What do nuclear detection, stopping a bullet, and a bad case of heartburn have in common?
They were factors in launching companies that would go on to become three of the 50 fastest-growing second-stage firms in Florida, according to Orlando-based GrowFL.
When people talk about the business climate of the Sunshine State, they normally reference the weather, lower tax rates and lack of red tape as reasons why companies choose to set up shop on the peninsula. But they seldom talk about the factors that motivate entrepreneurs to start a business in Florida.
According to the U.S. Census Bureau, Florida led the country in new business formations from January 2021 to January 2022, accounting for almost 12% of all new business starts nationwide. Of the 5.8 million applications for new businesses filed in the U.S. last year, Florida tallied nearly 700,000 of them.
What’s more, when WalletHub released its annual report on April 18 of the Best Small Cities to Start a Business, guess which state placed five cities in the top 20? Florida did, with Fort Myers, South Bradenton and Winter Park cracking the top 10; Altamonte Springs and Sarasota rounded out the rest.
"We’ve brought in talent from Virginia, Nevada, California and other places. They are wanting to locate to Florida anyway."
— Susie Glasgow, CEO, Kegman Inc.
What’s happening here, and more importantly, why does it keep happening? I decided to look into this phenomenon, and to do it I went straight to the source: the entrepreneurs who are choosing to build their burgeoning business empires in Florida. Here’s what they had to say:
Shattering the Glass Defense Ceiling
Susie Glasgow, president and CEO of Kegman Inc. in Melbourne, is not your stereotypical defense contractor. After starting her firm with her husband in 1999 as a part-time commercial and residential security company, she decided a dozen years later to make it her full-time job. Today, she leads a diverse team of scientists, engineers and technicians who use innovative technology to solve complex problems.
Glasgow, who has over 35 years of military, program and financial management experience, says her firm will do around $10 million in business this year, up from $7.8 million last year. “We will have 40 employees soon,” she says. “We are 100% in government contract work. We provide communications for the Atlas and Delta programs at Cape Canaveral. We provide support for Nuclear Atomic Detection Systems all over the world through the U.S. Air Force at Patrick Space Force Base.”
The Sunshine State is Hot All Over
Just when you think real estate markets in Florida can’t get any hotter than they already are, along comes a report from Cushman & Wakefield that raises the mercury.
According to the firm’s office market report on the first quarter of 2022, leasing activity in Florida was 47% higher this year than the same 3-month period in 2020. Vacant space has stabilized, and average class A office rent is up 17% over the last 24 months, C&W says.
To get a deeper dive into all things Florida real estate, we turned to one of its foremost experts in the Sunshine State: Gary Ralston, managing director and owner at SVN Saunders Ralston Dantzler Real Estate in Lakeland.
What real estate sectors are hot right now in Florida and why?
Gary Ralston is managing director and owner at SVN Saunders Ralston Dantzler Real Estate in Lakeland.
Courtesy of SVN Saunders Ralston Dantzler RE
GARY RALSTON: Frankly, everything is hot in Florida right now. It’s called being in the right place at the right time. In very simple terms, real estate is space for people. More people create more demand for real estate. The Florida population now is approaching 22 million. We are growing by more than 300,000 people a year (about 900 a day). That creates significant demand. That is more than some states have grown in 10 years. If you look at jobs, non-farm employment is 9,163,000 and that is an all-time high. We are back and then some. On the commercial side, jobs create demand for real estate. Nationally, we are still 2 million jobs behind the peak of February 2020. The bottom line is that population growth and job growth in Florida are stellar.
Have residential housing values stabilized yet?
RALSTON: I follow Brad O’Connor at Florida Realtors. He tracks sales. Sales were up 13% from 2020 to 2021. Cash transactions are approaching one-third of all home sales. Median sales prices are up 20%. Median time to contract on a house in Florida is less than two weeks, according to Florida Realtors. That bodes well for values to continue to appreciate. February 2022 saw 18,000 building permits for new homes in Florida. That is a strong increase. That includes multi-family units. Higher mortgage rates will reduce the rate of appreciation in housing costs, but the people moving in have to have a place to live.
Is demand for industrial space subsiding anytime soon?
