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What do nuclear detection, bullet stopping and a bad case of heartburn have in common?
They were factors in the creation of companies that would become three of the 50 fastest growing second tier companies in Florida, according to Orlando-based GrowFL.
When people talk about the business climate in the Sunshine State, they often point to the weather, lower tax rates, and lack of bureaucracy as reasons companies choose to locate on the peninsula. But they rarely talk about the factors that motivate entrepreneurs to start a business in Florida.
According to the US Census Bureau from January 2021 to January 2022, Florida led the nation in new business formation, accounting for nearly 12% of all new business formations nationwide. Of the 5.8 million new business applications filed in the US last year, Florida registered nearly 700,000 of them.
When WalletHub released its annual report on the best small cities to start a business on April 18, guess which state made five cities in the top 20? Florida did, with Fort Myers, South Bradenton and Winter Park making the top 10; Altamonte Springs and Sarasota filled in the rest.
“We brought talent from Virginia, Nevada, California and other places. They want to settle down in Florida anyway.”
—susi Glasgow, General Manager, Kegman Inc.
What is happening here and more importantly, why does it keep happening? I decided to investigate this phenomenon by going straight to the source: the entrepreneurs who chose to build their burgeoning business empires in Florida. This is what they had to say:
Break through the glass defense ceiling
Susie Glasgow, president and CEO of Kegman Inc. in Melbourne, isn't the stereotypical arms company. After starting her business with her husband in 1999 as a part-time residential and commercial security company, a dozen years later she decided to make it her full-time job. Today he leads a diverse team of scientists, engineers and technicians who use innovative technologies to solve complex problems.
Glasgow, who has more than 35 years of military, finance and program management experience, says his company will generate around $10 million in revenue this year, up from $7.8 million last year. "Soon we will have 40 employees," he says. “We work 100% on behalf of the government. We provide communications for the Atlas and Delta programs at Cape Canaveral. We support Nuclear Atomic Detection Systems around the world through the US Air Force at Patrick Space Force Base.”
The sunny state is hot all around
Just when you're thinking that Florida real estate markets can't get any hotter than they already are, a report from Cushman & Wakefield comes in that turns on the mercury.
According to the company's office market report for the first quarter of 2022, occupancy activity in Florida this year was 47% higher than the same 3-month period in 2020. Vacant space has stabilized and rents are up 17 over the last 24 months % , says C&W.
For an in-depth look at all Florida real estate, we turned to one of your top Sunshine State experts: Gary Ralston, Managing Director and Owner of SVN Saunders Ralston Dantzler Real Estate in Lakeland.
Which real estate sectors are hot in Florida right now and why?
Gary Ralston is the Managing Director and owner of SVN Saunders Ralston Dantzler Real Estate in Lakeland.
Courtesy of SVN Saunders Ralston Dantzler RE
GARY RALSTON:Honestly, everything is hot in Florida right now. It means being in the right place at the right time. Put simply, real estate is space for people. More people create more demand for real estate. Florida's population is now approaching 22 million. We are growing by more than 300,000 employees per year (approx. 900 per day). That creates a significant demand. That's more than some states have grown in 10 years. If you look at jobs, non-farm payrolls are 9,163,000 and that's an all-time high. We're back and something else. On the corporate side, jobs create demand for real estate. Nationally, we're still 2 million jobs down from the February 2020 peak. Bottom line, Florida's population growth and job growth has been outstanding.
Have residential real estate values stabilized yet?
RALSTON:I follow Brad O'Connor at Florida Realtors. track sales. Sales increased 13% from 2020 to 2021. Cash transactions account for almost a third of all home sales. Median selling prices increased by 20%. According to Florida Realtors, the average time to rent a home in Florida is less than two weeks. That bodes well for stocks, which will continue to rise. In February 2022, 18,000 building permits were issued for new homes in Florida. That's a steep climb. This includes apartment buildings. Higher mortgage rates will reduce home appreciation, but people who move need a place to live.
Will the demand for industrial space decline in the short term?
