NEWS FEATURE

Growing by thinking small

Revenue grows 50 percent for tech firm after a change in focus to the little guys

By Sheena Harrison, Crain's Detroit Business

Rochester Hills, Mich. - March 13, 2006

When the dot-com bomb fell a few years ago, Visicom Services Inc. realized that having large companies as its main clientele had set the company up for a large drop in revenue.

Rochester Hills-based Visicom provides computer-technology services. In 2001, about 80 percent of Visicom’s customers were companies with 300 or more employees.

As confidence in the information-technology industry plummeted, many of those large customers took their business away from Visicom, President Pat Casey said.

“Those companies pulled all of their business in-house, and that business at the time represented about 60 percent of our revenue,” Casey said.

Visicom began focusing on clients with 10 to 100 employees. By catering to small and midsized businesses, Visicom said it has found a niche that has provided 50 percent revenue growth since 2003 and allowed it to open a new office last fall in Portland, Ore.

“We’re gaining a lot of momentum,” said Casey, whose company generated about $1.1 million in revenue in 2005.

Visicom has nine employees today, but layoffs had cut Visicom’s staff to four after the dot-com bust. Casey said the company underwent a “serious strategy review” on how to rebuild. Visicom realized the customers that stayed were small businesses looking to reduce costs by outsourcing IT needs rather than spending money on internal IT departments, he said.

“Everybody’s looking to cut costs and increase productivity,” he said.

While larger companies have a critical mass of IT needs that justify outsourcing to other countries, small businesses have been turning to domestic companies such as Visicom to reduce costs, said Seema Chaturvedi, managing director of the Troy-based investment-banking and consulting firm Accelerator Group.

“Services that are being packaged now in terms of IT are being afforded at a decent price point that (a small or medium-sized enterprise) can take advantage of,” she said.

Royal Oak-based Lewis ig, another computer tech company, has always focused on smaller businesses, which helped the company weather the tough times, President and CEO Thomas Lewis said.

“The dot-com bust didn’t really affect us like it did many other people,” said Lewis, whose company generated revenue of $2.6 million in 2002 and $3.3 million in 2003. “In fact, we grew somewhat.”

Visicom created a program in 2003 called CompleteNetworkCare for small-business clients. The service costs $10,000 to $20,000 a year — compared with $40,000 to $70,000 a client would pay annually to hire a full-time IT staffer, Casey said.

About 90 percent of Visicom’s client base consists of small businesses that use the CompleteNetworkCare service, and the company has a backlog of customers who want to use the system, Casey said.

The company plans to have 10 customers at its Portland office by the end of this quarter. Visicom also plans to open a Toledo office.

“We’re spending a lot of time internally making sure the quality is there as we continue to grow.”

For more information on VisiCom Services, Inc. contact by phone at (248) 299-0300 or visit www.visicomsvc.com

For more information on Business Development Specialists contact them by phone at (248) 939-0585 or visit www.bizdevspec.com