THIS WEEK'S ISSUE
9/8/2007 7:00:00 AM
Dynamic Des Moines dozen make the Inc. 5,000
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| Chuck Kuba, owner of Iowa Diamond, says it was doing things differently
that allowed his company’s sales to increase by 51 percent in the last four years. Photos by Duane Tinkey |
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BY JOE GARDYASZ
Senior Staff Writer
Chuck Kuba doesn't sell diamond rings the way most jewelers do.
Rather than setting up shop in a high-traffic mall, Kuba located Iowa Diamond on the 13th floor of a downtown high-rise. Instead of displaying engagement rings in brilliantly illuminated cases, Iowa Diamond presents loose diamonds one by one to customers under the same "colorless" light conditions that professional buyers use.
It was doing things differently, Kuba says, that enabled Iowa Diamond's sales to increase by 51 percent over the past four years and earn a place among the 5,000 fastest-growing private companies in the United States.
Iowa Diamond is one of 12 Greater Des Moines-based businesses on the new Inc. 5,000 list, which the magazine unveiled on Aug. 23. The Central Iowa companies represent one-third of the 36 Iowa-based businesses included on the expanded list. Two other Iowa companies, Renewable Energy Group of Ralston and Environmental Lubricants Manufacturing of Plainfield, made the top 500 list this year, at 200 and 470, respectively.
The Central Iowa companies on the Inc. 5,000 include some familiar business-to-business enterprises, among them GeoLearning Inc., LightEdge Solutions Inc., Alliance Technologies Inc. and Spindustry Interactive Inc. The 12 companies represent a diverse mix from 10 industries, from real estate and construction to information technology services to retail, health and human resources.
The highest-ranked local company, Waukee-based MortgageHub, in-creased its revenues by 491 percent between 2003 and 2006. The company specializes in software for the mortgage lending industry. The second-fastest-growing private company in Greater Des Moines, Betterherbs Inc., grew its Web-based sales of nutritional supplements and foods by 179 percent between 2003 and 2006, and in February opened its first retail store in Altoona.
Compiling information to rank 5,000 private companies took a 70-member project team, plus many of the magazine's regular staff, a year to complete, said Inc.'s Jim Melloan, who managed the project.
"The Inc. 5,000 provides the most comprehensive look ever at the most important part of the economy - the entrepreneurial part," he said. The 1,046 Midwest-based companies represented the most from any region.
Many of the Iowa companies, though just a few years old, have already reached prominent status in their industries.
Packaged solutions
In 1999, Bill Adamowski assembled a team of technology experts to launch MortgageHub, whose software was the first to bring online transactions to the mortgage industry.
"The reason all lenders are interested in our products is because we are on the cutting edge of technology," Adamowski said. After several years of rapid growth, the company in 2006 entered into a strategic partnership with India-based ISGN Technologies Ltd., which subsequently acquired Fair Isaac Corp.'s mortgage banking division and Dynatek, a leading mid-market mortage software provider. MortgageHub now has access to more than 400 clients, including most of the top 50 U.S. lenders.
"We are now the most recognized software provider in the mortgage industry, spanning every segment of the market," Adamowski said. "We have had an exciting three years, and we are already planning on how we will make the Inc. 500 list next year."
Web pioneer
Technology has also been a critical part of Betterherbs' business. Mike Velez, founder of the company, said his business was a pioneer when it began selling over the Internet 13 years ago.
"We were one of the first functioning e-commerce sites out there," said Velez, who said he operated a number of successful ventures, among them restaurants and a trucking company, before launching Betterherbs. "So we had a good foothold of being in the right place at the right time. I had the vision of building this into a huge business, and it's come to pass."
Velez estimates that his regular online customer base numbers between 80,000 and 100,000 people, many of whom have purchased from his company for more than 10 years. "We're approaching $3 million a year in sales on the Web, and we'll probably exceed that next year by a pretty dramatic figure, actually," he said.
The family-owned business has been built on service, Velez said, which includes fielding customer calls seven days a week from 8 a.m. to 10 p.m. "We really take a lot of pride in what we do," he said. "We realize the reason people are buying these products is they need some help. We're helping people get well, feel well and change their lives."
Betterherbs opened a small bricks-and-mortar retail outlet in Altoona six months ago, also open seven days a week, which Velez plans to expand and use as a model for several more stores within the next five years. "We've been steadily increasing sales by $2,000 to $3,000 a month, which is a good, steady growth," he said. "Our biggest pitfall here is just getting people to know we're here. But it's just like a good restaurant; if you know it's there, you'll go find it."
Single-product focus
Similarly, becoming a destination and a having a reputation for good service are hallmarks of Iowa Diamond, Kuba said.
"We don't take our eye off the ball," he said, noting that the business specializes exclusively in engagement rings and bridal jewelry. "By having one store and sticking with essentially one product, it's allowed us to rifle-shot that market, and not get distracted," he said. "So we can carry 1,200 different engagement ring styles, because we're not carrying anything else."
Kuba estimates that leasing upper-floor office space rather than a regular retail location saved his company more than $200,000 last year. Rings are brought out to the customers in a relaxed, informal atmosphere.
"The main thing is how we treat engagement-ring couples," Kuba said. "Any couple who comes in here probably knows five couples who are thinking of getting engaged. So a lot of our growth also has to do with word-of-mouth."
The jewelry business runs in Kuba's family. His grandfather and father were both jewelers, and his sister and her husband opened Nebraska Diamond in 1980. "I was the late bloomer," said Kuba, who opened Iowa Diamond in January 2000 after a career in public relations in the performing arts industry, including stints with the Florida Philharmonic Orchestra and the Dallas Opera.
"So by the time I got to this business, I already had a business model of what I had to do, then I learned a specific product," said Kuba. Last week, he was getting ready to leave for a weekend conference in Chicago held by Inc. for the 5,000 companies.
"I'm interested in asking other business owners about how they got started," he said. "I suspect a lot of them learned business first, rather than being good at something and deciding to start a business."
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