RALSTON:Not in the near future. There is a high correlation between storage and employment and population growth. We will continue to see strong demand for industrial space. Warehouse space is the result of a more efficient supply chain. I worry about storage space in 10 years when there will be more efficient tracking of products in the supply chain. Remember: Amazon makes a lot of money from Amazon Web Services. They have money to spend on things. Industrial will continue to be very strong across the board. Manufacturing jobs have also increased. Self-storage is also growing here. Smaller lots and more condos and apartments are creating greater demand for self-storage. In a decade our world for industrial and office space will be different.
Which markets and submarkets are the most popular in Florida right now?
RALSTON:I'm in the middle of Florida's best market: the I-4 corridor. The entire area from Tampa to Orlando is growing 26% faster than Florida as a whole. It's good to be in the middle. It is also a stand-in-line situation with logistics. 22 million people live within a 5 hour drive of I-4. Other hotspots include Southeast Florida and Southwest Florida, particularly the Naples and Collier County market. This is the premier destination for wealthy northerners moving to Florida who don't want to live in Miami.
What's the big news regarding development along the I-4 corridor?
RALSTON:A dozen large plots of land are being acquired here and converted into housing estates. Approximately 6,000 acres in Osceola County will be converted into a master planned community. Hillsborough and Pinellas counties are already quite densely populated. Pasco County is a hotspot for that. We like Polk County, the Lakeland-Winter Haven MSA. From here you can easily travel to Tampa or Orlando.
Glasgow says he was working as an army reservist when he landed at BAE Systems, "but that wasn't what I wanted to do," he says. “When I left BAE, I hired one of the program managers and founded Kegman Inc. full time in March 2011. In September I won my first contract with NASA. We'll just go from there."
Glasgow says his company has always been based in Melbourne, although it operates across the country. "We had contracts in Virginia, Texas and Colorado," she says. “We are preparing to launch one in Albuquerque. Our teams travel”.
As his company has grown, it has had no problem luring talent to Florida's Space Coast, he adds. “We hire by word of mouth,” she says. “We brought talent from Virginia, Nevada, California and other places. They still want to settle in Florida. Most want to work for a small company.”
Kegman isn't done waxing yet either, he notes. "We want to focus on growth, but not grow so fast that it gets out of hand," says Glasgow. “One of our goals is to expand into more work for NASA. Our goal is to win two to three new orders per year. I'm 100% self-financed. It's exciting and I have the best team."
St. Petersburg (above) is home to Autonomous Vehicle Advantage.
Photos courtesy of St. Petersburg Area EDC
Why Florida? "I came to the Space Coast in 1986 and the Cape was my first station," he says. "It was my first job when I was in the military. I'm just walking through my backyard while I'm talking to you. The speed at which this place is growing is amazing.”
From the tragedy of the space shuttle Challenger to the construction of the 45th Space Wing, Glasgow has seen it all. "It was crazy to see how it turned out," she says. Now she returns. She works with CareerSource Brevard, has served as CEO for years, and has found other ways to get involved in the community.
A major benefit of doing business in Florida, he says, is that "we haven't had any disruption to our business during the pandemic. I advise small businesses. I know how incredibly lucky we are."
Glasgow shares this sentiment with its business peers in Florida. Everyone I interviewed stressed how critical it was to their business' growth that Florida allowed them to stay open even when many other states were enforcing severe lockdowns.
"Your plate saved my life"
David Goldberg, Founder and CEO of Body Armor Direct in Boca Raton, didn't just start a business. He saved a life.
On August 21, 2021, a customer called Goldberg and left a message. Caleb Arnold, an active duty National Guardsman, was shot dead in Pennsylvania and the bullet caught his backpack. The steel plate inside the backpack protected him. If you listen to the voicemail Arnold left, you can hear his voice crackle as he says, "Your plate saved my life."
This wasn't an accident. Goldberg earned a finance degree from the University of Central Florida and worked on government contracts at the Kennedy Space Center for 20 years before moving to Suwanee, Georgia to work for General Dynamics.
David Goldberg (inset) founded Body Armor Direct in his garage in 2017. Boca Raton is one of the fastest growing companies in Florida today.