RALSTON: Not in the near future. There is a high correlation between warehousing and growth in jobs and population. We will continue to see strong demand for industrial space. Warehouse space is a result of making the supply chain more efficient. I worry about all the warehouse space a decade from now when there will be more efficient tracking of goods in the supply chain. Remember: Amazon makes a lot of money from Amazon Web Services. They have money to throw at things. Industrial will remain very strong across the board. Manufacturing jobs are up as well. Self-storage is growing here too. Smaller housing lots and more condominiums and apartments create more demand for self-storage. Our world will be a different place for industrial and office space a decade from now.
Which markets and submarkets are the hottest now in Florida?
RALSTON: I am in the middle of the best market in Florida — the I-4 Corridor. The whole Tampa-to-Orlando area is growing 26% faster than Florida as a whole. It’s good to be in the middle. It’s also a stand-in-line situation with logistics. There are 22 million people within a 5-hour drive of I-4. Other hot spots are Southeast Florida and Southwest Florida, particularly the Naples and Collier County market. That is the premier spot for wealthy Northerners who are moving to Florida and don’t want to live in Miami.
What’s the big news in terms of development along the I-4 Corridor?
RALSTON: There are a dozen of large tracts of land that are being acquired and converted into residential subdivisions here. About 6,000 acres in Osceola County are being turned into a master-planned community. Hillsborough and Pinellas counties are already fairly dense. Pasco County is a hot spot because of that. We like Polk County — the Lakeland-Winter Haven MSA. You can easily commute to either Tampa or Orlando from here.
Glasgow says she was working as a reservist in the military when she ended up with BAE Systems, “but that was not what I wanted to do,” she notes. “I hired one of the program managers and launched Kegman Inc. full-time in March 2011 when I left BAE. By September, I won my first contract with NASA. We just went from there.”
Glasgow says her firm has always been based in Melbourne even though it performs work around the country. “We have had contracts in Virginia, Texas, and Colorado,” she says. “We are fixing to start one in Albuquerque. Our teams travel.”
As her firm has grown, she has had no trouble luring talent to the Space Coast of Florida, she adds. “We hire through word of mouth,” she says. “We’ve brought in talent from Virginia, Nevada, California and other places. They are wanting to locate to Florida anyway. Most of them want to work for a small business.”
Kegman is not done growing either, she notes. “We want to focus on growing but not grow so fast that it gets out of control,” Glasgow says. “One of our goals is to expand into more work for NASA. Winning two to three new contracts a year is our goal. I am 100% self-financed. It’s exciting, and I have the best team.”
St. Petersburg (top) is home to Autonomous Vehicle Advantage.
Photos courtesy St. Petersburg Area EDC
Why Florida? “I came to the Space Coast in 1986, and the Cape was my first duty station,” she says. “It was my first place to come to work when I was in the military. I am walking around my back yard now while I talk to you. The pace at which this place is growing is amazing.”
From watching the Space Shuttle Challenger tragedy to witnessing the whole 45th Space Wing built, Glasgow has seen it all. “It’s been crazy to watch how it has evolved,” she says. Now, she gives back. She works with CareerSource Brevard, serving as board chair for years and finding other ways to get involved in the community.
A big positive about doing business in Florida, she says, is that “we didn’t have any disruption in our company during the pandemic. I help mentor small businesses. I know how incredibly lucky we are.”
Glasgow shares this sentiment with her fellow entrepreneurs in Florida. Each one I interviewed stressed how critically important it was to the growth of their company that Florida allowed them to remain open even as many other states enforced rigid shutdowns.
‘Your Plate Saved My Life’
David Goldberg, founder and CEO of Body Armor Direct in Boca Raton, didn’t just start a company. He saved a life.
On August 21, 2021, a customer called Goldberg and left him a message. Caleb Arnold, an active-duty National Guardsman, had been shot at in Pennsylvania and the bullet hit his backpack. The steel plate inside the pack protected him. If you listen to the voice mail left by Arnold, you can hear his voice crack when he says, “Your plate saved my life.”
That was no accident. Goldberg earned a finance degree from the University of Central Florida and worked for 20 years in government contracting at the Kennedy Space Center before relocating to Suwanee, Georgia, to work for General Dynamics.
