Getting the latest gadget isn’t what drives Paresh Patel, owner of Courtesy Vending in Portland, Ore., to invest in technology. He learned early on that computers assist in operating a business, a lesson reinforced when the recession squeezed his profits.
Patel excels at making technology work for him, earning him money — like an investment. He starts by rating any technology purchase against specific criteria, such as, will it improve sales or reduce costs? According to Patel, this is the number one reason for implementing technology.
Patel also asks if the technology will improve safety or security. “Security is important as this is a cash business,” he said. And finally, Patel’s looks at whether the technology will improve customer service, which ultimately increases sales. Each criterion is weighted against the cost to buy and implement the technology.
BUSINESS ROOTED IN EXTENSIVE EDUCATION
Patel’s approach to investing in technology is rooted in a well-honed business education. He holds an MBA from the University of Washington. In fact, his vending company began as a way to finance his education. As a senior in high school, Patel planned to go to college and get a degree in business, but he needed a way to pay for it. He contemplated working a part-time job, but didn’t like the idea of being subject to someone else’s schedule.
He came across an ad for a vending route, which was most likely a blue sky business opportunity. Still, the notion of a vending business got him thinking.
Patel stopped in a mechanic’s shop to ask if they’d like a cold beverage machine. The mechanics were excited about the idea and agreed. When he returned home, he started looking in the phone book for a vending machine supplier. ”No one wanted to do business with a 17-year-old,” remembered Patel. It took him a few months to get and install his first machine.
Good business practices were important to Patel from that first customer. He assigned the mechanic shop a customer number in his database and an asset number to the beverage machine he placed there. “It was nice to have a system for doing that as we grew,” said Patel.
He placed the first machine in 1992 and grew the business while he attended college in Portland. He learned a variety of business practices and tools, from creating marketing campaigns and materials to inventory control procedures. “The structure is built up like a big corporation,” said Patel. Taking what he was learning and using it in a real world application also helped him do well in school.
In 1995, a year before he graduated, Patel hired his first full-time employee. He trained this first employee to run every aspect of the business, and to service the 50 locations he’d accumulated as he planned to continue his education at the University of Washington.
Unfortunately, a family crisis put his plans on hold for a year. But in 1997, Patel attended the MBA program. He also earned a Ph.D. in business.
When he returned to Portland, Patel was still working out of his garage. He wasn’t sure he wanted to stay in vending, but an ad for a vending business for sale peaked his curiosity. He called the seller and decided he wanted to buy the business.
However, he didn’t have the upfront money to purchase the company. “We worked out a deal where I got a Wells Fargo lease for some of the equipment, and they carried a note for the rest,” said Patel.
Two months later, he received a call to buy a business from a company three times his size. Patel was surprised, and told the seller he didn’t have the capital to buy it. The seller wanted to work something out.