Full Speed Ahead

Three small businesses that bucked the recession

Hardware assembly technician Freddy Abregon puts together lithium battery packs at K2 Energy in Henderson on Friday, Dec. 16, 2011.

For many small businesses in Las Vegas, the past few years have been like facing a typhoon in a rowboat.

Business after business failed or scaled back as the recession hammered the city, leaving even the biggest employers suffering heavy losses.

But amid the turmoil were small, privately held businesses that not only survived, but thrived — proving that not even the worst economy in nearly a century could snuff out the entrepreneurial spirit in Las Vegas.

This week, VEGAS INC looks at three small businesses — MonetizeDigital.com, K2 Energy Solutions and A&D Designs — that have grown despite the recession.

The businesses don’t offer much in common on the surface, besides being located in the Las Vegas Valley. MonetizeDigital.com, formerly known as CPAlead, is a digital advertising firm; K2 Energy Solutions makes rechargeable batteries, and A&D Designs is a printing and design company.

MonetizeDigital.com and K2 were listed by Inc Magazine among the 500 fastest-growing small businesses in the nation, and A&D Designs is a mom-and-pop that has put down roots and is expanding.

With Las Vegas on what appears to be a long road to recovery, understanding the three businesses’ success stories could be helpful to other small-business operators trying to steer their way through tough times.

Power company

K2, based in Henderson, was formed by six entrepreneurs — including three brothers — who set out to make a better rechargeable battery.

K2 Energy

Mark Stoker, business development director at K2 Energy in Henderson on Friday, Dec. 16, 2011. Launch slideshow »

K2 Energy Solutions

Address: 1125 American Pacific Drive, Henderson

Industry: Rechargeable batteries

Founded: 2006

Inc. 500 rank: 79

Employees: 110

2007 revenue: $178,943

2010 revenue: $5.5 million

The company started six years ago with four employees and now has 110, with more than 70 in Henderson and the remainder in China.

K2 contracts with a manufacturer in China that makes battery cells that are assembled into various configurations at the Henderson plant for use in such products as portable medical carts, power packs for electronic equipment used by outdoors enthusiasts, and booms of utility trucks.

The core of the company is its lithium iron phosphate technology, which produces batteries that are lighter and longer-lasting than traditional lead acid batteries, like the ones found in most cars.

K2’s batteries aren’t cheap. But the company’s founders say their products hold charges longer than other rechargeable batteries and are safer than lithium ion batteries that power a great deal of electronic equipment. Those batteries can ignite if overcharged.

Mark Stoker, one of K2’s founding partners, said a foundation of the company’s success was deciding when to risk investment on research and development. Such was the case in 2007, when the company developed and began supplying power sources for Wyoming-based Brunton Outdoor equipment.

“What it did was it showed our capabilities,” Stoker said. “We had a company that was willing to take a chance on us, and we came through.”

Stoker said that besides helping K2 stretch its potential, the relationship helped boost the company’s reputation due to Brunton’s status as a high-end supplier of products for outdoor enthusiasts — including GPS equipment and weather instruments.

Among the reasons K2’s founders were attracted to Las Vegas was the city’s well-established gaming-driven electronics industry, which offered partnership opportunities and helped make the city attractive to electronics engineers and technicians. It didn’t hurt that Nevada is home to commercial lithium mining, either.

“This is a really good place to make lithium batteries,” he said.

Stoker also credits K2’s growth to conservative business principles. The partners have kept overhead costs low and taken a cautious but steady approach to expanding.

It’s paid off with the company becoming profitable in 2011 and revenue growing from $179,000 in 2007 to well over $10 million last year. In the process, K2 was named the Technology Business Alliance of Nevada’s Green Tech Company of the Year.

Online marketing

Click to enlarge photo

"We're creating jobs -- even in this economy -- and that's something I'm really proud of," said Peter Tarr, MonetizeDigital.com's CEO.

MonetizeDigital.com started in 2006 with two questions.

MonetizeDigital.com (formerly CPAlead)

Industry: Online marketing

Inc. 500 rank: 40

Founded: 2006

Address: 6845 S. Escondido St., Las Vegas

Employees: 26

2007 revenue: $740,000

2010 revenue: $35.1 million

One: As an alternative to paying with money, would website visitors be willing to fill out consumer surveys to obtain products or get access to paid content?

Two: Would the information contained in those surveys be of sufficient value that advertisers would pay for it?

