BiGAUSTIN :: Prism sees `BiG' growth

Austin Business Journal - January 24, 2000

Prism sees 'BiG' growth

Firm benefits from organization's training, microloan
Mary Alice Piasecki
Special To The Austin Business Journal

Prism Imaging Inc.'s founders initially found themselves among the masses of small business owners struggling to get their ideas off the ground.

The Austin company began in 1993, when three University of Texas graduates decided to break into the business of converting paper files into archives on CD-ROMs. MBA graduates George Francis IV and Greg Dynek teamed up with computer science grad Montoo Desai to form Prism.

In its first year in business, Prism generated $17,000 in revenue. Six years later, revenue surpassed $1.27 million. Prism now employees more than 60 people and is opening a second location in Chicago.

Francis, president and CEO of Prism Imaging, says he thinks the company owes much of its success to an Austin organization called Businesses Invest In Growth, or BiG. In 1994, Francis and Dynek attended a 12-week training course offered by BiG.

The nonprofit organization is the first microenterprise development organization in the Austin area. BiG offers small businesses training and low-interest, flexible loans ranging from $500 to $25,000. Loans are extended to organizations with marginal credit and can be used for working capital or equipment.

"Like most small businesses, the traditional methods of financing were not available to us," Francis says. "BiG gave us the money to buy our first scanner - that was 11 scanners ago."

Prism has doubled its sales and its profit margins every year since completing BiG's program. That enabled Prism to pay off its $10,000 BiG loan ahead of schedule.

When Francis became involved with BiG, he thought Prism's greatest need was a loan. Jeannette Peten, president of BiG, hears such tales on a regular basis.

"Money doesn't solve all your problems. The number one reason businesses fail is lack of planning," Peten says. "My favorite part [of my job] is when an entrepreneur comes to me and the program has really made a change in their life."

By the end of the program, Francis had undergone such a metamorphosis. Francis now thinks the most important thing he gained from BiG was understanding how to apply the business theory he learned while earning his MBA. In short, he calls the program "a nice complement to your MBA."

"BiG taught us the practical application of that theory," Francis says. "We do a business plan every year now. It's fluid, constantly changing."

For Prism, that meant expanding its customer base and its services. Its initial customer targets were law firms, but the founders soon realized their services could be used outside that niche. Not long afterward, the company landed a contract with Dell Computer Corp. Other clients include Pinky's Pagers, Enterprise Rent-A-Car Inc. and the Lower Colorado River Authority.

Scanning of images or documents can be done at Prism or at the customer's site, depending on the client's preference. Information can be stored on CD-ROMs or DVDs and also can reside on a company's Internet site or intranet.

Having documents in such a small, accessible form has helped clients reduce the time its takes to retrieve files. It also improves accuracy, because files never are out of order or misplaced.

Francis says files on CD-ROMs pop up on a computer screen in less than 3 seconds. This speedy response helps some clients save money and helps others substantially reduce the amount of storage space.

Four boxes of documents, or the equivalent of one filing cabinet, typically fit onto one CD-ROM. DVDs store the equivalent of seven CD-ROMs, or a total of 150,000 pages. Prism typically charges customers on a per-page basis. Prices range from 6 to 8 cents a page, depending on the volume of documents.

Debra Selman, health information manager for the Georgetown Health Care System, remembers when patient records dating from 1987 through 1995 needed to be stored. At the time, the system had considered adding storage space or storing the documents on microfilm. Instead, it decided to try Prism's services.

"Once they got going, they were bringing in CDs once a week," Selman recalls.

Within a year, the job was complete. Selman adds that Prism representatives always were responsive whenever someone at Georgetown Health Care System needed to retrieve a file.

"Our labor costs are down because of the time it saves us from retrieving files," Selman says. "It gives doctors faster access to retrieving records."

Selman also appreciates the sense of security she gained when Prism Imaging created backup CD-ROMs in case any one of the originals become damaged.

Clients aren't the only people noticing Prism's success. In October, the Minority Business Development Agency, a unit of the U.S. Department of Commerce, presented Francis with the Entrepreneur of the Year Award.

"Both my grandfathers owned their own businesses," Francis says. "In both cases, they worked extremely hard - but their businesses generated options for them and allowed them to do many things in life."

His paternal grandfather owned a janitorial company, and his maternal grandfather owned a barber shop.

For Francis and his co-founders, being in businesses for themselves means they've been able to operate their business 24 hours a day, six days a week. For religious reasons, Prism Imaging closes on Sundays.

Francis sets a prime example for the company's casual dress code by walking around the office without shoes on. Reflecting on the success of Prism, he credits BiG with helping him earn enough money to buy those shoes.

"The truth be known, if we had not gone through the [BiG] courses, there is no telling where we would be today," Francis says.

In 1997, Francis decided to go through BiG's program again with his other partner, Montoo Desai.

"We came back through the programs a second time - not for the funding, but for a retreat," Francis says.

He says feedback from other BiG participants has been both brutally honest and immensely helpful. Peten says each BiG course typically has 20 students, who are encouraged to interact with each other. Graduates often end up returning to BiG as counselors or instructors.

Instructors are experienced entrepreneurs who go through a certification process to teach BiG courses. The next course, which begins Feb. 16, will be taught by Amy Miller of Amy's Ice Cream.

Peten says she witnesses a variety of results from BiG courses. Ten percent to 25 percent of the people attending courses for established businesses more than double their sales within a year of graduation, while another 40 percent to 55 percent double their sales within two years. Of the people attending courses designed for startup entrepreneurs, 50 percent to 75 percent of graduates launch a business within a year of graduation.

Peten says she thinks a combination of factors propelled Prism's success.

"I think they had the right attitude, the right time and the right stuff," Peten says. "They were very determined and had the drive to carry forward and follow through."