Utah's excellent entrepreneurs: Ernst & Young awards to honor best in state

Obviously, receiving one of the Ernst & Young Entrepreneur of the Year awards means a person is doing something right.

But what that "something" is can be debatable and often different for each entrepreneur.

"It's the whole ball of wax," said Becky Lunceford, founder and chairman of Lindon-based For Every Body, a 2006 EOY award recipient for the Utah region and a judge of this year's competition.

"It's hard to separate one thing from another," Lunceford said. "You just have a feeling about the ones that really stand out."

Several of those standouts will be selected from among 25 finalist companies and honored with EOY awards during the annual gala at 6:30 p.m. Thursday in the Grand Ballroom of the Salt Palace convention center. (To read profiles of each of the finalists, look inside today's Money section.)

The people who judged those finalists said what's crystal clear, at the end of the day, are the myriad ways in which companies can fall short of the degree of excellence expected of Utah's best entrepreneurs.

So for all the nascent entrepreneurs in this enterprise-rich state, here is a cautionary primer of what NOT to do if you strive to follow companies like Backcountry.com, Stampin' Up!, Overstock.com and LoveSac to EOY glory.

• Do what everybody else is doing.

This year's finalists don't just offer good products or services. Many have literally built a better blender or home security service or retail store. Or they've found new ways to sell insurance, software and doors.

Innovation and creativity play a part in deliberations, said judge Mark Burton, founder and chief executive officer of Ogden's International Armoring and a 2006 EOY winner. Companies that lack those qualities won't be rewarded.

"It might be because their approach to how they did business was not very inventive or necessarily original," Burton said. "Maybe the background of the company was not quite as strong as some of the others."

A number of this year's finalists excel at what Burton called "staying ahead of the curve."

"Some of them have reinvented their companies," he said. "They were going down one path, and they discovered another path with so much more potential. To change your approach, especially if it's working, is a real risk. You have to have some vision to do that.

"It's like this: If you're going along making $10, maybe you're happy with that, but then you see an opportunity to make $100. That's huge, and if you're really going to be an entrepreneur, you take the step."

Other companies, he said, created markets where none existed before or found a business model no one else had seen.

"They found a new way, and they did it very well," Burton said. "There's some very profitable companies out there."

• Don't worry about profits.

Ah, profits. Money's not everything, of course. But it does make the business world go 'round.

"They need to show profitability; that's the reason you're in business," said Lunceford. "Also sustainability: Is this a business that's only going to be here for a short time because they have a product that's going to be outdated or out of style soon?"

Burton said strong financials are always impressive, though some companies' growth is so explosive that it most likely won't last.

"We discussed one company, and we just looked around at each other and said, 'How do they do that? How do they produce that type of margin?"' he said. "And you do ask, will they be able to sustain that, and probably they won't. But it's impressive to see it."