Glenn Davis picked a strange time to leave his $110,000-a-year position as a technology consultant and account manager for a large IT firm to start his own company. It was March 2000, and most tech firms were downsizing, the U.S. economy was faltering, and technology workers were starting to worry about job security after having lived large on the tech bubble.
“Looking back now, I must have been crazy to quit like that and start my own firm,” says the 40-year-old president and CEO of Richmond, Virginia-based BranCore Technologies. The company provides project management, e-commerce consulting, Web development, and IT outsourcing services to private sector clients and government agencies. “I guess I just didn’t know any better. As a business owner starting from zero, I figured there was nowhere to go but up.”
As a solo entrepreneur working from a home-based office, Davis, a Virginia Commonwealth University graduate who majored in information systems, used $15,000 borrowed from his 401(k) plan to start BranCore. Because he didn’t have a non-compete agreement with his former employer, Davis was free to court customers with whom he was already working. One of them was First Health Services Corp. of Glen Allen, Virginia, a provider of healthcare management and information services. Right out of the gate, Davis provided that first client with seven IT employees on a direct-hire basis, in exchange for 20% of their base salaries. “That’s really what gave me my start,” he says.
But even with clients such as First Health on his roster, Davis quickly found out that running a company was different from bringing home a weekly paycheck. Most challenging, he says, was cash flow management, particularly since clients pay upon project completion while employee paychecks are paid on a more predictable basis.
“I was hiring development and database analysts and project managers who work for over $100,000 a year and paying them every two weeks,” recalls Davis, who supplemented his income by working as a musical director for a local Baptist church. “I didn’t realize there would be a 30-day-plus lag time between client billing and actual payment. That put me in a bind.”
To work through it, Davis turned to his 401(k) plan for another $15,000 and took out a $25,000 loan from Bank of America. He also leveraged his 8(a) minority business and small-disadvantaged business certifications. Combined, this strategy allowed the company to sign up clients like Philip Morris, the Department of Mental Health, and the Department of Environmental Quality. “I just kept plugging away,” says Davis, who moved BranCore into an office building in November 2001.
Today, Davis has 20 employees who work with customers in Maryland and Virginia. Company revenues have grown from $541,000 in 2002 to $1.2 million in 2003, thanks to projects like providing two staff members to DEQ to handle Oracle and SQL Server project management, and setting up a network and Websites for Virginia One Church, One Child.
This year, Davis expects company sales to rise to $2.5 million, thanks to more government contracts, like the one