By Peter Behr
Washington Post Staff Writer
Monday, January 19, 1998; Page F06

When Michael J. McLister went into business for himself five years ago, he started out with some low-rent space in an unheated furniture warehouse in Herndon and a $4,000 contract to troubleshoot a big company's software system.

Last year Business Impact Systems Inc. ran up $8.5 million in revenue, putting it at the top of Washington Technology's annual list of the 50 fastest-growing technology firms in the Washington region, in another demonstration of the area's fertile climate for entrepreneurs who find the right niches.

The technology newspaper's rankings are based on five years of revenue growth attested to by companies' accountants. Making the top 50 requires a head-snapping acceleration: BIS's five-year growth was 16,198 percent. The last company on the list, Realty Information Group L.P. of Bethesda, went to $7.83 million in revenue last year from $930,786 in 1993 a 742 percent increase.

Only six of the 50 had revenue of $50 million or more, led by Edgemark Systems Inc. in Silver Spring, a technology consulting firm that reported sales of $105 million last year. Slightly more than half the companies had appeared at least once before on the 11-year-old Fast 50 list, but most companies find the pace difficult to maintain. Only three of the top 50 in 1995 made the 1997 list.

As in the past, the government's primary affirmative action program for small contractors provided crucial support. Twenty-seven companies participated in the Small Business Administration's Section 8(a) program, which allows federal agencies to award sole source or limited competition contracts to approved minority-owned businesses.

Twelve of the 50 companies are women-owned, compared with nine last year and eight in both of the previous two years.

McLister was a high-volume sales representative for Electronic Data Systems in 1993 when he decided to assemble a team of experienced engineers and computer systems specialists to help clients solve problems with business management software programs. The timing was perfect, coinciding with the rapid growth of new software systems sales and a worsening shortage of technicians trained to handle them.

Unlike many larger competitors, McLister was able to offer key newcomers stock in the young company.

"I wanted the early partners to have a stake in the firm," he said. "When I had all the stock [but no business], I had 100 percent of nothing."