Bringing luxury to the masses: distributor specializes in unique contemporary products.

When Terry Phillips saw an opportunity to marry contemporary lifestyle with functional products, he knew he'd found a way to scratch his entrepreneurial itch. And with that, the engineering graduate from Kettering University and the University of Michigan founded Astute Advance, a distributor that hawks everything from money clips to high-end home and office furnishings and everything in between.

Phillips infuses exclusivity in Astute Advance's products and compares his firm to retailers such as Brookstone and The Sharper Image. With one difference: his company focuses mainly on style, home and office furnishings, and product personalization.

Making the transition from a developer and program manager for Ford Motor Co. to business owner, Phillips was forced to use $150,000 from his own savings to launch Astute Advance in 1999. He took to the streets and used the phone to find his first customers. His initial outlay added up to long-term gains.

"I made about 6,000 phone calls that first year," recalls Phillips, 46, president of the Ann Arbor, Michigan-based firm. "I took the multifaceted marketing approach, and it worked."

The payoff has been significant for Astute Advance, which in 2004 sold $360,000 in audio-video equipment, home furnishings, watches and clocks, exercise equipment, and related goods. This year, sales are expected to reach $450,000, based on a growing demand for the company's products, which range from a $12 brushed aluminum money clip to home furnishing arrangements worth more than $40,000. Phillips also partnered with My Gifts sand Gadgets in Columbus, Ohio, through an affiliate relationship.

Astute Advance sells its products via the Web and ships directly to clients such as Omni Hotels, The NASA Glenn Garrett Morgan Commercialization Initiative, and the University of Michigan. "Most of our market is national versus local," says Phillips. "It's better for us financially to have a warehouse instead of a showroom."

In addition to distributing high-end functional products to customers throughout North America, Astute Advance also offers business consulting including business assessment and selection, idea research and validation, and product commercialization. Phillips adds that several Astute Advance products are currently on the way. "I'm an inventor at heart, and the plan all along was to create and sell our own products."

Like many distributors, Phillips says his biggest challenge is maintaining a positive cash flow. Serving as a middleman means paying vendors for merchandise, and then receiving payment from customers. When one of those three factors doesn't add up, distributors can quickly find themselves in hot water.

"We try to pay up front for everything," says Phillips. He prides himself on the long-term relationships he's formed with customers and vendors, who are sometimes willing to wait a few extra days for payment. "We've made mistakes along the way, and learned to double-source everything."

Going forward, Phillips envisions more large orders and expects to open an affiliate in Denver within the next year. As a registered minority vendor with the Michigan Minority Business Development Council, the firm has procured interested from Toyota, General Motors, and Federated stores.

"I'd really like to see the firm grow through those regional distributors, some of whom will buy and stock inventory-something not all firms want to do these days," says Phillips. "Within the next two years, we'll also have our own branded products in the marketplace."

Astute Advance; Ann Arbor, MI; 734-332-9228; www.astuteadvance.com