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Seize the Opportunity


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  • | 7:21 a.m. January 11, 2013
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Sometimes starting one business leads to another more successful one.

You just have to recognize the opportunity and seize it.

That was the case with George Slay. He retired to Sanibel Island in 1972 at age 42 after running Sun Oil's operations in Venezuela.

The Texas-born oilman started an air-conditioning company called Island Air, and his brother Glenn joined him. But the Slay brothers recognized early on that computers could make the business more efficient, so they bought some of the first desktop computers and created their own software because none was available.

But the Slay brothers quickly realized that opportunities for growth lay in developing software for other air-conditioning contractors and service businesses. When they showed it around, the software was an instant hit with air-conditioning contractors because it helped them better manage their cash flows and inventories, among other tasks.

So the Slays sold Island Air in 1988 and formed what is now dESCO in Fort Myers. The software company currently has 6,000 customers nationwide and its sales have been growing at double-digit percentage rates in recent years (the company declines to disclose sales figures).

The Slay brothers retired and sold dESCO in 2006 to longtime employee Dean Schreiner, 58, now owner and president. Schreiner remembers the interview when he was hired in 1987. “They asked me if I liked Mexican beer and food, and I said yes, and they hired me,” Schreiner chuckles.
At the time, dESCO had just 50 customers. “People like Dean have made it happen and make it worthwhile,” says Slay, who stays in regular contact with Schreiner.

Island airs
George Slay moved to Sanibel in 1972 after visiting his son at school on the east coast of the state. On a whim, he drove to Sanibel, figuring the $3 bridge toll meant there was something appealing about the place.

At age 42, George Slay quit his job at Sun Oil after 20 years. “I came to the state with a nest egg,” he says. His brother Glenn quit his job as a sales engineer for Honeywell and joined him soon after.

George Slay didn't move to Sanibel with a plan. “I didn't have any idea what I was going to do,” he says.

But after making inquiries, Slay discovered the island needed an air-conditioning repair business. In those days, all you needed was a $4,000 bond and you were in business.

At the time, air-conditioner dealer Bill Smith in nearby Fort Myers only came to service island residents once a week, usually on Thursdays. “If your air-conditioning broke on Friday, you'd have to wait until Thursday,” Slay recalls.

Once the air-conditioning business started to grow, the Slay brothers were interested in making it more efficient. They flew to Chicago to buy their first computer in 1978. George Slay then bought a book about software at Radio Shack. “We taught ourselves the Basic language,” he says.

They started using their software for invoicing and found that customers paid computer-generated bills faster than the hand-written ones they had sent earlier. That was important to improve cash flow, because most Sanibel residents were away during the hot summer months when air-conditioning units broke. “Everything was on credit,” Slay says.

The computer software also let contractors track their labor and material costs. Combining that with receivables enabled them to maintain their profit margins. “It improved your bidding on the jobs,” says Slay.

In addition, the inventory control meant contractors didn't have to tie up a lot of cash in stocking parts and could be sure employees had the stock they needed for repairs. “The worst thing you can do is send out a guy without parts,” says Schreiner.

At the time, George Slay was president of the contractor's association in Lee County and he started showing others how his software worked. As word spread, Slay started selling the software and hardware for $30,000 to $50,000. The disk drive alone cost $10,000 and weighed 65 pounds. It read two 1-megabyte floppy disks. (By contrast, the software costs about one-tenth of that sum).

Still, despite the high cost of computers back then, the software improved operations so much that contractors were willing to buy it. “It would pay for itself in about a year,” Slay says. Adds Schreiner: “When you can control cash flow, that's huge for those guys.”
The Slay brothers sold Island Air in 1988. “I got tired of crawling in hot attics,” George Slay says.

What's more, dESCO's big break came around the same time. The Florida representative for the Carrier air-conditioning manufacturer struck a deal with the Slays to provide their software to about 200 contractors around the state.

Going national
After the deal with Carrier's Florida contractors, the Slays expanded nationally. “We had the country covered with sales reps,” says George Slay.

They hired Schreiner in 1987. Schreiner had developed and implemented software technology for a dairy company in Clearwater and later at a computer-consulting firm.

When Schreiner joined the Slay brothers, dESCO was still a small outfit. “There were only five of us at the time,” he remembers. Now, the company has 28 employees.

Schreiner says the key to growing the business is customer service. Unlike many firms, he refuses to outsource that part of the business as many software firms have done. “I thought about it for a day,” Schreiner laughs.

“You can't teach people-skills,” Schreiner adds, noting that the average tenure at dESCO is 10 years. “It's got to come from the heart.”

Recruiting people hasn't been difficult. “You're starting to see more talent come to the area,” says Schreiner.

One of the big selling points, of course, is that the founders of the company had experience running an air-conditioning contracting company. This understanding of the customer is now embedded in the culture of the company, Schreiner says.

The mechanical trades such as air conditioning make up 70% of the firm's customers. But other companies that dispatch services also use dESCO software. These include copier repair companies, telecommunications firms, locksmiths and landscaping companies.

The Slays and Schreiner have been able to grow dESCO without outside money, declining offers from venture investors or bankers. Schreiner also doesn't grow by acquisition. “Why pay them for customers I'll get anyway?” Schreiner asks. “We like to keep it organic.”

The company's sales rose 21% in 2012 through mid-December compared with the previous year, when sales rose 38%.

dESCO charges about $3,200 on average for a license and $900 to $1,600 a year for customer support. The company adds about 30 customers a month on average. The Internet has allowed the company to be more efficient about installation and support, most of which can be done remotely. The company is working on a subscription-only model that will be developed later this year.

Because of its customers' mobility, dESCO has been providing mobile technology since the mid-1990s and now has an iPhone application. Customers “just jumped on it,” Schreiner says. “Every tech has a cell phone of some sort.”

George Slay says this is the leap in technology he hoped to achieve. “It's always been a vision of mine to have mobile computing,” he says. Schreiner is seizing that opportunity now.

 

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