Telecommunication
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"Once you get a client, it takes, on average, six months before [revenue comes in]. That's the hard part."
photo by Eric Tadsen
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Start-Up: NovaONE Networks
June 1, 2010
As reported in the pages of In Business magazine.
When Jim Sauter's position as director of commercial marketing at TDS was downsized after 15 years, he had two choices: Stay with the company in a lower-level job, or take a buyout. He chose the latter.
While he hated to leave, and still speaks highly of his former employer, Sauter, 46, had always held onto a dream of venturing out on his own. Perhaps this latest development was the impetus he needed. His wife, after all, had just landed a job at HospiceCare, so the issue of health care insurance was covered. And as chair of the finance committee for the Mount Horeb School District, he had successfully saved the district 50% on its telecommunication bills after analyzing the costs and utilizing the knowledge he gained at TDS.
The question was, could he capitalize on those experiences and turn them into an entrepreneurial opportunity?
On January 16, 2010, a day after leaving TDS, Sauter launched NovaONE Networks. Its mission? To save businesses and nonprofits money on voice, data, and Internet services. His niche? "I'm like an insurance broker, but for telecommunications services," Sauter explained. Another analogy? Picture a store (NovaONE) with a variety of telephone companies and services displayed on its shelves. It will serve a need, he said, because all too often, companies assign the oversight of a telecommunication system to an employee already wearing several hats — and with no expertise. He believes that is where NovaONE Networks has its greatest opportunity.
"I do the shopping for the customer. I bring in quotes, make recommendations. I know which telecommunication companies might do some things better than others, which might tack on fees, or which cater more toward smaller versus larger companies."
And the cost to the customer? Nothing. The telephone companies pay Sauter residuals to market their services to businesses. He believes the concept is unique. "Others dabble in it, but this is my sole focus," he said.
Thus far, Sauter has self-funded the entire start up, spending between $12,000 and $15,000 on legal fees, and designing a brochure and a website. Because of his success in Mount Horeb, and with school districts everywhere facing slashed budgets and reduced funding, he is targeting other school districts initially, and hired an Illinois telemarketing company to help with cold calls. Health care also will be a focus, but Sauter insists any business or nonprofit organization regularly spending at least $500 a month on phone and data services might benefit from the service he can provide.
For now, Sauter shares office space with a friend who owns a different business, but it won't be long before NovaONE moves into its own location. Hiring an office manager may be next. "Cash flow is not coming in yet, but there's plenty of work that needs to be done."
Sauter has five independent contractors working with him part time, including one each in Vermont and Illinois. Each had recently lost their job. "It makes perfect sense to tap their expertise," he said. Sauter expects NovaONE to generate $100,000 the first year, its capital start-up phase. Long-term, though, he'd like the company to evolve into a complete network integrator with a full-time staff.
He has learned that in its infancy, progress can be slow. "Once you get a client, it takes, on average, six months before [revenue comes in]. That's the hard part," Sauter admitted. "I didn't figure on that. It will be a lean year."
Regardless, he's having a blast. "I was the 13th employee hired at TDS Metrocom, which was like building a company from scratch," he said. "That was so much fun. Now, I feel like I'm doing that all over again. I'm back in my element, and the momentum is incredible."
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