Russ: This is The BusinessMakers Show, heard on the radio and seen online at thebusinessmakers.com. It's guest time on the show and I'm very pleased to have with me Alison Le Compte, founder and President of ProSourceSolutionsInc. Allison, welcome to The Business Makers Show

Allison: Thank you very much, Russ, for having me.

Russ: You bet.

Allison: It's a pleasure.

Russ: You bet. Well tell us about ProSourceSolutions.

Allison: ProSourceSolutions is a professional employer organization that is commonly referred to as a PEO.

Russ: Okay.

Allison: We partner with our clients to provide the administrative employer services to our clients and human resources. We allow the business owner to get back to the business of their business.

Russ: Okay, pretty cool, and how long has ProSourceSolutions been doing this?

Allison: We've been in business since 1999 and I've owned the company, outright, since 2002.

Russ: Okay, own the company outright meaning it's your company, 100 percent.

Allison: Yes, sir, it's mine, 100 percent, my responsibility.

Russ: That's pretty cool. Now PEO companies, there seem to be a lot more today than their used to be, which I think the general rank-and-file of small and medium-sized businesses is learning to value.

Allison: They are. We still haven't gotten market penetration where we would like to as an industry.

Russ: Okay.

Allison: We're only two to three percent of the market that we - even though we have 2-3 million work site employees in the PEO relationship, we haven't penetrated the market as much as we want, yet, but that's an industry-wide effort to educate small business owners as to the value of a PEO relationship.

Russ: Wow, so that's industry-wide, meaning you along with your competitors, the other PEO.

Allison: Yes.

Russ: So it seems like if there's only that much of the market taken today there's lots of opportunity for a company like yours today.

Allison: There is certainly a lot of opportunity and it's more about educating the small business owner as to the value of the PEO relationship.

Russ: Okay, okay, well then I'm curious when you go out and you actually win a new company to become part of your client companies, are you usually getting a brand-new company or are sometimes actually taking 'em away from a competitor?

Allison: It's about 50 percent.

Russ: Wow.

Allison: More and more the small business owner is understandin g that there are so many regulations, obviously, to deal with on a day-to-day basis that they don't want to deal with those relationships alone so they want to share the liability with the PEO and then gain the expertise from the PEO to lessen the effort to keep compliant with the regulatory efforts.

Russ: Right well it seems like the regulation requirements really up-ticked after Obama was elected and that sort of brought in some new healthcare that - and then there was also, simultaneously, kind of a dip in the economy, which brought in new COBRA laws and all that stuff, right?

Allison: Oh certainly, certainly and you just mentioned three regulations.

Russ: Right.

Allison: Okay then there's - there's things such as GINA, which is the Genetic Information Act.

Russ: Never heard of that one.

Allison: Right so there's - but realistically there was, it seemed to be, a new regulation, employment regulation to keep track of every month in the first 12 months of Mr. Obama's presidency

Russ: Must've helped the business I guess for you guys.

Allison: It certainly did.

Russ: Oka y well but I'm curious you said, you know, like 50 percent of 'em are, sort of, from new but 50 percent are also you're winning competitive battles. What differentiates Pro Source Solution from your competitors?

Allison: We take the approach to listen to the client, to tailor the PEO relationship to our client. If they have decided that, in this point in time, they do not wanna offer healthcare to their employees, it's not necessarily gonna make them the employer of choice but, eventually, you want to win them - you know, convince them that if you wanted move toward to be an employer of choice, these two would offer benefits. We tailor our relationship to the client.

Russ: Okay whereas opposed perhaps everybody else sort of standardizes and --

Allison: A cookie-cutter approach.

Russ: -- but you're sayin', "No, this is what you gotta do, basically."

Allison: Exactly, if you want to be a client of ours then you must do - you must. It's a cookie-cutter approach.

Russ: Right well that - but that must kind of increase the workload on your end probably, to a degree, right?

Allison: Some, yes to certain extent it does, yes.

Russ: Okay, okay, but then, since you're doing that, it would seem like, maybe, you're more expensive than your competitors. How would you describe your pricing strategy?

Allison: Transparency is a word that's become a huge buzz word recently.

Russ: Right.

Allison: We are transparent in our pricing and translating that means that every cost is laid on the table to our client and we tell the client what we're going to charge them for our margin or our administration fee.

