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The Best Small Companies In America, 2016

This article is more than 8 years old.

This story appears in the February 7, 2016 issue of Forbes. Subscribe

All of the companies on this list have had opportunities to get as big as possible, as fast as possible. Growth is good, but the leaders of these companies have had other, nonfinancial priorities as well, such as being great at what they do, creating great places to work, providing great service to customers, making great contributions to their communities and finding great ways to lead their lives. The wealth they create, though substantial, is a by-product of success in these other areas.

To select the companies, we applied the same criteria I used ten years ago when I picked a previous group for my book Small Giants:

--The company has been acknowledged as outstanding by those who know the industry best.

--It has had the opportunity to grow much faster, but its leaders decided to focus on being great rather than just big.

--It has been recognized for its contributions to its community and to society.

--It has maintained its financial health for at least ten years by having a sound business model, a strong balance sheet and steady profit margins.

--It is privately owned and closely held.

--It is human-scale, meaning frontline employees have real interaction with top leaders.

There is one other factor. It's what I refer to as mojo, the business equivalent of charisma. When a leader has charisma, you want to follow him or her. When a company has mojo, you want to be connected with it. You want to buy from it, sell to it, work for it. As Justice Potter Stewart famously said about pornography, it's hard to define, but you know it when you see it.

The profiles on the following pages were written by Susan Adams, Peter Carbonara, Darren Dahl, Karsten Strauss and me.

See full coverage of America's Best Small Companies here.

Quality Bicycle Products

Bloomington, Minn.

President: Rich Tauer

Revenue: $200 million

Employees: 700

Founded in 1981 by avid cyclists Steve Flagg and Mary Henrickson, who wanted to help bike stores get tough-to-find mountain bike parts from suppliers in Japan, QBP has become the nation's largest wholesale distributor of bicycle parts and accessories, from helmets and bike racks to crank sets and ball bearings. It also owns seven bike brands, including All-City, Salsa and Surly, a brand favored by urban hipsters. One staffer's sole responsibility is collaborating with lobbyists and nonprofits to advocate for pro-cycling government policies. QBP's four warehouses across the country guarantee that almost all of its 5,400 bike-store customers get parts within one day of ordering. Last May it opened an office and warehouse in Taiwan, where its bike brands are manufactured. In 2015 its head count hit 700, including 24 staffers in Taiwan. "We want the world to be bike-ified," says President Rich Tauer. "We say we want every butt on a bike."

Gainesville Health & Fitness

Gainesville, Fla.

Founder and CEO: Joe Cirulli

Revenue: $16.5 million

Employees: 480

Joe Cirulli has long believed that the ultimate measure of a fitness business should be the health of the community in which it is situated. In the early 2000s he and his management team set a goal of having Gainesville recognized as the healthiest city in America. They proceeded to mobilize the community to achieve it, and in the spring of 2003 Gainesville became the first and only city to receive the gold Well City award from the Wellness Council of America.

Ask those knowledgeable about the international fitness industry to name the best clubs on the planet and Gainesville Health & Fitness will be on the list. Cirulli travels the world giving talks, for example, on why his centers have customer-retention rates almost 30% higher than the industry average and how he hires and trains the staff that makes such performance possible.

Although utterly without financial resources, he managed to scrape together the $1,700 needed to get his club up and running in 1978. Ever since, he has been relentlessly focused on building, expanding, changing, innovating and, above all, improving his company. He has had endless opportunities to build clubs outside Gainesville but has turned them all down. When asked why, he says simply, "I like Gainesville."

Tasty Catering

Elk Grove Village, Ill.

CoFounder and CEO: Tom Walter

Revenue: $10 million

Employees: 90

When an employee recognized that fuel prices were cheapest on Tuesdays and most expensive on Thursdays and Fridays, Tasty Catering changed the way it purchased fuel for its fleet of delivery vehicles and started saving $35,000 a year. That kind of engagement has resulted in profit margins that are nearly double the industry's national average. Engaging employees, most of whom are recruited from the local community, has also kept turnover below 2% in an industry where the norm is around 50%. Meanwhile, Tasty employees have launched 12 ventures of their own with funding help from the company, including a bakery, a gift company and a creative agency. "I get to sit and watch like a proud father as these companies started by our employees continue to do well and deliver tremendous returns," says CEO Tom Walter.

