TeamLogic IT Franchise Review: Steve and Nicki Hinch of Santa Rosa
Hard work, commitment to customers leads to rapid growth for Santa Rosa TeamLogic IT franchise
How do you know how to gauge the skill-level of an IT company, particularly an IT franchise? Consider this: Silicon Valley, the world’s technology capital, has warmly embraced TeamLogic IT. Among the half dozen franchise owners who have set up shop nearby are Steve and Nicki Hinch, who started their Team Logic IT franchise in Santa Rosa, CA, in 2010 after Steve retired from Agilent Technologies, where he had overseen R&D for one of the company’s largest divisions.
This is their story.
Why did you want to change careers and do something different?
Steve: I was the head of one of our divisions and my boss was based in Germany. Most of the division was in Germany or Colorado Springs, and they decided to consolidate operations to those two locations, and I didn’t want to go, so I retired instead. As part of my retirement at Agilent, they gave us a bunch of webinars/seminars about what you can do next in your life and one of them was about franchising. Before that, I thought franchising just meant Burger King and McDonald’s. We worked with a franchise broker who put a half dozen ideas in front of us — a healthcare business, a barber shop kind of thing, a consulting firm. This was the only one that was appealing to us.
What attracted you to TeamLogic IT?
It kept me in technology. It wasn’t that I had a lot of IT experience, but it was not completely foreign to me. Also, we wouldn’t have to move. Any other kind of job, at the level I was at, I would have had to move. Right after I retired, I had a chance to go to the D.C. area and be a VP at a multinational company, but we really wanted to stay here.
I spent quite a bit of time talking with existing franchisees when we were exploring this opportunity, asking what happens if a customer’s email goes down in the middle of the night? Is that a constant issue? I was assured that most clients ran 8-5, Monday-Friday businesses, so there is not a lot of afterhours work. That made me feel a bit better. Of course, we turned around and signed two really big clients that have 24-7 needs! One is an ambulance company and another dispatches air ambulance helicopters, and their previous IT company had left their networks in pretty bad shape, so there were problems, a lot of them in the middle of the night. Up until having those two clients, I didn’t get many calls on weekends. Now, after a year of upgrades, we don’t get many midnight calls from them, either.
So are the hours fairly normal?
You can’t expect a 9-5 job where you won’t ever have to think about the business after 5 or on Saturday and Sunday. There’s plenty of work to do to build your business, and you have to decide how much energy you are willing to put into it to get what you want out of it. It depends on the markets you go after. If you target professional services companies, people who work traditional office hours, then you don’t have to worry as much about working on the weekends.
Tell us about your growth.
It was hard at first because we started in the middle of the recession, but as the economy has picked up, our business has grown significantly. We pick up three or four new clients every month, and we haven’t lost very many clients. Maybe over 3.5 years, we’ve had two repeat clients go away. So we have been netting a lot of new business every year. The business is out there, and a lot of companies aren’t happy with their current IT provider, so it’s a matter of getting your name out there and proving yourself.
What sets you apart from competitors?
We get a lot of business from clients who say their existing IT company was not responsive. They would leave a message about a problem they were having and wouldn’t get a call back for 3 days, sometimes even a week or more. When your systems are down, you can’t wait that long to get your business up and running. On Christmas, I noticed that one of our SystemWatch IT clients had a computer go offline, and I let a technician know that he would hear about it in the morning. First thing the next morning, he was on top of it, and within 30 minutes, the client was back up and running.
Secondly, sometimes the IT people they have been using aren’t knowledgeable enough to do the job they need. For example, we added two clients in last two weeks who had been working with IT people who didn’t have the necessary skills to deploy a new server. We have a team of technicians, and the ones I employ can tap into the knowledge of 200 technicians that work for TeamLogic IT nationwide. None of our technicians have all the skills to help all of the clients, but by working together, we get the jobs done.
How closely do you work with other TeamLogic IT franchises?
Steve: We get together once a quarter with the other franchises in the San Francisco Bay area and spend a full day sharing ideas. Someone will fly up from corporate, too.
Nicki: We’re all in similar stages of the business, so we are all going through the same things together. It’s been really good to have that support. It adds value to our business, and it is energizing, too.
Who is your ideal customer?
What we are trying to shoot for is businesses with 20 to 50 users, but that’s definitely not all that we serve. The size of clients tends to build as you grow. When you are a brand new TeamLogic IT business, picking up a business with five end users is a major accomplishment. At first you need to build your reputation. In the first year, our largest customer had 10 users, and we also added a lot of small, 1-, 2-, and 3-person businesses. After about a year and a half, we started to pick up larger customers. If you can establish a good reputation with smaller businesses, it leads to bigger businesses being willing to try your service.
