If the story of SolSource Inc. isn't quite of Dickensian proportions, it is nevertheless worthy of a few words from the novelist's opening lines. In its two brief years, it has been the best of times and it has been the worst of times for SolSource, a high-tech firm born in all the ebullient swagger of the dot-com world. In November last year it gave a party to celebrate its first anniversary, but soon afterward the party hats were set aside. President Pamela Nichols had run the numbers. If SolSource wanted to see two, an internal revolution was in order.

A day in December, says CEO Brian T. Harris, "was probably the worst day ever for me. I was a sales rep the last year, and now I'm having to call everyone into the office and either cut compensation or fire'em. It was brutal. I did it in one day. But SolSource was going to die. Then. That's when it was going to die." Six or seven staffers were let go immediately, Harris says, and compensation cuts "scared others away."

As Harris details it, SolSource had plenty of work, was bringing in good money, and "never missed a payroll, paid sales tax every time, never bounced a check. We were doing things the right way." Indeed, first year revenues reached about $5.5 million, and the original idea ­ building a company with three business units offering systems integration, cable installation and data center construction ­ was right on track. "We didn't have a business plan, but we know the business," Harris says. "When you bring those businesses together, there's nobody else in this market that does what we do. It's a cool business model, because we don't have a lot of competition and we have a market that is so horizontal that if you have 15 employees and a pulse, you're a potential customer of ours."

Start on the mountaintop

SolSource began in the minds of Harris and three others who had been working for another firm that did cabling, created data centers and "did typical systems integration stuff. We tried to buy the company, but that didn't work out, so we decided to start our own. I thought that would be all right. I was minding my own business, selling in this market for about 10 years. This would be a chance for me to take the next step, from sales rep to owning a piece of the business. Then, wham, six months later I owned the whole darned thing."

For a variety of reasons, the partners fell away, and Harris dug into his own pocket to buy the others out. "Cash flow was coming from me, everything from the equity in my house to all my stocks. The one beautiful thing that happened was the day I cried when I had to sell my Cisco stock. I sold it at $78, and I had a lot. I just knew it was going to go up and split ­ and you know how it turned out [Cisco Systems Inc. was trading at just over $14 a share in early October]. SolSource was a better investment than Cisco."

There was no leash on the early optimism. "Day one, we hired 15 or 20 people, because they would come with us. It made us feel good." It was just the beginning of what Harris bluntly calls a series of "stupid decisions. Stupid decisions got me. They'll get everybody."

An 18-month sublease of 12,000 square feet of waterside office space where even the sales reps' walls were lined with mahogany cost $15,000 a month, $185,000 before SolSource could extricate itself. "Maybe I should have done what most did," Harris says, "put some desks in my garage, but I don't know if the big deal we closed with Enporion, when they came to our office with a $500,000 deal ­ did we get that because we looked impressive? If we had been in a 2,000-square-foot shack, would we have gotten it? I don't know. And I love sales people. I am sales people. I know when I got comfortable ... give me a chair with no seat and I won't hang around much. I'll probably get out there and ....

"Payroll was another mistake. We paid sales people too much. Back then, with bases or draws, we were trying to attract some people who have credibility in our field. We've tried everything. We overpaid them. We underpaid them. We've micro-managed them. We've not managed them. We've had quotas. We've had no quotas. I've got people with an incredible amount of experience in technology, I've got people with no experience. I've tried everything, and I can guarantee you there is no magic formula. It's individuals who want to make it happen. That's who I have right now, and it's taken me a long time. Mistake No. 72 was giving [sales] too much slack. Somebody you should have whacked three months into it ... they've got it coming ... but they see the writing on the wall and leave anyway."

Through the first year SolSource grew its revenues, but its obligations were growing faster. After about six months the employee count numbered about 30, "and it was costing us $200,000 a month to run the business. Fast-forward to today when it costs us about $90,000 a month to run the same business that is running about 15 percent [in revenues] ahead of last year. Payroll's pretty much a joke compared to what it used to be. Rent's a joke compared to what it used to be. And space," Harris pauses to look around cramped but temporary office space near the St. Petersburg-Clearwater Airport, "that was probably mistake No. 1, biting off more than we could chew." It's definitely more healthy to have too many people in too little space than it is to have it the other way."

There was at least one decision Harris made during that first year that he doesn't put in the "stupid" basket.

"I talked Pam into coming over here." Nichols, Harris's sister-in-law, was controller at Dosatron International Inc., a maker of metering devices and water-driven pumps. As their network administrator she was knowledgeable in technology.

"I was hesitant to bring family into the business. I've heard it works, I've heard it doesn't, " Harris says, "but I needed someone I could trust 100 percent. She left a perfectly good job to come over here, and she didn't know what the ship really looked like. All we knew was, ŒLet's do some business.' She's a rock."

Nichols says she found "issues right off, but nothing too severe." Nevertheless, as the holiday season approached ... in September, I knew we had to do something. We had a certain amount of consistent business, but way too much overhead."