Big Ass Fans

Lexington, Ky.

CEO and Founder: Carey Smith

Revenue: $202 million

Employees: 835

Founded in 1999, industrial fan producer Big Ass Fans could have sought to sell its high-end (and high-priced) wares through big-box retail channels. Instead, founder Carey Smith chose to avoid them, relying on his own army of salespeople to educate customers. In the past several years the company has expanded from the industrial sector into commercial and now residential markets, offering lighting products as well as smaller, sleeker home fans packed with high-tech sensors that sell for as much as $2,495. Today its residential products represent about 18% of company sales and growing. Big Ass Fans' creations are now prominent in the factories and warehouses of customers like Target, Whole Foods, Boeing, Coke and Amazon. "Throughout your day," says Smith, "most of the things you touch have been either manufactured or boxed for distribution under our fans."

Afterburner

Atlanta

Founder and CEO: Jim Murphy

Revenue: $8.5 million

Employees: 21 full-time, 50 contractors

Afterburner was founded 20 years ago by Jim Murphy, a former Air Force instructor pilot, who says he’s interested only in people with “the warrior ethos.” The company’s specialty is teaching clients how to define and execute a business strategy with a military-inspired approach to teamwork. Although the firm works primarily with large public companies, Afterburner remains small by design. Murphy says that, where large consulting firms often throw teams of people at clients, he prefers to use a “force multiplier” strategy by deploying just two to four consultants. He’d like Afterburner to be a $50 million company one day. For now he’s keeping head count low, partly as a matter of strategy and partly as a matter of preserving the firm’s culture. Read more about Afterburner here.

Blink UX

Seattle

CoFounder and CEO: Karen Clark Cole

Revenue: $12 million

Employees: 70

Every year as many as two employees who best embody the values of Blink UX are chosen to become partners in the business, a consultancy that advises clients like Microsoft, Starbucks and Amazon on ways to improve their digital interaction with customers. While CEO Karen Clark Cole says the equity shares doled out are small, they are meant to show how much employees are appreciated. When the company, which has never had outside investors, hires people, Clark Cole says it tells them, "We want you to retire here." She is also transparent about finances: "Anybody can find out anything they want to know about the company." Still, not everyone fits. Clark Cole says, "A disciplined work ethic is key to our culture and if someone isn’t pulling their weight we have to let them go."

Service Express Inc.

Grand Rapids, Mich.

CEO: Ron Alvesteffer

Revenue: $59 million

Employees: 290

When workers join SEI, which does on-site maintenance for companies' data centers, including repairs, troubleshooting and installations, they meet with a manager to lay out their personal, professional and financial goals. These may include buying a first home, visiting distant parents, attending a child's Friday football games or relocating to another city. When one employee expressed an interest in living in Nashville, for example, the company opened an office there. Managers meet with workers twice a year to reassess goals and offer support. CEO Ron Alvesteffer says the focus on employees has resulted in a yearly turnover rate of less than 10% and a customer retention rate of 98%. The theory, he says, is simple: "Take great care of your people and they'll take great care of your clients."

Redmond

Heber City, Utah

CEO: Rhett Roberts

Revenue: $65 million

Employees: 320

When a 1958 drought decimated their farm, brothers Milo and Lamar Bosshardt turned to mining the rich salt beneath it. In 1992 the family brought in Rhett Roberts, who repositioned Redmond's reddish-hued salt as a premium product, emphasizing how it melted at a lower temperature than conventional white salt and boosting efforts to market it as superior for the dinner table. In 1999 Roberts bought the company and became CEO, doing away with titles and instituting a profit-sharing program that divvies up 10% of the firm's net income among employees. He also opened up the company books, informing all employees about sales and profits.

