Chicago-area startup tells how they did it

by Don Kreski

I suspect most people in the AV business have dreamed of opening their own shop. Three years ago Tim Novak and John Toomey made the dream a reality by opening Novatoo AudioVisual of Carol Stream, Illinois.

“They say you can’t teach an old dog new tricks,” says Novak. “Well, it turns out you can.”

The pair had jointly run the rental department for a large Chicago-area audio-visual dealer, but they were never satisfied with the operation or their role in it. One of their customers approached them and suggested they start a new company with himself as silent partner. They opened TSP Audiovisual in August, 2002, but then bought out their partner and reorganized as Novatoo in December of 2004.

“I never thought that I would leave and start something new,” says Novak. “But we found ourselves with the opportunity and saw that we could do this.”

In a lot of ways having an investor made the whole process easier. “Our partner had his own business,” says Toomey, “so he had accounting people, graphic arts people, a lot of resources that we wouldn’t have had. He put that all into motion and Tim and I went banging on doors.”

The fantasy of starting your own company often involves calling all your old employer’s customers, but Toomey says that’s just not realistic. “We did talk to some people we had known before, but most of our customers were new.” Typically your old customers are loyal to your old firm, no matter how much they may like you personally. Then, too, you have to worry that your old employer may retaliate if you go after his bread and butter.

On the other hand, the way you have treated people will make a big difference in your new company’s success. “I would say it’s the most important factor,” Novak says. “You don’t know who you’re going to meet with or come across. There are people I do business with now that I went to grade school with. It’s true that people don’t wave their hands in the air and say ‘I’ve got something to give you,’ but if you treat them properly, they will give you an opportunity.”

For that reason, Novak says getting credit from suppliers was not a big problem for the fledgling firm. “People will look at your finances, measuring your debt and how much money you have, but the real credit issue is your personality. If people doubt you, if you’ve lied once or twice, the cost is huge. A lot of our vendors saw this as an opportunity to make more money during a down economy, but they took a chance on us as well. Many of those original deals were done on a handshake.”

Stress and service

I asked Novak and Toomey how running their own company compared with being department managers.

“It’s different work now,” says Toomey. “Not only do you have to go out and get the job, make the delivery and do the show, but you have to come back and pay bills and budget. When you have a break, a slow week or a holiday, you still have plenty to do.”

Novak says that the type of stress you’re under may be the biggest change. But he sees that as an upside, despite his greater financial risk as a company owner. “There was so much energy spent trying to convince someone else of what we should do. We’re a lot less afraid of making decisions now because we know we can live with the consequences.”

“Right now,” adds Novak, “our boss is the customer. The deadlines are what we think they need to be based on what our customers are requiring. It’s a whole different type of stress.”

Toomey says that personal contact with customers helps to keep the stress factor down. “We’ve built our relationships dealing with people face to face, talking to them and finding out about their business and what’s going on with their personal lives. Now the fact that we’re owners of the company and we still do that is enormous, huge. They look you in the eye. When they’re thinking of switching they have a harder time doing that knowing us so well.”

Another factor that trims stress is the diversity of the Novatoo business. They have hotel customers, corporate customers and even do private parties and shows. They do rental, staging and some AV installations. A lot of their business comes from word of mouth, but they also pick up jobs from subcontractors. For example, a party store they work with will refer people who need projection or sound. They’ll make referrals in turn.

And then, too, they say you need to decide how big you want to be and how fast you want to grow. “It’s true that you always have to be looking for more,” says Toomey. “Because something’s going to happen or some customer is going to leave.”

“But it’s not necessarily how big you get or how many customers you have,” adds Novak. “We have a consistent income right now. We don’t want to get too large and screw up any of the customers we already have.”

This slow growth model helps keep costs in line and risks manageable. Rather than hiring employees, for example, Novak and Toomey prefer to work with freelancers and outsource many business functions, including marketing.

Marketing Novatoo

Like many entrepreneurs, Novak and Toomey have recognized the need for a marketing program if their firm is to continue to grow. They originally had marketing help from their silent partner, but now reorganized as Novatoo, they’ve had to start over again in building a brand.

We’ve begun by designing new business cards and letterhead and by creating a rental price list. A website is in the works. The main goal now is to build the firm’s credibility with potential customers, but we’re beginning to look at activities that will bring in sales leads.

“It’s nice to have somebody who knows what he’s doing, and knows the industry, because we have our other jobs to do,” says Toomey. “It’s nice to have someone like you that we can say,’ this is what we need done’ and it gets taken care of.”