means they're in, red they're not.
The past five months, 80 have gone from red to green.
Although CompUSA still looms large in their hearts, the boys for all seasons are building a wider customer base that doesn't rely so heavily on one big retailer.
Their goal is to reach $20 million in sales by 2000 and then go public.
And they've added some big-ticket talent to help take them there, including a chief financial officer, CPA and a sales manager with a sales force under him.
"Every person we've talked with who's grown a company says the biggest mistake you can make is not hiring early enough," says Mr. Andres."If you think you can do it without hiring people, you'll get killed."
Several years ago, in the height of re-engineering fervor, Richard Gussoni's concept of"right-sizing" was really alien. The food executive espoused growing profits by adding people.
The CEO of Culinaire International still has arguments with his managers watching their corporate purse strings about the value of hiring staff before they are needed and stockpiling them as assets to be deployed as soon as good fortune presents itself.
The"people" version of ready cash.
"It's somewhat contrary to what people have heard at other companies," Mr. Gussoni says."There are plenty of opportunities out there, but you have to be ready to take advantage of them."
This philosophy has helped turn a $3 million catering business into a $40 million food provider to convention centers, hotels and corporations in just three years.
Want to feed 45,000 Mary Kay conventioneers in waves of 11,500? No problem. At the last wearing of the Pink in Dallas, Mr. Gussoni's company served up 150,000 sit-down meals.
When Home Interiors & Gifts celebrates its 40th anniversary with a black-tie fete in January, Culinaire International will dish down another 11,500 full-course dinners.
At the same time, he has deals in the wings that could make his privately held company the food and beverage operation of up to 50 more hotels. He can handle such quantum growth, Mr. Gussoni says, because he's stayed ahead of the growth with trained staff.
His management core of a few handful that he had when he left the Dallas Market Center to go it alone in 1993 has blossomed to about 100. The company boasts 1,200 permanent employees and will process 3,000 W-2 forms this year.
He'll be disappointed if he doesn't add 50 percent more business in 1997."If we don't do $20 million in additional revenue, we will have done something real bad, because we have a lot on our books."
When Tim Clott took over Lyrick Studios last year, some people thought he'd taken over a role in Mission Impossible.
His goal was to expand the home of Barney into a multifaceted production house that would give real meaning to the idea of Dallas as the"Third Coast."
A year later, and the 49-year-old former Paramount Pictures exec is feeling pretty good.
A spotted Jack Russell terrier named Wishbone has become a children's TV favorite, and the gentle purple dinosaur is enjoying resurgent popularity among the world's toddling set.
Although the Lyrick chief won't discuss actual numbers for the privately held company, Mr. Clott will say revenue is up 30 percent to 35 percent. That would place annual sales in the $26 million range, according to industry estimates.
"The numbers are pretty phenomenal," Mr. Clott will allow."We've had a 900 percent increase in net profit on Barney. I'm smiling."
Barney's 20-city stage show, which received rave reviews from tough-callers like the Los Angeles Times, has been extended into a two-year concert tour of 60 cities. The dinosaur invasion will spend two weeks next month at New York's Radio City Music Hall.
Lyrick has signed a three-year commitment with the Studios at Las Colinas to produce another 60 episodes of Barney & Friends and a minimum of 15 videos for retail sale. It will renew shooting Wishbone episodes at its Plano facility and Allen backlot in March - including a prime-time one-hour special, The Legend of Sleepy Hollow, to be aired on PBS for Halloween.
Francesco's Friendly World, an animated program designed for kids ages 4 to 9, is being kicked off with two one-hour specials to be broadcast on the Family Channel next year.
Business is so good that Lyrick's long-range thinking includes building a corporate production campus."That will take a long time to build," says Mr. Clott,"and we have urgent product needs right now. But on a five-year horizon, that's part of our dream."
1993 was the Elvis Year, when Lyrick (then called the Lyons Group) pulled in an estimated $50 million in Barney royalties and revenue. Purple and green was everywhere.
Barney bashing nearly killed the company the next year, and 1995 became the year of the comeback.
Having barely survived one bout with understaffed explosive growth, Lyrick is another company trying to hire ahead of need, with Mr. Clott expecting to add 30 people next year to its permanent staff of 175. When both Barney and Wishbone go under the cameras this spring, Lyrick's contract staff will swell those ranks by another 200.
