She Owns It
Portraits of women entrepreneurs.
At the most recent meeting of the She Owns It business group, the conversation focused on the end of the payroll tax holiday, the impact of the federal budget impasse, and the challenges of implementing new technology.
Jessica Johnson, who owns Johnson Security Bureau, said many of her employees didn’t realize their paychecks would be 2 percent smaller when the payroll tax holiday ended in January 2013. As soon as they got their first checks of the year, the complaints began, she said.
“You’re taking my money!” they told her.
“No, we’re not taking your money, we’re withholding the proper payroll taxes according to the federal government,” she responded. “I would love to have a check for all that two percent that I’m withholding.”
“That’s funny, I haven’t had anyone say anything, and I know it affects people,” said Susan Parker, who owns Bari Jay.
Ms. Johnson is also thinking about the March 1 deadline for the federal government to agree on a budget, and how any decisions — or lack thereof — will affect her business. Cuts in government spending are a likely part of any plan, she said. “If the federal government doesn’t have the money,” she said, “then money won’t trickle down to the state level, which will mean that state and other municipal contracts that I have might be impacted.”
Beth Shaw, who owns YogaFit, asked what percentage of Ms. Johnson’s business these contracts represent.
“Less than 50 percent,” Ms. Johnson said.
“So, still significant,” Ms. Shaw said.
“Still significant,” Ms. Johnson agreed. But she added that her greater concern is the way in which cuts to various government programs, such as Section 8, the federally funded housing subsidy program, may affect her employees. “If somebody doesn’t get their Section 8 voucher, then will that mean I have homeless employees? And if you’re homeless, how can I expect you to go to work?” she asked.
“But there’s nothing you can really do about it,” Ms. Parker said. “First of all, you’re speculating as to what’s going to happen.”
“That’s true,” Ms. Johnson said.
“And second of all, even if that is ultimately what happens, what can you do to change it?” Ms. Parker asked.
“That’s a very valid point,” Ms. Johnson said.
“I feel like I’m throwing the towel in, but I don’t know what proactively you could do,” Ms. Parker said.
In the meantime, Ms. Parker is preoccupied with the new software her company has been trying to implement for more than a year. The customized Web-based software will run all of Bari Jay’s operations, including invoicing and order entry. Ms. Parker said she paid the software design firm $36,000 during the early stages of the project, and “tens of thousands on top of that for data conversion.” Additionally, beginning in November, when the software design firm began testing the system with Bari Jay’s live data — like the actual number of dresses it will produce — Ms. Parker has been paying a monthly fee of $2,000.
“It’s so frustrating I don’t even know where to begin,” she said. “I was supposed to be on this software a year and change ago.” The software design firm initially thought the job would take three months. Finally, they are close to “going live,” Ms. Parker said. She thinks that should happen within a month. But, she said, “I know once we’re live, a whole new slew of problems are going to come about.”
Deirdre Lord, who owns the Megawatt Hour, agreed there will be challenges.
“How do you implement something new or make a major change and have the course of business continue?” Ms. Parker asked. “It doesn’t have to be a new software system, it could be any major change.” Further complicating matters, the changeover will now have to take place during her busiest time of year.
“Can you run the two systems in parallel for a period of time?” Ms. Lord asked.
Ms. Parker said the systems were running in parallel now as the new one is tested , but once the new one goes live, the old one will shut down. The group also wondered what, exactly, has caused the delays.
Ms. Parker explained that when she began the process she spoke with multiple software companies — all of which assured her they handled work for garment companies. “But the bridesmaid business is so different from almost any other garment company out there,” she said. For example, her dresses are made to order — a dress may come in three different colors and the customer can choose whichever she wants.
“How many S.K.U.‘s” — or products for sale — “do you have?” asked Ms. Shaw.
“I couldn’t even tell you,” Ms. Parker said. A dress may have three different colors, and a customer might have 30 colors from which to choose, she said. “I mean what’s 30 times 30 times 30?” she asked. And that’s just one style out of hundreds.
Most garment industry software systems run on S.K.U. numbers, Ms. Parker explained. Because Bari Jay has so many, the programs tend to crash. The good news is that her new system hasn’t been crashing while on trial.
But that was just one challenge. Other issues arose from the high level of customization her business required. With the exception of bookkeeping, everything had to be tailored, including accounts payable and accounts receivable.
Ms. Lord said Ms. Parker should prioritize the issues her software company must address, and give it a time frame for each.
Ms. Parker said invoicing, production, and order entry were the most critical functions. If those work, Bari Jay can deal with other issues. At the moment, she said, order entry works, production works, and invoicing “mostly works.”
Again, Ms. Lord said, “You need to create some way of prioritizing problems around the business issues so they can be responsive.”
“I understand what you’re saying,” Ms. Parker said.
“You need almost a service-level agreement that commits them contractually to solving certain problems in a certain priority order,” Ms. Lord said.
“So, if it’s a production or an invoice thing, they have to do it immediately, whereas if it’s something else they can get to it whenever,” Ms. Parker said.
“And then there’s a penalty associated with missing those goals,” Ms. Lord said.
“I actually really like that idea,” Ms. Parker said.
While Ms. Parker can’t rewrite the agreement at this stage, she knows the software company is eager to get her new system up and running. Doing so will enable it to pursue other clients in the bridal industry. “I could say, ‘You want to go live? Well this is what I need from you,’ and I think I might get them to agree to it,” she said.
You can follow Adriana Gardella on Twitter.
Article source: http://boss.blogs.nytimes.com/2013/02/26/business-owners-confront-the-budget-impasse-and-a-software-challenge/?partner=rss&emc=rss