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I was shocked -- shocked! -- to learn there's a computer-driven system out there to make sure that time at work is reported with ridiculous accuracy.
Actually, Jeffrey Goldenberg and Carl Pressman insist that the automatedtime-and-attendance system on which they've built a million-dollar business is more about improving the speed and accuracy of the payroll system and the data it provides managers than it is about spying on employee work habits. Whew!
Goldenberg, 42, and Pressman, 41, own TimeTrak Central, a Bloomington company that started life in 1919 selling and repairing old-fashioned, punch-in time clocks. Indeed, that remained its largest business until 1998, when Goldenberg and Pressman bought the company as the time-clock market waned and sales slid below $100,000.
What was the attraction? Goldenberg and Pressman, with backgrounds in sales and marketing, saw a potential for significant growth by upgrading the comparatively unsophisticated automated time and attendance clocks and card readers the company had begun to sell, but was not emphasizing.
After a year spent assembling the hardware and software for a more powerful, applications-rich system that would appeal to larger clients, the two built TimeTrak's sales to an estimated $1.5 million in 2006, up 25 percent from $1.2 million in 2005 and 15 times the 1998 level.
And that's just the beginning of their growth schemes, it appears: After seven years of handing their time and attendance data off to others to process, the two started their own automated payroll-processing company this year to focus on the small to mid-size clients they view as less well-served by large national firms.
The ensuing trends for the business, dubbed Press-Gold Payroll, have been encouraging: From July through November, the company signed 35 clients and was adding two or more a week into December, all with only Pressman doing any sales and marketing.
These results will produce little more than $20,000 of revenue in 2006, Goldenberg said. But with most of the clients starting the service in January, and given plans to add two or three sales reps next year, Pressman and Goldenberg are looking for sales to reach $250,000 in 2007.
In launching Press-Gold, Goldenberg and Pressman are going up against such sizable national firms as Paychex in New York and ADP in New Jersey, not to mention Bloomington-based Ceridian.
The strategy is to compete "by giving smaller companies the same kind of service the big companies expect, "Pressman said. He cited such items as a professional contact assigned to each client, attention to updating state regulations and flexibility in the choice of banks and salary payments, including the use of debit cards.
The personalized local touch can even be a money-saver, thanks to a Press-Gold staffer assigned to stay current with regulation changes.
"For example, about 20 of the Press-Gold clients signed so far -- all of them former customers of national firms have erroneously been paying Minnesota unemployment withholding on the salaries of the owners," Goldenberg said. "That requirement was lifted in 2005.
"It's not a lot of money -- maybe an average of about $400," Goldenberg said. "But one business was paying $2,000 a year unnecessarily.
It gives you an idea of the problems a small company faces."
But Press-Gold isn't targeting just the smaller clients of national firms. Small businesses that still handle their payrolls internally might also
benefit from professional help.
One new Press-Gold client who had been processing his payroll internally offers an example: He was found to have been handling benefit deductions inconsistently, jumping back and forth between pretax and after-tax, an action that exposed him to liability.
The cost of the service ranges from $1,000 a year for a client with fewer than 20 employees up to $12,000 for a company with 500 employees.
With capital in short supply for marketing and charitable contributions, Goldenberg and Pressman have come up with a creative approach they
Hope will serve both needs.
Starting in 2007, they will select one nonprofit organization to receive free payroll processing and offer a 50 percent discount to others for a year, up to a fee level of $10,000. That's expected to cover about 10 recipients.
Goldenberg and Pressman see the program as a way to serve the community and raise the company's visibility. And depending on Press-Gold's success, they expect the program to grow, Pressman said.
By Dick Youngblood
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