The Joy of Ownership

Now the business is flourishing And now that Gene has known the excitement of being your own boss, of making daily decisions for your own company, he declares, I could never go back to being an IT director again.

Xperia has a staff of forty-two people, thirty of them development people ”programmers, customer support people, trainers . We re a small company, and I try to make it a family, Gene says. We try to get involved with people on a personal basis ”understand what their problems are. Our attitude and atmosphere are different from that in a corporate environment, where there are levels of management. We have a very flat organization, and we have an open -door policy when somebody has a problem.

We have meetings every three weeks. We bring in lunch , and everyone has an opportunity to air his opinions about the company ”what we do well, what we don t do well, what we need to work on. When we make mistakes, they bubble to the surface quickly, because everybody has a problem with them. There s an attitude that we try to bring out in our meetings: If people need help, let s give them all the help they can use. But if they don t want to take the help, let s replace them.

We pay our people fairly , but we try to reward them periodically ”quarterly ”with bonuses, based on how well our company does. With that methodology we ve managed to keep people at our firm a very long time. If I take new hires out of the equation, our average length of stay for employees is ten years. And remember, our company is only nineteen years old.

I look for talented people by two methods . I advertise in the paper. I keep it local, within the Allentown area, or go to Philadelphia or New York. I ve attracted people from those areas who are looking to get out of the city. If I m looking for a trainee, there are several local colleges that have a two-year course in COBOL for the iSeries. I have a couple of people here from these schools who are excellent programmers.

I hired one trainee, and within two and a half years he had gone from $18,000 a year to $50,000. And that s in the Allentown area, where salaries aren t as high as they are in Philadelphia or New York.

In our organization, a super programmer makes $72,000 a year. In Philadelphia that s probably worth $100,000.

Like any entrepreneur, Gene wants to see his company outlive him. And so he recently sold Xperia to his employees. I offered the employees the opportunity to buy the company, he says, and they all agreed to participate. Now, he says, his people have an even greater commitment to Xperia s growth and profitability. Under the employee stock option program, the employees have a significant stake in the company; eventually they will own it. It s a terrific exit strategy ”a great way for me to exit the company, he says, and a great way for the company to continue after I retire.

Is a programmer who likes to sit in front of a computer screen all day likely to make a good entrepreneur? Gene doesn t think so. If you re going to found your own company, you d better be gregarious, he says. You ll spend your day hustling for clients , directing employees, stepping in to resolve conflicts. You d better not be the retiring type.

$$ The Bottom Line $$

Gene Bonett s advice to new entrepreneurs? Don t do it his way. Don t take the risk of starting your own firm without having an adequate amount of cash in reserve, without understanding cash flow, without knowing how to write a business plan ”without, in short, acquiring a realistic idea of the obstacles you might encounter. Make sure you understand the ramifications of this move into ownership, he says. And, he counsels, pay attention to this truism when you re making your plans: No matter what contracts you think you re going to sign, they never come through when you think they will.