David Goldberg (inset) started Body Armor Direct out of his garage in 2017. The Boca Raton firm today is one of Florida’s fastest-growing companies.
Photos courtesy of Body Armor Direct
“I came back to Florida and returned as vice president of sales for Point Blank Body Armor, a 40-year-old company that sells through distributors,” says Goldberg. “People were starting to buy direct from companies online, so I left and waited on the sideline for three years before starting Body Armor Director out of my garage in Boca Raton in 2017 just after the mass shooting in Las Vegas that left 60 people dead and 411 wounded.”
That’s when he got his idea. “If I made them standard products, I could sell them to the general public and police and security firms,” he says. “They could be worn by law enforcement. My company got traction from law enforcement agencies, and they started buying from us. We landed one of the top 10 law enforcement departments in the country.”
Today, Body Armor Direct sells products to congresspeople, judges, doctors, lawyers, and anyone who needs more personal security.
Film Studio Grabs 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 am Florida born and raised,” he says. “I came to Tampa 15 years ago. The video market here was not developed. There is so much opportunity here. I have seen Tampa transform since then. It’s a blank canvas but with a structure that allows a lot of opportunities. I created a company that just got $17 million in funding, and now we have 55 people on staff.”
For the past 50 years, people have been using green screens to film pivotal scenes in shows and movies. Vu changed that. “Now we do large-format 100-foot walls that are like IMAX screens. Whatever you put on the screen is like being on an HD camera. There is no need for post-processing. We were on the Today Show during the Super Bowl when it was held in Tampa last year. That was our big break.”
It’s only been 10 months since Vu incorporated, and already the firm is in four cities: Tampa, Orlando, Nashville and Las Vegas. “We’re announcing a Stamford, Connecticut, studio in the next few weeks,” says Moore. “And we’re planning on opening one in Atlanta next year.”
Moore says his goal is for Vu to become the world’s largest virtual studio network. “For the past 100 years, studios were big boxes that you built and tore down in weeks,” he says. “Now we have the ability to connect with each other and decentralize production. You don’t have to be in the city anymore. You can do it remotely. We will have close to 40 studios across North America over the next five years. We have built 15 total to date. There are 36 soundstages in Hollywood. We think this is a game-changer. If you can work anywhere in the world, wouldn’t you want to come to a place where people go on vacation?”
Moore estimates that he will have 400 people on staff within three years. About 10 to 15 people are needed per studio. “A lot of our staff will be centralized here in Tampa. A lot of our core functions are done here,” he says.
Located in the uptown area, the Innovation District, Vu operates in an Opportunity Zone. “It’s a great place to grow at a low cost,” says Moore. “The Tampa Bay EDC has been very helpful. Craig Richard and Michelle Bauer have been very good at connecting us to opportunities and facilitating introductions to other markets.”
He adds that prior to the pandemic, “we were site scouting both New York and Los Angeles. After the pandemic, it solidified our decision to remain in Florida. It’s because of how the legislation reacted here. People from all over the world came here even as the pandemic happened. A good example is Disney. They moved a majority of their production staff from California to Orlando because they could work and be productive on site.”
When asked what he would tell executives in other states, he says, “Just look at where Florida is trending. The environment is changing dramatically for the better. We have tremendous infrastructure for helping small businesses get off the ground. If you’re looking for a place that is low cost and business friendly, and where you can scale, grow and prosper, 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 about 10 full-time workers and another 20 contractors.
Goldberg says he chose Boca Raton because “I used to vacation here when we lived in Boston. I live one mile from where I vacationed as a kid. I decided to make my life a vacation. I live on the beach. I am here for the weather.”
He adds his goal is simple: “We are working to be the largest body armor company in the nation.” To help him attain that, he relocated his firm in January to a new facility in East Boca Raton.
David Habib (inset) is the founder & CEO of Yo Mama’s Foods, the No. 1 seller of pasta sauce on Amazon.com.
Photos courtesy of Yo Mama’s Foods
The key to his success, he says, is that “throughout the entire pandemic and civil unrest, we remained open. We never closed. 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 environment in Florida for businesses has been great.”