Russ: Wow.

Allison: So that they know you're going to be paying these payroll tax percentages whether or not you're in a PEO relationship but the only investment that you're making and it is an investment. Some would like to think it's an expense but this really is an investment --

Russ: Right.

Allison: -- is what we will charge to provide our piece of substance.

Russ: So they when you do this exercise then they literally look at it and know what they're getting and now what kinda profit Pro Source Solution is making off of their arrangement.

Allison: Yes, that is.

Russ: Wow.

Allison: Yes.

Russ: Well that is kind of a unique approach I would say.

Allison: It certainly is a unique approach.

Russ: And is that the way that the company's operated since you took full ownership?

Allison: Yes, we've morphed into this relationship as far as letting our client know what the margin is just because our client mix of industries and risk has also changed.

Russ: Okay.

Allison: So is - we've become - not be rude but more sophisticated clients will dictate or we've explained to them that this is what we wanna do.

Russ: Okay.

Allison: Not necessarily all PEO's do this.

Russ: Right.

Allison: I think we're prolly one of the few if not one of the only in the area that do delineate what we're charging as an administration fee.

Russ: Have you had had prospective clients try to negotiate down your profit off of the transactions?

Allison: Certainly.

Russ: Yeah?

Allison: Yeah, certainly they have done that, absolutely, and they've also taken our - our quote and they've taken it back to their current provider into "this is what we've gotten."

Russ: Right.

Allison: And we've - you know, we've sometimes lost deals that way.

Russ: Right, okay, real interesting.

Allison: Part of the business.

Russ: Okay so how many client companies do you have today?

Allison: We have approximately 50 client companies at the moment.

Russ: And about how many employees?

Allison: 1,000 work site employees.

Russ: Okay, 1,000, all right, and so how big is your company at your in-house employees?

Allison: We have six and a half in-house employees.

Russ: Six and a half?

Allison: We believe in leveraging technology and I am a working owner.

Russ: Okay, wow! That almost seems impossible, 6.5 employees workin' with 50 companies that have 1,000 employees. Did I get that right?

Allison: Yes, sir.

Russ: Okay.

Allison: Yes.

Russ: And your industry, in the PEO industry, do they ever rank you guys and measure and show how you're doin' this?

Allison: They certainly do. They --

Russ: Wow.

Allison: -- they - our National Association of PEO's and APO performs a financial survey every year and so they will absolutely - so you can kinda measure yourself against. The industry will publish these statistics.

Russ: Do you measure very favorably in those?

Allison: As far as - yes, as far as number as work site employees to corporate employees, we do measure very well.

Russ: That's real impressive. Talking with Allison Le Compte, the Founder and President of ProSourceSolutionsInc. and we'll be back with more, with Allison, after this. This is The Business makers Show heard on the radio and seen online at thebusinessmakers.com.

Russ: This is The Business Makers Show, heard on the radio and seen, online, at thebusinessmakers.com and continuing on with Allison Le Compte, the Founder and President of ProSourceSolutionsInc. So Allison you have today 50 companies. Did you have 50 companies back in, say, at the end of '08, when the bottom dropped outta the economy?

Russ: No, Russ, we had more, at the - actually, at the end of 2008. There were some with the economic downturn who decided that they wanted to take their - and perform their services in, we call it in-house in their own internal company. We had some other client companies who, because of the particular sector of the economy that was affected, who were extremely nervous and went through a period of belt-tightening but we were able to help them keep the calm. Through their own attrition they lost a few employees but no noticeable massive layoffs with any of our clients and we were pretty diversified, as far as the industries that we were not concentrated in any one industry, so we, as a PEO, were okay and our clients, initially, were nervous but have seen to recover and I attribute a lot of that to being in Texas.

Allison: Okay, okay, absolutely. That's good. All right, so, in fact, what's your biggest client? How many employees do they have?

Russ: They have 300.

Allison: Oh, wow. But the average -

Russ: That's a pretty big company --

Allison: That's --

Russ: to be a PEO.

Allison: Exactly, exactly, there's a number of different entities, --

Russ: Yeah?

Allison: different locations averaging, roughly, 50 employees each location. The industry-wide average for the PEO industry is a client-to-company size of 20 average employees.

