Profitable from the Start

FINALIST

Profitable from the Start

Jeff Wenger

Co-founder

Tax Technologies Inc.

Bradenton

Jeff Wenger joined with Biren Patel and J.D. Choi in January 2000 to form Tax Technologies Inc. - a firm specializing in U.S. tax law for companies with international interests.

The trio, all formerly with Arthur Andersen's Sarasota software division, combined their intimate knowledge of U.S. tax code with a knack for programming to offer Internet-based tax compliance and audit software for the nation's large corporations.

Annual revenues have increased an average of 86% since 2001; from $1.1 million in 2001 to $3.8 million in 2003. The company maintains negligible debt. Its clients fund projects, which are then modified for general use. There are no outside investors - the partners each invested $7,000 initially - and the company has operated profitably since selling its first product three months after opening its cyber doors.

Wenger is quick to point out the company is not a dot-com.

"Managing cash flow is always an issue," he says. "Growing from three to 60 (people) without outside investment has caused us to manage our cash flow very closely."

Wenger, who serves as chief development officer, calls 2003 a banner year, and notes that his company added another Fortune 25 financial firm to its roster. In all, the company represents 11 clients: eight Fortune 100 companies and three Fortune 10 clients. Wenger won't name names.

Last year, the company successfully delivered a solution for compliance with Sarbanes-Oxley, the 2002 act that forces corporations to take more responsibility for their corporate accounting. Sarbanes-Oxley forces comptrollers to sign off on reported financials. A Fortune 25 bank, for instance, must now go to each of its 250 controllers - who may work in countries all over the world - and have each controller verify the financials submitted for their area.

Tax Technologies offers software to make that process less painful. The company still does brisk business with its pre-Sarbanes tax planning and international tax computation software, but Wenger says the 2002 act forever changed the way his company designs products.

"Accountants are usually happy using what they have," he says. "Sarbanes-Oxley provided catalyst for change."

Wenger says the company is poised for growth. "When we hit 250 people, we'll have a full suite of tax software products. Having that will fuel the growth. After that, we'll move into the global tax arena.

"We see a lot of value in providing simple solutions to help with the U.K., for example," he adds. "And we just opened a subsidiary in the Netherlands, which will be our gateway to Europe."

Before Tax Technologies, Wenger worked five years for Arthur Andersen in the company's Sarasota division as part of the corporate tax leadership team. Prior, he helped with an IPO for a startup in Research Triangle Park, N.C. The Lancaster, Pa., native and son of a heavy industry general foreman holds a dual degree in computer science and economics from the University of Miami.

During his senior year of high school, Wenger built a 3-D CAD (computer aided design), which he says was "big news" back in the 1980s.

"I had planned initially to make something out of that business wise, but all it ended up doing was giving me a science fair win," he says.

Wenger, the only member of the founding threesome to work locally, manages his employees, mostly telecommuters, in a hands-off fashion. He recruits from his circle of friends, choosing innovators who don't need micromanagement.

"I am capable of defining and managing a vision," he says. "Counseling underperformers is difficult for me. I don't really tolerate underperformers."

He sets goals on a project basis using a divide and conquer method. He measures results based on the final product - not the effort put forth.

The most valuable lesson he's learned during his entrepreneurial years: "I've learned it's better to do things right the first time than to do them over 10 times."

STATS

Employees: 2001: 12; 2002: 25; 2003: 35.

Revenues: 2001: $1.1 million; 2002: $1.9 million; 2003: $3.8 million.

Average annual growth: 86%