Working at Home: How Suite It Is Now

The freedom to work in his bathrobe and at odd hours is a cherished benefit of working at home for DeVaux McLean. It’s also a key reason he decided to buy a bigger house rather than move his growing home-based telecommunications company to a commercial site.

He appreciates the convenience. More importantly, though, the instant access to his office allows him to field calls from his ProDial Communications Inc. customers before and after regular office hours, part of the customer service on which he prides himself. Customer service is one of the reasons his company, which resells long-distance telephone service, has been able to double monthly billings to almost $500,000 over the last year, he said.

“This is a changing business and there are a lot of challenges, but it’s certainly going in the right direction,” said McLean, a former insurance company sales executive.

A year ago, things were looking a bit more bleak. The company, then 3 years old, was growing slowly, cash was tight and so was space in McLean’s living room, where the business was based.

“I had reached a spot where I just couldn’t see how to grow anymore because we didn’t have the money,” said McLean, who contacted The Times for a Business Make-Over last fall. He needed more staff, more space and the funds to make it happen, yet he didn’t want to take time away from his sales efforts, the financial lifeblood of the company.

In fact, that’s just what make-over consultant Paul Ratoff advised McLean to do. Ratoff, a financial and management consultant at Los Angeles-based Moss Adams, wanted the business owner to spend less time selling and more time boosting the efforts of his commissioned sales force and planning an expansion. To free up that time, he suggested McLean hire full-time help. He also recommended that the company move from McLean’s townhouse to an outside office and more than double its line of credit to $25,000 to fund the changes.

“I paid a lot of attention to his recommendations,” said McLean, whose silent partner Lewis J. Kanter is not involved in day-to-day operations. McLean got the bigger line of credit and has two “mostly full-time” employees now. He’s put money into a Web site (https://www.prodial.com) and spends more time, about 40% of his workweek, managing his outside sales force. And he moved into a two-office suite with six phone lines.

The office suite happens to be located in his new, larger house in Newbury Park.

After researching the cost of leasing a commercial site, moving the business and other expenses associated with an outside office, McLean decided it would be more cost-effective to put the money into a new house with room enough to grow the business.

Sales are growing steadily, spurred in part by referrals. McLean has added specialty products such as calling cards and international calling plans. But now that he’s overcome the hurdles of the last year, he is interested in setting much larger goals. Change is happening fast in the telecom industry and he’d like to be a part of it in a bigger way, he said.

“We are growing and things are going nicely, but what do you do to really become a newsworthy, big corporation?” he asked.

One option, McLean said, would be to make a major investment in equipment to carry telephone calls directly, rather than acting as an agency as ProDial does now, reselling time on other phone companies’ lines.

A recent industry conference drove home just how fast the industry is changing and the need for McLean to keep his independent sales force up to speed, he said. The company’s core long-distance resale business could become obsolete as rates continue to plummet, flat-rate plans become more popular and technical changes such as cable hit the phone industry.

“I suppose the next hurdle is to come up with a business plan for the future,” he said.

McLean is relieved that the company is healthy in its fourth year, but he is realistic about changes needed to ensure success in the future.

“I don’t think you can continue to [grow] by making buggy whips,” he said.

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Make-Over in Review

* Company: ProDial Communications Inc.

* Headquarters: Newbury Park

* Owners: DeVaux McLean and Lewis J. Kanter

* Sales: $2.4 million in fiscal year ended Sept. 30, 1997; $4.7 million in fiscal 1998

* Employees: 2 part-timers in 1997; 2 full-timers in 1998

Main Business Problem One Year Ago

After a slow start, the home-based business had outgrown the owner’s living room and swamped his part-time staff. Owner and President DeVaux McLean wasn’t sure how to take the company to the next stage of growth, or even what the next step should be, given the cost of expansion.

A Year Later

The company is tracking its income more closely, landed a bigger line of credit, moved into bigger quarters and hired full-time staff to handle business, which is still growing.