Nancy Connolly Has the Business Plan to Scan, Print and Copy

Author: Helen Graves

Women's Business Boston

April 2003

Last year, co-founder, President and CEO Nancy Connolly increased 14-year-old Lasertone Corp.'s revenues an astounding 57 percent over 2001 — to $13 million — and she only has greater expectations for the laser printer management solutions provider in the years to come. Already the industry's No. 1 woman-owned business and, overall, in the industry's top 2 percent, Lasertone, by the end of Connolly's new five-year plan, should skyrocket to $50 million in revenue. "Actually, I hope to exceed that," she says.

What's buoying Connolly's confidence is Lasertone's preparedness to ride the next — and imminent — wave of laser printer technology, a feat she has pulled off since starting with recycling toner cartridges in 1989 and instituting a service division in 1997. Add to her business foresight a personal commitment to pounding the pavement while doing whatever it takes to deliver quality, and it's no wonder that the Women's Business Enterprise National Council (WBENC) honored her at its annual gala last year.

Today, Lasertone, headquartered in Littleton, is the Northeast's leading remanufacturer of toner cartridges, each year recycling 200 tons of plastic and metal. Beginning at a time when there were only two printer types on the market, the 70-employee company now offers a complete line of Lasertone brand and OEM toner supplies for Hewlett Packard, Xerox, Tektronix and Lexmark printers. Its service division, offering as-needed and contract options to deliver same-day certified maintenance and warranted repair, now out-paces the annual growth of its cartridge sales.

Multi-functional printers (MFP) — the convergence of copying, scanning and printing in an all-in-one machine — comprise the latest next wave, and so Connolly has implemented a consulting division to help companies efficiently and cost-effectively integrate the new technology. She's capitalizing on Lasertone's recent certification as a Hewlett Packard MFP Value Incentive Partner, one of 87 partners across the country, and WBENC status to open more doors at the Fortune 1000 level.

"I expect to be the No. 1 reseller for HP MFP products in the country a year from now, and that may attract attention from others who may say, 'Why don't you sell ours, too,' " Connolly says. "So we might expand our product line, our hardware offerings, our manufacturing, looking at the printers themselves in how they're produced and what might be remanufacturable, such as customer replaceable parts. We need to be technology savvy in the way we manage our service, so supplying our field technicians with the right technology is also important."

High hopes to be sure, but then Connolly has always thought big, even when Lasertone was a two-person big kind of company with a confidence level that we can handle what we promise," she says.

Although her first customers came from the contacts she'd made during her 10 years at Exxon Corp., Connolly found early success in her own backyard by providing hands-on service, down to offering cartridge pickup and delivery. "I was ready to saunter into all the major names I had worked with during my Exxon days, but I didn't meet with much success there," she says. "The procedures were too rigid and nobody wanted to take a chance on some little upstart company bringing in something used. I went to Cambridge where people were more risk-taking. That's where we found our first success."

By serving customers locally, Lasertone earned $22,000 that first year but jumped to $100,000 in 1990, prompting the hiring of three employees. By 1995, Lasertone hit the $1.3 million mark, employed 20 and acquired two smaller toner cartridge remanufacturers. Two years later, revenue tripled. That year, the company launched its on-demand printer service and repair division, bringing employee numbers up to 42. Revenues jumped from $5.7 million in 2000 — the same year that Lasertone expanded its employee base to New York and New Jersey.

"We have been growing the top line over the past few years and growing along with the tech boom years, particularly in our service division," Connolly says. "During those top line growth years, the bottom line was almost break even. We feel we now have the right infrastructure to keep things in check in terms of costs and overhead. We finished 2002 with pretax of 7 percent, which is impressive in our industry."

In keeping with the five-year plan she pulled together over the last six months of 2002, Connolly will be on the road developing business for the next 18 months. Using her "in" through WBENC, a designation corporations seek out to meet diversity quotas, she has a goal of talking to two major corporations each month and, by February, she'd met with Verizon, Avis, JP Morgan Chase and Citizen's Bank.

"If I were to lay out a time line, the opportunity to actually get an order ranges from six months to a year and a half after those appointments, but I have a strategy laid out step by step of what I have to do in order to keep my name in front of them," Connolly says. "The WBENC certification is going to get you access, but you need to work it. I get on planes, show up, and promote Lasertone at all WBENC expos locally and nationally. I recently spent five days in Houston. I didn't close Shell Oil but the next time Shell Oil has an RFP, are they going to know who Lasertone is? Yes, they are."

Her balance sheet is her best sales tool, Connolly says. "Number 1, I have never overcommitted Lasertone," she says. Number 2, she adds, she has partnered on national, regional and local levels in distribution, service and logistics to acquire and maintain an account. In Detroit, for example, she partnered with a minority company to do business with Ford Motor Co. Her willingness to do whatever it takes — to listen to what the customer is buying vs. what she's selling — has made a name for Lasertone in half of the 50 states.

"I have a philosophy I stick to," Connolly says, "that a piece of the pie is a good business decision, and a win-win for everybody is far more satisfying than going in and saying, 'I'm cheaper, give me your business' and going on to the next one."

To date, Lasertone's growth has been funded from operations with some debt financing, though that could change with the introduction of the next generation of printer technology over the next three years. "We're very much entrenched in that game, which may require very different kinds of options such as leasing, where we'll be purchasing equipment and so we'll need growth capital. We're poised to do that," Connolly says.

What began as a new way to sell toner has certainly turned into a complex business now that Lasertone is helping companies assess their needs and catch the next technology wave by bundling service, supply and hardware into a lease program.

"I am so energized," says Connolly, who's heading toward her 51st birthday. "We're so ready for this whole new wave in terms of our balance sheet, our infrastructure, our technology capability, the people we've been bringing into the company. So even after 14 years, I joke that I'm still selling toner, but that's just a piece of it now."

Doing the Right Thing

Nancy Connolly makes a point of helping women-owned businesses. "One of my missions is to give back to the business community simply because I can and for the sake of feeling good about it," she says.

Last year, 6 percent of Lasertone's total expenditures went to MWBEs — "and that number would be higher if I strip out our raw materials, because there's no woman that I know of who makes toner."

This year, Connolly's MWBE goal is 10 percent. "I believe women should be doing business with each other," she says. "If a WBE calls on Lasertone for anything — advice, help, give me a discount — I will respond in the best way I can to help that person. I still want to make money, don't get me wrong, but I firmly believe it's the right thing to do."

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