Russ: All right, okay, good. What's your smallest?

Allison: We have the onesies and twosies as well.

Russ: Okay.

Allison: We - we're a sponsor of the Houston Angel Network and so what we like to do is to get the startup companies before they learn the habits and get them started on the right track of prosperity so we - we will absolutely will take on a single entrepreneur with no staff and, as they grow, we grow with them.

Russ: Wow, that's really cool, real interesting, so you - you've said several things that make me feel that ProSourceSolutions has a unique approach to PEO. Well, is there more or do I have it that you open up your books and show 'em how much profit you're making and you have this incredible inside-employee ratio, so is - is there more?

Allison: Oh, absolutely, there's more. We --

Russ: Okay.

Allison: We have recently started the Human Capital Management aspect to partner with our clients.

Russ: Okay.

Allison: And so therefore what we want to do is make sure our clients have happy engaged employees.

Russ: Okay.

Allison: That's gonna be the source of their - their success.

Russ: Right.

Allison: Studies have shown that there's one-in-four employees waiting for an economic recovery so they can jump ship from their current employer.

Russ: Right.

Allison: They're just not happy --

Russ: Right.

Allison: for a variety of reasons but we want to partner with our clients to make sure that they understand their culture within their own company and communicate that culture to their employees.

Russ: Okay.

Allison: Understand what their mission is and their vision is and live-and-breathe their mission and their vision and communicate it to their employees and get their employees engaged and onboard with the vision of the company.

Russ: Okay.

Allison: And once you buy into that from the employees' perspective we can't do anything but succeed.

Russ: Right so this is like an add-on service for an add-on fee or something like that?

Allison: No, sir.

Russ: Okay.

Allison: No, it's part of our relationship.

Russ: Wow! Wow.

Allison: Part of our relationship. We wanna do this for our clients.

Russ: Wow and then how do you do that?

Allison: Well, you obviously hafta have buy-in from the owner of the company.

Russ: Right.

Allison: So and not all clients, at this point in time, are buying into this --

Russ: Right.

Allison: -- because there are still lingering effects of the economic downturn.

Russ: Sure.

Allison: But those clients that buy into this, we start off with surveys to determine just the general nature of what your employee's attitude is toward the company.

Russ: Okay.

Allison: And so from those surveys can communicate the results to the owner and then start making suggestions as to how to improve your employee engagement.

Russ: It's interesting, employee engagement, it seems like in my experience has always been enormously important but sometimes it's - it's tough to have I mean particularly when there's tough economic times. I mean, you want everybody to continue to pull and help but you also know that, my goodness, there might even be a reduction in force here, down the path, and I'm already feelin' guilty about it and I'm not doin' it yet and kinda this everything becomes disengaged then, so.

Allison: Absolutely and the big secret to that is what you've done as an employer for your employees prior to the economic downturn.

Russ: Okay.

Allison: How happy, what kind of an employer were you to your employees prior to the downturn?

Russ: Okay.

Allison: And so if you're taking care of them and they're part of your - and it's truly a team and they understand it's a team effort and in the good times when the bad times come, the employees do remember it. They certainly understand that they want continued success for the company so they will - it's not gonna make it any less. I mean it still - you might have to have a reduction in force but I think it's the remaining employees aren't as affected by that reduction as if you've taken care of them.

Russ: Right, so the people that you've done this, sort of, engagement survey, I mean, Number 1, I assume it's all confidential and --

Allison: Certainly.

Russ: Yeah, and do you find surprises, surprises from the owner's perspective, the owner is saying, "I think they're all engaged," and you discover they're not or vice-versa?

Allison: That's true, too! Exactly! No, and the surprise, normally, is your employees aren't --

Russ: Right.

Allison: -- happy and your employees aren't -

Russ: And they think that they are, yeah.

Allison: And they think that they are. They think that they're doing everything that they humanly can for them.

Russ: Right and so let's assume that I'm an owner and you came in and you surveyed my people and you went, "Wow, you know, these people," or you thought they were all gonna give you a "10" and then they about a "6.5," what - what are the kinda things that you recommend, at that point, to have them further engaged?

Allison: Well, it depends on what the complaint is from the employees.

Russ: Right.

