The secret to growing sales again, and again, and again

Ten years ago, channel fortunes were so bad that veteran reseller Sydney Borg told his daughter, who was about to start university, to major in a subject that had nothing to do with IT reselling.

“Twenty years ago, I thought there wasn’t more than one to two years in this business and 10 years ago I thought the same thing,” says Borg, chief executive of PCS Australia. “I couldn't build a five-year business plan because I couldn't see five years in it.”

His daughter, Lauren Kaye-Smith, took his advice and studied a bachelor of sports science and medicine.

It’s a testament to Borg’s acumen that Lauren now manages PCS Australia’s high-growth education portfolio. Borg proved growth is possible even in a down market, and he has lifted revenues year after year.

One secret of his success has been the kind of radical restructure few resellers would consider – drastically trimming the workforce and hiring people back as outside contractors. By doing this, PCS Australia’s revenue per employee rose from $1.27 million in 2009, the first year the company appeared on the Fast50 list, to $8.62 million last year. And while he halved staff to six employees over that time, revenue also trebled from $15.2 million to $51.7 million.

PCS Australia is one of just six companies in the elite Fast50 All Stars club – resellers that have appeared on the annual list five or more times. The others Perth’s Leap Consulting, Sydney’s Commulynx, Brisbane-headquartered Comscentre and two Melbourne-based companies, Blue Apache and Advent One, both of which have appeared on all six Fast50 lists.

Borg’s radical restructure was a lesson he had learned early on: when he took over Photoset Computer Services from Kerry Packer in 1985, Borg soon had to cut the $20 million-a-year company with 64 staff to a $4 million-a-year company with far fewer workers as he divested business units.

“I saw the recession coming 18 months before it arrived; we scaled down very quickly. [Divestment] reduced my payroll, guaranteed me more management control and quality. That made a huge difference.”

Borg has stood the test of time by following a strict cash flow discipline. This is how PCS has avoided becoming on of the “horrifying number of resellers going to the wall”, he says.

“You can’t survive by saying you have $20 million deals and then when you get cash in the business you strip it out. You can’t hope you can live on the next month’s worth of trade to pay last month’s – you’re tricking yourself.”

Next: How Advent One tripled in size to $27.4 million in six years