The cash-flow analysis Nichols presented left no room for discussion. "We said, if we keep going like this, we're gonzo," Harris recalls. "I was basically tapped out. I don't have the rich uncle. We had work, but you take in money and throw at payroll that's two or three times as high as it should be, and you can dig yourself a hole real fast."

Turnaround

But SolSource proved more resilient than even Harris had anticipated.

"As it turns out, we've got some loyal people. They believe in me, more than Pam did. But we just dug in and started heading in the right direction. it happened almost instantly after we did it. Things just started turning around."

With about a third of the $5.5 million in first-year revenues coming from each of the three business segments, Harris "knew we were doing something right." We're still feeling the pain from year one, but we've made money every month this year, and we're definitely headed in the right direction. One good thing that's happening right now is that about 70 percent of our business is referrals, including referrals from competitors. We excel at design and project management. When the Poynter Institute needs cabling, and they need a data center, and a PBX, and security and network redesign, we blow everyone else out of the water."

A SolSource project included cabling FCCI's new corporate office at Lakewood Ranch in Sarasota County, "one of the largest cabling jobs in Florida last year," Harris says, with 1.5 million feet of Category 6 cable. We ran four Cat 6 and one fiber run for 1,000 desktops, all under raised flooring which we designed."

Other work rolled in, much of it, Harris says, because he believes in "relationship selling. Whenever I left to go to another company, all my customers came with me."

SolSource built a new computer room for Lincare Holdings Inc. in their new facility, completed data center work for Aegon USA, and performed a variety of jobs for Jabil Circuit Inc.

There is another key to SolSource's success, Harris says. The focus has always been on standard corporate customers. "We got caught up a little bit, and we got burned for doing some work for some dot-coms. I got stuck for about $100,000 for a couple we were doing services for. They were in a big race to raise money, and spent all their money racing to get their infrastructure built. By the time they were done, they couldn't get their revenues done fast enough to support the money they'd spent. They flat ran out of money. The scariest phrase we can hear on our sales calls is, ŒWe'll have our funding shortly.'" Because that means they're not going to get their funding, period. But, if they say they're going to have funding shortly and I can get 50 percent down, I'm crazy enough to do that deal ..as long as I can go and get my equipment back if the other 50 percent doesn't show up."

SolSource's losses "didn't kill us,' Harris says. "That made us stronger. We're very careful now about the things we do."

The details of the Enporion Inc. deal show SolSource at its best, Harris says. Enporion "call us one day. Somebody told them about us.

"It was a beautiful example of our business model. They needed to buy a bunch of hardware, they needed all the integration work done to install it, they needed the cabling done, and they needed a datacenter built."

SolSource famous ads

Referrals weren't the only way SolSource became known during its first year in business. Readers may recall the minor controversy stirred by billboard and print ads that showed a scantily clad woman and mildly suggestive wording, or an IT type make in the restroom reading a newspaper. Harris had earlier created what he says was a "little radio ad" and "got about $1 million in business from that commercial. How much business could I get with the print media and billboards?"

Both Harris and Nichols had approved the advertising campaign, but it was costly. During the six months it ran, Harris says, some found the photos and the copy offensive. "I'd had enough after three months. Nasty E-mails. I got hexed by witches, people telling me that they and all their IT friends would never work with me. I offended men and women alike." Still, he says, "I think it was enjoyed by people in my community. But would I do it again? No."

The worst is over, Harris is certain. "This has been a rebound year, and next year I look for it to jump up considerably. I can easily see us doing a 60 or 70 percent increase, and doing that without adding more than one or two bodies. We're making money, and that's good. We're beyond the stop-the-bleeding stage. I want this company to get to where it's a well-oiled machine. It's so easy to get sidetracked, but I won't allow that to happen."

He expects the business model to remain as it was during year one, with income distributed more or less evenly among the three segments of SolSource's abilities. "We certainly threw a lot of money away, and made a lot of stupid mistakes, but at least I knew that we were doing something right, because we did $5.5 million. If we were operating the way we are now ... but of course you can't look back."

Times have changed, of course, and not just for SolSource. The economic slowdown is a factor for all businesses. "There's just fewer people who are throwing money away like it's candy," Harris says. "But we're focused on corporate companies. You may need to dig a little bit deeper now, but there's a ton of business out there. Companies that geared their entire business model towards the ISP or telecom are gone. But we're in the right business."

And new business continues to roll in. As the second anniversary comes around on November 15, the 18 people at SolSource are counting large jobs at Collegiate Funding Inc., a Virginia company that has a call center in the Gateway area of Pinellas County, at Clearwater Central Catholic High School, which is building a technology infrastructure to allow it to attract top students, at Shell Point Village in Fort Myers, where SolSource is in the second year of a six-year project to build a data center, run redundant fiber and basically redesign the entire networking structure, and at eMerge Interactive Inc. in Sebastian, where SolSource is putting in raised flooring for a data center and restringing the cable."

Nichols see a consistently expanding SolSource ahead. "It may be slow for awhile in the first and second quarters next year, but we finally have the opportunity to grow wisely.

"Our revenue this year should hit about $6 million," Harris says, smiling. "And we're at 40 percent of the overhead we had last year."