Utah is full of entrepreneurs and start-up businesses ready to capitalize on the next big idea.
But big ideas don't always mean big revenues.
Often, Utah entrepreneurs are too willing to cash out rather than growing their businesses to the next level, according to Mike Sharp, president of the Utah chapter of the Association for Corporate Growth.
Sharp calls it the "Utah syndrome," a common scenario among companies in the state with revenues of $10 million to $20 million.
"We see a lot of business owners that just get scared," Sharp said. "They don't want to risk their entire net worth growing to the $100 million range, because they know to get there they are going to have to invest heavily. And they're just nervous that they are going to roll the dice one more time and then lose it all."
Today, ACG will host its annual Capital Connection conference in downtown Salt Lake City, where 33 private equity firms and roughly 150 Utah companies will hear from experts on how to grow their companies and capture higher revenues.
Logan-based Chem-Dry, a carpet cleaning franchisor, is one company that simply would not settle for being small.
After starting with a couple franchises in the late 1970s, the company eventually partnered with a private equity firm in 1997 and another in 2002.
Today, the company has roughly 4,000 franchises and operates in 50 countries. Craig Donaldson, company president, said the Chem-Dry brand is now worth more than $300 million. And the company is not finished growing.
In January, The Home Depot Inc. purchased Chem-Dry for an undisclosed amount.
"They have literally millions of customer visits a day, and we want to turn that store traffic into jobs for our Chem-Dry franchises," Donaldson said. "We want to turn Home Depot carpet purchasers into Chem-Dry customers."
While not every company can grow from $10 million to $100 million, Jordan Clements, managing partner for Salt Lake-based Peterson Partners, said companies that have superior management teams and offer a product or service that is in demand can expand.
Peterson Partners has invested in roughly 50 companies since its founding in 1995, including Diamond Rental, Energy Solutions and JetBlue.
"A lot of business owners are finding that there is another approach, and that's where we get involved," Clements said. "They can sell a significant part of the business and obtain a significant level of personal liquidity and yet retain a stake in partnership with a firm such as ours, and then grow the business from $10 million to $100 million."
E-mail: danderton@desnews.com