Progressive Expansion Overcomes False Start with Computer Systems
By Viki Reath
From The Washington Times, Business Times - Monday, February 24 1997, Page D6 "The Entrepreneurs"
After scraping by for years, Stuart E. Kushner has seen Progressive Office revenues quintuple since 1992.
When he left his systems management job in 1986 to start Progressive Office,
Inc., Stuart E. Kushner [1974] knew only one computer language and had
little money.
He then lost the money and ended up in debt.
"My first client didn't pay me for three months," he said. "He was a real
estate investor who hired me to write a program to automate his business and
talked me into investing $10,000. He owed me $18,000 and still had my money.
So I started out broke and in debt. I didn't even have the money to get
literature printed, to advertise. He eventually gave me $6,000 back."
But perseverance paid off. Mr. Kushner has parlayed his Silver Spring
business into a million-dollar operation with eight full-time employees and
400 clients.
"This is a competitive business," Mr. Kushner said. "But there are tons of
small white-collar businesses and tons of Beltway bandits who need my
services. There are 15,000 businesses in Bethesda alone."
But back in 1986, all he could afford was a rent-free office offered by a
friend. He stayed there six years.
"I started working on marketing myself a little bit, calling people," he said.
"I made a few contacts and got a contract from a firm looking to land a
government contract to do on-site system maintenance for computer systems in
Fort Belvoir. When we got the contract, I was working for the company four to
five days a week.
"The mistake I made was not having a partnership agreement with them. They
lowered the number of days I was working to one a week. Finally they said
thanks for nothing and told me they didn't need me at all."
Somehow he won enough clients to keep going. After several years he raised
his rate from $35 to $75 an hour.
"That was actually the going rate, and I got more clients," he said.
"Businesses started to take me more seriously."
Although the higher fees helped boost revenue, the turning point came when
small businesses became the fastest-growing market for the computer industry
in the late 1980s -- and Mr. Kushner got in on the ground floor as an authorized
vendor for Lantastic, a hot-selling networking product.
Finding a hot product, coupled with careful marketing research and personal
service, fueled growth, leading to $1.2 million in revenue last year, a 400
percent increase from 1992. Revenues are expected to total $2 million this year,
Mr. Kushner said.
"We'll do whatever it takes to keep a client," he said.
Alex Perilla, director of administration for the National council of La Raza
Association, can attest to that.
"They're as convenient as it gets," Mr. Perilla said. La Raza has used
Progressive as its prime vendor the past three years.
Non-profit associations and law firms make up the bulk of Mr. Kushner's
clients. "What they all have in common is that they're small companies and
have between two and 40 computers," Mr. Kushner said. "We love our big
clients. But we wouldn't want just them. It's a big plus to have small
clients. Although we don't like to lose anyone, if we do lose a small client,
it's easier to absorb."
Occasionally he does lose clients, usually because of bad equipment, he said.
Sometimes they return.
"In the case of one client that hired then fired us, the problem started with
a network tape driver that didn't work," Mr. Kushner said. "We replaced it,
and the replacement didn't work. They fired us. But we kept sending them our
newsletter, and they would call to say they liked it. Finally, they called us
to come out again, saying they'd had somebody else in there who had totally
screwed up their network."
Typically, Progressive acts as a client's computer department, Mr. Kushner said.
"We don't need room to stock inventory, because all we keep around are repair
parts," he said. "Whatever is shipped goes directly from distributor to
buyer."
What drove him to persevere, despite starting out in debt and facing numerous
other setbacks?
"My desire for success was greater than my fear of failure," he said. "You
have to be willing to take chances and do things you haven't done before."
Inset:
Company: Progressive Office, Inc.
Business: Provider of computer consulting and network support and system sales
to small businesses.
Location: Silver Spring
Chief Executive: Stuart E. Kushner
Initial Investment: $2,000
Estimated 1997 revenues: $2 million
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