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Thursday, Jun 1, 2023

Quiet Companies Soar Under Radar

A look through the San Fernando Valley Business Journal’s list of Fastest Growing Private Companies shows that growth is not exclusive to high profile companies operating in well-known industries. The ten companies with the highest growth rates work in disparate industries from computer systems integration to toy manufacturing, retail flooring and this being Los Angeles spas. The companies on this year’s list have found ways to outshine competitors, develop completely new products and some could end up reshaping their business sectors. Infospectrum Inc., which holds the top spot on this year’s list, got hit like the rest of the country’s tech businesses during the dot com crash. In 2001, the company made a key strategic decision faced with the need to control costs and built an offshore team in India. Now, employees in Agoura Hills handle the company’s sales and customer relations, but 80 percent of its 160-person workforce is now based in India. While the job exports have been a bone of contention at all levels of government, and were even a point of debate during last year’s federal elections, the move has prompted a 216 percent growth rate at Infospectrum. The company has found a winning formula working for defense firms that have computer systems that have a hard time communicating with each other. Infopsectrum’s ability to improve the communication between different systems has made it possible to land heavyweight clients like Northrop Grumman and Nortel Networks. Red Peacock International, among the top fastest-growing companies on this year’s list, also had to find a way to succeed in an industry populated by much bigger companies. The consumer electronics distributor delivers to independent retailers, but had to find a way to lower prices for its clients who were being undercut by companies like Best Buy and Circuit City. In order to help its customers lower their prices, Red Peacock found a company that was willing to work on a smaller margin, and cut its own margin. As a result, Red Peacock sustained a growth rate of over 1,500 percent in a five-year cycle ending in 2003. This year, it reported a 151.9 percent increase in revenue over the previous year. In fact, Red Peacock has managed to gross over $27 million with only nine employees. Not all of the businesses making appearances on this year’s list are high tech or new economy businesses. Altour/Classic Cruise & Travel managed to post revenues of $22 million in 2004, a 10 percent increase over the previous year. Penny Entin and her partner Susan Reder founded Classic Cruise & Travel in 1989 after meeting on a bus in Egypt. Their business focused on cruises at first, but eventually the two found investment partners and opened a full-service travel agency. After a year in business, they bought out their partners. About seven years ago, Altour International purchased a 50 percent stake in the business. “Even though we’re a full service company, we do specialize in leisure, and in the last couple of years we’ve been specializing more in luxury travel packages,” said Entin. Using the Internet When travel Web sites began to spring up, threatening to turn traditional travel agencies into anachronisms, Entin and Reder developed their own Internet presence. “We have a wonderful Web site, we hired a webmaster a couple of years ago,” said Entin. “I would say that probably over 50 percent of our new business has been because of the Web site.” The company’s business continues to grow, Entin said, also because of its attention to customers needs. Plenty of people still prefer dealing with agents who have personal knowledge of the different tours and destinations that a company sells, something that is hard to replicate with a travel Web site. “It’s what motivational speakers call the “wow” factor,” Entin said. “We go a little bit further to show our customers that we really are better, that we pay a littler more attention than other companies.” The Allen Lund Company, one of the largest on the list with over $206 million in revenues, has spent the last 30 years building a reputation in Los Angeles and throughout the rest of the country. The company is a third-party transportation broker, which means that when a farmer needs a fast strawberry delivery or a manufacturer needs to get its product to New York, they call the Allen Lund Company to handle the delivery. Since the economy started to improve a few years ago, the company has seen its revenue grow by about 15 or 20 percent every year, said David Lund, vice president of sales and operations. “We’ve been hiring new people, we’ve been going into new markets and we’ve also benefited from a very good economy where manufacturers are shipping more and people are buying more,” said Lund. This year, the company opened it first office to focus strictly on international sales, adding another service to the company’s growing list of clients. The Allen Lund company has been careful to control its expansion, opening offices as they seen new demand. Started almost 30 years ago by Allen and Kathleen Lund, the business was located across from the Los Angeles Produce Market before it moved to its La Canada Flintridge headquarters. Business grew steadily, but it’s exploded over the last several years. The company reached the $100 million mark in 1998, and by 2004 it had doubled its business. One of the newer companies on this year’s list, Michael Cope’s Amigo’s Flooring Monster has earned its name in the retail flooring world. Cope worked installing flooring throughout Los Angeles, and decided that most stores were missing an opportunity with 1,500 or 2,000 square-foot stores. His idea was to open much larger stores and buy product direct from manufacturers in order to offer better prices. In 2001 he opened his first location in North Hollywood, and said he has doubled his business every year. Like many business owners in this year’s report, Cope spent everything he had and then some to get his business off the ground. “I borrowed $60,000 from a relative, and he got paid back very quickly, he made a nice profit,” Cope said. “My partner who invested money also got a huge return on his investment.” Amigo’s locations range from 10,000 square feet to 30,000 square feet, and later this month the company will open its seventh store in Rancho Cucamonga. Cope said that business has doubled every year, a pattern he expects to continue.

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