For years, we've heard the promise: Technology will help the little guy. Nonsense -- small businesses will help themselves, and take whatever tech they can get. They have to be more discerning than their bigger brethren, and wiser with their money, as well. Now that they're finally getting their hands on some truly remarkable tools, there's no telling what they'll do.
The companies on our list represent the most innovative original businesses, from every part of the country and every field and industry. It is, of course, too short. So think of it as a sampler: See what companies like yours are doing; learn from some that are very different; get inspired. And give credit where it's due.
15-year-old office supply and furniture provider
"When I first tell people that I work for an office supply company, they don't think it's very glamorous," says Matthew Fisher, an independent contractor on assignment for the past year and a half as the IT Guy at Apricot Office Supply in Miami, Fla., "but when I show them the things we are doing with technology, they say, 'That's pretty cool.'"
It is pretty cool that six months ago Apricot Office Supply set up an online business-to-business order center that, without a single employee ever touching an order form, phone, or packing slip, generates $50,000 a month in revenues. It's also cool that Apricot saved $65,000 in 1999 in labor and transaction fees simply by instituting an electronic data interchange (EDI) system that, at the time of order, automatically deducts payments from its larger clients' banking accounts.
Apricot's 35 employees generate more than $9 million in revenues annually selling office supplies and furniture to Florida's government agencies, universities, county school board offices, and businesses of every size. Fisher credits the company's willingness to embrace technology -- and spend money to make money -- with its success.
"We're not a value-added reseller selling services," Fisher says. "We actually do just sell pads of paper. We can only cut the list price of items in an effort to generate business to a certain point, after which we have to say, 'How else can we make money off these things?' We see technology as a way of saving money on internal processes to make more money off that pad."
On Apricot's business-to-business e-commerce site, its customers get a user name and password. They search an electronic catalog, click on the items they need, and they're done. Once an order is submitted, it goes to Apricot's system, which links to the company's suppliers and orders the items. "They arrive here that night, and they go out on the truck the next morning," Fisher says. "There's no human intervention at all."
The automatic payment EDI program also cuts down on human intervention. The old method of payment was the use of "purchasing cards," which are similar to credit cards. "We had one person dedicated each day to entering in those orders because the card did not get the line item details of what the customers were paying for. We had to manually enter each order, and there was a high transaction fee for each order," Fisher says. "Now it's invisible for us and them. The orders go straight from our system to theirs, and their funds go straight into our bank, and nobody has to key in any information at all."
In addition to using technology to interface with clients, Apricot uses it to give its employees the information they need to sign up new customers, make new sales, and improve internal communications. A company intranet allows employees to see memos about meetings, post templates to ensure that the salespeople are using the same type of quotes, and check out links to competitors. There is also interoffice GroupWare for people to schedule meetings and share documents, and remote computing capabilities allow executives and senior sales reps to work from the road or home.
"Apricot has really dedicated the resources to get these projects up and running and working for them," Fisher says. "They really understand that technology can make them money by saving them money."
"What we've done is seek out a niche market that wants efficiency -- in process as well as in the final product and service," says Basil Bernard, the company's chief executive officer. "We've always realized that there are companies out there with a lot more fiscal resources than we have. However, we can easily keep stride with them by just keeping up with technology."
--Angela R. Garber
Coconut Grove, Fla.
17-year-old advertising agency
Technology, says Bruce Turkel, cannot make people more creative. But it can give creative people more time to be creative. At Turkel's advertising agency, Miami-based Turkel Schwartz and Partners, the key asset is the creativity of 46 employees who produce TV, radio, and print ads for companies ranging from the Discovery Channel to Mortgage.com.
But how do you "store" an asset like that? How do you count it, keep track of it, access it? One way Turkel Schwartz does it is by using the giant database of past advertisements the company keeps on CD-ROM and DVD discs, all indexed via Adobe Acrobat. Account managers can quickly find, for instance, a print ad that ran for a client two or three years ago. "When an account executive is talking with the Peabody Hotel Group, a client in Orlando, a guy there might say, 'We did a special a year ago with Stag's Leap Winery, and we want to do the same thing,'" Turkel explains. "Our person can cross-reference it by date or word search and find it. That makes us more efficient and lets us better serve our clients."
The firm has also created an office environment that's more conducive to the outside-of-the-box thinking that goes into successful ads. Turkel Schwartz's office has a wireless network that enables employees to work anywhere they want with their laptops. "People create in different places," says Turkel. "Some like to sit at their desk, others outside. People can easily get together with their laptops and show each other what they're working on. That makes people more creative and team-oriented."
