SBA’s ‘Academy Award’ Goes to Costa Mesa Exec

David Cline, who guided Balboa Instruments Inc. in Costa Mesa from a start-up to a leading maker of electronic controls for spas, won the U.S. Small Business Administration’s top entrepreneurship award Wednesday.

It is the first time in the competition’s 37-year history that a Southern Californian has landed the prestigious National Small Business Person of the Year award.

Cline, who founded Balboa 21 years ago after a hydroplane boat-making business failed, is scheduled to meet President Clinton today along with some winners of state and specialty SBA awards.

The award also recognizes, in effect, that thousands of small businesses throughout the Southland form the backbone of the region’s economy. Local companies and their investors have transformed Orange County into “one of the top 10 entrepreneurial centers in the country,” said UC Irvine economist Dennis Aigner.

The federal agency selected Cline from among 53 regional winners, one each from every state, the District of Columbia, Puerto Rico and Guam. Judges considered profitability, sales, employment growth and community service.

Cline, a 56-year-old Cal State Fullerton graduate, joins the ranks of Ben Cohen and Jerry Greenfield of ice cream maker Ben & Jerry’s and David Giuliani of toothbrush maker Optiva Corp. as a national SBA winner.

“I’m feeling absolutely bowled over and delighted,” Cline said Wednesday in a telephone interview from Washington, where he accepted the honor. “It’s like winning the Academy Award.”

The private company’s earnings and sales have grown 25% a year for nine years. It recorded $38 million in revenue last year.

Cline credits the company’s 300 workers for Balboa’s success and said he tries to treat them well.

About 22% of Balboa’s annual pretax earnings, for instance, are distributed to workers as a combination of cash and 401(k) matching funds. Workers who put in an extra half hour on the job Monday through Thursday can take off Friday afternoon to get a jump on the weekend.

Cline also holds monthly pizza lunches with employees to talk about operations, and needed a forklift to deliver all the food at last month’s meeting.

As one key morale-booster, he rewards talented employees by promoting from within the company whenever possible.

“Dave . . . talks to and encourages everyone from production workers to managers,” said Cindy Otto, 35. In 17 years at Balboa, she said, she has risen from the assembly line at $5 an hour to vice president of engineering with a salary in the “high five figures.”

Chuong Phan, 28, of Garden Grove has been promoted six times in his five years at Balboa and now supervises 38 workers in the manufacturing plant.

“I have great opportunity here,” said Phan as he stood on the crowded floor amid the sounds of drills and hot presses and the bustle of workers assembling spa control systems that regulate water temperature, lighting and bubbles for hot tubs.

Phan, who has nearly doubled his starting salary of $7 an hour, said he has no intention of leaving.

As a measure of the respect Cline has within the company, he was secretly nominated for the award by his employees, as well as by the Costa Mesa Chamber of Commerce. He has said he was “totally surprised” to learn about it later.

Balboa grew steadily for about a decade until it lost its only client. With sales and profits plummeting in 1989, Cline spearheaded efforts to bring in new customers, reviving the company.

Over the years, Balboa has invested heavily in technology to be able to fill orders in five working days for such clients as Jacuzzi and Coleman Spas.

Cline said he also has used the company’s profits to help the community. Balboa offers summer intern jobs to high school students every year and hosts several field trips for area high schools, he said.

Stacey Sanchez, an SBA spokeswoman in Santa Ana, said Cline reflects the “creativity, persistence and importance of Southern California entrepreneurs.”