Entrepreneur earns by saving companies cash
Growing up in suburban Philadelphia, Dan Schneider wasn’t a troublemaker, per se, but high school classrooms didn’t really offer the precocious teen a chance to shine.So, at 16, Schneider dropped out – initially to his mother’s dismay – and started selling cellular phones at a time when digital service was just being rolled out and the handheld devices still had a bricklike quality.”I was bored with school,” he said.
He used money he earned in business-to-business cell sales and bought his first mobile phone retail store shortly after he turned 18.
In just a couple of years, Schneider had expanded to 12 locations in the Philadelphia area, an impressive feat on its own. But Schneider wasn’t satisfied, and he quickly moved on to another venture. He formed Main Street Assets, a global mobile phone wholesaler that worked with large companies to offload their extra cell phone stock.
A little more than two years later, Main Street had grossed $35 million.
As Schneider rocketed toward success, he became increasingly disillusioned by the toll work was taking on his life. He was working “crazy” hours while taking calls from Hong Kong and the Middle East throughout the night. He was also 50 pounds heavier than he is today and “couldn’t tell you what my hobbies were.”
With a net worth that involved “two commas,” Schneider divested himself of Main Street and spent most of his mid-20s relaxing.
“I never got to be a kid, so what was the point of working?” Schneider, now 29, said.
He moved outside of Philadelphia and took up kiteboarding and cycling, treating the latter like a job and embarking on 30-mile daily jaunts. Off came the weight and off Schneider went – to Europe, to Israel, to the Caribbean.
“I was having fun,” he said.
Schneider had plans to build a condo on the Dominican Republic’s North Shore, but when hurricane season delayed that work in 2008, he came to Charleston for what was supposed to be a three-month stay.
But something funny happened on the way back to paradise.
“I started to get the bug to work again,” Schneider said.
He leased office space in Mt. Pleasant without a concrete business concept, just lots of ideas and lots of time.
“People in the office building were like, ‘What are you doing?’ “Schneider said.
What he was doing ended up being something called “contingency based cost savings” with his new firm SIB Development & Consulting.
It works like this: Instead of telling a company what it does wrong- like many consulting and auditing firms do – SIB examines fixed monthly expenses and looks for overcharges in areas such as telephone,
Internet, waste removal and property taxes.
“We never look at the books. We’re looking at their bills,” Schneider said. “And we’re looking at the bills in specific categories.”
If SIB’s staff – which totals about 15 and is split locally and nationally- finds past overages, they work to get their clients credits and set up future plans with vendors based on benchmark pricing.
“We know what everyone pays and the best rates,” said Schneider, whose staff is filled with experts in the specific areas they research.
Schneider said the goal is to keep his clients with their current vendors, and SIB increasingly is looking to bundle the companies it represents for even better pricing.
“That’s how we can do it with a smaller staff . We’re not negotiating with a vendor and haggling,” Schneider said. “We’re basically getting the price we know that they can do.”
SIB represents health care, manufacturing, restaurant groups and retail companies nationally and locally. It has worked with Suffolk University in Boston, which Schneider said “is kind of funny because I’m a dropout.”
Schneider said he chose the business because, in the recession, people “didn’t want to pay anything for anything.” SIB’s revenue comes only from found money – the company receives half the savings it uncovers for a fixed period of time. “You don’t release a single dollar to us until you receive that refund check from the vendor,” Schneider said. “You don’t pay us until you have that money, so there’s no budgeting.”