With a bit of luck and some hard knocks along the way, Mike Cachat, 31, has built a thriving business out of a one man show.

At age 16, Cachat started JensonUSA, an online catalogue that sells bicycling merchandise, as a way to pay for his travel to mountain bike competitions, all part of his desire to earn a sponsorship from a gear company that would catapult him into semi-professional or professional racing.

Cachat, who now lives with in Temecula with his wife and children, had always had a notion that he wanted to be an entrepreneur.

At age 13, he helped out at a bike shop in Brea where Jon Forrest, then the manager, began mentoring him. It was clear to Forrest, who coached the young mountain biker in riding skills and bike building, that Cachat's maturity and thirst for knowledge would pay off.

"He'd always dreamed about having a business," said Forrest, now the CEO of iCAN international, an organizational consulting firm. "There was no question that he was going to be an entrepreneur."

Cachat consistently peppered Forrest with questions about the biking industry, so it was no surprise to Forrest, when the teenager asked him how to start a business selling bicycle parts.

Fifteen years later, with 50 employees, a headquarters and warehouse in Ontario and a retail store in Corona, JensonUSA is one of the rare Inland Empire businesses that is growing despite the economic downturn.

In November, Cachat was honored at the 7th Annual Spirit of the Entrepreneur black-tie event with an award in the general entrepreneur category.

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Steven Lewis / Special to the Business Press

Kyle Faught places shippinglabels on orders at bicycle part retailer Jenson USA's Onratio warehouse. According to Jenson USA, online orders placed by 5 p.m. will be shipped the same day.

The company is in the process of hiring more help. Cachat declined to disclose company revenue.

Several years into the running of JensonUSA, Cachat found himself immersed in financial troubles and struggled to keep his life's dream from going under.

For Cachat, starting an online mail order catalogue for mountain bike components and accessories seemed like a natural step. He felt he had the maturity and drive to run a business.

In addition, he had some background in the catalogue business. His uncle worked in direct mail, and his father worked for a fulfillment company, processing orders for mail order companies.

In the first few years, Cachat's age proved to be a hindrance. When he interviewed his first potential employees for a job opening, they asked him if they were part of a joke and if they were being taped by a hidden camera. Meeting face to face with vendors also didn't go well.

Cachat found that it was easier to do business by telephone.

"Over the telephone, it took age out of the equation," he said.

"People didn't know how old I was."

Cachat wasn't deterred. He wanted to be self-made. He came from a frugal family. He had learned from them how to conserve money in his business, but it also made him want to live differently.

Cachat devised an rigorous schedule in an attempt to balance school and JensonUSA. He would attend classes from 6 a.m. to 11 a.m., then head back to his parents' house, where he would work until 1 a.m.

Afterward, he would finish his homework before bed.

Sleeping was one of the only activities he could cut back on.

"There were a lot of things I missed out on by starting a business at such a young age," he said.

The business took off. The phone was ringing. Orders were rolling in.

Meanwhile, Cachat's bedroom was serving double duty as sleeping quarters and warehouse. Boxes of mountain biking merchandise were stacked to the ceiling.

In 1996, one of his vendors threatened to refuse to sell to JensonUSA because the company didn't have a storefront, a violation of the vendor's terms and conditions.

Cachat, now 17, could afford to rent the warehouse space that he picked out in Yorba Linda, but he needed his father to co-sign the lease.

He had also reached the point where he needed to hire an employee to take orders while he was in school.

Gradually, he increased his staff and delegated more and more of the duties -- advertising, accounting, buying, shipping.

Around that time, he discovered he had made a huge mistake in his accounting system that would take the company to the brink of failure.

When he looked at his spreadsheets, it looked like the company was making money. In reality, money was being lost.

The process for keeping track of purchases was flawed, and his balance sheet was inflated. Over time, the cost of goods sold was undervalued, and the inventory was overvalued.

"What was physically in the warehouse was a lot different than on paper," Cachat said.

The mistake took two and a half years to show up.

By then, it was 1998, Cachat was 19 years old, and he owed approximately $700,000 to his vendors.

"I had vendors beating down my door for money -- lawsuits, collection agencies, anything you could imagine," he said.

Cachat had no recourse but to lay off about a dozen employees. The two he kept are still with the company.

Five or six vendors sued him for nonpayment. Rather than turning inward, he started asking everyone he knew for advice -- his employees, his father, his mentor, John Forest.

"I think if there's one thing that sums up Mike, it is that he is a survivor," Forrest said. "He's got this unflappable spirit. He made some really significant mistakes and miscalculations. That was the point at which he realized if this was going to work, he needed to get an education on running the financial side of the business."

Finally, Cachat sat down with his vendors and showed them the financials. The only way he could pay them back would be to turn the business around.

"I was just up front about everything. Here's the financials. Here's the deal," he said.

And it was during this time that Cachat developed a new motto for the company -- "To be the best company for customers to buy from, vendors to sell to, and employees to work for."

Before, Cachat hadn't been as honest as he could have been with customers or vendors.

If a customer called asking if an item was in stock, Cachat would reply, "Yes, that is available," even if he had to order it. And, he says, he took advantage of his vendors' terms.

"That did a lot of damage to our name in the industry," he said.

One of the changes he implemented had to do with the JensonUSA Web site, which was one of the first besides Amazon.com to post the real-time status of inventory stock and the customer's order status.

"We were up front with our customers," Cachat said. "They loved it, and then we would ship it next day air just to blow them away."

"I think we were pretty cutting edge at that point in time," said Jeff Bolkovatz, information technology director, who has worked for the company since 1996. The company was also one of the first to offer online price matching, Bolkovatz said.

JensonUSA began paying its vendors early, becoming one company within a select few in the biking industry to do so, Cachat said.

In 2001, the company had outgrown its space in Yorba Linda, and Cachat moved the operations to Ontario. But the relocation was ill-timed and coincided with the downturn following Sept. 11. The cost of upgrading to a new software system, combined with the cost of the move and the dive that sales took immediately after the terrorist attack, posed a challenge. The company was losing money again.

Two of the areas, the company has focused on has been customer service and improving its presence on the Internet .

"We realized our goal wasn't so much to get as much stuff on a page as much as to show a great deal," said Travis Hanson, art director. "In the last four years, to see us grow, it's been surreal."

In 2004, Cachat implemented a profit-sharing structure for employees.

Within four months, the company became profitable again. Cachat believes that being open with the company's financials with employees has benefited business operations.

"Since Mike is so open with the books, it really drives everyone's decision-making ability," said Justin Christopher, sales and marketing director.

About 20 percent of JensonUSA's business comes from buying distressed inventories; the rest from regular merchandise companies. The company buys wholesale and sells at the minimum MSRP, Cachat said.

Cachat thinks purchases have remained strong because cycling can be an inexpensive sport to get into and because, with layoffs and furloughs, people have had more time for hobbies.