Net Flow Corporation, Napa
Company Profile - Net-Flow Corporation is a technology business that provides a range of customized options for Web hosting, E-Business design and development, and network/IT support and consultation for small to medium-sized businesses. Beginning in 2003 and continuing throughout 2004, owner Dean Bowen developed a new series of low cost products -marketed to small businesses- that streamline customer relationships, internet marketing and internet commerce through technology applications. Located in Napa, CA the company was founded in 1995 by Dean Bowen and has enjoyed modest success during and after the boom and bust of Silicon Valley’s “Dot.Coms.”
Challenges – Up until 2004, the company fluctuated in size from 2 employees to 6 employees, expanding and contracting without stability. Bowen wanted to increase stability for his employees and for his business. Additionally, the majority of Net-Flow’s business came from consulting and software solutions that were highly customized, even though many of his customers had common needs. Bowen knew he needed to look at his product/service offering and how it lined up with his market, but needed help sorting this out. Most important, while profitable in 2004, billable hours were down significantly in mid 2005, and cash flow became a critical issue. Setting the business on a path to stable profitability became urgent.
Actions Taken – Bowen attended a local NxLevel business planning course and worked individually with SBDC Consultants, Charlie Monahan and Ray Kimball to analyze Net-Flow’s financials and business structure. Together, they identified improvements to how the business was organized and how work flowed. Monahan also made suggestions to increase billable hours. Subsequently, Bowen returned to tracking the company’s billable hours on a daily and weekly basis. He was also able to cut costs within the business by increased utilization of technology for project management. With simplification of business processes and a better handle on his billable hours, Bowen regained focus on the marketing and the operational sides of the business.
Results - Two part time positions within Net-Flow evolved into full time positions and one additional full time position was created in 2005. (Net gain of 2 FTE). 5 additional jobs were retained. New technology and streamlined project management enabled a renewed focus on billable hours, resulting in a sales increase of 37% in the second half of 2005. Sales for the first two quarters of 2005 were $189,613, with a net loss of ($11,179). The second half of 2005 yielded sales of $259,843 with a profit of $84,940. The first half of 2006 showed an even larger jump—sales of $378,205 with a profit of $156,285.
Statement from the Client - “My problems at Net-Flow were that I was didn’t know where the problems were. I knew we had to do something different but that was all I knew at that point. The NxLevel program was key, as it taught me how to look at the business and realize what details I should pay attention to. Then, working with SBDC consultants Charlie Monahan and Ray Kimball, I was able to clearly identify areas to improve and track. Almost immediately, billable hours increased from 50% efficiency to 75% efficiency. Not until I sat down with Charlie and Ray was I able to understand my business model.”
Dean Bowen, Net-Flow Corporation
1556 First Street, Suite 101
Napa, CA 94559
Napa Valley SBDC
28 Carmel Drive
Novato, CA 94945