Photos courtesy of Body Armor Direct
"I returned to Florida and became vice president of sales for Point Blank Body Armor, a 40-year-old company that sells through distributors," says Goldberg. “People started buying directly from online businesses, so I went and waited on the sidelines for three years before founding Body Armor Director in my garage in Boca Raton in 2017, right after the Las Vegas mass shooting that left 60 dead and 411 claimed wounded".
Then he had his idea. "If you made them standard products, you could sell them to the general public and police and security companies," he says. “They could be used by law enforcement. My company was attracted to law enforcement and they started buying from us. We have one of the top 10 law enforcement agencies in the country.”
Today, Body Armor Direct sells products to Congressmen, Judges, Doctors, Attorneys and anyone in need of increased personal security.
The film studio takes the spotlight in Tampa Bay
Tim Moore and Vu Technologies.
Courtesy of Vu Technologies.
Tim Moore, CEO of Vu Technologies, says his film production company chose Tampa because it represents the land of opportunity.
"I was born and raised in Florida," he says. “I came to Tampa 15 years ago. The video market here was not developed. There are so many options here. Since then, I've watched Tampa's transformation. It's a blank canvas, but with a structure that allows for many possibilities. I started a company that just received $17 million in funding and now we have 55 employees.”
For the past 50 years, people have used green screens to film key scenes in shows and movies. Vu changed that. “Now we're doing 100-foot large format walls that are like IMAX screens. Everything you put on the screen is like on an HD camera. Post-processing is not required. We were on the Today Show during the Super Bowl last year in Tampa. That was our big breakthrough."
It's only been 10 months since Vu joined and the company is already in four cities: Tampa, Orlando, Nashville and Las Vegas. "We're announcing a study in Stamford, Connecticut, in the next few weeks," Moore said. "And we plan to open one in Atlanta next year."
Moore says his goal is to make Vu the world's largest virtual studio network. "For the last 100 years, studios have been big boxes that you can build and tear down in a matter of weeks," he says. “Now we have the opportunity to network with each other and to decentralize production. You don't have to be in town anymore. You can do it remotely. We're going to have about 40 studios in North America over the next five years. To date we have built a total of 15. There are 36 stages in Hollywood. We believe this is a game changer. If you can work anywhere in the world, wouldn't you like to go where people vacation?
Moore estimates that he will employ 400 people within three years. Between 10 and 15 people are needed per study. “Many of our employees will be centralized here in Tampa. A lot of our core functions are performed here,” he says.
Vu is located in a residential area, the Innovation District, and operates in an opportunity zone. "It's a great place to grow cheaply," says Moore. “The Tampa Bay EDC was very helpful. Craig Richard and Michelle Bauer have been great in connecting us to opportunities and facilitating adoption into other markets.”
He adds that prior to the pandemic, we were "scouting locations in both New York and Los Angeles. After the pandemic, she reinforced our decision to stay in Florida. It is because of how the legislation has reacted here. Even during the pandemic, people came here from all over the world. A good example is Disney. They moved most of their production staff from California to Orlando because they could work locally and be productive."
When asked what he would say to leaders in other states, he says, "Just look at the trend in Florida. The environment is changing dramatically for the better. We have a huge infrastructure to help small businesses get started. If you are looking for a place that is cost-effective, business-friendly, and where you can scale, grow and thrive, then Florida may be the place for you.”
In December 2021, a Series A investment from outside the company enabled Body Armor Direct to rebrand and sell its products in retail stores across the country. The company currently employs approximately 10 full-time employees and another 20 contractors.
Goldberg says he chose Boca Raton because "I used to vacation here when we lived in Boston. I live a mile from where I vacationed as a kid. I decided to make my life a vacation. i live on the beach I'm here for the weather."
He adds that his goal is simple: "We are working to become the largest bulletproof vest company in the country." To help with that, he moved his business to a new facility in East Boca Raton in January.
David Habib (inset) is the Founder and CEO of Yo Mama's Foods, the #1 seller of pasta sauces on Amazon.com.
Photos courtesy of Yo Mama's Foods
The key to its success, he says, is that "we've stayed open throughout the pandemic and civil unrest. we never close There was a time when there was a curfew at the start of the pandemic. You had to have a letter from the Department of Defense or law enforcement that you were an essential service, and we had that letter. The Florida business environment has been great.”
