08/22/2002
For Mike Hogan and his information technology consulting company, there's a thin line between family and work. "My wife, Kathy, is vice president of administrative services, our daughter Julie is our controller, her husband, Steven, is a systems consultant, our son Michael is a national account rep and my brother Patrick is in charge of technical recruiting," says Hogan. "It really is a family venture."The Hogan Group, founded in 1994, has approximately 50 employees -- "The number varies greatly as we staff up for big projects," Hogan says -- and provides consulting services to large companies with fairly sophisticated IT needs. "A lot of our work involves functional and technical implementation of large ERP (Enterprise Resource Planning) applications such as PeopleSoft, SAP and JD Edwards. These applications cover everything from finance and accounting to manufacturing and human resource management systems. We also have consultants who provide maintenance and enhancements for so-called 'legacy' mainframe and client-server systems that have been around for years and are in need of updating."
Starting his own business was something Hogan knew he wanted to do early on. He even told his former employer as much. "I had found consulting to be a fun business and wanted to get into it," Hogan says. "But I didn't consider myself a business manager. So I joined a larger company -- an international consulting firm -- in 1988 and basically told them I was going to learn the ropes, and when I'd learned enough I was going to start my own company. When I did leave them, I had a non-compete for a year and spent that time working on the business model for The Hogan Group. Two days after the non-compete expired, I had my first client."
If The Hogan Group was a natural extension of his earlier work, it was also the answer to a common practice that really bothered Hogan. "It's something I called the 'consultant merry-go-round.' Take a city like Detroit with the auto industry. You might have a firm that raids consultants from GM and Ford and sends them to Chrysler. Meanwhile, you have another firm raiding Chrysler and GM and sending people to Ford. And it's this endless, incestuous cycle that creates instability in the information technology arena. I decided that rather than exploit the technical community, I wanted to build it. We started hiring outside of Nebraska, figuring that by bringing in good people we would not only be building our technical community, but we'd be building the local tax base and growing the overall economy. We call that our Win/Win/Win model because the clients win, the consultants and community win, and the Hogan Group wins."
The idea has paid off. "So far we've brought about 250 families into Nebraska. And we're starting to expand to rest of the country. We don't turn down local talent; but our focus is on finding top-rate talent that we can relocate into the local communities that we serve so we can help build the community."
Quick Facts:
Name: Mike Hogan
Business: The Hogan Group
Location: Omaha, Neb.
Founded: 1994
Number of employees: 45-50
Web site: www.hogangroup.com
How did you get involved in the NFIB?
Early on, I was working with the chamber of commerce, and at a meeting I ran into a couple of folks who had a neat idea for promoting their business -- they were going to start their own radio show. They asked if I'd like to get involved as a sponsor, and -- long story short -- I wound up hosting the show. One of the fellows we had on, Lee Terry, a former television broadcaster was the regional rep for NFIB. He wouldn't let me get away without signing up. I've been an avid member ever since, and I'm still very good friends with Mr. Terry.
How active are you?
I had done some lobbying with the National Association of Computer Consultant Businesses on a couple of issues of interest to us and then participated in the 2000 NFIB Small Business Summit in Washington. For whatever reason, Bob Hallstrom, the state director of NFIB/Nebraska called me and asked if I'd be interested in chairing the Nebraska Leadership Council, and I said I'd be quite honored to do that. At this point, most of my activity in that role is geared toward recruiting new members. People need to know that we're here, and I think there are a lot of businesses that still don't know about us.
Which business-related issues concern you most?
The inheritance (death) tax. We're a family-owned business, and in the consulting industry, quite frequently if you had someone put a value on the business, they'd look at your annual revenue and come up with a valuation based solely on that. In actuality, revenue is only part of the picture and, in our case, a fairly inaccurate part. So we're in the situation -- as are many family businesses like ours -- where we don't make enough to pay the taxes on the business should I die. So yes, getting rid of the inheritance tax is big for us, and NFIB has been very outspoken on that issue.
Another area we've been working on that could have positive long-term effects for us is getting small businesses to band together to get more affordable insurance coverage. Last year, I think our insurance premiums went up 50 percent, and they've been going up 25-40 percent the last five years. Families whose coverage cost $100-$150 a month several years ago now cost $1,000 a month.
What do you like about being a small business owner?
The sense of independence is good, but more than that, you get the feeling you're bringing something to the community that a large company can't. We're able to live our values through our business. We don't answer to any stockholders, so we can do what we believe is right without somebody else forcing us to do what would be more profitable.
