Sow The Seeds, Reap The Rewards
The husband and wife team that is VAR Step One Solutions fertilized its company by finding a Web-friendly software package and planting the Internet in its business model.
The meeting of Wayne Poirer and Sue Devlahovich involved dozens upon dozens of roses and sparks flying between the two. They weren't sparks of passion (though they might argue otherwise), and Wayne wasn't showering Sue with flowers. The sparks were from the tip of a welding torch, and the roses adorned parade floats. It was shortly before the Tournament of Roses Parade in 1991, and Wayne had volunteered to help build floats. He was welding a frame that would soon be covered in roses when Sue walked into the barn, looking to help out. "We're only welding right now," Wayne told her. "Well, I could probably learn that," she replied. Eleven years later, Wayne and Sue continue to learn from one another. The two are husband and wife and business partners.
A self-taught entrepreneur from Massachusetts, Wayne Poirer got a foothold on the POS (point of sale) business in the hospitality division of Data Terminal Systems (DTS). He realized a desire to branch out on his own in 1988 when he became the sole proprietor of Step One Systems, the business that would grow into Burbank, CA-based Step One Solutions (SOS), (www.steponesolutions.com). Sue, a legal secretary of sixteen years, began working full-time with him shortly after their marriage and has since become his partner. Together, they have grown the business from a peddler of brick-and-mortar POS stations to an integrator of solutions that exploits modern means of electronic communication, sprouting a Web design firm and a hosting company along the way.
Eliminate Potential Thorns By Managing Growth
In the beginning, the company's goals were simple. It focused on installing traditional POS stations in brick-and-mortar family businesses. In 1988 Poirer won his first big contract with Shoe City, a small, family-owned retail shoe store with one location in Los Angeles. Today, Shoe City operates 27 stores in L.A. and Orange County, all of them using SOS for hardware, networking, installation, and support. While rapid growth like Shoe City's can be profitable for the VAR, it challenges Poirer's small staff of seven, especially when his brand-new customers need training as well. To address that challenge, SOS is in the process of developing a CD-based training kit. "We want to take advantage of technology to continue to make things easy for the customer. A CD training kit will give them something to refer to when they have questions or take on new staff. It saves them money and alleviates our cost of providing training," claims Poirer. The training kit will also minimize one of Poirer's biggest challenges - finding and hiring the right employees. "It takes even a computer savvy person a year to get up to speed in this industry. There's a lot to learn about the retail business, all the peripherals, the technologies, and who the players are. Responsiveness is an attribute that POS service people must have," says Poirer. "When a computer goes down in a store, that store is out of business. Once you're this deep in the technology, it's impossible to go back to the cigar box mentality."
The Right Tools For The Job
At first, expensive hardware and incompatible peripherals hindered Poirer's effort to introduce small businesses to new technologies. Falling prices on computing hardware have made his job a little easier, though, and Internet technologies such as VPN (virtual private network) and DSL (digital subscriber line) have given the company the ability to work remotely. SOS has most recently been taking advantage of the Web to set up and administer complete POS solutions remotely. Metalsmiths (Edmonton, Alberta) is a 17-store jeweler where SOS averages three new store installations per quarter. Interestingly, since winning the contract in May 2000, SOS has never actually been to Metalsmiths. The hardware it sells to customers like this, including EMAX double-sided pole displays, MS cash drawers and POS decks, Star receipt printers, Symbol Spark scanners, and Dell Pentium and E-Axion monitors, is shipped from SOS and installed by the customer, with telephone assistance available if necessary. The plug-and-play capability of most POS hardware lends itself to ease of installation, precluding the VAR from needing to physically visit the installation site. Software transactions and service calls are handled securely over the telephone and Internet using DSL. "From our office, we can monitor and control the polling of data from the stores to the customer's home office. If something goes wrong, we can fix it from here. As hardware becomes cheaper and more reliable, we're leaning toward software-based customized solutions, software support, and training as our main sources of revenue." And the Internet, says Poirer, has "opened the floodgates" to these revenue sources.