Best advice: listen to mom
Ever had a bad case of heartburn? David Habib did it and he solved it by listening to his mother.
Habib, founder and CEO of Yo Mama's Foods in Clearwater, started his business on Mother's Day 2017 for one simple reason: "Nobody does food better than your mom," he says.
“We focus on clean ingredients. No fillers. No colors Our pasta sauces make up the majority of our business. No added sugar,” he says. “I worked at Corporate America and ate a lot. I got heartburn. That was my motivation to start my own food company. I asked how can this be done better? I quit my job in January 2017. We started online on Amazon in October 2017. We focus on offering no added sugar foods and low sodium diets. That led us to Whole Foods. We now work with 10,500 retailers across the country and have the best selling pasta sauce brand online.”
It may only have 14 employees today, but you can already find its sauce at Publix, Whole Foods, Sprouts, Harris Teeter, and other grocery stores.
"We started with me in the dining room in 2017," says Habib. “We should double our employee base in two years. Initially, we operated from a 300 square meter storage unit. In 2019 we moved to our 26,000 square foot warehouse in Clearwater."
He adds, "We look forward to exploring other options, but we will remain in Clearwater. We are downtown. Here, too, we want to expand. Finding the right manufacturing partners was very important. They believe in our brand. Cash flow has always been a challenge. It's a store with a lot of inventory.”
Selling products online saved business during COVID-19, he says. “Most retailers don't pay for 30 days. With all the challenges of COVID-19, we had the right infrastructure. Has helped many specialty food companies. Many customers never came back. Our customer acquisition has also increased during this time.”
For the future, Habib says: “We are looking for growth in the international channel. We started exporting to South Korea, Hong Kong, Mexico and Canada last year. We're also looking to expand our major accounts at Costco, Sam's Club and BJ's."
"Even during the pandemic, these companies forecast continued growth in 2021, with revenue up 62% and employee growth 49% compared to 2020."
—Jennifer Schneider, CEO, GrowFL
Being based in Florida is a huge advantage, he adds. "It's a diverse area. The City of Clearwater was a great help. Enterprise Florida, Pinellas EDC, and the local Small Business Development Center also helped us. Also, this is one of the most beautiful cities in Florida. We are about two miles from the beach and can visit whenever we want.”
Here the sun shines on small businesses
According to Jennifer Taylor, general manager of GrowFL in Orlando, about 40% of Companies to Watch honorees in Florida are women or belong to minorities. “These companies continue to grow and create more jobs during the pandemic. That's what we want to see here in Florida."
According to GrowFL, these second-tier companies generated more than $1.06 billion in revenue from 2017-2020 and hired 770 new employees, reflecting a 124% increase in revenue and a 105% increase in jobs over a four-year period . That equates to compound annual revenue growth of 31% and compound annual headcount growth of 26%.
"Even during the pandemic, these companies forecast continued growth in 2021, with revenue up 62% and headcount growing 49% compared to 2020," Taylor says. "If their projections are accurate, these companies will have generated $1.7 billion in revenue and hired more than 1,500 people over the past five years -- a 263% increase in revenue and a 206% increase in jobs since 2017."
These actions are not arbitrary. They are supported by a clearly SME-friendly business climate foundation. A recent study published by OpenPhone shows that three Florida cities made it onto the list of the 25 fastest growing cities for small businesses in the United States. Tampa checked in at #19, along with Pompano Beach at #20 and Jacksonville at #23.
Mercedes Martinez, content marketing specialist at Green Flag Digital, says that while Miami didn't make the top 25, it did see a significant increase in startup funding, growing more than 320% from 2019 to five amounts for the startup -Funding in 2021 with more than $333 million.
In many cases, business formation simply follows the migration of people and talent. When the US Census Bureau recently released its list of the 20 fastest growing mid-size cities in the country, it was no surprise that seven Florida cities made the list: Lakeland (3); Fort Myers (5); Port of Santa Lucia (6); Sarasota (7); Daytona Beach (8); Melbourne (12); and Pensacola (19).