ENT Institute

Atlanta

Founder and CEO: Jeff Gallups

Revenue: $27 million

Employees: 189

ENT Institute is a 17-location medical business in the Atlanta area that attracts doctors from across the country who specialize in treating ear, nose and throat ailments. Founder and CEO Dr. Jeff Gallups says his model allows him to charge less and pay top performers much more than they could earn in a regular private practice: "We have five docs who are making over a million a year." Unlike most hospitals, ENTI posts prices for its procedures on its website. A tonsillectomy for an adult, for instance, will cost about $2,300, compared with a national average of about $4,000. ENTI can charge less because, unlike a general hospital, it has no moneylosing departments (like an emergency room) to support. Gallups has been buying practices and plans to expand into neighboring states. "I'm not calling them," he says. "They're calling me."

New Belgium Brewing

Fort Collins, Colo.

Chairperson and CoFounder: Kim Jordan

Revenue: $225 million (est.)

Employees: 685

Back in 2013 the employees of New Belgium Brewing were called to an all-hands meeting, where Kim Jordan, the company’s cofounder and then CEO , took the stage to deliver big news. She told her employees she had just sold the company, a revelation that produced gasps. To whom? She asked the employees to open the envelopes that had been left on their chairs. Inside they found a mirror, which was Jordan’s way of announcing that she had sold the company to them. Today New Belgium is owned entirely by its employees through a stock-ownership plan and is widely recognized as a case study in progressive management. It is a certified B Corporation and gets high marks for sustainability: Its Fort Collins brewery produces 18% of its electricity on-site, and the company wins lots of awards for its culture. Read more about New Belgium Brewing here

Cue Ball Group

Boston

CEO: Tony Tjan

Assets Under Management: About

$200 million

Employees: 12

Cue Ball is attempting to reinvent venture capital--by not promising investors quick returns. It is adopting a Warren Buffett buy-and-hold strategy. Instead of hoping that one or two out of ten investments might succeed, it is aiming for ten out of ten. Read more about Cue Ball Group here.

Abt Electronics

Chicago

Co-Presidents: Jon, Michael, Billy and

Ricky Abt

2015 revenue: $400 million (est.)

Employees: 1,404

Abt Electronics is one of the last examples of a nearly defunct species of business: the family-owned, single-location electronics and appliance retailer. Jon Abt, one of four brothers who currently run the business, says Abt has survived the onslaughts of Best Buy and Amazon by truly providing what many businesses only talk about: great customer service. It also has a big, beautiful store--70,000 square feet--with tremendous selection.

Balsam Brands

Redwood City, Calif.

Founder and CEO: Thomas "Mac" Harman

Revenue: $90 million

Employees: 120

Balsam Brands has succeeded despite selling the most seasonal of products and charging far more than its competitors. Mac Harman got the idea for the business shortly after he graduated from Stanford Graduate School of Business and noticed that his in-laws’ fake Christmas tree didn’t look much like a tree. He traveled to China, met with a tree manufacturer and designed 16 models based on real varieties like Norway spruce. By October 2006 he had more than 5,000 trees shipped to the U.S., where he opened a pop-up store in the Stanford mall. He also set up a website, and in the space of a month he grossed $3 million. Since then he’s expanded his selection of trees, some of which sell for upwards of $2,000, and added wreaths, garlands, ornaments and other products. Read more about Balsam Brands here.

Askinosie Chocolate

Springfield, Mo.

CEO and Founder: Shawn Askinosie

Revenue: $1.8 million

Employees: 17

In 2005, after 20 years as a criminal defense attorney, Shawn Askinosie turned to making chocolate. What really distinguishes Askinosie Chocolate is how it works with farmers in Ecuador, Tanzania, Honduras and the Philippines who supply the cacao beans used to make its chocolate. Askinosie sees those farmers as business partners and includes them in a profit-sharing program that distributes up to 10% of company profits. Because he doesn't blend chocolate from different suppliers--each batch of chocolate can be tied directly to a single source--Askinosie created a system where farmers get a percentage of final sales of their chocolate. Every year he makes several pilgrimages to bring his suppliers translated copies of his financial books. In Tanzania, where cacao beans are a commodity, his farmers had never tasted chocolate before.

Fresno First Bank

Fresno, Calif.

