Helping Small Businesses Score Points

SUSAN BOWLES; St. Petersburg Times; Jun 17, 2002 ; pg. 8.E;

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For Tim Engel and Tim Pappas, starting a business was easy.

But running one? That was a challenge.

Employees didn't show up. The price of butter spiked - a major problem because their company, Working Cow Inc., makes and distributes ice cream under its own label, and ice cream is made with butterfat.

The company's freezer broke that first December, forcing the two to choose between a new freezer or family Christmas gifts. And neither man knew when he would start collecting a paycheck.

"We gave up a lot," says Pappas, Working Cow's president. "We sacrificed our lives, our families to make it work."

Pappas and Engel might take comfort in knowing they're not alone. Starting and growing a business is rife with surprises and pain, says Ron Caffrey, vice chairman of the Suncoast/Pinellas chapter of the Service Corps of Retired Executives, or SCORE. Chief among them:

Undercapitalization.
Few customers.
Loss of focus.

Caffrey should know. The more than 35 counselors in his SCORE chapter work with about 70 budding entrepreneurs and established small-business owners each month. Nationally, the organization has provided free assistance to more than 4-million established and would-be entrepreneurs over the years.

Here is a look at the birthing and growing pains of three local companies, and at the gray-haired wisdom that SCORE's veterans of the business wars were able to offer them:

Working Cow:

Charting a path

The leap from beer to ice cream may sound like a long one, but that's not the way Tim Engel sees it.

Microbreweries were gaining popularity in the early 1990s, and Engel, a vice president of GTE Mobilnet in Southern California , was looking for a business idea and a way to Florida . Microbreweries sounded interesting, he says, but "I'm not a drinker."

Then Engel heard about an ice cream company in Clearwater that was for sale. "I thought, I like ice cream, and I know how to make it," he says. "It seemed like a good fit for me."

Engel purchased the business, founding Working Cow Inc. in 1995. Pappas joined a short time later.

It wasn't long before the surprises began. Not only did the price of butterfat spike, so did the price of fuel, cutting into pencil- thin margins. In addition, Pappas and Engel were faced with the cold reality of a cyclical business: Orders from ice cream parlors plunged in the winter, even in sunny Florida , affecting sales and cash flow.

"It's pretty bleak," says Engel, Working Cow's chief executive. "I thought, we really have a challenge."

Focus was a challenge, too. Engel had purchased Working Cow with his own money and a vision. But without a formal business plan, the business was rudderless. When the two Tims bought an ice cream parlor, Engel's wife called SCORE.

"She said, 'You guys are all over the place. You're trying to do everything at once,' " Engel recalls. "These guys at SCORE had done it before and made it. That's what we wanted."

SCORE teamed Engel, 60, and Pappas, 37, with Bill Keegan, a longtime retailing executive and former vice president of sales for Revlon. The 81-year-old Keegan's first piece of advice was as crucial as his wording was outdated: "Get an office girl in here." With some administrative help, Engel and Pappas could concentrate on running and growing the business.

Keegan counseled Working Cow for seven years. He recently left SCORE to join the company as a full-time consultant.

"They husband every dollar," he says of Engel and Pappas. "They don't spend a dollar if they don't need to."

They're also loath to borrow. Engel financed Working Cow with $30,000 of his own money, and the company hasn't looked for outside investors. The philosophy, Pappas says: Entrepreneurs make their own money go further compared with outside money that's "freely given, freely spent."

Today, Working Cow employs 20 people and distributes its ice cream to retailers, restaurants and assisted-living facilities throughout Florida . Revenues have grown from $700 a week in 1995 to $50,000 a week. The company anticipates sales of $2.5-million this year and $3-million next, Keegan says, reading from, yes, a formal business plan. Working Cow also is profitable, the trio says, declining to give specific numbers.

Engel and Pappas share the traits common to most successful entrepreneurs, Keegan says: They're energetic, take pride in their business and work hard.

"It's pride," agrees Engel, pointing out the many taste tests Working Cow ice cream has won. "These are the things we work for. Money is a result."

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