Los Alamitos-based Altametrics Inc. expects to hit $30 million in sales next year making software for restaurants.
The company makes Internet-based software that helps restaurants manage and monitor costs, sales, inventory, supply, customer relationships, business intelligence and workers.
The programs are “designed to help restaurants streamline their business processes,” said Mitesh Gala, cofounder and chief executive of Altametrics.
Altametrics’ software is designed to boost a company’s profitability by about 3%, which can equate to savings in the millions of dollars for large restaurant companies, he said.
The company sells its software through four-year subscription contracts. Clients include Atlanta-based Wendy’s/Arby’s Group Inc., Los Angeles’ California Pizza Kitchen Inc., Chipotle Mexican Grill Inc. of Denver and Lake Forest-based Johnny Rockets Group Inc.
Restaurants pay $49 to $300 per location per month to use Altametrics’ software.
Gala grew up working in the fast food restaurant industry.
His parents, who are of Indian heritage, were franchisees of San Diego-based Jack in the Box Inc. in the 1980s.
Gala started working at his parents’ restaurants at age 14 and moved up to restaurant manager by age 15.
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Mitesh Gala of Altametrics: “designed to help restaurants streamline their business processes” |
Later, he began to notice that profits at his restaurants were eroding and then began to look for a way to manage costs and inventory.
He made a basic software program at home called Q & D; Inventory (short for quick and dirty inventory).
The program helped Gala’s restaurants improve profits, he said. It wasn’t long until he started giving copies to other restaurant owners and managers.
“It was really basic, but it was helpful,” Gala said.
Gala managed Jack in the Box restaurants throughout his teens.
He then earned degrees in biology and psychology at University of Southern California.
Instead of becoming a doctor, Gala decided to start his own business.
He turned his restaurant fascination and teen experience into a software business that catered to the industry.
He launched Altametrics in 1997 and tapped a few software developers to help him get the business off the ground.
The fledgling company had a lot to overcome.
Gala’s lack of experience in computer science and software technology prompted him to delegate research and development to programmers.
But finding programmers who could make products up to his standards was tough.
He finally came across Vijay Shiv, another USC grad who had a lot of experience developing software.
Shiv helped Gala develop a software program and the two quickly became partners.
They leased a 600-square-foot office in Gardena and started hawking their products.
But being an unknown software developer made it difficult for the company to nab customers.
They burned through their money fast and had to lay off some four or five employees.
“It was really tough in those early years,” Gala said. “We were out of money and we had to lay off employees.”
Gala and Shiv worked hard to rebuild their company.
They put in a bid to provide software to Wendy’s but lost hope when they didn’t initially hear from the company.
Several months later, the partners got a call from Wendy’s requesting to meet with them about their technology.
“We were pretty intimidated,” Gala said. “We were just two guys with no experience in the corporate world.”
Altametrics struck up a deal with Wendy’s to provide software for the restaurant chain.
The deal gave Altametrics a cash boost and the company re-hired all of the workers they had laid off.
“We just ramped up from there,” Gala said.
Having Wendy’s as a marquee client helped Altametrics nab more accounts.
Word of mouth spread, and the company was able to get its foot in the door with other restaurant chains.
Altametrics now counts 175 workers at its 10,000-square-foot headquarters and a handful of others at its offices in Canada and New Delhi.
The company spends a good chunk of its money on research and development and protecting its patents, Gala said.
“We have to be very innovative,” Gala said. “It’s a necessary investment.”
Altametrics plans to come out with more software programs that can be applied to the healthcare and petroleum industries.
The company plans to make an acquisition some time this month, but Gala is mum about the deal’s details.
A downturn in the economy poses challenges for Altametrics’ clients.
Restaurants are among the hardest hit in the economic downturn as consumers scale back on their spending and eat at home more often to save money.
Altametrics hasn’t seen a dip in software sales since its revenue is guaranteed through subscription contracts, Gala said.
The company has noticed more inquiries from potential customers who are looking for ways to weather a tough sales environment.
Altametrics has had buyout offers from private equity firms, but the company isn’t ready to sell a stake in the business just yet.
The company could seek investors in the next few years when the economy bounces back, Gala said.
Boutique Closes, Reopens Online
Upscale boutique Erica Dee has closed its doors in Corona del Mar and is becoming an Internet retailer.
The seven-year-old company generates about $2.5 million in yearly revenue selling clothes and accessories for men, women and children at a 4,200-square-foot store off East Coast Highway.
Erica Dee plans to start selling products on its Web site ericadee.com this month.
The company’s move online comes at a time when brick-and-mortar retailers are challenged more than ever with the rising costs of labor, insurance and merchandise.
These expenses and weak economic conditions have made it difficult for the company to stay profitable.
Sales are down about 40% for the year, according to the company.
Moving Erica Dee’s business online should help the company keep operating costs low, which will allow the business to pass savings on to its customers, owner Erica Thomas said.
The company will also be able to boost sales since it will sell and ship products all day and every day across America and abroad, Thomas said.
“It is bittersweet,” she said. “We’ve had an amazing and truly successful seven years as a distinctive Orange County fashion boutique, but now I have the opportunity to bring that same unique shopping experience to people around the world.”
Building a presence on the Internet won’t be easy.
Like other new Internet retailers, Erica Dee will have to invest a lot of time and money in marketing the store through advertisements, blogs and other forms of virtual media.
The company faces a slew of competitors from other stores that sell chic clothes for women, men and kids on the Internet including Los Angeles’ Kitson, Lisa Kline and Fred Segal.
CEO Peer Groups
Renaissance Executive Forums in Orange wants to provide a space for executives to pick each other’s brains.
The company hosts “CEO peer groups,” where chief executives, chief financial officers, chief operating officers, managers and others from various industries meet and talk about managing costs, succession planning, private equity, international business and other work matters.
Renaissance Executives’ peer group meetings are held once a month at the company’s 600-square-foot office off North State College.
The program’s costs vary.
A peer group for small, startup companies costs $95.
Meetings for companies that generate more than $100 million in yearly revenue cost about $795.
Many businesses, particularly small ones, are wondering how they can manage costs and prepare for growth in an economic downturn, according to President Ric Franzi.
“It’s a difficult environment,” Franzi said. “Now, more than ever, companies need to reach out and get advice.”
The peer groups could be affordable alternatives to hiring outside consultants, Franzi said.
A peer group could also be used as a networking vehicle, he said. Rather than tapping outside consultants, executives can join Chief Executive Peer Groups to get advice on topics from other executives who have overcome similar challenges, Franzi said.
“It’s a much more cohesive way to find answers to problems,” Franzi said. “Rather than just getting the opinion of one person, you’re picking the brains of many others.”
The company plans to open a second location in Laguna Niguel next year.