CEO and President: Steve Miller

Revenue: $12 million

Employees: 33

Founded in 2005 to serve the banking needs of small businesses, Fresno First Bank has deliberately remained in a single location rather than opening additional branches. Not only has that kept costs under control, but it also allows the bank to retain a flat organizational structure so it can respond quickly to customer needs. Employees get additional motivation from an annual contribution of approximately 8% of total salaries to an employee stock-option plan.

See full coverage of America's Best Small Companies here.

Zifty.com

Atlanta

President and Founder: Todd Miller

VICE PRESIDENT: Jennifer Peté

Revenue: $8.3 million

Employees: 107

Zifty stands out in the increasingly crowded field of restaurant- and grocery-delivery services because it's been around since 2003. Founded by Todd Miller, it offered customers real-time tracking of orders before any of its competitors. It has grown without taking outside investments or incurring debt (apart from a mortgage). "Every time we made a little bit of money," Jennifer Peté says, "we put it back into the business." And in a high-turnover field, the company has managed to attract and keep good drivers. A third have been with the company for more than a year and 19% for more than two years. Instead of hiring contractors, says Miller, "we use the W2 model."

Radio Flyer

Chicago

CEO: Robert Pasin

Revenue: $110 million

Employees: 101

Antonio Pasin, who had learned cabinet-making on a Venetian estate, started manufacturing a wooden toy wagon in Chicago in 1917, first calling it “Liberty Coaster” for the Statue of Liberty, then changing the name in the late 1920s to Radio Flyer, to capture the fascination with early radio broadcasts and airplane flights. He then pioneered the technique of stamping wagon parts out of steel, earning him the title “Little Ford” from suppliers. But Pasin’s son Mario, who took over as CEO in 1970, allowed the business to stagnate. In 1997 Mario’s son Robert took charge, overhauling the product line. “We made mistakes trying to be different from the competition,” he says. Then they hit on the Pathfinder, which has seats that flip up and down, and it remains a bestseller. He also introduced scooters, tricycles and a four-wheeled contraption called a Ziggle, which kids operate by wiggling. Wagons have gone from 100% of sales to just a third. In 2002 Radio Flyer opened an office in Shenzhen, China, where it now manufactures two-thirds of its inventory. Read more about Radio Flyer here.

McRoskey Mattress

San Francisco

CEO: Robin McRoskey Azevedo

Revenue: $7.2 million

Employees: 30

In 2003 Prince Charles stayed at a bed-and-breakfast in Marin County, Calif. and on his departure told the proprietress she should order McRoskey mattresses for all the rooms. Which she did for most of them. McRoskey mattresses, judging from the comments of customers and online reviewers, are practically a religion for their owners, even those who are not royalty and even though they cost $5,000 for a queen-size and $6,000 for a king. The 30 employees continue to make the mattresses meticulously, even forming the coils and building the inner spring units on-site because they're more comfortable and last longer than any the company could buy. Of the 30 employees, 15 have been there for 15 years, 2 for 20 years and one for 36 years. CEO Robin McRoskey Azevedo is the granddaughter of one of the founders.

Torch Technologies

Huntsville, Ala.

CoFounder and CEO: Bill Roark

Revenue: $240 million

Employees: 460

At most companies, proposals for government contracts are handled by senior managers. At Torch Technologies, which is 100% employee-owned and provides engineering services such as missile-systems modeling and simulation to the U.S. Army, everyone is encouraged to participate. Proposal teams range from one person who works a few hours each evening for a week to teams with 40 to 50 people who work extra hours for two months to help win bids for contracts, which range from $75,000 to $100 million. The result: Since the company's founding in 2002, sales have grown at an annual clip of 35%. In Huntsville Torch renovated several decaying buildings to use as its headquarters.

Integrated Project Management

Burr Ridge, Ill.

Founder and CEO: C. Richard Panico

Revenue: $29 million

Employees: 145

Rich Panico learned from his father that "anything you do, you should do to last," and so--even before he started Integrated Project Management in 1988--he resolved to build it to last 100 years. With that in mind, the first person he hired was someone who could replace him if he couldn't continue for any reason. (She's still his second in command.) Since then Panico and his team have built a company that's won so many awards for excellence he doesn't know where to put them. They have done it by implementing state-of-the-art management disciplines, such as an annual planning process in which all 145 full-time employees are actively involved. Along the way, Panico has been a pioneer in professionalizing an industry that was in its infancy when he started.

