February 21, 2005
Phone home | A chat with Fred Orne, owner of 207 Wireless Inc. in Scarborough.
By Dorothy Ogrodowczyk
Founded: May 2004
Employees: Three
Startup costs:$50,000
Revenues, 2004: $114,000
Projected revenues, 2005: $195,600
Contact: 510-6464
162 U.S. Rte. One, Scarborough
www.207wireless.com
You're a cellular phone provider. Describe how your business fits into the wireless services sector.
This is a retail operation. We sell Cingular Wireless products and services, including basic voice and data services for Blackberrys, PDAs and laptops. We are an independent Cingular agent, not a franchise. I head up sales and marketing, and my business partner, Nick Gennaro, handles the operations.
When did you first get the idea for the company?
If you've ever worked in corporate, you'd know the answer. We come from corporate at AT&T Wireless. I did national sales and marketing. [Nick] trained store managers. You come to point in your career when you have to step off the escalator.
We decided to put our heads together and come up with a business plan and bring back customer service. As agents, we have the luxury of time to spend with people, and we're not under anyone else's microscope.
How did you finance the launch?
We tried traditional bank financing, and we tried to seek venture capital funds, but that was not in our favor. We ended up using personal funds.
What have you achieved since then?
We have approximately 400 customers, of which roughly 30% are business clients. In this business, we have the word churn, which describes when a customer signs up with one company and then switches to another. One reason for churn is bad coverage, and the other is bad customer service. We try to keep churn at a minimum rate. Ours runs between one percent and 1.35%. Last month, we lost one customer out of 100.
How do you market your business?
We market to small and medium-sized businesses, and we try to drive people in off the street. We don't do the one-shot ad approach. We're getting our name familiar in community. For example, we donate $5 for every new activation to the tsunami relief effort, and we donate to Toys for Tots. We're getting into public eye that way instead of just saying, "We're here, come spend money."
We also belong to the Portland Business Builders BNI [Business Network International] group. That's been a great resource.
But we sustain our business on referrals [from current customers]. I'd say we do about 75% of our business on referrals.
What was the biggest challenge going from idea to reality?
Our biggest challenge has been the cost of equipment. The public has a misconception about phone pricing. Every time you open the newspaper, you see ads for free phones. But the average price we pay to buy a phone is $200.
What's your competition like and how do you differ?
Our biggest competition is the Internet for equipment purchases, and national retailers like Best Buy or Circuit City. They're low-cost channels because they buy in huge volume, and they have lower overhead. Our cost of equipment is higher, and close to [but still higher than] Cingular-owned and operated stores. But we try to match their prices when we can for consistency.
Where we differ from the Internet, national retailers and Cingular-owned and operated stores is that with us it's more of a personal touch. Our average sale time is 30-40 minutes, as opposed to 15-20 minutes in other stores.
There are other independent agents in the area, but it's a tight network. We generally help each other. For example, we buy inventory from each other at times when we need certain piece of equipment.
You mentioned you had a business plan. Tell me more about that.
We're projecting 10% growth in revenue over the next year, and we're hoping to start searching for a second location in late spring, early summer. We'd like to have three to five new stores in the next four years. Our goal is eventually to have stores as close as five miles away from each other.
What's your personal ring tone?
My personal ring tone is "Life's Incredible" from the animated movie The Incredibles. I chose that ring tone because the movie was entertaining, and my 10-year-old son, Michael, thought it would be cool!
New Entrepreneurs profiles young businesses, 6-18 months old. Send your suggestions and contact information to dorothyo@mainebiz.biz.
Employees: Three
Startup costs:$50,000
Revenues, 2004: $114,000
Projected revenues, 2005: $195,600
Contact: 510-6464
162 U.S. Rte. One, Scarborough
www.207wireless.com
You're a cellular phone provider. Describe how your business fits into the wireless services sector.
This is a retail operation. We sell Cingular Wireless products and services, including basic voice and data services for Blackberrys, PDAs and laptops. We are an independent Cingular agent, not a franchise. I head up sales and marketing, and my business partner, Nick Gennaro, handles the operations.
When did you first get the idea for the company?
If you've ever worked in corporate, you'd know the answer. We come from corporate at AT&T Wireless. I did national sales and marketing. [Nick] trained store managers. You come to point in your career when you have to step off the escalator.
We decided to put our heads together and come up with a business plan and bring back customer service. As agents, we have the luxury of time to spend with people, and we're not under anyone else's microscope.
How did you finance the launch?
We tried traditional bank financing, and we tried to seek venture capital funds, but that was not in our favor. We ended up using personal funds.
What have you achieved since then?
We have approximately 400 customers, of which roughly 30% are business clients. In this business, we have the word churn, which describes when a customer signs up with one company and then switches to another. One reason for churn is bad coverage, and the other is bad customer service. We try to keep churn at a minimum rate. Ours runs between one percent and 1.35%. Last month, we lost one customer out of 100.
How do you market your business?
We market to small and medium-sized businesses, and we try to drive people in off the street. We don't do the one-shot ad approach. We're getting our name familiar in community. For example, we donate $5 for every new activation to the tsunami relief effort, and we donate to Toys for Tots. We're getting into public eye that way instead of just saying, "We're here, come spend money."
We also belong to the Portland Business Builders BNI [Business Network International] group. That's been a great resource.
But we sustain our business on referrals [from current customers]. I'd say we do about 75% of our business on referrals.
What was the biggest challenge going from idea to reality?
Our biggest challenge has been the cost of equipment. The public has a misconception about phone pricing. Every time you open the newspaper, you see ads for free phones. But the average price we pay to buy a phone is $200.
What's your competition like and how do you differ?
Our biggest competition is the Internet for equipment purchases, and national retailers like Best Buy or Circuit City. They're low-cost channels because they buy in huge volume, and they have lower overhead. Our cost of equipment is higher, and close to [but still higher than] Cingular-owned and operated stores. But we try to match their prices when we can for consistency.
Where we differ from the Internet, national retailers and Cingular-owned and operated stores is that with us it's more of a personal touch. Our average sale time is 30-40 minutes, as opposed to 15-20 minutes in other stores.
There are other independent agents in the area, but it's a tight network. We generally help each other. For example, we buy inventory from each other at times when we need certain piece of equipment.
You mentioned you had a business plan. Tell me more about that.
We're projecting 10% growth in revenue over the next year, and we're hoping to start searching for a second location in late spring, early summer. We'd like to have three to five new stores in the next four years. Our goal is eventually to have stores as close as five miles away from each other.
What's your personal ring tone?
My personal ring tone is "Life's Incredible" from the animated movie The Incredibles. I chose that ring tone because the movie was entertaining, and my 10-year-old son, Michael, thought it would be cool!
New Entrepreneurs profiles young businesses, 6-18 months old. Send your suggestions and contact information to dorothyo@mainebiz.biz.
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