Cultivating AIDC Sales

A few years ago, Steve Schmidt, CEO/founder of Abraham Technical Services, Inc. (AbeTech) (Minneapolis), was contemplating a "field service" application of epic proportion. It was during the last presidential election, and Schmidt, who lives on a 64 acre farm, wanted to cut his hay field into the word "Bush" and carve a giant bar code underneath the name. "I thought it might be a fun thing to do that would create some publicity," he mused. Schmidt never did create that hay field message. Instead, for the past few years he has been focused on harvesting sales from a crop of products and services he believes are key to the company's future growth, namely: label applicators, data collection software, and hardware repair/service.

In 2001, AbeTech acquired three companies that each specialized in one of the aforementioned growth areas. Schmidt stressed that, going into 2001, it wasn't his plan to grow his company through acquisitions. However, the poor economic climate of 2001 was forcing many small companies to decide if it was better to remain solo or be a part of a larger entity.

"It's not like we spent millions of dollars on these acquisitions and gained a lot of employees," Schmidt stated. "Instead, these were more like marriages of convenience, sometimes involving earn outs [i.e. when a portion of the purchase price is determined by the future performance of the business]. In total, these acquisitions netted us only 10 additional employees."

The Demand For Label Applicators
AbeTech offers a veritable cornucopia of AIDC (automatic identification and data collection) hardware (e.g. printers, scanners, handhelds, wireless LANs) and software (e.g. bar code labeling). However, prior to 2001, many of the company's customers felt one product was missing. "More than half of our customers use our products in either manufacturing or warehousing environments," Schmidt explained. "Many of those customers were asking for automated label applicators as an alternative to the time-consuming and error-prone hand labeling process."

Label applicators (which also print the labels) integrate with an assembly line and either blow or tamp a label onto a carton, case, or packaged good. To add the particular project management skills and product knowledge required to sell these applicators, AbeTech acquired integrator Data Solutions (Minneapolis) in the spring of 2001. "We added only one employee with this acquisition," Schmidt said. "But, having that employee's label applicator experience has dramatically shortened our learning curve in this technology."

Create A Suite Of Data Collection Software
Unlike with label applicators, AbeTech had experience creating its own data collection software before it acquired Advanced System Design (ASD), a Buffalo, MN, software developer. ASD created canned and customized turnkey data collection software. The company specialized in solutions for manufacturing and distribution asset tracking and sales automation. As with AbeTech's software, ASD applications were designed to eliminate paperwork by using bar code scanning systems. The union of the two companies yielded a new line of applications branded as 4Precise. Developed for tier-two and tier-three companies, the 4Precise series includes modules for asset tracking, warehouse management, shop-floor and labor tracking, mobile computing, and security guard data collection.

Schmidt said AbeTech has clients using each of these modules, especially 4Precise Mobile Computing, which customers commonly deploy for field service applications. For instance, one AbeTech customer is a plumbing company with multiple plumbers on staff. The owner wanted to receive service (e.g. parts used at a site, time spent at a job) and invoice information (e.g. customer name, price of service) in real time at the main office. However, he didn't want to have to pay for another wireless connection in addition to the Nextel phones the plumbers were already using. AbeTech equipped the field personnel with Unitech (Lakewood, CA) PT930 portable terminals that could connect to the Nextel phones and transmit data via 4Precise back to the main office. This solution enabled a parts runner to travel to the next locations of plumbers in the field and restock their trucks on-site. The software application also transmits accounting information to speed up the invoicing process. Finally, the application enables the plumbers to process credit cards at the customer's site.

What Level Of Repair Can You Offer?
In the past two years, AbeTech added 35 new employees (the company has a 5% turnover rate), most of whom work in the company's service/repair department. Some of those employees came from the acquisition of Barcode Service Source (BSS) (Minneapolis), which offered professional repair programs to resellers and end users. BSS provided depot services, repairs, sales, and exchange services for thermal bar code printer manufacturers such as Datamax, Intermec, Sato, Zebra, and TEC. "With the addition of BSS, AbeTech is now one of less than 10 companies authorized to repair Intermec printers," Schmidt said. "The acquisition also provided us with component-level, thermal printer repair capabilities and a successful hot spares program to complement our existing depot and on-site repair services."

A Year Of Growth
2002 has been a year of growth for AbeTech. In May, June, and July, the company broke its previous records for sales revenue during each month. In addition, to accommodate the new personnel and products AbeTech has added from recent acquisitions, the company will move into a new 31,000-square-foot location that is more than twice the size of its present headquarters.

With or without acquisitions, though, growth is nothing new to AbeTech. In 1998, the company was listed as number 236 on the Inc. magazine "Inc. 500," a ranking of the fastest-growing private companies in America. According to the magazine, AbeTech's sales went from $708,000 in 1993 to $9 million in 1997, an increase of 1,181%. This year, Schmidt himself was profiled in a full-page article in the May 2002 issue of Inc. Which leaves you wondering; with that type of publicity, who needs a giant hay field bar code?