When John Horning started his first business, he was sure he’d hit on the right formula.
But then he learned the truth about the home inspection franchise he’d purchased: It was highly seasonal; it demanded long hours; it offered little chance for repeat business and provided a mediocre return.
He had followed his gut and suffered for it.
Horning’s gut continued to bring mostly frustration until recently, when he stumbled into a business so successful that it surprised even him. He says he’s not about to let it slip away.
Horning is owner and president of Akron Canton Connection Inc., which boasts $1.3 million in annual sales and 10 full-time employees. In short, ACC provides local telephone connections to consumers who would otherwise pay long-distance charges on calls between Akron and Canton.
A recent court case could force Horning out of business. But he’s preparing with something he didn’t have in prior businesses: solid research, planning and marketing.
The story of John Horning’s entrepreneurial life has many twists and turns, and in all cases, he’s been the underdog. That’s what makes his current venture seem so right.
“Perseverance is the main thing I’ve done right,” Horning says. “Half the things I’ve tried have lost money, but at least I learned something along the way. I always wanted to be on my own. I guess I used the trial and error method of getting there though.”
From Holsteins and cubicles to the Far East
Horning spent much of his childhood living on a farm. His parents raised dairy cows and, while Horning remembers brief encounters with the Four-H Club and the Future Farmers of America, he “was too busy working on the farm to be involved.”
Perhaps it was the work ethic he adopted as a child or his preference for wide open spaces, but corporate life didn’t sit well with Horning. He landed a job with The Timken Co. after graduating with a mechanical engineering degree from Virginia Polytechnic Institute and State University in 1974.
“I found myself sitting in a cubicle and couldn’t imagine sitting there for another 40 years,” Horning says. “I never did fit the model of a typical corporate employee, and I never wanted to be forced into retirement.
“There was nothing holding me down, and I wanted to do something crazy-so I quit.”
Horning traveled the country for six months, finally settling in Salt Lake City. He worked as an engineer for a medical supply company there for most of his eight-year stay.
He became a Mormon and “spent two years in Japan proselytizing on a church mission.” After that he married and, in 1985, moved back to Northeast Ohio and took a job with a small consulting firm before buying the home inspection franchise.
Ready, fire, aim
With his engineering background, inspecting homes seemed like a good fit. But he soon learned the basic problems with the business.
“Sales weren’t renewable,” he says. “I was worn out most of the time. It followed the home buying season so it was too busy in the summer and too slow in the winter.”
During the busy season, Horning worked from early morning to late in the evening six days a week.
“I could have worked seven days a week and still wouldn’t have been able to keep up sometimes,” Horning says. “There was not enough money to make it worthwhile, but it was our main source of income for six or seven years.”
Before finally selling the franchise, Horning started a part-time venture in 1991 called VoiCenter, which utilized his expertise in computer programming. Once again, it was a case of shooting first and aiming later.
“I talked to a fellow in the voice mail business, and he did well,” Horning says. “So, I automatically assumed I could do very well. I was constantly evaluating my resources and wondering what I could do. I didn’t realize then that there may not always be a demographic for certain services.”
VoiCenter was designed for businesses that wanted a service to automatically answer their phones. In the early ’90s, however, there was still plenty of resistance to automated answering systems as a replacement for a live receptionist.
By 1993, however, Horning created another software-based service called Voice-Ads, which was just successful enough to let him work at the venture full-time.
“At that time, real estate companies had numbers to call for information on homes for sale,” Horning says. “I thought it would be a good idea for other things as well. Voice-Ads was a classified, over-the-phone ad service.”
Individuals or businesses could place voice ads into more than 100 categories. At the time, Horning says he thought Voice Ads would eventually be as common as newspaper or yellow pages advertisements.
“I tried to do a marketing plan, but with no operating budget it was difficult,” Horning says. “We were broke the whole time so it was tough to get it off the ground.
“I made a mild attempt to get money. I wrote a business plan, but it didn’t work out. The lack of credibility and money killed that business.”
