One-Stop Service for Hardware and Software : Computers: Cam Data Systems’ performance resembled a roller coaster ride. Then founder Geoff Knapp hired his former boss from a competitor.

Ten years ago, when he started Cam Data Systems Inc., one of Geoff Knapp’s first items of business was to handle a multimillion-dollar lawsuit alleging theft of trade secrets.

His former employer, Triad Systems Corp. in Livermore, had sued its then 23-year-old former salesman for breach of his employment contract and unfair competition.

It has been a roller coaster ride ever since for the company, which builds cash register and inventory control systems for small businesses. Knapp, who started Cam Data with $25,000 in savings, said the lawsuit was eventually dropped and the company’s insurer paid the legal bill.

Today, Cam Data Systems has 84 employees and predicts revenue of $12 million this year. As chairman, Knapp, now 34, has carved out a niche for the company by becoming a one-stop service provider for small retailers who need computer hardware and software.

In its nascent years, the company grew fast but was running low on cash. In September, 1987, Cam Data raised $2.2 million in an initial public offering.

Knapp used the money to expand, but found that the company could not reach critical mass. Sales began dropping in 1991 and losses mounted. From 1988 to 1991, the company lost $1.7 million.

“I was hating life,” Knapp said. “I was working seven days a week and 12 hours a day and wondering how to get out from underneath this burden. I decided to bring someone in as president so I could focus on building a good sales force.”

The company’s first attempt to hire a president turned out to be an “incredible disaster,” Knapp said. In less than 90 days, the board fired the new president, who had an impeccable resume including a stint at a Fortune 500 company but no experience in running a retail-oriented computer company.

For his second attempt, Knapp went with someone he knew. In 1990, he hired former boss Carl Smith, who headed the division in which Knapp worked when he was at Triad Systems, which sells computerized accounting and information systems to retailers.

Since Smith joined Cam Data, the company has made three small acquisitions and is looking to expand further. The company reported sales of $9 million for the fiscal year ended Sept. 30 and a slim profit of $510,000--its first in four years.

“At any company, you have to have an inside guy, operations-oriented, and an outside guy, with a strategy,” said John Girton, analyst at Van Kasper & Co., a brokerage in San Francisco. “Carl has done a good job day to day, and Geoff is an excellent sales guy. They’re a good team.”

Knapp credits Smith’s hands-on operations management for the six profitable quarters.

“We’re not the next Microsoft, but the company has done well and a growing portion of our revenue comes from service,” he said.

Smith has been able to sharpen the company’s operations, first reducing the work force and then hiring, and Knapp has focused on making the company’s 17-member sales team more productive. Now the company is gaining sales momentum, since customers are less daunted by the company’s precarious financial condition, Knapp says.

The addition of new management also helped Knapp through a personal endeavor. A father of three young girls, he moved his family away from the urban troubles of Southern California to Boulder City, a small town near Las Vegas.

Knapp considered relocating the entire company, but decided he couldn’t afford to lose key employees. He commutes to the Fountain Valley company one week each month and said he lives on the road helping with sales, attending about 70 sales shows each year.

“I make sure we pay our sales people well,” Knapp said. “Every one of our people has received a job offer this year, but nobody has left.”

Cam Data buys equipment from various vendors and sells a complete package to retailers; the packages include computers, receipt printers, bar-code scanners, cash registers, hand-held devices for tallying inventory, price label printers and inventory management software.

Customers range from bike shops to hardware stores, usually small businesses with fewer than 20 locations. The retailers include LA Gear factory outlets and the Boy Scouts of America’s 47-store chain.

“Our system is more than a glorified cash register,” Knapp said. “It’s what the little guy needs to stay competitive. We have nine programmers and we enhance the software every year.”

The company will develop a system based on the Windows software by Microsoft and another to run on networks of computers, which are used by larger retailers.

As the company upgrades its offerings to compete for business from larger retailers, it will run into industry giants such as NCR Corp., which is owned by AT&T.; But Knapp says: “Those guys aren’t guerrillas.”