New Directions: Corporate Integration
For example, the trend towards integrated systems is one he enthusiastically followed, beginning a few years ago when his customers starting demanding it. He now dedicates most of his time, energy and funds to the commercial integration side of his business.
On the other side of his business - the residential side - he sees a troubling pattern. "I call it the $29.95 Wal-Mart Syndrome," he says. "It affects everything from airline tickets to computers to the burglar alarm industry. The problem I see is it's dangerous for us to yield to that mentality and not educate our public that they may not always be getting their security needs professionally met."
Happily, Cooley sees a gradual reversal of this attitude, and he can anticipate a time when high-end residential will again make up a substantial portion of his revenue. For now, however, he is focused on the commercial market, while servicing residential customers who ask for it.
"We are not pursuing that market. If someone calls to talk about a security system, we will install a system for $200+ and monitor it for $14.95 a month. We are not proactively marketing it.
Cooley operates on the principle that any customer, however small, can potentially become or lead to a big customer.
"I don't think I would ever turn down residential business. A lot of residential accounts either own, manage, supervise or are employed by commercial customers. Dale Carnegie used to talk about satisfying the 59-cent customer need. If you can't help with that, they won't give you a chance to help with their $59,000 problem. With us, each customer is treated the same."
Focusing on the FutureA few years ago, Cooley decided to put a major effort into the commercial integration side of his business. "I'd like to say it was my insight," he says. "But really it was just being able to go in and sit down with a customer and listen to his needs and coming up with those solutions."
Originally a security company attached to a high-end electronics retail store, Cooley sold off the electronics store in 1991 to focus solely on security. At that time, Electronic Sales Co. was a "typical burglar/fire alarm system company," devoting about half its resources to residential and half to commercial accounts.
"During that time I monitored my own accounts," Cooley recalls. "I owned an answering service. They were my central station, as well. Later, I saw we would have to focus more on the installation/service side, so I sold the answering service and [went] to a monitoring facility."
Another change he saw was the technological advances in CCTV, computers and access control. "Now we could solve much more intense security needs for the commercial side."
For Cooley, that translated to the ability to concentrate more on the integration side, "because that's where we saw the money coming from. We became less and less of a $29.95 company, so that now, about 25 percent is that $29.95 business and 75 percent is integration."
While no transition is instantaneous, Cooley says his company began to focus on integration about 18 months ago, and accomplished the transition about a year ago. However, he stresses, "we already had a good strong base. Before the word 'systems integrator' was popularized, we had a good commercial base of customers. As the technology began to catch up with the demands of the customer, we began to fill those demands with [integrated] products."
Making the TransitionHow did focusing on commercial integration change his business? For starters, it grew from a one-person office with two technicians to a seven-person office with five technicians. "It has more than doubled since we started emphasizing that part of the business," he says.
"We hired some plant/maintenance people and started our training. We took their basic electronic background and trained them into electronic technicians. We find that we're having to grow our employees. We are not finding these employees available on the open marketplace. We do a lot of on-the-job training, seminars, books, and in-house training that enables us to continue to grow a good harvest of people."
From a customer perspective, Cooley didn't change his marketing strategy at all. "We don't advertise except for a large Yellow Page ad. We're finding that word of mouth is giving us plenty of business." Cooley makes personal contact via mail, phone calls and in-person visits to targeted commercial and industrial facilities. "We are letting them know what possibilities are out there to solve some of their biggest headaches."
The main thrust of the transition, Cooley says, was his own personal involvement with seminars, reading, and "finding out what the market had to offer, which were the tools I needed to solve customer problems. I'm not looking for bells and whistles. I'm just looking for basic quality and technological advances that will allow us to solve those problems in a secure way."
Cooley chose Northern Computers, Pelco, Securitron, IEI and Ademco as his product/system suppliers. "In 42 years, I've tested one of everything out there. We chose companies based upon quality and tech support. We're very loyal to our vendors. We typically sell just one or two vendors per technology."
Another area of research Cooley has invested in involves a management consulting tutorial called the E-Myth. Developed by Michael Gerber, E-Myth (entrepreneurial myth) teaches business leaders how to structure their company's systems to achieve the desired result. "The main concept is that people do not run companies. Systems run companies. People run the systems." Cooley says.
