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Work it


  • By Mark Gordon
  • | 7:52 a.m. May 17, 2013
  • | 2 Free Articles Remaining!
  • Entrepreneurs
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Skeptics sometimes creep up on Mark Pentecost and jab him with a disbelieving frown.

That's not a total surprise, especially considering Pentecost's firm has had some colossal growth recently, like a 590% increase in annual revenues, from $29 million in 2010 to $200 million in 2012. That makes the company, Bradenton-based It Works Global, one of the biggest, and fastest growing, privately held firms in the Sarasota-Bradenton region.

The firm had $1 million in sales in one day in March, a first-time feat. Then it did it several more times in April, when it set a monthly sales record at $45 million. More than 300,000 people have bought its products, and the firm has 50,000 independent distributors worldwide. “It's going crazy here,” says Pentecost. “We're killing it. We've become a customer-generating machine.”

Yet the skeptic script almost always repeats itself. Pentecost realizes some people doubt a local business, in a region that produces few gazelles, can really grow that much, that fast. Further, the firm's flagship product — a cloth wrap infused with a botanically based cream that can tighten and tone a body and waist in 45 minutes or less — almost demands doubt.

Pentecost, though, rarely takes offense to the uncertainty. He usually says something similar to what he told a stranger on a cruise in March who flat out asked him if “it really works?” Replies Pentecost: “I told her that after 11 years it has to, otherwise we should call the company, 'It Doesn't Work.'”

It Works, instead, sells a line of wellness and health products, including the Ultimate Body Applicator wrap, through multi-level marketing. That business model, where a sales force earns money on sales and on the sales of other distributors they recruit into the network, has faced a bevy of its own skeptics. A prominent Wall Street investor, for example, recently alleged that Herbalife, a $4 billion multi-level marketing firm, is a pyramid scheme for relying on network recruitment, not product sales, to generate revenues. Herbalife, denies the allegations.

But for all the skeptics, plenty of others consider multi-level marketing companies an entrepreneurial dream that's minted many millionaires. The walls of It Works' headquarters, a former concrete and building materials office, are filled with framed pictures of the people nationwide who have reached that seven-figure sales mark.

It Works has 58 employees in the corporate office, which Pentecost plans to relocate to Palmetto, just north of downtown Bradenton, later this year. A chunk of the those employees moved to the region with Pentecost in early 2011, when he moved the company from Grand Rapids, Mich., where he founded it in 2001. Manatee County and Florida economic development officials dangled about $800,000 in performance-based incentives and tax refunds for It Works to move south.

Now Pentecost says 2013 looks like it will be another strong growth year, with $500 million in sales a reasonable target. But the hyper-competitive Pentecost already looks past that mark, to what some consider the valley of death for large fast-growth businesses: The leap from $500 million to $1 billion.

“You get to a certain level of sales and you think you don't have any problems,” says Pentecost. “But you do. It's just a new set of problems. Now we have high-class problems.”

Overcome challenges
One of those dilemmas, says Pentecost, is the supply chain must keep up with the demand. That's because the firm now has a line of skin care products and nutritional supplements — all sold under the direct-selling model. No products, from weight loss energy bars to a stretch mark moisturizing cream, are sold retail. Says Pentecost: “We could sell as many products as we can get our hands on.”

Pentecost also makes sure employees stay focused on small goals to build up to big successes. He constantly reminds employees that the firm can't do everything. “It's really easy to get distracted,” he says. “Our no's mean as much as our yeses.”

Pentecost admits he has to check himself, too, from overdoing it. “I'm a very competitive person. I'm always setting goals,” says Pentecost, a former high school teacher and basketball coach. “My biggest problem could be my competitiveness. I get obsessed with winning.”

Another challenge for Pentecost is It Works has attracted complaints. For instance, the Better Business Bureau West Florida office, based in Clearwater, has received and closed 172 complaints on It Works Global in the last three years. The agency says it closed 108 complaints in the last year.

