We had a customer that made a lot of money in this business. Back in 2003, we structured a deal to sell our system to him for $75k. The system was about 20% of what it is today.
I think everyone is familiar with the phrase, “Don’t count your chickens before they hatch.” What we probably should have done is gave him the payday loan software for free and signed a $150k two-year contract to modify and maintain the system.
This payday business was very profitable, but they never spent money on IT employees. It was incredible what they were able to accomplish with 2 $40k/year employees and about 30 $10/hr employees.
This experience is why the On-demand, subcription software, software as service (SaS), started to make a lot of sense to us. The cost was not in the payday loan software. The cost was finding the people that could get the results that lenders are looking for.
For example, we have an attorney that costs us $375/hr. Personally, I think we got a deal. This service costs us about $5-10k per year. This is a deal in comparison to paying a mediocre attorney $75k to make non-profit related items seem important because they want to justify their pay.
Let’s face the facts, no software is going to make you successful. The successful businesses have good locations, good managers, get their customers to come back more than once and (especially in this industry) don’t let their employees steal from them.