Allison: Do you need to beef up your benefits? If it's something as simple as adding more PTO days to the bank, certainly you can do that. That's a no-brainer but it's more of finding out is it a matter of if it's an education program, would you consider paying for a portion of their education, performance-based merit, compensation plans, just a myriad of different things that you can implement depending on what the complaint is coming - or what the suggestions are from the employees.

Russ: Okay, okay, now I'm kinda doin' some math in my head, as you said that. I'm still finding this difficult. You do that, you offer that today but, once again, you're the PEO that just has six and a half employees. Who does the engagement?

Allison: That's our human resource department and so there's a lot of online tools that you can utilize so - but it does require - I mean, we have an investment with our employees that are very invested in and very vested in our clients' success so we spend a lotta time with our clients and our clients' employees.

Russ: Okay now Allison you're definitely in our sweet spot. You are an entrepreneur and you're working with entrepreneurs and, in fact, your comment about going to Han and even recruiting very small ones, you're - you're in the same world that we are in. I'm curious about your background. Have you always thought you were gonna be an entrepreneur? How did you get here?

Allison: It was a very long path.

Russ: Okay.

Allison: My background is investment portfolio management for a bank that is no longer -- it's been gobbled up - and for a large suburban school district in the eastern area so, uhm, but that's my background --

Russ: Okay.

Allison: -- and no entrepreneurial bones in my body until this present - the opportunity presented itself.

Russ: Okay well it seems to me also that you're doing very well. Do you find it to be just a piece-of-cake and not even that much of a challenge?

Allison: No, sometimes I'm wondering who owns who.

Russ: Okay.

Allison: So no, it is. It's very challenging, very challenging, you must - it requires a lotta dedication.

Russ: Okay.

Allison: A lot of dedication and it's not something to be taken lightly. If you wanna be successful you have to work at it.

Russ: All right.

Allison: There's nothing wrong with good hard work.

Russ: All right. Well how proactive is your company today at going out and winning, you know, more client companies?

Allison: It's getting easier. We're having a little bit of success and companies are feeling more confident. I recently attended a bank economic luncheon and the economist was talking about how this is going to be a recovery, not necessarily an expansion and so when employment will lag for a little bit and until companies get extremely confident that we're solidly in a recovery then I think our job at picking up clients will become easier.

Russ: Okay.

Allison: So right now we're still educating. We're building the framework and the groundwork with our prospects --

Russ: Okay.

Allison: -- and as I think that, once again, once the clients or the prospects become comfortable that we're down-the-road, as far as the economy's concerned, then we'll - we'll see some easy pickings and --

Russ: Okay, great!

Allison: -- food for _____.

Russ: But I'm still just real curious with this lean organization that you have, how do you spend your day, whadda you do?

Allison: I'm a working owner. I have been known to pick up a payroll and run a payroll if I - if need be. It's whatever it takes.

Russ: Do you make sales calls?

Allison: I do. I make sales calls.

Russ: Okay.

Allison: I make human resource calls. I have two or three clients that I'm their human resource director.

Russ: Okay.

Allison: So it's really it's whatever it takes to get the job done.

Russ: Do you get involved in these engagement sessions as well?

Allison: Yes, I do.

Russ: Okay.

Allison: Yes, I do.

Russ: Okay do you ever sleep at night?

Allison: Very little.

Russ: Okay, well look, I've really enjoyed you telling us about your company but before I let you go let's imagine that we have an aspiring entrepreneur watching right now and thinking, "Wow, this is pretty impressive. This lady didn't aspire to be an entrepreneur and she is but she seems to be passionate about it." What kind of general advice would you give to a young, aspiring entrepreneur?

Allison: To be completely and totally dedicated to the mission --

Russ: Okay.

Allison: -- of your whatever - whatever path you choose, whatever industry you choose, whatever you decide to do, to be completely and totally dedicated to it.

Russ: Okay.

Allison: -- and to its success.

Russ: Okay, otherwise don't dive out there and get into the world of owning your business, right?

Allison: No, no, no, because it does take a lot of hours of your day.

Russ: Okay, Allison, I really appreciate you sharing your story with us.

Allison: Thank you so much, Russ.

Russ: You bet. That's Allison Le Compte, the President and Founder of ProSourceSolutionsInc., and this is The Business Makers Show, heard on the radio, and seen, online, at thebusinessmakers.com.