HotSchedules may broaden scope - after success with eateries, retail eyed
Austin Business Journal - by Christopher Calnan ABJ Staff
Ten years ago, Austin bartender Ray Pawlikowski came up with the idea for an electronic scheduling system for waitstaff at the restaurant where he was working.
Today, the concept has evolved into the company
HotSchedules.com Inc., the developer of software used by 4,000 U.S. restaurants - including some of the largest chains, such as Outback Steakhouse, IHOP Corp. and P.F. Chang's.
In October, the company is scheduled to release its fourth version and consider expanding to other industries, such as retail and grocery, where work schedules also change weekly.
Pawlikowski, CEO of HotSchedules, said his company has grown without venture capital nor advertising.
VCs never took the company's business model seriously. But restaurant managers understood the need for reliable scheduling well enough to spread the word, especially when they moved from one chain to the next, Pawlikowski said.
"Our clients are basically our spokespeople," he said.
Nationally, the restaurant industry employs about 13 million workers, or 9 percent of the U.S. workforce. The sector is projected to add 1.8 million jobs during the coming decade, with employment reaching 14.8 million by 2019, according to the National Restaurant Association.
The group's spokesman, Mike Donohue, said although restaurant software programs are popular, some owners and managers prefer a more hands-on approach in which they're more involved in scheduling.
HotSchedules, which employs 35 people, reached profitability in 2005 and has grown its net income every year since, Pawlikowski said. He declined to disclose the company's annual revenue, but he said HotSchedules has doubled its revenue during each of the last three years and is on track to do so again this year.
The labor management software is available in four versions that range in cost from $35 per month for a base application for a single restaurant to $200 per month per location of an enterprise-level restaurant chain. Each version is delivered as a Web-based application that users access online.
Such software-as-a-service models have grown in popularity in part because they enable customers to account for them as operating expenses rather than one-time capital expenses. Also, they typically don't require extended installation times nor information technology staff that are common for installed software.
For the software provider, subscription models provide an easily forecasted revenue stream. Also, upgrades and patches can be made to the software over the Internet.
About 20 percent of HotSchedules customers are single-unit restaurants, but their percentage is rising, Pawlikowski said.
Since HotSchedules launched its first version in 2000, the application has expanded beyond scheduling to become a clearinghouse for all notices between workers as well as between management and workers.
"It's become the watering hole for employees," he said. "It's a central communication portal as well."
The online application also enables workers to check or change their schedules remotely. So miscommunication is minimized when schedules are updated.
Uchi Restaurant, a sushi restaurant in Austin, replaced its Excel spreadsheet-based system earlier this year with HotSchedules to coordinate the hours of its 50 employees. The main purpose was to eliminate errors when workers swap shifts, General Manager Andy Erdmann said.
"Everything is standardized and all in one place," he said. "It makes something that was unnecessarily complicated much easier."