How does a business grow? (Hue Inc.) (Company Profile)

MANY BUSINESSES GET STARTED on a shoestring. Sandy Chilewich and Kathy Moskal started theirs on a pair of black shoes. In 1978, on a whim, the partners (who were neighbors at the time) took a pair of Chinese cotton shoes they had uncovered in Moskal's closet, bleached them, dyed them fuschia and showed them to friends and neighbors.

Not only were their friends impressed, local retailers were as well. In no time, the shoes (dyed in a palette of exotic colors) were selling like Pet Rocks. Chilewich and Moskal began adding other lines--vividly colored accessories--and before a year was up, their company, Hue Inc., was looking at $90,000 in sales.

The partners could have stopped there--and the majority of entrepreneurs would have. "Most business owners are what I call lifestyle entrepreneurs," explains David Gumpert, author of How to Really Start Your Own Business. "They're most concerned with providing an income for themselves and being their own boss." Only 25 percent of America's 20 million small businesses have any employees. A minuscule .003 percent employ 100 people or more. Women-owned businesses are particularly susceptible to languishing in Lilliput, economically speaking. "Women usually run homebased and service-oriented ventures with little potential for expansion," explains Marsha Firestone, PhD, vice president for training and counseling at the New York-based American Woman's Economic Development Corporation (AWED). The reasons: lack of capital, fear of risk-taking, and an unwillingness to take control of their financials.

"When we ask women what their business fantasies are, they answer in diminutive, idealistic terms," says Firestone. "Rarely does someone come in and say |I want to be the biggest.' Women have been programmed to think they can't run a million-dollar business...they just haven't been taught to think big."

That's not Chilewich and Moskal's problem. Today, Hue, now legwear company, employs 96 people, occupies a 12,000-square-foot office on Manhattan's Fifth Avenue and generates sales of $38 million a year. Like any successful business owners, Chilewich and Moskal had a solid business idea, ample capital and plenty of perseverance. But growing a business beyond the lifestyle phase takes more than these fundamentals. As their story shows, business-building takes the vision and daring to seek out new sources of capital; plow money into advertising and promotions; leap into new markets before your competitors; hire top-flight personnel (and actually delegate work to them); engage in palm-sweating scrutiny of the bottom line;and much more. Opportunity and growth have to be bought.

HOW SHOES LAUNCHED A BUSINESS

Hue's creation may have …