Headsets.com

San Francisco

Founder and CEO: Mike Faith

Revenue: $26 million

Employees: 44

It sometimes takes a crisis to discover the true character of a company and its leaders. Driven by legendary service and a fun-loving culture--"Be whacky" was and is a core value--Headsets.com had grown rapidly, reaching $30 million in revenue by 2007. But customers stopped buying in the recession, and sales dropped by a third. Although CEO Mike Faith had to lay off 30 of his 70 employees, he found new jobs for almost all of them. And the company is now doing better than ever.

Bi-Rite Market

San Francisco

Founder: Sam Mogannam

Revenue: $44 million

Employees: 300

Bi-Rite Market sets the standard for grocery stores that champion locally sourced products grown by small producers. It offers all staffers, including part-timers, health insurance, a 401(k) with a 4% match and profit-sharing. Sam Mogannam's father and uncle ran the flagship store in San Francisco's Mission District until they sold out in 1989. Trained as a chef in Switzerland, Sam and his brother Raphael bought the business back in 1997, installing a kitchen that smokes its own salmon and mixes hummus from their mother's recipe. Sam rid his shelves of two bestsellers: farmed salmon and yellowfin tuna, which is overfished. In 2006 he opened Bi-Rite Creamery & Bakeshop. Honey comes from Bi-Rite hives on the market's roof. In 2008 it started its own farm in Sonoma. The Mogannams also run a catering company, Bi-Rite Catering, and a nonprofit that offers free and subsidized cooking and nutrition classes.

See full coverage of America's Best Small Companies here.

Air Force One

Columbus, Ohio

CEO: Greg Guy

Revenue: $30 million

Employees: 160

Air Force One has become a regional giant despite its local focus. The company provides heating, ventilation and air-conditioning services to large, owner-occupied commercial buildings. CEO Greg Guy, whose father founded the company, says that most of his competitors are small operators with maybe $5 million in revenue, but his ambition is to keep growing. Employees, Guy says, are attracted by the company's commitment to transparency and teamwork. Air Force One recently stopped paying its sales staff commissions, which Guy says pit "department versus department and salespeople versus salespeople." Instead, each of the company's six divisions shares in the profits if it meets or exceeds its financial goals. In 2014, the first full year after abandoning sales commissions, Air Force One exceeded its annual sales goal by 20%.

Innotec

Zeeland, Mich.

President: Mike Lanser

Revenue: $90 million

Employees: 400

Innotec, which makes lighting, applied metals and power-distribution products for the automotive, office-furniture and retail-lighting markets, uses a flat, decentralized organizational structure that gives each of its manufacturing lines, called "cells," control over its own P&L and balance sheet. Those cells then report their operational and financial results to the rest of the company every month. Owned in part by an employee stock-option plan, Innotec has more than 20 U.S. patents and manufactures products in the U.S., China, Europe and Mexico. The employees take a similar approach to giving back. For instance, the company helped launch a charter school in Zeeland called Innocademy, where teachers, rather than administrators, run the schools. Innotec also helped fund and organize a well-drilling project in Nigeria that is providing clean water to more than 140,000 people.

West Paw Design

Bozeman, Mont.

CEO: Spencer Williams

Revenue: $10 million

Employees: 70

West Paw Design is one of the companies defying the conventional wisdom that you can't manufacture in the U.S. anymore. In fact, 99% of the company's pet toys and beds, which use nontoxic, organic or recyclable materials, are made in Montana, which can hardly boast a legacy of manufacturing. The company has even sourced materials from its customers, who send back old pet chews to be recycled into new products made of a material the company calls Zogoflex. The sustainable approach helped make West Paw the first company in Montana to be certified as a B Corporation. "Our vision is to create a world where business success is friendly to people and the planet," says Spencer Williams, who was 23 when he bought the business in 1996. He has implemented open-book management and a companywide profit-sharing plan.

See full coverage of America's Best Small Companies here.