The complaints, according to the bureau's website, include allegations of customers who receive the wrong products; consumers who receive additional products after trying to cancel orders; consumers who say the firm bills them after cancellation; and customers who say they didn't know about a $50 cancellation fee. The firm earned an A- ranking from the bureau on an A+ through F scale.

Pentecost says the complaints, while taken seriously, total less than 1% of the firm's 350,000 monthly orders. Company spokeswoman Kate Martin adds that most of the bureau's reports stem from termination fee issues, which can also be a misunderstanding. “We are currently reviewing the termination terms and system to improve our customer experience,” Martin says in an email response to questions about the Better Business Bureau grades.

Tough love
All the challenges, from complaints to supply chain, are the polar opposite of what Pentecost dealt with when he founded It Works. Pentecost was a teacher and coach back then, and he sold phone services at night through a multi-level marketing business. He had a passion for teaching and coaching. But Pentecost, who was born on a farm in Tennessee and grew up mostly in Michigan, also discovered he was a good salesman.

His opportunity to prove it full-time came when heard about the It Works wrap from a friend, Pam Sowder. Pentecost and his wife, Cindy Pentecost, used the product, invented by Luis Mijares, a skin care scientist. They believed in it and started the business. Sowder and Mijares are executives with It Works today.

Things started slowly. Pentecost invested $300,000 to $500,000 of his own money in the company, and he and Cindy Pentecost took out a second mortgage to keep it afloat. “We didn't pay much in the beginning,” Pentecost says. “We didn't have much.”

Now It Works has customers nationwide and in Australia, Canada and parts of Europe. The international division makes up about 5% of the total business.

But while It Works has grown substantially, one constant, say people who know Pentecost, is the founder's ability to coach and teach through tough love.

“He's like a general you want to go to war with,” adds Don Hamilton with the Grand Rapids office of Huntington Wealth Advisors, who has been It Works' banker since its inception. “He's the little engine that can.”

Klein, Hamilton and others, including It Works employee Zach Hesse, say Pentecost's energy and competitive zeal also run unusually deep. Klein has seen it come out when Pentecost plays cornhole, a beanbag toss game. Hesse has seen it on the golf course and in the boardroom.

“I've never seen anyone who doesn't rest on his past like Mark,” says Hesse, an assistant to Pentecost. “There is something about his drive. He just goes and goes and goes.”

Snazzy scene
The next physical place Pentecost, and It Works, will go is into a new corporate headquarters.

That building, which Mark and Cindy Pentecost bought late last year, is on the Palmetto side of the Manatee River and was previously a health club and spa and a bar. The Pentecosts paid $3.13 million for the 36,000-square-foot building, according to Manatee County property records.

Renovations, which Pentecost says will cost another $3 million to $4 million, are already under way, with a possible completion of later this year. Plans include the addition of a glassed in outdoor fourth floor with a fire pit that will replicate a snazzy nightclub scene. Pentecost says that floor will be used for training and entertaining the sales network. Another potential feature of the building: Pentecost says there will be a slide on at least one floor, instead of an elevator.

The plans, in general, scream fun over formal — which is just how Pentecost wants it. “I tell people I'm more Jimmy Buffett than Warren Buffett. I'd rather be in sandals and shorts. We like to have fun here, but we still take the work seriously.”

Mark of Success
Mark Pentecost, founder of It Works Global, hasn't shied away from enjoying the spoils of success. His recent feats and purchases include:
- In October 2010 he bought the 18-hole Stoneybrook Golf Club in east Manatee County. Pentecost and his wife, Cindy Pentecost, paid $3.5 million for the course, which is now where the firm holds training seminars and events;
- He bought a 340-acre ranch in Myakka City last year. He hunts, drives a four-wheeler and generally pals around with employees and friends there;
- He attended the Masters Golf Tournament and he played in a pro-am event at the Innisbrook Resort and Golf Club in Palm Harbor, where teamed up with 2003 U.S. Open winner Jim Furyk.
- A lifelong fan Michigan State athletics fan, Pentecost recently traveled with the school's basketball team on its team bus, for a game against Indiana University.

 

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