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My A-Ha! Moment
Why I Recession-Proofed My Company
by Barbara Porter
January 1, 2005
T
he realization hit me as I was doing a SWOT (strengths, weaknesses, opportunities, and
threats) analysis of my company during our monthly National Association of Women Business Owners
(NAWBO) CEO Roundtable in 2002: The threats to my information technology (IT) business, BTG
Enterprises, were opportunities to others.
Law firms dealing with compliance issues and those companies providing
offshore computer programmers for much cheaper than we could afford to supply were thriving - even
during a recession. The focus for that roundtable was business planning, and I knew I needed help.
These sessions were taking place during a challenging economic time - especially for those of us in
the high tech business - in the wake of the Dot.com bubble, Y2K, and September 11, 2001.
BTG needed to capitalize on the offshore trend and establish a recession-proof book of
business. As a 30-year veteran of this industry, I'd seen plenty of ups and downs. In 1990, my
colleague Tedd Petrik and I decided to form our own IT services firm, BTG Enterprises (formerly
Business Technology Group) in Atlanta. We started with14 skilled, computer consultants - all
passionately committed to offering creative solutions with a higher degree of personalized service
than large IT consulting firms offered. And we'd do it all on time and on budget.
We grew steadily through the mid-1990s. By 1996, my focus became more strategic. When I saw
the opportunity in IT staffing, we moved quickly to offer that service for our clients. At the
height of the tech boom our sales soared past the $10 million mark.
Our revenues directly reflected the technology bubble. The dot.com craze and the Y2K scare
drove the need for more and more technology resources and subsequently (IT) salaries went through
the roof. That was great for companies like ours: We had grown to a staff of approximately 100 in a
few different locations across the U.S. We began to focus primarily on satisfying the need for
resources and less on providing actual IT solutions. Customers were calling us, but the nagging
question dogged me: "How long will it last?"
My suspicions of the dot.com startups were confirmed as we watched some of our dot.com
customers fail, leaving behind unpaid invoices. Our lease was expiring in 2000, and we found more
suitable space elsewhere. However, the landlord demanded that a Letter of Credit (LOC) from our
bank accompany the lease. The Letter would escrow and secure the landlord's build-out costs over
the life of the lease.
At this point our 10-year-old company had leased office space with build-out before, but we
had never been required to provide an LOC. When I called the bank to request the Letter of Credit I
asked about the landlord's insistence. Our banker said it was becoming increasingly common to
require LOC's from high tech companies due to the failures of so many internet startups and the
impact on the commercial leasing markets. Another warning light had just come on: The question was
no longer whether the technology sector was overheated, but when it would tumble - how hard and how
fast. Over the next year, demand slowed down. More customers defaulted on payments.
In 2001 our revenues slid to $7 million, but we wanted to believe the forecasters when they
predicted a turnaround "next" quarter or beginning of "next" year. Then came September 11, 2001.
We knew 2002 was going to be a year of tough decisions and a battle for survival - a real
test of faith. We were forced to reckon with a downward spiral and resulting downsizing.
That led me to the realization that relationships and networking - something I'd never
invested in - were the only way to survive. Recognizing that need pushed me to join NAWBO and the
CEO Roundtable, and the ultimate reassessment of our business.
As it happened, Pete Mastin, BTG's project services director, had attended a conference
dealing with regulatory compliance. He was enthused about the niche and pitched the idea of BTG
creating a software application to help companies better manage regulatory compliance. We entered
into a partnership with a company called IntegraSoft, which had a rapid application development
tool, to do exactly that. Our partnership also enabled us to develop software on the .NET and Java
platforms faster and more efficiently, making us more competitive with offshore programmers and
saving as much as 80% in terms of cost and time against local IT firms.
Since that SWOT analysis, we have diversified and now promote ourselves in the rapid
applications development and regulatory compliance arenas, accounting for about 50% of our $3
million in revenues, which are once again steadily climbing.
Brenda F. Porter is CEO, co-founder and majority owner of BTG Enterprises (www.btgenterprises.com), a certified woman-owned business. DiversityBusiness.com recently named BTG Enterprises one of the nation's Top 500 Women Owned Businesses.
