Foundation Software
Profitability

In the construction industry, as in most, accounting software is one of the first things you buy. Fred J. Ode knew there was nothing more critical than controlling costs and monitoring cash flow in labor-intensive industries, because he’d been helping construction companies with their accounting for years. It seemed natural at some point to write his own financial software—Foundation Software—and sell it to them.

But the selling wasn’t as easy as he’d thought. The first job he got was an hourly-rate gig for a steel contractor for the World Trade Center in 1985. Customers of his former employer’s software supported him and his first associates for a long time—85% of their revenue came from custom programming. But Fred just wasn’t sure who else would buy their product or services.

Three years and hundreds of phone calls later, he got his first product sale to a construction customer and got a real start—on the road to the company’s current mix of 85% product and 15% services, a much more desirable situation.

In his quest to grow, Fred knew he had to evolve the product—and at some point, bite the bullet and re-write his DOS-based software. He did so in 1990, using SQL Server and adding desirable new functionality. But he knew that no matter how good a product might be, it was always a question of getting it sold.

One of Fred’s secrets is to carefully nurture the sales process with a unique approach: he uses an internal sales staff, but because different qualities are valuable in each of the stages of selling—generate/qualify/close—Fred actually uses different people for each stage. He’s been so successful—now up to 1500 clients in his totally self-funded business—that 35% of revenue is now new business.

Fred’s advice to entrepreneurs: Be the best at one thing. Put people first—have your hiring, education and termination processes firmly in place. And last but not least: Manage by the numbers and watch cash flow.

What else from an accounting guy?…