Firms Morph from Simple to Complex
By Karen J. Bannan
Published September 13, 2004
Successful small businesses, the ones that eventually become larger companies, often take on more complexity as owners learn from customers and their own trail and error.
Safety Depot is one such business. Owner Henry Coleman's wife delivered the couple's first child in January, and her pregnancy prompted him to start the venture.
"The company was launched in December as an Internet-only consumer company. My idea was to be a niche provider in baby and child safety products," says Mr. Coleman. "I did plenty of research and figured we were entering a space where there was a gaping hole. I thought our combination of customer service and selection would fill that hole." Mr. Coleman, however, had no idea how prescient his assumption was.
His first month out, the company sold $5,000 worth of equipment like baby monitors, cabinet locks and safety gates. The next month sales topped $10,000. Then they went to $30,000. And then the calls and drop-ins started.
Safety Depot's offices are on the second floor of an Ashland Avenue building. And yet people started peeking their heads into the warehouse-like space, looking to buy. Realizing that walk-ins were a target market, Mr. Coleman opened for limited retail sales -- initially, Tuesdays and Thursdays from 9 a.m until 6 p.m. People started pouring in, many demanding additional hours. And it wasn't just consumers who were taking advantage of his services.
"We kept getting e-mails and phone calls from professional baby-proofers who didn't want to keep their own inventory. We weren't set up as a wholesaler, though, so we had to go back and redesign our Web site and create an area and pricing for them, too," he explains. Gift baskets were next. Real estate agents and eager gift-givers asked for them, and Safety Depot obliged.
Ken Jaffke, president of software company TredFast in St. Charles, has a similar story. Mr. Jaffke started his entrepreneurial life by purchasing a cleaning franchise. While operating that company, he realized how much easier his and his customers' lives would be if there was software that could report on the progress of building cleaning.
"I noticed that when we were working on the larger class of buildings, cleaning progress was kept with pencil and paper," says Mr. Jaffke. "I came up with software that would let building owners view all my reporting and monitor what (the cleaning people) were doing on a daily basis."
He added a wireless feature in 2002 so cleaning people could enter that information into a tablet PC, a device more commonly used by sales people and insurance adjusters. The final piece came once he paired up with an old friend who runs a private detective security agency. The two collaborated and developed software to handle building security, maintenance and inspections, and report back to building owners through the Web.
"If you've got 50 buildings throughout the nation, it's tough to know what's going on in Tampa if you're sitting in Chicago," he says.
Info collectors
Sometimes, innovation and complexity come not from your customers, but from the changing face of business, says Pat Dolan, a senior vice-president with BearingPoint Inc., a business consultancy based in McLean, Va.
"The idea is to make someone within the company a collection point for information and trends about your industry -- those what-if ideas," says Mr. Dolan. "It might be as simple as talking to your sales reps and asking how your current customers like your products and, more importantly, what they are looking for that they don't have."
Oakbrook Terrace-based business-to-business telecommunications provider CIMCO Communications, which launched in1984, handled billing, collections and repairs from the get-go when it signed a contract with AT&T Corp. Although a contract with such a major player could have sustained the company, President and CEO William Capraro Jr. watched the telecommunications industry for new opportunities and technologies. As they popped up, he added services to his lineup, he says.
"We started with calling cards and then entered the long-distance business, and then we started getting more complex. We saw the Internet was taking off, and we started offering Internet services. We added local service. We got into network monitoring --24-7 monitoring," he says. "We focus on the customer, and we evolve as their needs evolve."
Adapting to requests
Safety Depot's Mr. Coleman says his company will continue evolving, too. He decided to add big corporations to his customer base this year after being contacted by a large industrial company that wants to offer "safety bucks" as an incentive to its employees. Installations and on-site service aren't far behind, he says.
"The hardest part is saying no," says Mr. Coleman. "If we did everything that we want to do and people are asking of us, we'd be swamped