The key, says Kirk Kaplan, the company's chief knowledge officer, is understanding where technology can help -- and hurt. "There's a lot of overuse of tools," he says, mentioning as one example the vast array of largely unnecessary features open to graphic artists who use Adobe's Photoshop. "In that sense, technology has almost been bad for creativity." But other tools are immensely useful. To translate the Discovery Channel's program guides into Spanish, Turkel Schwartz employs a translation engine and Microsoft Excel. "Tools like that eliminate the tedious part of creativity," Kaplan says. "That's got to be good."
Kaplan also notes that technology has reached a point where even equipment that is several years old performs extremely well. Now the company can now spend money on new tools, rather than upkeep. "It's a golden age," he says. "Our IT people can now spend time looking outward for new capabilities, rather than cobbling together balky equipment that doesn't work together, or networks that don't run smoothly."
The next step is to extend the wireless network off the company campus, bring in more bandwidth with a T1 line, and look for things that are useful, but a little fun as well. "We're still juvenile enough that if it is really cool, that might be a reason to buy something," Kaplan says.
20-year-old travel consolidator
The Fast Lane
When discounted travel services started popping up on line, many people thought it would only be a matter of time before the more traditional brick-and-mortar-based travel agents were looking for new jobs. Internet technology has indeed sealed the fate of many in the travel industry -- just not in the expected way.
Trans Am Travel Inc., a travel consolidator headquartered in Northern Virginia with additional offices in Virginia, New York City, San Francisco, and Los Angeles, has not only survived the advent of Internet travel, but has thrived. The 90-employee agency will bring in $100 million dollars this year. In the past three years business has doubled, thanks to Internet-based technology, with a 20 percent jump in the past six months alone.
A travel consolidator traditionally spends a lot of time shuffling papers around. The company receives thousands of unpublished fares each day from the airlines and then sells them at a mark up to its travel agent clients. Prices change daily, so when Trans Am opened its doors in 1980, it sent all of its pricing and contract information to each of its five offices via Federal Express. The company continued to do so up until about three years ago.
"It was just a nightmare," says vice president and chief operating officer Scott Toelle. "The time it took to get the documents back and forth, the money we spent on FedEx, and the mistakes that were made selling tickets at different prices were just unacceptable."
Three years ago Trans Am took its first big technological leap. After 17 years of relying on overnight delivery, Trans Am acquired a dialup connection and started sending information electronically. The system saved the company time and reduced mistakes, but it was far from perfect.
"We have 8 million fares at any given time and to send data packets that size over the phone line took us literally four hours per location, and with five locations it was getting hectic," says William Gomes, director of technology for Trans Am. A year ago Gomes started talking to DSL providers, and six months ago he set up a virtual private network (VPN) to connect his five offices.
Gomes says it now takes about five minutes to transfer the same amount of data that once took four hours. "It has been terrific," Gomes says. "It was inexpensive, and it increased our business 20 percent. We are looking at another 25 to 30 percent increase in sales again next year. It has -- and will -- save us a lot of money in the long run."
Trans Am also allows about 30 travel agents to tie their Web sites directly into its database of fares. It repackages fares under the agents' domain names, so that when their customers purchase tickets they go straight into the Trans Am database. "We give them the data structure from our backbone, and it helps us to get the bookings," Gomes says.
"In our business, we are selling information," he says. "We don't have anything stocked up in a warehouse, so getting that information out faster and giving our customers easy access to that information is the most important thing we can do. The Internet has truly been a blessing."
Kansas City, Mo.
Gregg Katz is the first to admit he didn't know a red rose from a hyacinth when he and his wife Heather took over a floral shop owned by her parents. He'd been a Marine, worked for the FBI, and managed a convenience store. "I thought florists were a bunch of hokey people who stood around and sold flowers in vases," he says.
Katz has proven to be a quick study. He still doesn't know much about flowers -- "Heather handles that side of the business," he says -- but he has turned a struggling business into a floral powerhouse. Now, Kansas City-based Katz Floral Designs (originally named Al Manning Florists, founded by Heather's grandparents) has become one of the nation's top sellers of FTD-licensed arrangements. It has won national and local awards for marketing and generates nearly $20,000 each day in sales outside its home area.
