Ride the Subway

REVIEW SUMMARY
Company. Benseron IT
Industry. Technology
Key. Shower customers with attention to build a brand.

Onur Haytac was a student at Florida Gulf Coast University in Fort Myers six years ago when his phone rang about 10 p.m.

It was the development agent for the region's Subway restaurants, a man he had met networking with other computer students at FGCU. One of the computerized registers at a Subway restaurant crashed; could he fix it?

By 3 a.m., Haytac had resolved the computer glitch. “They were using a legacy system,” Haytac recalls, using the tech-speak term for obsolete computers.

With that kind of do-anything-to-help-the-customer attitude, Haytac formed his own company called Benseron IT Inc. at age 24 and quickly became the technology service provider for 150 Subway restaurants.

His reputation among Subway operators grew so that when a new customer-loyalty program was introduced, 400 restaurants hired Benseron to manage the computer side of it. “I set up a remote help desk,” Haytac recalls. “That was my first application.”

Since those early days, Benseron has become a provider of point-of-sale software and hardware, a fancy name for what used to be called the cash register. The company targets restaurants and stores, principally individual operators with single stores.

He targets “mom-and-pop” operators with software and hardware that costs less than larger competitors such as Micros. It costs about $3,000 a year for the software, hardware and 24/7-tech support.

Haytac declines to cite his company's revenues, but he says sales have grown at a 40% annual clip in the last two years. Benseron systems now operate in 1,000 restaurants around the country, from the Jolly Roger Sports Bar in Ocean View, Del., to Bliss Frozen Yogurt in Ojai, Cal.

Real estate ATM

Haytac funded his start-up the same way many entrepreneurs did during the boom, with credit cards and home-equity lines.

While he was still a student, the Turkish-born Haytac bought a three-bedroom condo in Bonita Springs with $5,000 he borrowed from his parents, renting spare rooms to his college buddies. He paid all his bills on time, building perfect credit that helped him get a home-equity line for his business.

Haytac came up with the company's name by combining the first few letters of his first name with those of two college roommates, Benny and Serkan.

As the number of Subway restaurant customers grew, Haytac needed help but couldn't afford high-paid technology experts. So he turned to his alma mater for help and hired student interns from FGCU's computer department. “They were fast, they were smart and they really helped build my company,” Haytac says. “They are so multi-faceted.”

While he was well trained in computer programming, Haytac didn't know as much about the restaurant business. So he bought a Subway restaurant where he tested his software.

Haytac quickly learned that the restaurant business succeeds or fails on inventory control, from the fistful of napkins customers grab to the slab of beef employees steal. That's because restaurant margins are so thin that loss of inventory can quickly make a store unprofitable. “It's a penny and cents business,” Haytac says.

This quest to understand the restaurant business works to Benseron's advantage because Haytac says he can provide advice to restaurateurs beyond technology assistance. “We give them ideas,” he says. “We don't just give them software and say see you later.”

For example, Benseron can now install surveillance cameras that can track employees at the register. Restaurant owners can even install special cameras inside refrigerators to make sure food doesn't disappear. “That's an up-sell for me,” he says.

Hardware from Korea

Business with Subway franchisees was humming along so well at first that Haytac didn't see the need to diversify his list of customers. “Then, in 2007, the recession hit,” Haytac recalls. “Nobody bought anything.”

For three months in 2007, Haytac remembers making zero sales. So, he built an elaborate Web site and shifted to selling point-of-sale software to restaurants and retailers nationally. That's because other parts of the U.S. weren't hit as hard as Florida. “When things were terrible in Florida, Texas was booming,” Haytac recalls.

“The Web site was key,” Haytac says, because that's how most customers find Benseron. While Haytac did a lot of the Web design himself, he outsourced some of the work to India, ultimately spending $2,000 to create it. He estimates it would have cost him $20,000 to have American programmers design the same site.

The key to Benseron's system is the ability for techies to access the registers remotely. “To standardize, we need to have the equipment,” Haytac reasoned.

So Haytac traveled to South Korea, where he contracted with a manufacturer to supply the “registers,” rugged computers with touch-screens and credit-card swipers.

After testing the units at his Naples facility, Benseron mails all the equipment to a restaurateur, whose only job is to plug in the unit. The Benseron system does everything from accounting for gift cards to tracking customer orders and processing credit cards. Waiters can learn the system in minutes.

Benseron competes against much larger competitors, such as Micros, but it targets individual restaurants and shops and showers them with great customer service. “That builds the name,” Haytac says. About a dozen employees work at Benseron in Naples, not from a remote call center overseas. “They're dealing with real people,” Haytac says.

Haytac takes great care in hiring, giving prospective employees a battery of psychological tests to learn their strengths and weaknesses. He hired a consultant to help him do that. “I learned how to analyze people,” he says.

Haytac makes sales himself. For example, the CEO sold a system to Mai Nguyen, owner of C Grape Coffee and Wine Bar in Bonita Springs. “He was the one who came in and talked to us and convinced us to use his system,” Nguyen says.

It helped that Benseron's system cost several thousand dollars less than the nearest competitor. “I negotiated with him for the best price,” Nguyen laughs. The system cost about $3,000 and that price included one year of tech support, for which she now pays $300 annually.

Haytac is eyeing overseas growth, perhaps through acquisition of an international competitor. “This is the transition time,” he says, smiling and reluctant to say more.

Advances in technology make it easier to expand geographically. For example, long-distance communication is easy using the Internet's VOIP. “It's free,” Haytac says.

Haytac, who owns 100% of Benseron, is considering using debt to expand and maintain control. “I don't want equity investors,” he says.