Best Advice: Listen to Mom
Ever have a bad case of heartburn? David Habib did, and he solved it by listening to his mother.
Habib, founder and CEO of Yo Mama’s Foods in Clearwater, launched his business on Mother’s Day of 2017 for one simple reason: “No one makes food better than your mama,” he says.
“We focus on clean ingredients. No fillers. No colors. Our pasta sauces are the majority of our business. No added sugar,” he says. “I was working in Corporate America and eating out a lot. I was getting heartburn. That was my motivation to start my own food company. I asked, how can this be done better? I left my job in January 2017. We launched online on Amazon in October 2017. We focused on offering foods with no sugar added and low-sodium diets. That led us into Whole Foods. We now work with 10,500 retailers nationwide, and we have the No. 1 best-selling brand of pasta sauce online.”
He may only have 14 employees today, but you can already find his sauce in Publix, Whole Foods, Sprouts, Harris Teeter and other supermarkets.
“We started in 2017 with me in the dining room,” says Habib. “We should be doubling our employee base in two years. Initially, we operated out of a 300-square-foot storage unit. In 2019, we moved into our warehouse of 26,000 square feet in Clearwater.”
He adds that “we are excited to explore additional options, but we will remain in Clearwater. We are in the downtown area. We hope to expand here as well. Finding the right manufacturing partners has been really important. They believe in our brand. Cash flow has always been a challenge. It is a very inventory heavy business.”
Selling products online saved the business during COVID-19, he notes. “Most retailers do not pay for 30 days. With the whole COVID-19 challenge, we had the right infrastructure in place. It helped many specialty food businesses. Many customers never turned back. Our customer acquisition increased during that time as well.”
Moving forward, Habib says, “We are looking at growth in the international channel. We started exporting last year to South Korea, Hong Kong, Mexico and Canada. We are also looking to grow our big box accounts with Costco, Sam’s Club and BJ’s.”
"Even through the pandemic, these companies projected continued growth in 2021, with a 62% revenue increase and 49% growth in employees compared to 2020."
— Jennifer Taylor, CEO, GrowFL
Being based in Florida is a huge advantage, he adds. “It’s a diverse area. The city of Clearwater has been very helpful. Enterprise Florida, the Pinellas EDC, and the local Small Business Development Center have also helped us. Plus, this is one of the most beautiful cities in Florida. We are about two miles from the beach here and can visit it anytime we want.”
Sun Shines on Small Business Here
Jennifer Taylor, CEO of GrowFL in Orlando, says that about 40% of the Florida Companies to Watch honorees are women or minority owned. “These companies continue to grow during the pandemic and increase jobs. That’s what we want to see here in the state of Florida.”
According to GrowFL, from 2017 through 2020, these second-stage companies generated more than $1.06 billion in revenue and added 770 employees, reflecting a 124% increase in revenue and a 105% increase in jobs for the four-year period. That translates into a 31% average annual revenue growth and a 26% average annual growth in employees.
“Even through the pandemic, these companies projected continued growth in 2021, with a 62% revenue increase and 49% growth in employees compared to 2020,” says Taylor. “If their projections hold, these companies will have generated $1.7 billion in revenue and added more than 1,500 employees over the last five years — a 263% increase in revenue and a 206% increase in jobs since 2017.”
These performances are not arbitrary. They are backed by a business climate foundation that is clearly a friend to small business. A recent study published by OpenPhone shows that three Florida cities made the list of the 25 fastest-growing cities for small business in America. Tampa checked in at No. 19, along with Pompano Beach at No. 20 and Jacksonville at No. 23.
Mercedes Martinez, content marketing specialist at Green Flag Digital, says that even though Miami did not make the top 25, it saw a major increase in startup funding, jumping over 320% from 2019 to 2020. Miami also ranked in the top five largest dollar amounts for startup funding in 2021 with more than $333 million.
In many cases, business formation is simply following the migration of people and talent. When the U.S. Census Bureau recently published its list of the 20 fastest-growing midsize cities in the country, it surprised no one that seven Florida cities made this list: Lakeland (3); Fort Myers (5); Port St. Lucie (6); Sarasota (7); Daytona Beach (8); Melbourne (12); and Pensacola (19).
