Khedouri Azair had been making his living as an independent computer consultant since 1992, operating out of a small Westwood office under the name K-Tech Computer Services.
Business was steady, if not spectacular, but last year Azair stumbled onto a niche with loads of untapped potential: Non-profits, which were primarily responsible for Azair doubling his revenues in 1996, to $250,000.
The jump was enough to entice Azair’s wife, Cheryl Cutler, a veteran of the non-profit sector, to join him this year.
Together, they hope to hit it big by providing computer hardware, software and related services to L.A.-area non-profit organizations.
“By turning to technology, the smartest organizations are streamlining their organizations, and in doing so, they’re able to carry out their mandates more efficiently,” Cutler said, adding that the need for computer services in the non-profit sector is dramatic.
Yet service providers such as K-Tech still don’t face a lot of competition in the sector. And the sector’s size is considerable.
There are more than 15,000 non-profit organizations in Los Angeles County. Nearly 4,000 have annual budgets in excess of $25,000, and several have multimillion-dollar budgets.
“The non-profit sector in the aggregate generates substantial revenues and relies on services, such as insurance, office supplies and technology, like any private business,” said Patty Oertel, executive director at the Center for Non-Profit Management in downtown Los Angeles.
Besides the business potential of servicing the non-profit sector, the pursuit offers other rewards as well, say Azair and Cutler.
“There’s an opportunity here to make organizations that are really doing good, to be even better,” said Cutler. “It’s a good feeling going into work every morning if you can do that.”
Added Azair, “When I’m working with non-profit organizations, I feel I’m doing something good.”
The non-profit organizations for which Azair has designed custom software include the California Soccer Association and Project Angel Food.
The latter, a not-for-profit organization that prepares and delivers meals to Los Angeles-area HIV/AIDS sufferers, has been a particularly rich source of business for K-Tech.
“Project Angel Food was typical of most organizations that start out small,” explained Azair. “They relied on a simple database program to keep track of menus and deliveries and were doing a lot of things by hand.”
When Project Angel Food was established eight years ago, only 200 clients were enrolled in its free service, and computer use was limited. Since then, the number of people using the service has quadrupled, and daily operations have become increasingly complex.
“No (software) program fit our needs exactly,” said John Gile, executive director of Project Angel Food, which enlists 100 volunteers daily. “We needed a program that would highlight variations in menus, clarify routes, and provide accurate demographic reporting for foundations, grants and government entities.”
Since K-Tech installed the system four months ago, the time spent on daily operations has dropped 25-30 percent. Chefs have an easier time deciphering menus and special dietary restrictions and volunteer drivers don’t have to wait in line as long to pick up meals and drive around looking for residences.
The improved operations are making chefs, drivers and patients happier.
“The food delivery program is still evolving, and there is a lot of room for growth. We may change some procedures or add features, but Project Angel Food will never meet the limits of the program,” Azair said.
One of the most immediate benefits of the program is the ability to compose customized reports for foundations, grant-providers and private philanthropists. Efficient information channels are important for non-profit organizations that face funding cut-backs and greater competition for donations.
Investing in up-to-date computer hardware improves internal and external communications and, in the process, may attract more money from donors, said Cutler.
For example, networks provide the means to significantly cut costs through the use of shared printers and improve data efficiencies through e-mail, group scheduling, and mailing lists.
Project Angel Food is K-Tech’s largest customer, and will account for about 25 percent of K-Tech’s total revenues this year, Azair said.
Getting such a large share of revenues from one customer, of course, makes K-Tech somewhat vulnerable. But Azair downplayed the significance of that situation.
Until last year, K-Tech was getting most of its business from Mission Foods. When that account ended, Azair landed Project Angel Food. “You lose one, you gain one; that’s the nature of the business,” he said.
Other non-profit clients of K-Tech include Meals On Wheels and the California Soccer Association. Its for-profits clients include Pinnacle Contracting, a construction company in Woodland Hills; Premier Steak and Seafood, a restaurant in Bell Gardens; Highland Home Health Care in Beverly Hills; and several independent law and accounting firms.
But it’s the non-profit sector that Azair and Cutler are targeting to fuel K-Tech’s growth, primarily because such organizations are just now embracing technological advances.
“Non-profits often lag behind in implementation, but that’s not necessarily a bad thing, as long as we don’t lag too far behind,” said Oertel of the Center for Non-Profit Management. “Upgrades are hard to build into the budget, so why not let private businesses try things out first? But in regard to using technology and employing motivation as a means of productivity, the non-profit sector can certainly learn from businesses.”
Azair said he and his wife are working at about 70 percent capacity right now, so there is still plenty of room to grow. He expects to begin hiring additional employees within the next year.
He is also looking to shift K-Tech’s focus away from hardware, which currently accounts for about 75 percent of revenues, and toward computer services, which have fatter margins.
“So our revenues should stay about the same for awhile, but our profits should go up considerably,” Azair said.
