Controlling overhead costs is important for any business, but Panamsec.com Inc. President Fergus Keyes points out that maintaining low overhead costs gives a startup business a better chance of succeeding.
There are three main ways that Panamsec.com Inc. maintains low overhead costs: staffing, technology, and outsourcing.
First, Panamsec's people are an important factor in the company's success. While the staff is small, they provide a deep pool of expertise and knowledge. "Panamsec.com is lucky to have three very experienced people in the group", says Fergus Keyes. Good contacts and knowledge of the industry are critical, and all three members of Panamsec's staff have been involved in the security products industry for more than 25 years each.
Fergus Keyes has held senior positions with a number of North American and International security distributors since 1966. It seemed natural, he says, to start up his own security distributor operation when various mergers and acquisitions within the security industry resulted in the elimination of his last position as President of a large Canadian distributor.
Second, Panamsec uses technology effectively to promote their products to professional security installing companies both in Canada and around the world. Fergus Keyes calls Panamsec's Web site "the main focus of our business."
"I would never say that a Web page eliminates the need to "bang on doors" and see customers face to face, but to provide a source of information, nothing is better. In our case, we are able to highlight new products, sell them directly over the site and accept credit card purchases - all great possibilities to develop a business."
"I don't think the Web in general has reached anywhere near its full business potential. But it has come a long way. Especially when you think that less than 10 years ago the question was "Do you have an e-mail or a Web page?" to where it is now; "What is your Web page or e-mail address?" Very quickly the assumption has changed to the expectation that everyone in business has a site."
Third, Panamsec knows the value of outsourcing and utilizes it fully. "Using the abilities of other small businesses dedicated to a specific function can allow a company to provide a service that in the past would have required a much larger investment," says Fergus Keyes.
For instance, a distribution business needs a warehouse for inventory and to ship and receive goods. Panamsec.com was able to find another small Canadian business called iZon Logistics in Oakville, Ontario that receives, inventories, and ships all Panamsec.com products. Because of this outsourcing, Panamsec didn't have to invest in the costs and operation of their own warehouse - which was especially beneficial during the initial years of building the business.
Panamsec.com's Web site is another example of outsourcing. The company's Web site was designed and is regularly updated by a small Toronto-based company called Briaz Inc. While outsourcing is one of the main ways that Panamsec has been able to maintain a low overhead, it also gives the company the opportunity to support other Canadian businesses.
