Small company, big profit

How do lean businesses outperform rivals with fatter payrolls? A look at four entrepreneurs who cracked the code.

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Name: Contract Interiors
Industry: Office furniture
Employees: 18
2007 revenues $15 million

Deni Tato serves a market that spends less when the economy languishes. But Tato isn't sweating the current slowdown. Ever since she chopped an arm off Contract Interiors, her Cincinnati-based business, the CEO runs a leaner, more profitable operation.

When Tato, 52, started her business back in 1986, she envisioned a vertically integrated firm that would handle sales, installation, delivery, and service. After she bought a large distributor in 1992, Contract Interiors moved into a 55,000-square-foot warehouse filled with thousands of chairs and desks.

But when the office furniture market dipped in 2000, her high overhead kept her from being as profitable as she should have been. In 2001, Tato forged partnerships with two local installation companies, which bought her warehouse and trucks and also absorbed many of her former employees. She then turned a critical eye on her streamlined staff.

Contract Interiors is now firmly focused on its core competency - sales and marketing. While her staff has shrunk from 50 in 2000 to about 18 today, revenues have held steady at more than $15 million a year.


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LAST UPDATE: Oct 16 2008 | 9:05 AM ET
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