What do you like about your business?
I feel like we provide very quality service. We get nothing but compliments, and I feel like we are making a difference for clients. If we weren’t here, they wouldn’t have IT services that are working as well. That makes me proud to be the owner of this company. The other part is, we have five technicians now, and I enjoy being able to employ people and contribute to the growth of our economy. We are providing positions that satisfy their needs and allows them to take their skills and use them to help the community.
How do the two of you split responsibilities?
Steve: I do the business development — meeting with customers, putting together business proposals, quotes for computers and servers, and also manage our five technicians and make sure all of the customer support requirements are being met.
Nicki: I manage the office, make sure bills are paid and invoices are sent out, and also manage our marketing to generate new leads. TeamLogic IT has a great marketing program. Not having any real background in that when we started, I went through training and learned about marketing to start getting clients. Corporate provided a list of potential business customers, and we started sending postcards and stopping in to leave brochures. We have a wrapped vehicle that is like a little moving billboard. We do networking. We do Google AdWords. Thanks to TeamLogic IT’s marketing plan, that was all in place when I started. Our new client, the one that didn’t trust their IT guy to install a new server, is somebody we’ve been marketing to since we started the business in November 2010. It’s an ongoing process and it works. It works.
What other support has been helpful?
One reason we picked TeamLogic IT is because we heard great things about the franchisor and their responsiveness. It has lived up to all the hype. They can offer a lot of insight and if they don’t have an answer, they will connect you to someone who does. And you don’t wait. When I send off an email with questions, I quickly get back a response. It doesn’t matter if it’s a business question or a technical question.
I was used to running $70 million a year divisions in the corporate world, but I had never written a contract for managed services before. What should be included in it? What are the right prices to charge? What promises should you make? What exceptions shouldn’t be there? They provided templates for me, and have answered questions I had. The other major area where they have offered a lot of help is in terms of selecting the vendors we work with. There are a lot of services we provide that come from third parties, and if I was doing this on my own, trying to figure out whether a particular vendor or backup service is a good one or not, I wouldn’t have the bandwidth to figure it all out. They have vetted suppliers and negotiated great prices and preferred support. I get deals on equipment that I could never get on my own. Those are just a couple of examples. The way I look at it: Back when I was in the corporate world and had a marketing team, a sales team, etc., I would spend 15% of my revenues on R&D every year. In this business, as a franchisee, I am getting the value of corporate level R&D and the royalties I pay are a lot less than 15%. And R&D is critical for a high tech company. When I talk to potential franchisees, I tell them, “If you were buying a burger franchise, most of the fee goes to the franchisor, and you may not get a lot of value for it, but the money you send to TeamLogic IT is being well invested in the capabilities being delivered to us.”
What is needed to succeed as a TeamLogic IT owner?
If you come from a corporate background, you have to realize that there is a lot more that you’ll need to do yourself. You don’t have an army of people to delegate to. You need to be a self-starter — someone comfortable doing what needs to be done. I never, in the corporate world, did outside sales because I hate the thought of it. But it’s part of the job, and I do it, and it’s helped us grow the business pretty significantly. It also needs to be someone who isn’t expecting a 9-5, Monday-Friday job.
Another point: When you first start out, the very first technician needs to be a really good technician, because they will be doing all the technical work at first. As the business owner, you’re not going to be doing the technical work. You may not have that knowledge anyway, but your job is to grow the business.
Is TeamLogic IT helping you meet your personal and professional goals? How quickly did you reach break-even?
I would say that sustained break-even came about a year and a half after we opened. We had individual months where we did better than break-even, but it bounced around for a while. Part of the reason is we added technicians probably more rapidly than our financial picture suggested we should have. I wanted backup support so that if our one tech was sick or on vacation, we could still serve customers. I hired a part-time technician after six months and a third technician six months later, which was early. Financially, we could afford it — we didn’t need to take a lot of money out of the business in the first year or two. We were focused on growth, and we doubled our business from 2011 to 2012, and again in 2013.
Learn more about TeamLogic IT
TeamLogic IT provides managed IT services to small and medium-sized businesses. Its 50 franchise units and 200-plus technicians give the technology franchise a nationwide footprint and a massive knowledge-base with which to provide exceptional service to clients. TeamLogic helps its clients become more productive and secure, and that focus has helped franchise owners earn double-digit average same-unit sales growth for three years in a row. To learn more about the business, including startup costs for a franchise, visit our research pages. You can read interviews with TeamLogic franchise owners on our blog. For even more information, fill out a form to download our free franchise report and start a conversation. We look forward to hearing from you!