Our Software Company Continues to Adapt and Grow at $2.7M/Year [Update]
This is a follow up story for HMS. If you're interested in reading how they got started, published almost 2 years ago, check it out here.
Hello again! Remind us who you are and what business you started.
My name is Chris Vandersluis. I am the president and founder of HMS Software based in Montreal, Canada. In 2022, I was first interviewed by Starter Story (How We Built A Timesheet Solution And Grew It To $2M/Year) and I thought I’d give a follow up today on how we’re doing.
We started HMS in 1984 as a consulting and project management software specialist and grew as a consulting and project management software distribution business over the following 10 years. Like many start up businesses we shifted as the industry shifted and in 1994 I decided we would become a software publisher instead of a consultancy.
Our flagship product TimeControl became and remains the main source of our business. While we are a relatively small firm of less than 20 employees, our customers have never been our size. We count among our many clients, some of the biggest names in both the public and private sectors. TimeControl is in use by companies like CAE and AMD, EXFO, and Aegion. We are in use by public sector organizations like the Government of Quebec and numerous US agencies.
TimeControl has been the driving force behind HMS making between $2m and $3m in 2023 and continuing to keep HMS Software profitable.
We’re grateful for the long-standing relationships with our existing clients... Keeping our clients happy is woven into our mission statement and every part of our business. It has continued to pay off.
Tell us about what you’ve been up to. Has the business been growing?
HMS did grow in 2023 despite market conditions being challenging for many organizations. We have had several big milestones this year including shifting our recurring revenue from 76% of total revenue in 2022 to 84% this year. That was a primary goal for our team this year which was achieved. Our profitability continues to be strong between 20% and 30% ensuring our ability to continue to grow for years to come.
Another shift this year has been to extend contracts beyond a one year window where some of our larger clients have been able to take advantage of better corporate discounts for longer subscription terms.
We’ve had several key milestones. We released two major versions of TimeControl this year. Version 8.4 came out in the early spring. It had a slew of new features including a completely revamped dashboard system. We were already working on Version 8.5 which we released in December. The TimeControl Project version 8.5 includes numerous improvements to project planning functionality such as our Agile Boards.
Version 8.5 had an even longer list of new features including an all-new TimeControl BI module. Both of these new upgrades included extensive ranges of new and improved features. They affected all our editions of TimeControl including TimeControl and TimeControl Industrial on-premise, TimeControl Online and TimeControl Industrial Online, our Software as a Service subscription offerings in the Cloud as well as TimeControl Project Online and TimeControl Mobile, our free TimeControl Mobile App for Android and iOS devices.
Here is a screenshot of our new TimeControl BI module.
We’re particularly grateful for the long-standing relationships with our existing clients in which we invest all the time. Keeping our clients happy is woven into our mission statement and every part of our business. It has continued to pay off. We have several clients who have used TimeControl for over 10 years and some even for more than 20 years. This year we were able to add some key new clients to the TimeControl family.
Marketing is a shifting environment. There’s no way to put all your marketing efforts into one space. We have a holistic marketing philosophy. We think you have to be promoting a little bit wherever you can. So, you’ll find website collateral being continually updated. We’ve got active social media on Facebook, LinkedIn, YouTube and X/Twitter. We keep an active blog. We do speaking engagements wherever we can and have the capacity. We do some webvertising on both Google and Bing, SEO optimization, Public Relations, and, of course, stories like this one. If user focus shifts from one platform to another, we’re already there.
Our best advertising though is always our existing clients. We often get client referrals as new leads and that has a lot to do with keeping our client satisfaction at the top of our priority list. A referenceable client is part of our mission statement!
What have been your biggest challenges in the last year?
When I think of challenges in 2023, staffing comes to mind. Staffing is a constant challenge particularly when trying to bring on new technical personnel. We thankfully already have a deep rooted team in our technical group with some of our people having been there for 10, 20, or even 30 years. That makes it great when new people come into the team as they have the foundation of extremely experienced people and the team can take advantage of outside perspective and experience. We are once again looking forward to increasing our technical team size again in 2024 as well as our sales and marketing team.
One thing that is an ongoing challenge at the moment is the general concern in the industry that the economy isn’t doing well or won’t do well. With interest rates much higher now than they were 18 months ago, many prospective clients are taking a more cautious approach to changing existing systems. This has slowed down some sales cycles. In our case, because we maintain a conservative hold on cash and value, we’ve remained profitable and have good working capital. I know that’s not the situation for everyone in our industry.
What have been your biggest lessons learned in the last year?
If I had to pick a lesson for the year, it would be one that I’ve had to keep in mind many times and that’s to remain patient. If the sales cycle slows, we could have become victims of trying to grow over-ambitiously. But we are conservative in the way we manage money and profits so we can take the long view and keep relationships with our contacts and profits.
Our long-standing relationships in our industry and with our clients continue to pay off. This year again we were introduced to new prospective clients by happy existing clients. We think that’s the best kind of prospect you can get.
If you or your business are struggling, then try thinking about the longer term. Remember, the vision energy and initiative that got you started in the business is still your most powerful tool and it hasn’t gone anywhere.
What’s in the plans for the upcoming year, and the next 5 years?
There are always projects in the works at HMS. TimeControl continues to expand and gain new users. We will focus our attention this year on adding new functionality, improved monitoring for performance, and improving the infrastructure we use for the product. There are currently 5 editions of TimeControl including TimeControl on-premise, TimeControl Industrial on-premise, TimeControl Online, TimeControl Industrial Online, and TimeControl Project Online. These are all part of an identical code-base so we can extend in one direction with any edition and the others will all benefit.
I expect more development to go into our newest module, TimeControl BI this year as well as the TimeControl Project which continues to expand its functionality at a rapid pace.
One of the fastest growing aspects of TimeControl is the adoption of our free TimeControl Mobile App. Clients in both the public and private sectors are finding this a great way not only to add timesheet data but also to do approvals and reporting. TimeControl Mobile’s reporting features bring decision making literally into the hands of management.
Our longer term projects include extrapolating our already successful business model into new regions. TimeControl is a multi-lingual product and we think there is a great opportunity for it in areas where different languages are key. We anticipate steady growth over the next 5 years.
Internally, we’ve already renewed the leases for our physical space so we expect to keep a hybrid work environment and have at least some part of our work in person and we’re working on updating our internal infrastructure.
What’s the best thing you read in the last year?
I’m reading all the time so it’s tough to pick just one subject. I have enjoyed keeping up with Greg Head’s Practical Founders podcast and blog.
Advice for other entrepreneurs who might be struggling to grow their business?
My recommendations for those who may be struggling is to be patient and take the long view. That can be hard to swallow if you’re facing market conditions that seem impossible. Next year will be HMS Software’s 40th. That’s a long time. We’ve weathered 3 separate recessions. And, no, I didn’t like any of them.
All this past year we’ve been told by the market that another recession is right around the corner. That can be stressful. I tell those who ask about it that if a recession comes, it’ll be our 4th and we will survive it just like the last 3. If you or your business are struggling, then try thinking about the longer term. Remember, the vision energy and initiative that got you started in the business is still your most powerful tool and it hasn’t gone anywhere.
Are you looking to hire for certain positions right now?
We will be looking for a new developer by mid-January and for someone in a sales or marketing role later in the year. The best place to watch for our job listing is on LinkedIn.
Where can we go to learn more?
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
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