Small biz optimistic for 2006


(Link to Article)

Lisa van der Pool, Journal Staff
From the December 30, 2005 print edition

A majority of small- and midsize-business owners expect to thrive in 2006, according to a national Web-based survey, and many local entrepreneurs agree.

Software firm Avalara Solutions Inc., of Bainbridge Island, Wash., queried 12,000 businesses across the United States about their performance this year and expectations for the new year. Nearly 85 percent of respondents said that their businesses fared better in 2005 then in 2004, and the same percentage expected their businesses to improve in 2006. Companies were also optimistic about the U.S. economy, with 72 percent saying it will improve in 2006 over 2005.

A sprinkling of local small businesses echoed the survey's results by putting a positive spin on expectations for the year to come, pointing to -- among other factors -- a healthy local economy and robust consumer spending. Some, however, were circumspect about factors in the local and U.S. economies that might hinder success, including a dent in the housing market and the after-effects of Hurricane Katrina.

"The diversity of small business is so great that it's hard to generalize in Massachusetts," said Stephen Adams, regional advocate for New England at the U.S. Office of Advocacy, a unit of the Small Business Administration in Boston. "There's a mixed message from forecasters, but the small businesses tend to be more nimble and more able to respond to market changes, so it's not surprising that they would have a positive outlook for 2006, even with interest rates rising."

Here's an assortment of small businesses that talk about the year they've have and what they expect for 2006.

U.S. Wealth Management
After a year spent evolving, John Napolitano, CEO of U.S. Wealth Management in Braintree, expects to reap the rewards of change in 2006. "I think it's going to be a fantastic year for us," said Napolitano. U.S. Wealth Management targets CPAs and law firms looking to expand services into the wealth management business, although the company used to focus exclusively on the CPA market. "Within the last year we've broadened our market," said Napolitano. This year the company also inked a deal with its new joint venture partner Ash Brokerage in Fort Wayne, Ind. Because of the changes, Napolitano sees 2006 as an opportunity to improve significantly over the 40 percent growth and foresees adding 10 people to his 20-person staff in 2006.

Direct Tire & Auto
Known for his radio ads extolling the virtues of maintaining a smooth-running ride, Barry Steinberg, founder, president and CEO of Direct Tire & Auto Service in Watertown, is upbeat about 2006 for his company and New England in general. "There's a lot of pent-up spending and employment in this market is good," said Steinberg, 60, who started his business in 1974. "I think we're going to have a sensational year." His strategy for success is to be more aggressive in marketing; he also plans to open a fifth location. Steinberg said 2005 was a good year with $15 million in sales and about 7 percent growth.

Humboldt Storage & Moving
CEO Howard Goldman's feelings about Humboldt Storage & Moving's upcoming year can be summed up in one word: mixed. "We're driven by home sales and homes may drop off -- on the other hand I think the economy is in really good shape," said Goldman, 46. "Overall, we're predicting an increase in revenue that probably won't be as great as last year's." Goldman spent the better part of 2005 beefing up the GPS navigation systems for his team of 30 drivers and giving each a BlackBerry. "We can e-mail them instead of call -- it gives us instantaneous communication," said Goldman. Humboldt, which has 75 staffers in addition to its drivers, will close out its year 15 percent up with about $14 million in revenue.

Construction Recruiters
Colm Allen, founder and president of Construction Recruiters, will begin the sixth year of his Boston-based company fully aware of a few stumbling blocks. "Some of the danger signs we're seeing is the possibility of inflation raising its ugly head, and materials are markedly higher than they were last year." Allen also noted that although the rebuilding of New Orleans has yet to have an impact on New England, materials management, labor and transportation will be at a premium once the Gulf Coast starts to rebuild. Still, with 30 percent growth in 2005 over 2004, Allen, 56, is optimistic about his 12-person firm: "The odds are everything will be all right."

Boathouse Group Inc.
Boathouse Group Inc. founder and partner John Connors capped off 2005 by giving each of his 54 employees a new $1,400 LeMond bicycle. It was a good year marked by 40 percent growth and $70 million in billings for the Waltham-based advertising agency, according to Connors, and he predicts more success in 2006. "It's a good market to be a strong creative independent shop," said Connors, 38, who founded his agency in 2001 and is the son of Jack Connors, chairman of Interpublic Group of Cos.' Hill, Holliday, Connors, Cosmopulos in Boston. "The nature of this market now is there's more small to midsize clients and they like working with small to midsize agencies," he said.

Looking ahead, Connors plans to diversify his agency's offerings to include deeper interactive expertise. "We will keep focusing on the quality of the creative product and keep expanding beyond the definition of advertising," said Connors. "The Internet is much more of a mass media vehicle now, so we have to make sure we bring that along."

S2 Security Corp.
CEO John Moss pegs 2006 as the year his 3-year-old startup S2 Security Corp. in Wellesley will take off its training wheels. "In 2005 we managed the burn rate, but our real goal was to build a functioning company," said Moss, 50. "This year we want to take the functioning company and make it stand on its own." With a healthy product pipeline of its security management system S2 NetBox, Moss predicts next year will be its first ever cash-flow positive year. In 2005, which marked NetBox' debut, S2 Security sold 500 units, doubled its 18-person staff and opened sales offices in Santa Cruz, Calif., and London.

Genomic Profiling Systems Inc.
Detecting microbes, such as anthrax in the blood or microscopic contaminants in drugs, is Genomic Profiling Systems Inc.'s specialty. Building on its progress in 2005, the Bedford-based 24-person company is readying the launch of its first product next year, Growth Direct test, a rapid microbe detection device designed for pharmaceutical companies. "2006 will be a very exciting year for us," said Bob Linke, 46, president and CEO of Genomic. In 2006, the company plans to market its new product and will seek funding during the second quarter of 2006.

LISA VAN DER POOL can be reached at lvanderpool@bizjournals.com.