Subscribers learn to work smarter, not harder
Ron Unger is the CEO of WorkSmart, an industry leading provider of Information Technology management and support for businesses throughout North Carolina and the Mid-Atlantic region.
Unger, originally from Alaska, attended college at Georgia Tech and then landed in North Carolina in 1997, working in a large engineering and construction firm. He went on to earn his MBA from UNC at Chapel Hill.
Unger says his primary reason to go back to business school was to have a hiatus from work in order to be able to start a company. He was certain he had a viable business idea which serviced a real need. In 2000, Unger started putting together a plan for outsourcing solutions for small businesses that involved a subscription service model in which there would be predictable bills and consistent term agreements for the client. He explains that at that time many companies had been sold a lot of technology equipment because of the dot com era, and he saw opportunity there.
“People were buying all kinds of equipment and maybe not even implementing it much,” says Unger. “We went in with a strategy. If you want us to sell you some equipment and install a project when you need it, we will do that and certainly at an affordable price. But our main business is maintaining and keeping your things going, and making sure your end users are productive and you’re thinking about IT as more of a strategic investment, not something you just put money into.”
Unger says that this kind of practice was common in other industries but at the time there wasn’t yet a very savvy mentality around technology, particularly for smaller companies. He brought in business partners, CFO Ricky Ayers, who he’s been friends with since freshman year in college, along with COO Clay Harris. Ayers was finishing his MBA at Harvard at that time, while Harris was at UNC with Unger. The three successfully balanced their studies along with the full-time rigors of starting a company.
Worksmart’s first operating year was 2002.
“We probably had a couple thousand clients here in the Raleigh-Durham Area. We actually had some clients in Charlotte by then, as well. We were pretty aggressive about getting out there because we had to make payroll,” Unger says. “We didn’t have big bank accounts or much investment, no money at all, just a little bit cobbled together. So it really had to be based on cash flow from operations.
Unger says bringing value to their clients has always been the company’s main mission from the beginning, and they are constantly adapting to fit the changing technology needs of clients.
“Back then we never even talked about cell phones with our clients because they were pretty much unknown. Nowadays, we’re servicing Blackberries, iPhones, recently, iPads. We service all these things because all these things are part of the IT infrastructure, the devices that allow them to communicate effectively, internally and externally.”
WorkSmart’s typical clients are companies with any where between 5 to 250 employees, many of which have multiple locations. These clients are based in North Carolina, as well as in the Baltimore and Philadelphia areas, where WorkSmart has expanded through recent acquisitions in the past year.
Unger says that he started his company because he felt the IT field was underserved and that it was due for a professional service firm. He explains that the predominant model at the time was “tech people solving tech problems.”
Unger felt that his calling was to focus on not just exclusively technology, but on business strategies that were enabled by technology.
“We were coming at it from a completely different angle,” he says. “We’re not technical people by trade, whereas most of our competition are technical people. We’re fairly networked nationally with companies like us. In every major metro there’s a couple of companies our size doing what we do. When we talk to them we’re still the odd man out because we’re not computer engineers by trade.”
Additionally, Unger says he likes being able to provide a subscription service business model in which there is a built-in consistency.
“I think that’s kind of our persona, part of our philosophy; what kind of work life we want as people, business owners,” he explains. “We want this consistency. We like working with the same clients, of course more of them, but the same clients from the history of our company.”
WorkSmart’s comprehensive services allow clients to focus on their big picture and not get bogged down with the intricacies of ever changing technology.
“IT is not getting simpler, it’s actually getting a lot more complex, even though people are becoming more savvy with using their PCs,” Unger explains. “The iPad makes your life simpler in a lot of levels, but it makes management of IT a lot more complex. As complexity goes up the value becomes more. One of the things that is happening now is that things are moving to the cloud and that’s what’s called somewhat of a game changer in our industry. The cloud has been a great thing for us because there’s no way a business owner running a law firm, an accounting firm, a civil engineering firm, or construction firm is ever going to have the time to really understand it well enough, the cloud or local-base infrastructure. The smaller microbusiness, sure, things can get really simple and they might need just quarterly type support. You get beyond that and the complexity goes up exponentially.”
WorkSmart has earned a spot on the Inc. 5000 list every year since its inception in 2007. Unger attributes his company’s consistent revenue growth to its long-term relationships with clients. He says much of his competition tends to focus on upfront project work, while WorkSmart deals with on-going technology management. This kind of continued work with clients has allowed Worksmart to grow organically, even having two acquisitions in the last two years.
“During the downturn, we actually had clients, a non-profit as an example, who went from their staff working 40 hours a week to 30 hours a week because they had to save money, but they did not drop a bit of our services because what are they going to do?” says Unger. “So there are two reasons why we were able to make the Inc. 5000 in the past couple of years, where a lot of our competition didn’t even get close because they were on a downward swing. One, we focus on the long-term relationship. We don’t recommend anything unless we can back up years and years in the future. So we have to think about the long term on anything we recommend. The second thing is that quantitatively, our product sales and our project work are a fairly low percentage of our total revenue anyway. Most companies in our industries will have, typically, around 60 percent of their revenues coming from one-off projects or equipment sales. Ours has never been more than 30 or 40 percent, and even at recent times it’s probably in the 20s.
Though Unger admits his job can be stressful, he says at times he steps back to think about the larger perspective.
“Life’s short. Really experience and enjoy every minute of it,” he says. “Literally, that’s what I feel and believe when I wake up in the morning. We’re taking on the problems of clients,’ right? We’re just taking it on and we’re trying to make it easy and that creates a situation where we’re in constant stress. We have 320 different businesses that pay us a monthly fee, expecting it always to work. Like electricity and cable TV, it’s a utility, and when it doesn’t, which happens as you know, it creates stress. But then I’m thinking too what can I do now to really soak up that time with my kids to make sure I’m really a part of all of that? Happiness is right up there with health. I think a lot about that with my kids growing up and what I’d really like them to believe and feel. Their health and happiness is everything. Everything else is not even close. If you’re happy and you’re healthy, it doesn’t really matter what you have.”
Unger’s advice to other emerging business owners is to be very conservative, even as they begin to earn a profit.
“There, hopefully, will be a point where your small business will get to a level where you can make a lot more money, and take money out of the business for different things, but when there’s that point, be very careful,” he says. “Be conservative with your lifestyle and make sure you’re re-investing back in the business.”
This kind of thinking has served WorkSmart well.
“That has always been our philosophy that rather than up and then down, we would rather have something that would grow nice and steady,” Unger says. “That philosophy kept us in the Inc. Magazine 5000. The funny thing is that if we had been too aggressive about paying ourselves we wouldn’t have the money to power through this last economic condition. We didn’t have to reduce anybody’s salary during the economic downturn, not ours or any of our staff. Sure it’s a decent industry to be in, a decent business model. But I have competitors in our industry in this model who had a downturn. And because we’ve made certain strategic investments and we had the cash to do it, we came out of it in a better place. I think that comes with the business owners’ mentality about their money, how they spend it, their lifestyle.”