Barney: The Movie should begin production soon, with PolyGram Filmed Entertainment slated to distribute the first toddler flick in spring 1998.
"No one will deny that this is a marketing challenge to reach a demographic that's never been reached before in a movie," Mr. Clott says of a feature-length film designed for those under 6. He also faces such unusual questions as how to make movie concessions more little-tyke friendly and what to do with all those dirty diapers.
The studio chief hopes for a manageable, but not smash, hit."As we look at Barney as a case history, we were not prepared for success," he says with a laugh."Unless it goes absolutely crazy again, we are prepared now."
Knack for knicks
Don Mechanic may be the only guy in Dallas still focused on Christmas. He's not running behind the calendar, he's a year ahead.
The wholesale knickknack knight is hawking his Christmas 1997 line of Santas, nativities and angels to retailers.
A representative of the Vatican is on the phone, wanting his opinion on which depiction of Jesus would make the best framed reproduction for its gift catalog. The sublime irony isn't lost on the Jewish Mr. Mechanic.
"We're pricing Christmas '97, and we're loaded for bear," he says happily."The line looks great. Hopefully, people did well with our stuff this year and will order more."
The Addison showroom of Don Mechanic Enterprises Inc. is cluttered with breakable gee-gaws from ceiling to floors.
The 47-year-old founder of the now-defunct Zaks retail chain made his comeback from financial ruin by moving down on the arts-and-crafts food chain. Instead of selling to crafty consumers, Mr. Mechanic peddles his wares to such mail-order catalogs as the Treasures of the Vatican Collection and to former competitors like Michael Dupey at MJDesigns.
He's grabbed market share by trekking to China's outback, where he can buy refrigerator magnets really cheap. Never mind that most of the Chinese workers have never seen a refrigerator.
His 1996 panned out just dandy, with sales of about $3 million. Sales for his first quarter of fiscal 1997 climbed 30 percent, with gross profits up nearly 40 percent, he says. He'd like to finish the year at $5 million.
But like others, Mr. Mechanic knows firsthand the dangers of explosive growth and says he's trying to take things slower this time."If I had the opportunity to do $20 million and make no money, well I've done that with Zaks," he says."I'm trying to hold it to where it's still fun, I make money, but don't kill myself.
"I'm sorta talking to myself here. I have a tendency to go for it, so I'm watching out for the black holes."
May your 1997 be filled with sure footings and good vibrations.
Cheryl Hall is the Financial Editor and columnist of The Dallas Morning News. Ideas at Work is intended as a forum for ideas and opinions of interest. Have one to share? Write to her at P.O. Box 655237, Dallas, Texas 75265.
PHOTO(S): 1. (The Dallas Morning News: Natalie Caudill) Charles Moore, owner of Lemon Chill & Moore Inc. of Fort Worth, cools down at the Ballpark in Arlington last summer with a sample of his frozen concoction. 2. (The Dallas Morning News: Beatriz Terrazas) Paul Andrews, CEO of primary owner of Fort Worth-based TTI, holds some of the nickle-and-dime electronic parts that he sells by the billions. At left is Arthur Andersen consultant Steven Player and at right is TTI vice president Craig Conrad. 3. (The Dallas Morning News: Carol T. Powers) Richard Gussoni is feeding the masses as president and CEO of Culinaire International, which now generates $40 million a year in revenue. Mr. Gussone has a trick to catering meals for large conventions -- hire people before you need them. 4. (The Dallas Morning News: John F. Rhodes) Brad Schclachter (left) and Marc Andres, the owners of a sports licensing company called Team Mouse, are ending the year with a bang after a few whimpers along the way. 5. (The Dallas Morning News:Richard Michael Pruitt) Tim Clott, CEO of Lyrick Studios, is proving detractors wrong with the continued popularity of Barney and Wishbone. 6. (The Dallas Morning News: Ariane Kadoch) Left: Wholesaler Don Mechanic, a purveyor of knickknacks, already is thinking about next year's Christmas. 7. (The Dallas Morning News: Natalie Caudill) Denie Schach, the inventor of the Hairdini, expects to sweep up if Evita inspires a trend toward glamourous hairstyles.
Reprinted with permission of The Dallas Morning News.