San Diego Business Journal

In the feast-or-famine business of image-making, two Lyons are gorging themselves on the meaty advertising needs of emerging companies.

Things are so good, Mark and Susan Lyon soon will move into a $2 million, 9,000-square-foot, two-building production center in Solana Beach for image strategies, logo design, Web site layout and commercial tapings.

It's the perfect habitat for the two Lyons.

The husband and wife team of Mark and Susan Lyon are the craft and cunning of Lyon & Associates Creative Services, Inc., a 9-year-old design and strategic marketing firm in Encinitas.

Named February's Emerging Business by the San Diego Regional Chamber of Commerce, the firm's client list includes Sharp Healthcare, 3Com and IBM Microelectronics.

Initially a "maybe" business first run from a spare bedroom, Lyon today is expected to generate more than $3.8 million in revenue annually now. The majority of revenue is derived from emerging companies searching for an image to compete in start-up industries, Susan said.

From naming a company to designing the business cards, "we're about as ground up as you can be," she said.

Most clients come looking for a basic Web page.

"That's fine if you want to promote the Downtown Encinitas Main Street Association, but it's obviously not what a corporation should do," she said.

Professional Attitude

That's the vigor and professionalism Lyon & Associates brings to the table, clients said.

"For being such a small shop they really have their act together," said Chris Kane, director of marketing communications for the San Francisco-based SiteROCK. The managed-service provider maintains E-business systems in real-time, including third-party contingencies, remotely.

Lyon & Associates produced the SiteROCK name, logo, Web site, company brochure, advertising and overall messaging.

Lyon & Associates' most attractive quality, Kane said, was its flexibility.

"We're a new business in a new environment that is highly reactive and still evolving," he said. "We needed to work with a design company that did not need to be overly rigid and, believe me, a lot of them are."

Over the past year Lyon & Associates has quietly moved away from printed materials, placing more emphasis on overall strategic marketing, Web site development and television commercials.

"When we first started we were making a third of our money marking up print. Now it's like a sixth," Susan Lyon said.

The results of the shift from the photography, printing and mailing aspects of the business means profits are up; revenues are down; and hours billed are way up.

"The print side appears to be just holding firm, but the other side is adding," Mark Lyon said. To move to the Internet and video production "is a great opportunity. It's just something we have to go with."

It might be because their client group is pushing them in that direction, said Ted Hansen, president of the 28-year-old, San Diego firm Hansen Associates. Primarily known as a design company, Hansen's clients include the county of San Diego, Cox Communications, Trophy's restaurants and Scripps

Lyon & Associates Creative Services, Inc.

Owners: Mark and Susan Lyon

Employees: 14

Revenues: $3.8 million in 1999; $3.8 million projected for 2000

Business: Advertising and strategic marketing

Ocean View Convalescent Hospital.

"We started doing Web work because we had a couple of clients who said, 'You're our design firm and we want you to do it,'" Hansen said.

It's a move all design firms will make sooner or later, he said.

Evolution

"I think it's unavoidable in the future," Hansen said. "I think eventually design firms will have to deal with it because you'll be thought to not have a pre-designed service."

Hansen said he'll be one of the last design firms to evolve.

Professionally, the best thing about being the boss, Susan Lyon said, is tinkering with the system.

"I have a lot of friends from business school who are one step away from being partners in the top consulting firms and they don't have that opportunity," she said.

Personally, she said, it's helping her employees buy a house or put a spouse through college.

Although a small company, employee wise, Lyon & Associates has a profit sharing program. Every fiscal quarter, 20 percent of the revenue is divided among the firm's employees equally, regardless of seniority. Employees are eligible if they have worked at the firm for a year and can directly contribute to revenues or controlling costs, Susan Lyon said.

"We did this in the beginning because we were too poor to pay competitive salaries," she said. "We were like a communist country."

The Lyons believe the quarterly payout encourages their employees to remain focused and work hard.

"I think it's really critical to our success, because it allows our employees to engage on projects as if they were owners," Mark Lyon said. "I don't think the effort would be as strong without employees seeing a direct link between their efforts and the return."

To promote employee retention, the firm puts 15 percent of what every employee receives in gross compensation every year (salary, bonus, and profit-sharing) into a high-yield mutual fund. The fund is only paid in full should the employee leave the firm after six years, she said.

On the Fast 'Trek'

The Lyons don't take titles seriously. Their official titles , president and secretary , were switched back and forth for years. They're not sure which is which now, but "Captain Kirk" for him, and "Scotty" for her, will suffice. At home they're still Mommy and Daddy to two boys, ages 3 and 6, and maybe it's best that way , they are partners.

"I'm not sure we could have managed two careers in different arenas," Susan Lyon said. "I think then we wouldn't have been intertwined enough to make it through the blur of sleeplessness both parenthood and a growing business inflict and come out still happily married."