The answers were yes and yes, and MonetizeDigital.com has been growing ever since.

The online marketing company, which was launched by a couple of buddies in Madison, Wis., moved to an office park in Las Vegas in 2009 and has grown from 17 to 26 employees in the past year.

The company’s business model works like this: Advertisers pay a fee each time a user interacts with their survey or ad, which acts as payment for the delivery of content to users.

For example, a user would be able to download a piece of music by filling out a survey about his or her buying habits — including personal information in some cases — as opposed to making a cash payment for the file.

After starting with the survey product, the company has expanded to offer two other digital marketing tools — including ads that pop up between web pages, sort of like full-page print ads in magazines — and is nearing completion on a fourth. Its customer base has grown to more than 170,000 from about 15,000 a couple of years ago, and the company is in the process of adding six members to its sales staff.

“We’re creating jobs — even in this economy — and that’s something I’m really proud of,” said Peter Tarr, MonetizeDigital.com’s CEO.

Tarr said the foundation of the company’s growth was its survey tool.

“We were doing something different than anybody else at that time,” Tarr said. “And it really grew at a grass-roots level among people operating websites. What it proved to us was that if the market is crying out for a solution and you’re providing it, you’re going to do well.”

From there, the keys to growth included watching the market carefully and taking a cautious approach to expansion. Although digital marketing is a relatively young field that is evolving quickly — putting pressure on businesses in the industry to introduce new products frequently — Tarr said MonetizeDigital.com made a point of developing adequate support systems before rolling out its products. For example, he said, the company took its time in creating a system and staff to prevent bogus information from being submitted in surveys.

“For us, 2011 was a great year in terms of building infrastructure,” he said. “2012 is the go, go, go year.”

Person-to-person

Tony Ferriera has built A&D Designs on personal connections. He believes in seizing opportunities to meet potential clients, from regularly participating in business and professional organizations to aggressively promoting his business in social media.

Click to enlarge photo

Tony and Dawn Ferriera, owners of A&D Design, have nurtured their business through social media and personal contacts.

A&D Designs

Industry: Design and printing

Inc. 500 rank: 98

Founded: 2010

Address: PO Box 320967, Las Vegas

Employees: Four

Jan./Feb. 2010 revenue: $6,340

Jan./Feb. 2011 revenue: $13,429

“My wife laughs at me when I say this, but I’m serious: Growing a business is like running for president — in Las Vegas, at least. You’ve got to be out there shaking hands, kissing babies, whatever you can do to get business,” Ferriera said.

The approach has helped Ferriera go from mom-and-pop status — his wife, Dawn, is his partner — to adding a designer and a sales staffer during the 18 months the business has operated in Las Vegas. The couple founded A&D Designs in 1998 in California, but revived it after relocating to the valley.

Other keys to the company’s growth, Ferriera said, include keeping prices low and delivery times short. In Las Vegas’ plodding economy, he says, clients appreciate nothing more than efficiency and low costs.

“The biggest thing right now is price,” he said. “Years ago, it was all about quality. Now, price comes before quality. That’s why we pride ourselves on QPS — quality, price and service.”

The Ferrieras came to Vegas after their business, which relied heavily on clients in the real estate industry, fell victim to the collapse of the housing market in California.

“Running a small business, you don’t have a lot of time for vacations, so my wife and I would take little weekend getaways to Las Vegas on occasion,” he said. “While I was here a couple of times, I started hooking up with a couple of management groups here in town. So when the market crashed on the real estate side in 2005, it was kind of a no-brainer for us to move to Las Vegas and start fresh.”

Ferriera landed a job with the North Las Vegas Chamber of Commerce, but was replaced when the organization changed leadership. He has maintained a strong relationship with the organization, however.

“Looking back at the year I spent there, it’s probably the reason why I’m doing as well as I’m doing now,” he said. “It opened some doors and allowed me to find out how the Las Vegas business community works.”

The Ferrieras still run their company out of their home, designing and printing everything from business cards to posters to table-tent cards for restaurants, which are printed at an operation they still maintain in California.

“Our approach just goes to show you that a small business can form relationships at low cost or no cost at all if you find the right avenues,” he said. “I spend two nights a week out networking (at chamber and professional events) and two mornings a week doing breakfast groups. And another thing I do is post weekly specials on Facebook every Monday. A lot of people tell me that they don’t have time for Facebook. I say you’ve got to find time.”

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