While he takes his hiring decisions seriously, Poirer notes that it's the corporate decisions he's most wary of. "We don't make big decisions; we make a lot of small ones based on set goals," he says. "Frankly, I'm cautious about making big decisions. If you make the wrong one, it takes a long time to recover." But despite his vigilance, Poirer has made some weighty decisions recently, including the acquisition of Universal Web Designs (UWD) (www.uswebdesigns.com) on January 1, 2000, and the development of Step One Hosting (www.steponehosting.com) shortly thereafter. He considers these additions more an evolution than an overhaul.
The relationship with UWD began when Wayne and Sue contracted Shawn Younquist's Universal Web Designs in 1999 to build the SOS Web site. The Poirers were so impressed with Youngquist that they made him an offer to join their business, which he accepted, and he was soon named a partner. The addition of Internet design capabilities expanded the power of SOS' arsenal, helping it win clients like VitaGanza, a hybrid brick-and-mortar/e-commerce business that sells vitamins and nutrition supplements. "Keystroke POS software (Dillon, CO) has allowed us to connect VitaGanza's storefront and e-commerce inventory management," says Poirer. "We sell Keystroke because it comes with all the bells and whistles, because we know that our customers are going to grow. We just keep the bells and whistles turned off until customers are ready for them," he says. "When they're ready, we come back in and turn them on and train the staff. There's revenue built in that way."
SOS' ability to network inventory management data between different sales channels for Vitaganza opened the door to a high-profile partnership with nationwide television infomercial company Guthy-Renker. SOS is currently completing an installation for Guthy-Renker that will centralize its entire ordering process on the Internet.
The speed of advancing technology has set the pace of growth for SOS, which was installing pure brick-and-mortar POS networks as little as two years ago. "If a customer is having a problem, we just look around and identify a technology that will provide the solution," says Poirer. "You'd be surprised at how many calls we get at Christmastime when customers want to process credit cards faster. We install a DSL and their problems are over. Cards are processed in three seconds instead of fifteen. Where there's a problem, there are technologies that offer a solution," adds Sue.
SOS could now install brick-and-mortar POS stations, design Web pages, and integrate inventory management for physical and virtual storefronts. But, Poirer wanted to take the same "one-stop-shop" mentality that he started with and apply it to his Internet interests. In a business environment growing increasingly aware of service revenue opportunities, the next logical step was to host SOS clients' Web sites. The company contracted with Visual Perspective Internet (VPI.Net), (Laguna Hills, CA) for server time, and Step One Hosting was born. Poirer simply buys server time from VPI.Net and then resells it.
Pruning POS Fantasies
Poirer cautions about potential customers who aren't technologically aware. He says that he's had to back out of potential partnerships in which the customer was expecting a fantasy. "It's a problem in our business that people who haven't been around the technology sometimes believe things are more fantasy than reality. We'll try to explain how things work, what the solution does and what it doesn't do, and they just won't get it. We've had situations where we've had to pull out halfway through the training process when we realized that our solution is not going to work for the customer," Poirer claims. His best customers are those that have advanced knowledge of POS technology. They know what they have to gain, they know how it works, and they know the value of VAR support. But where short-term revenue might be lost on tech-ignorant customers, Poirer maintains that establishing long-term relationships is the best bet. "Some people are cash register people, and maybe they'll always be cash register people," he says. "We don't sell cash registers. If we don't have a solution for them right now, we're not going to lead them astray."
While most any VAR will talk a blue streak about service, integrity, and honesty, a gun-shy market tells the real story. Most buyers of POS have been burned before and approach resellers cautiously at best, if not skeptically. "By the time many customers find us, they're wary. They've just spent $20,000 on a piece of junk. We tell them what our solution does, and we let them walk if they want to. I won't promise the moon because I can't deliver it," Poirer says. And that is true growth management. Even the gardeners that grew the roses that went on the float that Wayne and Sue built would tell you that managed growth is healthy growth.