I’ve fallen and I can’t get up
Horning’s next business was designed to serve the sick and the elderly. He wrote a program that would allow a computer to make phone calls and accept responses from homebound individuals-alerting appropriate authorities or family members in the case of an emergency.
“We capitalized on the name of the movie, ‘Home Alone’,” Horning says.
It seemed like a good idea at the time, but customers didn’t come running.
“There wasn’t enough money in it to advertise the service,” Horning says. “If more people had been aware of it, it could have gone farther.”
When Horning started the next business-called the Entertainment Connection-he finally decided to apply the biggest lesson he’d learned: that he couldn’t succeed in any business if he didn’t get serious about sales and marketing.
“That realization helped to build what I have today,” Horning says. “An important part was that I gained skill in marketing.”
Horning planned to sell phone ads to advertisers of local events. Individuals could call the Entertainment Connection and receive prompts for various categories including sports, movies, theater, concerts and so on. Callers would receive information regarding dates, times and costs for entertainment and other events.
“For it to get off the ground, we needed to make the service credible,” Horning says. “I wrote the [computer] program for the service and most importantly, I learned how to advertise.”
But the advertising knowledge came, he admits, after it was too late. Though Horning hired a salesperson (who is working with him today on a current venture: Internet service) to sell the entertainment service, he folded it after only a few months due to lack of revenue.
Finally making a connection
The next effort was to use more software of his own design to charge a flat, money-saving fee for interoffice calls at companies that had offices in both Canton and Akron.
It was, he found once again, a tiny market. But that’s the idea from which Akron Canton Connection evolved.
“I knew I could transfer people from Akron to Canton and vice versa, but I needed to know how to provide a service people wanted,” Horning says. “I knew companies had branches in both areas, but I never found a market for [business-to-business transfers].
“Then, it just came to me one day … I knew it was long distance to call from Uniontown to North Canton. I thought maybe there would be a demand among normal people. So I put together software to connect Akron, Canton and other communities.”
The system works through an Ameritech Centrex system. When an ACC customer calls from his or her home in Canton to a telephone number in Akron, for instance, the call goes through one of ACC’s computers in North Canton, and then is forwarded to the Akron line the caller was ultimately trying to reach.
The customer is charged a flat rate of roughly 33 cents a call, no matter how long he or she talks. ACC, in turn, pays a flat rate to Ameritech f
or
use of the Centrex system.
“Our average customer doesn’t spend more than six or seven dollars a month and 40 percent of that goes directly to Ameritech,” Horning says. “It’s not much per customer, but with 21,000 customers, the cash flow is pretty good.”
While Horning seems to have finally found something that works, he also knows he will probably be forced to change it once again.
“When I started this company, I knew it would be a temporary business, and it’s gone even longer than I thought it would,” Horning says. “There is plenty of opportunity here. We’re not planning on folding up.”
What makes it temporary is the recent settlement of a case between a Hudson-based company similar to Horning’s and Alltel Telephone Services Corp., which provides local and long-distance service in Hudson.
“The situation was a bit different with the company in Hudson,” Horning explains. “Ameritech was also involved because calls between Akron and Cleveland were going through Hudson. So the calls were originating in Ameritech’s territory and terminating in Ameritech’s territory. But they were routed through Alltel.
Alltel sued to end the practice and won, putting the Hudson company out of business.
Ameritech, Horning says, “is supposed to apply the rules to everyone whether they want to or not,” Horning says.
For its part, Ameritech makes money with the arrangement. ACC provides more than $500,000 a year in revenue to Ameritech. But the service is, at best, questionable under current regulations of the Ohio Public Utilities Commission.
“We will have to become a different type of phone company to be out of the jurisdiction of Ameritech,” Horning says.
As a result, ACC is becoming an Internet Service Provider, and Horning also plans to begin the common practice of buying long-distance service at wholesale prices and reselling it at a discounted rate.
“I want to be able to offer customers both services with one bill,” Horning says.
To do this though, he will either have to purchase or lease his own phone lines. Once that is done, it’s a small step for ACC to offer “Internet telephony”-telephone service through the World Wide Web, with or without a computer.
Is there a market for this service? More often than not, Horning has answered that question incorrectly.
This time though….
