Genesis Security Systems to move to new headquarters

Company expect $19 m in revenue, service contracts account for one-third of revenue
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Wednesday, October 3, 2012

GERMANTOWN, Md.—Genesis Security Systems is growing. After ten years in its current 6,000-square-foot headquarters, it’s moving in December to a new 12,000-square-foot space, Genesis SVP Alan Kruglak told Security Systems News.

Genesis was “created in 2002 with five guys and no revenue,” Kruglak said. The company now has 47 employees. It did $17.5 million in revenue in 2011 and is projecting revenue of $19 million this year. “Our operating profit is 26 to 28 percent,” he added.

Officers in the company include Kruglak, his brother Glen Kruglak, who serves as president of the company, Chris Foster who oversees sales, and Ed Simon, who is in charge of production. The Kruglak brothers previously owned GIC, a systems integration company that was sold to Sensormatic in 1995.

Based here, Genesis does less than 5 percent of its work with the federal government. About one-third of its customers are government contractors who have offices in the Washington, D.C. metro area. “They get their business from the federal government and we secure their facilities,” Kruglak said.

Another third of Genesis’ business is with quasi-financial institutions such as the International Monetary Fund and the World Bank. A final third is made up of hospitals, law firms and other commercial businesses.

Eighty percent of Genesis’ business is in the Washington, D.C. area. For jobs farther afield, Genesis works with its national integrator group, National Security Integrators, a 15-member organization, of which Kruglak is the president and founder. All integrator partners must be Software House dealers, and Kruglak says he uses three criteria to handpick partners for NSI. “They must provide really good service and treat my customers like their own,” he said. The final criterion is “Do I like them?” he said.

Kruglak, who has written four books about running a business, believes standardization on products and processes is vital to success and to providing the best customer service. Genesis offers Software House and “only Software House” for access control. What about potential customers who cannot or will not use Software House?  “We can live without them,” Kruglak said.

For cameras, Genesis offers specific models of Axis, Sony and Panasonic cameras. Standardizing on a VMS is not so easy, Kruglak acknowledges. Genesis carries six varieties of VMS.

Standardizing on products means that Genesis can maintain a large inventory onsite, and each company vehicle carries  $15,000 to $20,000 worth of spare components. All of Genesis techs are factory certified on each product, and because the number of products is limited, they all know the products well, Kruglak said. While factory certification is essential, about “15 percent of the learning comes from installing the product in the field,” he said. All of the systems in the field look alike, he said. “When you do something again and again, you can do it a lot quicker … and it’s more efficient.”

While other companies’ techs do two to three service calls per day, Genesis techs do four to six. 

Kruglak says he pays above-average wages, gives bonuses twice a year, and “treats people like they have value.”

Another important component of the business is service contracts, which Kruglak says accounts for one-third of the company’s revenue.  Customers want to limit their exposure to risk, get something fixed if it breaks, and they want to stay within budget. With that in mind, Genesis offers one service contract, which covers all labor and materials, preventative maintenance, and software maintenance. He said he has 400 customers and he’s only lost eight customers in the past 10 years.

What are Genesis’ growth plans for the next 10 years? Kruglak says he’ll continue to “pick his customers.” With no debt and “substantial” cash reserves, Genesis may look at acquisitions, but acquisitions are not a goal, he said. The market will bring more growth, he predicted, and the new headquarters will ensure that the company can expand as the market demands.