To that end, Cooley recently implemented a major overhaul to his business structure. "Right now I'm concentrating on the communications breakdowns between sales and production, and production and billing/accounting. I'm implementing new technology and systems for people."
He has also developed a new organizational chart for his company.
"One of the hardest things I've had to do is back up and say 'we have to pretend we were in business yesterday, not 42 years ago. What we have been doing for the past 42 years has been wrong. We need to start all over again and install from the ground up.' What I'm doing is preparing my company for very good growth."
The Long and Short of itCooley has both short and long-term goals for his company. A $1 million company in 2000, Cooley would like to see that figure rise to $1.3 million for 2001, and expand to $2.7 million by 2005. With a fiscal year beginning in March, he has the first quarter under his belt and feels his firm is on track. "Last month we did a little over $100,000, about the same as 1999. Four years ago we were a $900,000 company.
"Our numbers this coming year are going to be way up. We are very focused in that direction. We want to see at least a 20 percent growth. We've added another salesman and two additional installers gearing for that."
The company sales dropped a little in 2000 over 1999, Cooley says, primarily because he lost his lead salesperson. "We've sold several large systems since then. We've employed and partially trained his replacement. Nothing hurts us worse than to see our sales go down. But we're back on track. A good integrated sale takes anywhere from 30 to 60 days. Some take six to eight months. You are dealing with budgets, factories, people that have layoffs. All of that tends to influence what happens to your bottom line."
Is Cooley concerned about an economic downturn? "I would be a fool to say I wasn't concerned about the tightening economy. But I'm not obsessed with it. I'm having record sales. It's hard to get me to be concerned with it, except that I've seen before where the negative downturn effect doesn't reach us until a year or year and a half later. So I'm cautiously optimistic about it."
His plans to ride out the downturn if it occurs? "It's very simple. It's the first thing my dad taught me when I started: Always make sure your income exceeds your expenses."
From a new-business perspective, all indications are good. "We just installed our first $75,000 fire alarm system integrating our sensors into our customer's computers," Cooley says. The project, for a major soybean plant, involved the installation of a vast fire system interfaced with the company's massive computer system, so that any of the 50 computer workstations positioned all over the plant could act as a fire alarm panel. Working closely with the company's computer consultants, Electronic Sales installed a smaller system in a new section of the plant to see if the planned system would work. It did, and they recently got the go-ahead to do the rest of the plant.
'Begin With the End in Mind'The secret to any successful job, Cooley says, is to "begin with the end in mind. I always approach a problem that way. You tell me the problem and we'll back into the solution. We use a lot of flow charts around my organization. We go step by step until we've solved our problem. I've learned to eat an elephant one bite at a time. There's no other way to eat it. I don't care how big the guy's problem is. Give me enough time and money and I'll solve it."
This same philosophy carries over into Electronic Sales' business goals.
"I've learned that in order to succeed, an entrepreneur must have a very clear picture of what the business will look like when it's finished - not the way it is now, but how it will be in the future - if it's going to help everyone associated with it achieve their dreams," Cooley told his employees at a recent meeting designed to introduce his new business development plan.
Long-term, his goals include moving into a new building within the next five years. Once that occurs, he will institute a greater separation between his commercial and residential business. "We're actually working cross-trained right now. It's hard to have a technician and his truck and training and tools aligned with one industry and ask him to cross over into another industry. It makes for inefficiency and cuts into profit. I will see the day when we'll be more separated."
In that same time frame, he expects to employ 16 full-time employees and three part-time installer/service technicians. "Our market area will be the southeastern United States, and we will constantly be increasing our Atlanta and Birmingham presence. We will service commercial, institutional and residential customers. Customers with good credit will be increasing our MRR to $50,000 [up from $32,000 now] per month by Feb 28, 2005."
Although he sees his company as fully an "integration company" right now, this continued forward-thinking is what Cooley says it will take to stay on track with his goals of increasing his systems integration business.
"I'm a strong believer in the idea that what you focus on gets bigger.We're focusing on systems integration."