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Fortune Small Business

Highlights of the April 2006 Issue of FSB: FORTUNE Small Business

The full stories are available at FSB.com.

COVER PACKAGE:
Move Over Mister! Which Women Get Big?
, by Anne Fisher, page 25
When it comes to building large businesses, women lag far behind men-but that's changing fast. According to the Center for Women's Business Research (CWBR) only 6.6% of the U.S. businesses with more than $1 million in annual sales are owned by women. Clearly female entrepreneurs have some catching up to do. What's encouraging is that there are signs of a dramatic shift. Women now own some 10.6 million firms-nearly half of the privately held businesses in the country, according to the CWBR, up from 44% in 1997. In many ways the playing field is beginning to level for women who want to take those small companies and turn them into giants.

SECURITY
Face Time
, by Seth Stevenson, page 63
New software could eliminate once and for all the need to memorize passwords. Passfaces, a fast-growing Annapolis firm, has created software that takes advantage of the astonishing neurological talent for recognizing faces. The companies list of clients includes about 1,000 staff members and lawmakers of the U.S. Senate.

CONTROVERSY
Blood Brothers?
, by Ron Stodgehill, page 76
Celebrity jeweler Neil Lane creates red-carpet rock candy for the likes of Barbara Streisand, Madonna, and Renee Zellweger, plus enough royal weddings to keep paparazzi cameras clicking forever. Lane's cozy niche could be at risk, though, as he moves to grow his business through a partnership, producing an exclusive line of jewelry, with the controversial diamond-mining colossus DeBeers. For years DeBeers bought diamonds from virtually any supplier without asking many questions about their provenance, which, critics charge, helped fuel bloody conflicts in Sierra Leone, Angola, and the Democratic Republic of Congo. Ominously for Lane, "blood diamonds" have become a Hollywood social cause. Despite that, Lane decided that the potential reward for partnering with DeBeers was worth the risk in activist backlash.

HEALTHY BUSINESS
Greener Tea
, by Samuel Fromartz, page 85
In a highly competitive market, bottled-tea company Honest Tea has rocketed to $9.5 million in annual revenue in just seven years and broke even in 2005, thanks in part to a radical decision it made a few years ago to switch its entire line to organic teas. Although organic foods and beverages account for just 2% of the $460 billion in U.S. food sales each year, they have become the market's fastest-growing segment: Sales have risen at a double-digit rate for the past few years-and 19% in 2005 alone, according to industry tracker A.C. Neilsen. But while the organic niche might seem, in hindsight, like a no-brainer, it took brains and guts to get it right. Honest Tea had to find sources for organic ingredients, offer customers a brew both tasty and pure, and create an identity that clearly stood apart from the Liptons and Cokes of the world-none of which proved easy.

FREE AGENT
Heart Monitor
, by Patricia B. Gray, page 71
Wayne Sotile is a cardiac psychologist who soothes stressed-out entrepreneurs-and his talk isn't cheap. In the past five years Sotile has doubled annual revenues by focusing on a specific niche: teaching entrepreneurs and other high achievers to manage their hard driving personalities and fast-paced lives and avoid heart disease.

INVENTORS
Vision Quest
, by David Whitford, page 45
Ron Lando has energy, a great product, and a patent, but is that enough to protect his eyewear company? Lando's company CliC, manufactures glasses that fasten in the front, between the lenses, with a magnet. They wrap around the head, rather than hooking over the ears, and have adjustable sideposts. CliC had a breakout year in 2005, generating more than $5 million in U.S. sales and another $2 million overseas. Of course, a lot can go wrong though. "If your product has significant revenue potential, somebody's going to try to take a piece of it," says Andy Gibbs, founder of consulting firm, PatentCafe. "The patents will be challenged or intentionally infringed with a response, 'So sue me.'" For now, Lando is willing to risk it all to maintain absolute control of his company and his product.

In Startup: A handful of cases coming before the Supreme Court this term could have a big impact on your business. Plus: Why home repair help is so hard to find. And a small firm profits by turning ordinary vehicles into promotional machines. Also, a disinherited Sweet'N Low scion dishes on the rise and fall of the family business in a new memoir.

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