Kevin Baker's business strategy helped his own financial stability.
Independence Day usually falls in July, but for Kevin Baker, president and founder of Florida Business Interiors, this year it falls in December. “We're actually breaking away from our parent company,” he says. “We're becoming completely independent.”
Baker was able to buy out his partners in a transaction that will be final Dec. 28., he says. He declined to disclose the terms. The office furniture company, which he founded in 2007, will carry on with business as usual, and without a name change, says Baker.
Its work force of 13 employees may increase slightly, but no major expansion is planned. “It really doesn't change the way we go to market or anything,” says Baker. “It's a peace-of-mind move. It's kind of my step toward long-term financial stability.”
Still, the dream has been a long time coming. “I've been in the industry for 32 years, and to have my own company and to be the sole owner is pretty exciting,” Baker says. “There were a lot of sleepless nights, a lot of stress.”
The company had revenues of $17.5 million in 2011, up from $8.2 million in 2010. But 2011 was an anomaly, because the company managed to get a large contract, says Baker. His current projection for the calendar year is $14 million.
Baker's financial strategy in buying out his partners involved patience. He quietly paid the company off over the past five years, he notes. But the end result was a burden lifted. “I've actually come out of it debt-free,” he says.
And that was worth a celebration, even before he inks the final agreement. “We celebrated as a team. I took all of my employees and their significant others on a cruise to the Bahamas.” It was a four-day trip from Cape Canaveral.
Over the years, as he made his payments, he successfully charted a path through stormy waters. The company weathered the recession as it catered to government clients from educational institutions such as State College of Florida to military installations, including MacDill Air Force Base in Tampa, a major client.
Now, however, the office furniture market is changing, in an encouraging way, says Baker. Businesses are showing new interest in updating their furniture. “I would say the public companies and the large corporate-end users are starting to free up capital. Where before it was very strong federal and state, now we're seeing corporate America starting to come back fairly strong.”
And Florida Business Interiors, with its showroom in Ybor City, the trendy Tampa sector filled with repurposed warehouses, is ready for the new clients. It has a sizable furniture warehouse at another site.
For now, there are no plans to buy new trucks, or make other investments for a growing clientele. The company doesn't want to increase its overhead, the owner says.
But even as Baker and his team celebrate their new independence and prepare for corporate clients, he is keeping a wary eye on Washington. As with other business owners, he is anxious over the possibility of a tax hike and its potential consequences. “That means we have less money to invest in the business,” he says.
The nation's economic recovery is fragile, Baker notes. “It would be the worst thing to have companies that have eyed expansion suddenly start looking around, retreating, holding onto their cash because of uncertainty,” he adds. “That would not be pretty.”