Michael Pirron started his IT firm, Impact Makers, in 2006. He came up with his model of starting a “not-for-profit” business while getting his MBA at the Kellogg School of Management at Northwestern University.
After returning to the states and working for a couple of other companies, Pirron decided it was time to give back.?? His company has contributed its profits to Rx Partnership, a Virginia nonprofit that helps provide free prescription medication to uninsured patients. The company just added its second nonprofit partner, CHIP of Richmond. CHIP works with parents to improve the health of children.??
BizSense caught up with Pirron to see how much the company has grown since we first checked in with them last year and what is in store for the future.?? Below is an edited transcript:
Richmond BizSense: How is your company different from other IT companies???
Michael Pirron: We are a for-profit company with no shareholders. ??We do all the same things any other for-profit does in terms of job creation and creating value for clients.
RBS: You are a principal of the company, and you added partner Carl Miller last year. How does that work in a company that gives its profits away?
MP: Because there is no ownership, we work at risk. It is our responsibility to build enough work to pay our salaries and grow the business. It is not unlike the role of other principals, but we don’t have ownership. Instead we have a margin-sharing agreement and are paid a percentage of growth in margins. Other employees are just like any other employees and paid on salaries.
RBS: So tell me how the nonprofits you work with fit in to the scheme of things.
MP: We create partnerships with nonprofit partners, and all of our profits we generate from business activity go to our partners. Regardless of what our profitability is, we contractually obligate ourselves to give profits to our partners, which is a minimum of $1,000 a month per partner. ??We’ve given a total of $22,000 so far this year. Next year we are hoping to be in a position to have $1.5 million in revenue, of which we will be able to give at an absolute minimum $100,000 to our nonprofit partners.
RBS: You are about to start your fifth year in business. How would describe the growth up to this point?
MP: From the very beginning it has been pretty steady, but never over half a million in revenue. At times it was painful being a small business with no capital. We have been growing organically, which is unheard of these days. Growing on word of mouth. We’ve been selling on capabilities and price, just like any other firm.
RBS: But the business has been growing a bit more rapidly lately, right?
MP: Our revenue this year end is going to be just about $900,000, which is more than double last year. This year we have seen explosive growth, and for next year we already have $1.1 million in commitments signed.
RBS: You must have gone through some tough times as a start-up when the economy went downhill. Was there ever a point where you thought you wouldn’t make it?
MP: There was a point a couple of times. To be quite honest, this is the first year I made the compensation that I made prior to starting Impact Makers. When the economy crashed about a year and half ago, we went from seven full-time people down to two. A lot of contracts we had fell though or got canceled. I wasn’t sure we would survive. Luckily, being lean was one of the things that let us survive.
RBS: And how many employees do you have now?
MP: Right now we have 13 people full and part time. We are in the process of hiring one in January and eight more between now and April.
RBS: Is this a model any type of business can follow, or is it suited to a particular field, like IT?
MP: It works well for the services industry — anything that doesn’t have large capital expenditures. We grow organically though sales. I’d say law firms, architects, ad agencies or even something like plumbers. Any service-based agency could easily take this model.
RBS: Is the charitable aspect of the business also a selling point?
MP: In terms of why give back, doing well and doing good is also good business. We don’t lean on the social aspects, but it does create an interest factor in a competitive bid. Sometimes it gets us in on the deal to begin with if the client is one who cares about social impacts in the community.
Michael Pirron started his IT firm, Impact Makers, in 2006. He came up with his model of starting a “not-for-profit” business while getting his MBA at the Kellogg School of Management at Northwestern University.
After returning to the states and working for a couple of other companies, Pirron decided it was time to give back.?? His company has contributed its profits to Rx Partnership, a Virginia nonprofit that helps provide free prescription medication to uninsured patients. The company just added its second nonprofit partner, CHIP of Richmond. CHIP works with parents to improve the health of children.??
BizSense caught up with Pirron to see how much the company has grown since we first checked in with them last year and what is in store for the future.?? Below is an edited transcript:
Richmond BizSense: How is your company different from other IT companies???
Michael Pirron: We are a for-profit company with no shareholders. ??We do all the same things any other for-profit does in terms of job creation and creating value for clients.
RBS: You are a principal of the company, and you added partner Carl Miller last year. How does that work in a company that gives its profits away?
MP: Because there is no ownership, we work at risk. It is our responsibility to build enough work to pay our salaries and grow the business. It is not unlike the role of other principals, but we don’t have ownership. Instead we have a margin-sharing agreement and are paid a percentage of growth in margins. Other employees are just like any other employees and paid on salaries.
RBS: So tell me how the nonprofits you work with fit in to the scheme of things.
MP: We create partnerships with nonprofit partners, and all of our profits we generate from business activity go to our partners. Regardless of what our profitability is, we contractually obligate ourselves to give profits to our partners, which is a minimum of $1,000 a month per partner. ??We’ve given a total of $22,000 so far this year. Next year we are hoping to be in a position to have $1.5 million in revenue, of which we will be able to give at an absolute minimum $100,000 to our nonprofit partners.
RBS: You are about to start your fifth year in business. How would describe the growth up to this point?
MP: From the very beginning it has been pretty steady, but never over half a million in revenue. At times it was painful being a small business with no capital. We have been growing organically, which is unheard of these days. Growing on word of mouth. We’ve been selling on capabilities and price, just like any other firm.
RBS: But the business has been growing a bit more rapidly lately, right?
MP: Our revenue this year end is going to be just about $900,000, which is more than double last year. This year we have seen explosive growth, and for next year we already have $1.1 million in commitments signed.
RBS: You must have gone through some tough times as a start-up when the economy went downhill. Was there ever a point where you thought you wouldn’t make it?
MP: There was a point a couple of times. To be quite honest, this is the first year I made the compensation that I made prior to starting Impact Makers. When the economy crashed about a year and half ago, we went from seven full-time people down to two. A lot of contracts we had fell though or got canceled. I wasn’t sure we would survive. Luckily, being lean was one of the things that let us survive.
RBS: And how many employees do you have now?
MP: Right now we have 13 people full and part time. We are in the process of hiring one in January and eight more between now and April.
RBS: Is this a model any type of business can follow, or is it suited to a particular field, like IT?
MP: It works well for the services industry — anything that doesn’t have large capital expenditures. We grow organically though sales. I’d say law firms, architects, ad agencies or even something like plumbers. Any service-based agency could easily take this model.
RBS: Is the charitable aspect of the business also a selling point?
MP: In terms of why give back, doing well and doing good is also good business. We don’t lean on the social aspects, but it does create an interest factor in a competitive bid. Sometimes it gets us in on the deal to begin with if the client is one who cares about social impacts in the community.