Since launching KCFlorist.com in September of 1998, Katz has created a Web juggernaut. His site has 4,000 to 6,000 pages with close to 100,000 hyperlinks, and offers gifts, plants, and balloons, in addition to flowers. Katz has proven that the Internet can allow the little guy to play big -- and he's done it on a shoestring.
Katz designs his own pages on Microsoft FrontPage, and when we caught up with him he was a little hyper from a night spent drinking coffee and preparing a major redesign that he was rushing to complete before FTD introduced its new fall designs on its site. KCFlorist.com's pages aren't slick looking, but they are functional and designed to give visitors the ability to land on the product they want to buy with just a few clicks. "People know what they want when they come to my site," Katz says. "They don't want pretty backgrounds. They want to buy something." An outside Web-hosting service carries his site for about $75 a month, and he uses an e-commerce vendor that allows him to maintain "house" accounts, which are given separate pages within the site.
Katz takes a similar do-it-his-self technology approach to the rest of the business. He manages the company on QuickBooks 2000, keeps an Internet browser in the store for customers to use, and has fully computerized inventory and order processing. But he also works hard to give customers a personal touch. One woman recently ordered a birthday bouquet for a date that seemed suspiciously distant. Katz called her up, and learned that delivery was for the next day -- not in a month. "Customers know there are people behind the site," he says.
Katz has become something of a hero in the world of small floral shops, which are hard-pressed these days with competition from grocery store flower shops and sites such as 1800flowers.com and marthastewart.com. He speaks at FTD conferences and runs seminars on how to start a Web site. "It's just not that hard to do," says Katz, whose first computer was a Radio Shack TRS-80. "I don't see another florist as competition -- through the FTD network, we take care of them, and they take care of us."
For all his success, Katz has one confession: "I couldn't do a floral arrangement if my life depended on it," he says.
99-year-old law firm
Practice Makes Perfect
Lawyers tend to have a reputation as being a tad on the techno-phobic side. But the partners at Beckman and Hirsch of Burlington, Iowa, not only embrace technology in the everyday workings of their law firm, they are also using it to help them establish relationships and better serve their clients.
For instance, they created secure extranets to use with clients. Instead of faxing, mailing, or delivering documents back and forth, they post them to a secure site accessed only by password and only by the involved and approved parties. Beckman and Hirsch creates a database for each client that contains all the document files, motions, and timelines. A deposition that is taken in the morning can be up and available for review by the afternoon. In this way, the extranet replaces the corporate minutes books that have typically been a problem for lawyers.
"You used to get into this problem of 'does the attorney have the book, does the corporation have the book, maybe the accountants have the book, maybe some investors have the book,' and before long, nobody knows where the book is," says partner David Beckman, whose grandfather started the firm in 1901. "There were some potential ethical issues involved in putting this kind of information up on an extranet, but we've solved them by encrypting the database and by allowing only one outside person to edit it."
As a document on the extranet is edited, software in the background is "versioning" it. "We keep copies of the old ones so that we can see what the change was and why it was made," Beckman says.
More impressive, Beckman and Hirsch have produced the whole system in-house using only LotusNotes databases. "The only time we've used consultants has been for our firewall," Beckman says with some pride.
How have they been so successful in adapting new technologies where other law firms have hesitated? "Unlike a lot of law firms, the two partners are very interested in technology," he says. "And I think our relatively small size has helped. We're able to try something, and if it works we adapt it, and if it doesn't we get rid of it without a lot of bloodshed."
Another project Beckman and Hirsch has taken on is "e-lawyering." "Practicing law on the Internet is a new thing," Beckman says. "There are a number of companies going into this area, and they probably hire lawyers, but as a law firm we're probably somewhat unique in doing this."
What e-lawyering means right now is doing simple wills and medical power of attorney documents on line, free of charge. A potential client logs onto the site (www. iowalaw.com), fills out a quick form and submits it. As long there is no conflict of interest, Beckman and Hirsch execute the will, the client comes into the office and signs the document, and they're done.
The traditional way is for the person to come in, the lawyer takes down the information and puts together the will, the client comes back in, and most likely some changes would be made. After about three hours of billable time, and about two weeks, the will would be signed and executed, says Beckman. "The free e-will takes 5 to 10 minutes of everybody's time and is typically ready in two days, and it costs us nothing," he says. "It's no big deal for us to donate that amount of time, and it's a great way to introduce ourselves to new clients."
"The bottom line," Beckman says, "is that technology allows us to communicate better and to provide more services for our clients, so we'd be hurting ourselves not to use it."