Keeping Business At A Manageable Level

While most VARs strive to grow their businesses, Ernie Roma is working hard to keep his business at a manageable size. Roma is president of Expense Management Systems, Inc., a point of sale (POS) reseller based in Cleveland, OH. Roma doesn't want sales to increase to the point where he can no longer properly service his customers. Therefore, Roma selected a profitable vertical market - specialty retail, specifically golf courses. He is targeting only his own home state of Ohio. His plan is paying off. Expense Management Systems has POS installations in 70% of the installed golf courses in Ohio. Targeting this niche market has pushed annual company revenues close to the $1 million mark. With only six employees (three of them part time), Ernie Roma's business is exactly where he wants it to be. Here, he explains his formula for success.

Leaving A Stagnant Market
Before Roma, a self-confessed "golf junkie," got into his dream market, he had to learn a few lessons. Roma began Expense Management in 1978. He originally sold PCs and billing software (cost recovery systems) to law firms. Cost recovery systems enable law firms to track their billable hours. Lawyers typically bill their clients for long distance telephone calls, faxes, and photocopies made on their behalf, Roma explains. Roma's business did well until the late 1980s, when most law firms had cost recovery systems in place. Roma found himself selling mostly upgrades and servicing existing clients. He was also faced with another problem. The three hardware suppliers he worked with merged into one large company, reducing the number of available equipment options. "With only one vendor to work with and sagging sales, I knew the company needed a new direction," Roma says. However, that direction, Roma admits, was not clear at first.

Selecting A New Vertical Market
Roma credits his father with pointing him in the right direction. "My father said to me, 'you love golf. You love being around golf courses; you know the people there. Do business with golf,'" says Roma. Taking his father's advice, Roma investigated selling golf equipment (clubs, balls, etc.) to pro shops. While making the rounds of courses in his area, he discovered that most courses were using cash registers to collect fees and sell pro shop merchandise. Having a knowledge of PC-based POS systems, Roma took a chance on cracking this potential new market. He evaluated 20 different software packages as well as POS hardware. "I found two software packages that I thought would work well in the golf course market," Roma says. He put together a PC-based system and began knocking on the doors of golf course managers. Roma was pleasantly surprised by the results. "Golf courses were definitely ready to begin automating their POS systems," he says.

Approximately 80% of Roma's golf course customers use only the POS and accounting functions of the software he sells. However, the software, says Roma, also accommodates tee time scheduling and golf handicapping. Roma notes that as a self-confessed "golf junkie," he keeps a set of clubs in his car. After a day spent making sales calls, servicing accounts or installing systems, he hits the links at his last stop. To be successful in any vertical market, Roma advises VARs to become members of trade associations. Roma, for example, is a vendor member of the Ohio Golf Course Owners Association. He takes advantage of many of the workshops and seminars the association offers. "It helps me gain a golf course owner's perspective on doing business," Roma says.

Lessening The Fear Factor
Roma also works with other specialty retail stores, such as gift shops, pet stores and shoe stores. He concentrates on independent stores and chains of one to five stores, since larger store chains are more difficult for Roma's small staff to service.

He says convincing customers to switch from cash registers to PC-based POS systems often means lessening what he calls the fear factor. "I often use the term 'super cash register' instead of PC or computer when demonstrating a system," Roma explains. The customers are less intimated because they are already familiar with what cash registers do, he says. In addition to being apprehensive about adding technology, customers may also have high expectations of what technology will do for them. "A POS system isn't going to sell your merchandise," says Roma. It can, however, help a business owner make sense of, and use, the information collected at the point of sale each day.

Selective Service
To keep late night service calls to a minimum, Roma did two things. First, he chose not to work in hospitality (restaurants, hotels) or grocery (c-store) markets, as they often demand late night service. Secondly, he only does installations in Ohio. This helps keep his costs down and his employees closer to home. "With all my customers in one time zone, I generally don't have any service calls after 9 p.m."

Roma and three other employees handle service and support. With only six employees total, Expense Management installation technicians also double as help desk support staff. The company offers 24-hour, 7-day-a-week help desk support, despite its small size.

Training Keeps Money In VAR's Pocket
In the past, when faced with a new customer request, such as Web site development, Roma was quick to make a referral to a third party. He's discovered that, through education and training, he's able to keep more money in his pocket. Roma has been able to expand his business and increase sales without having to hire additional employees.

He cites the example of the Cleveland-area Repro Depot, a full-service copy shop where he installed a PC-based POS system. The owner of the store had been working 10 hours a day in the store and spending an additional three to fours hours each evening on paperwork. The system Roma installed reduced the amount of time the owner spends on accounts receivable, for example, from several hours to 30 minutes a week. Now, Roma is designing a Web site and online ordering system for this same customer.

To increase the networking side of his company, Roma is obtaining Microsoft Certified Systems Engineer-certification through a rigorous home-study course. Again, by learning new skills himself, Roma doesn't have to hire an additional employee and increase his business expenses. "More small businesses are networking their computers. These smaller companies typically don't have an MIS staff in-house to do this," says Roma. He says most of his networking business comes through referrals. Networking makes up only 10% of Roma's business today. He expects it to make up 50% of his business three years from now.

Business At A Comfortable Level
Roma admits, that although his company is small, he works long hours. "I typically work from 8 a.m. until 10 o'clock at night," says Roma. He admits that he is never far from his cell phone and laptop computer. He travels approximately 50,000 miles a year in his car. Still, his schedule affords him the occasional afternoon off to play golf. Focusing on golf course and specialty retail markets has helped Roma's business remain steady. This year, he and his wife will take their first vacation in seven years. "I know the company can grow larger, but I don't want to work 70 hours a week," says Roma. He feels Express Management is at a good place right now. "I'm as busy as I want to be," he says.