Simple Goals: Employee Buyout turns into a $50 million Business – Business Goal Setting Series
When Andrew Baca was named 2006 Minority Male Entrepreneur of the Year by the U.S. Department of Commerce, he accepted it by saying, “I know the motivating power of ownership.”
As president and CEO of IT company Abba Technologies, Inc., based in Albuquerque, N.M., Baca counted some $50 million in 2006 revenues – a lofty achievement that had its beginnings in a very traditional start. Baca may have benefitted from being a third-generation entrepreneur, but setting simple, traditional goals laid the foundation for success.
Goal 1: Learn Your Business from the Inside
Baca began, as do so many young professionals, at a large company – IBM, in his case, where he worked first as a programmer and then in business development. When he joined Abba Technologies in 1997, it was his third job ever.
At the time, the company had seven employees, and all its business came from supplying tech hardware to the U.S. Department of Energy’s Los Alamos and Sandia national laboratories. Today, under Baca’s leadership, Abba Technologies has nearly 50 employees serving clients throughout the Southwest.
His advice to others who want to start a business is to do what he did. “Work for a larger company in your field and gain as much experience as possible,” he says, “so you have a head start and some ideas of what type of culture you need to be successful on your own.”
Goal 2: Recognize an Opportunity – and Pounce
Baca’s golden opportunity was the chance to lead an employee buyout, and with little hesitation, he seized it. “I took the company to the next level by starting a transition from our traditional IT reseller business to an IT solutions company,” he says.
The goal was to leverage Abba’s main strength – its solid reputation – and turn that into a way to capture more clients. Because additional training and sales staff were required, the transition bit into Abba’s profitability, but it paid off because Baca had already met his first goal.
“When I took over the company, I understood our strengths and I also knew our vulnerabilities,” he says. “So we acted quickly to reduce our overall risks by transitioning to an IT solutions company.”
Goal 3: Get Real About Financial Targets
Baca says he set financial goals far too high at the onset. Over time, he’s become more realistic, but still aims a little higher to inspire. “By setting goals that are attainable, but a stretch, I only see us growing,” he says. “I’m constantly looking at adding value to our existing business as a way to keep things changing.”
Abba’s employees share the vision because they own the company. “We didn’t have enough money to buy the company outright so the founder took a note for 40 percent, and we got (an SBA-guaranteed) loan from the bank for 40 percent,” says Baca. The remaining 20 percent came from employee investors.
The gamble paid off, and not only did Baca get personal recognition with the commerce department’s award, his company was named 2006 National Minority Supplier/Distributor of the Year. Satisfying, to be sure, but he also sees the honors as tools for growth toward new goals.
“I’m trying to leverage these awards,” to build on Abba’s regional reputation, Baca says. It’s a logical progression from a local start and regional growth. Next goal: Take it national.
Alice Rhein is a frequent contributor to StartupNation.