Computer Store Owner Chips Away at Problem Area: Mastering Business Basics
Bill Gates can rest easy. His business empire is safe for now from Torrance start-up NonTech Computers, despite the owner’s early hopes to quickly join Gates in the pantheon of household names.
Craig Burdick is having a hard enough time mastering business basics as his computer sales and repair company hits the three-year mark this month.
Sales jumped 35% to $270,000 last year, a reflection of Burdick’s technical and people skills. But profit margins are shrinking as the industry changes rapidly.
“At the beginning, I just thought having a business and opening the doors would be an easy process, and that creating this household name was just going to be something that wouldn’t require a lot of work,” Burdick said.
“Now I realize that just creating a functional, profitable business is much more of a chore than I imagined,” he said.
His aspirations may have been outsized, but even then Burdick knew he needed help getting his shop on Pacific Coast Highway up to speed. When he contacted The Times about becoming a candidate for a Business Make-Over, his list of problem areas was lengthy--cash flow, tax records, commingled funds, record-keeping and paperwork management, to name just a few.
“I know in the back of my head that businesses that fail, fail largely because of the reasons I’m lacking,” he told The Times in a November 1997, make-over article.
Burdick took to heart the advice he got from consultant Eric G. Flamholtz, who agreed to meet with him at The Times’ request, about the company’s need for basic infrastructure, including current tax and financial records.
It took more than the recommendations of Flamholtz, despite his qualifications as professor of management at UCLA’s Anderson School, author of books on organizational management and president of ManagementSystems Consulting Corp., to get Burdick to act on the advice.
The business owner had to get the same message from a book about entrepreneur pitfalls, “The E-Myth Revisited,” suggested by a friend, before he began to understand why Flamholtz recommended that he develop the operational systems needed to run the business.
“It was almost like [Flamholtz] was too big. Like that didn’t apply to a little guy like me,” Burdick said. The business owner has made some progress on the recommendations, but no “giant strides,” he said.
The company finally has a qualified accountant, the third Burdick has tried out in a year. The company now has a chart to log month-to-month sales. Burdick also tracks sales-to-expense ratios and was surprised to find that despite healthy sales, the company wasn’t profitable every month.
He set up a personal budget and tries to take a regular, though small, salary. Still he finds himself on occasion dipping into company funds for a personal expense.
He bought a software program to create a business plan and the sales and profit forecasts that will be a part of it. So far, though, it’s a project without a deadline for completion.
“It’s really hard because I’ve got daily operations to deal with, which are tiring in themselves,” Burdick said.
Burdick did set aside time last year, and spent $8,000, to become a Microsoft-certified systems engineer, qualified to set up and trouble-shoot computer networks. He’s not finished training yet, but hopes the booming market for networking services will eventually replace revenue NonTech Computers has lost as profits on sales of computer “boxes” decline.
It’s a trend he was warned about early on by an industry friend, but Burdick thought he knew better.
“The first couple of years I thought I was putting him to shame because we were doing well,” Burdick said.
Over the last year, though, profit margins on computers have plummeted along with prices. Burdick’s efforts to make it up on volume haven’t worked. Even his advertising isn’t pulling in customers like it used to and has been dropped. Burdick theorized that, with computers selling for under $1,000, customers aren’t shopping around anymore. They just pop into the nearest electronics superstore and snap one up.
In a potentially risky move, Burdick has agreed to spend 20 hours a week teaching a late-afternoon computer class at a local high school. He knows it will temporarily slow his efforts to tap the networking market and will take time away from business plans, sales forecasts and other needed infrastructure. But he hopes to generate new business from his students and their circles of friends and family. And he enjoys teaching, a people skill with which he’s comfortable.
“Money is not everything, let’s face it,” Burdick said.
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Company Make-Over In Review
Name: NonTech Computers
Headquarters: Torrance
Owner: Craig Burdick
Sales: $200,000 in 1997; $270,000 in 1998
Employees: 2 part-time in 1997; 2 full-time and 2 part-time in 1998
* Main Business Problem One Year Ago
He had been in business for only a year, but Craig Burdick hoped NonTech Computers would soon become a household name. Unfortunately, his company lacked the basic records and internal systems needed for long-term survival.
* A Year Later
Burdick has begun to implement the systems he needs but has discovered that creating a functioning, profitable business is a lot harder than he expected.
