Deploying Mobile IT Solutions to Businesses in North America
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Nerds On Site Inc. (CSE:NERD) is a mobile IT support company that provides small to medium-sized enterprises (SME) with various services, including network installation and support, PC setup and tailored software services, among other services. Nerds On Site also provides its services to residential and corporate users. A notable corporate client of theirs is Canadian Tire (TSX:CTC.A). The company is currently operating in 10 cities across Canada and is planning on expanding their business into targeted areas in the US.
The company uses a revenue sharing model in Canada, where their EntrepreNERDS (eNerds: independent contractors) share between 37 percent to 50 percent in revenue from each contract that they sign. Using this model has resulted in the company producing an annual revenue of $8 to $10 million. In total, the company has generated over $160 million in revenue since its inception in 1995. Nerds On Site will be moving their revenue share model down to the US as they expand. The company will be selling franchises to approximately 150 eNerds in 10 cities in the US, rolling-out an ‘Area Developer franchise’ model. The company expects this to double their revenue to $19 million annually.
The backbone of the company rests on their highly-trained and vetted eNerds, who all have backgrounds in technology and are tested for real world experience before they are allowed to interact with customers. Each eNerd is certified by industry leaders such as Google (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Dell (NYSE:DVMT), Amazon (NASDAQ:AMZN) and Cisco (NASDAQ:CSCO) to ensure that they can provide clients with IT solutions for any interface. The eNerds are also encouraged to work as a team through the company’s IamaNerd.com interface, a web-based database of IT solutions and a system for billing, purchasing and communication between the company, its customers and contractors.
In a report released by Research and Markets, the global managed services market is expected to grow at a compounded annual growth rate (CAGR) of 11.23 percent between 2018 and 2022. The growth of the market is being driven by the adoption of internet of things (IoT) solutions that connect hardware devices, embedded software, communications services and managed services to one another usually through a cloud-based application.
Nerds On Site is partnered with industry leaders to ensure that their eNerds are qualified to handle issues on any user interface or technology. The company is also partnered with Apple (NASDAQ:AAPL) to provide mobile solutions for SMEs that routinely use iPads and iPhones in their offices.
Stadnyk and Partners is a notable shareholder in the company and provides their marketing skills. Go Capital, a private capital company is also significantly invested in the company. In addition to their major shareholders, Nerds On Site’s management team is also notably invested in the company, holding 50 percent of the shares. Management is also comprised of certified technology experts that have experience working in various industries.
- Generating annual revenue of $8 to $10 million.
- Generated over $160 million in revenue since the company’s inception.
- Operating in 10 cities in Canada with 128 uniquely trained consultants.
- Aggressively expanding into the US with franchise model.
- Trademarked red Volkswagen NerdMobile™ create recognizable brand.
- Expects to double revenue to $19 million once established in the US.
- eNerds are certified by industry leaders and are vigorously tested by the company for technology knowledge.
- Partnered with industry leaders such as Google, Microsoft, Dell, Amazon and Cisco.
- Agreement in place with Apple for providing mobile solutions to SMEs that use iPads and iPhones.
- Canadian Tire is a major client.
- Management notably owns 50 percent of the company’s shares.
The Nerds On Site Way
Nerds On Site has been around since 1995 and in the past 16 years, they have developed a proven business model that they have been utilizing to provide exceptional IT solutions 24/7 for their customers. The company has done this, in part, through the creation of IamaNerd.com, a proprietary web-based database of IT solutions and a system for billing, purchasing and communication between the company, its customers and contractors.
The development of this database and system allows Nerds On Site to build a network of eNerds that have backgrounds in various technologies, ensuring that the company to provide solutions to almost every problem. As the company has grown, so has its brand name. Nerds On Site has been creating a franchise name for itself through their recognizable and trademarked red Volkswagen Beetles named NerdMobiles™.
The company lacks direct competition in Canada as they are the only franchisable company that offers onsite IT services and solutions for businesses and their residential clients. While Best Buy’s (NYSE:BBY) Geek Squad, provides similar services to Nerds On Site, they are targeted more towards the installation of video and audio systems rather than onsite IT solutions.
The company’s IT solutions have allowed Nerds On Site to consistently generate revenue. On average, Nerds On Site has generate approximately $8 million to $10 million in revenue annually and has generated approximately $160 million in revenue since its inception.
Nerds On Site can attribute their success to their revenue sharing model that they have deployed in Canada. An eNerd will start with a 37 percent share in contract revenue and receive an additional 13 percent marketing bonus when they lease a NerdMobile™ to provide services and assist in growth by employing a mobile billboard.
The company intends to roll-out a franchise model in the US and will initially be targeting cities in Florida and Arizona. The company will be utilizing their IamaNerd interface to communicate with their IT specialists and are expecting the majority of their costs to be associated with recruiting and training their eNerds, marketing and leasing cars.
The eNerds will be required to pay a very low $2,500 franchise fee that will also include BootUp training. eNerds in the US will also reflect the Canadian model, receiving between 37 percent to 50 percent in revenue from each contract. They will also be responsible for their own client origination and maintenance. Additionally, the eNerds will be able to use the NerMobile™ for marketing and client services.
Eventually the company will be deploying an Area Developer franchise model in the US. Each consultant for the company will become a franchisee and geographic franchises will be offered for purchase once these areas are established. Once established, Nerds On Site is expecting the expansion into the US to double their revenues to $19 million.
Nerd Development and Community Outreach
The University of NERDology
On top of the training their eNerds already have, Nerds On Site has developed a program to ensure that their eNerds have real-life experience in finding solutions for businesses and individuals. The University of NERDology has over 250 competencies that they test for and are continually updating that list to include the latest technologies.
Aside from their work in IT, the eNerds are also interested in giving back to the communities they work in. One such initiative they are involved in revolves around their red Volkswagen beetles, called Fill the Beetle, Feed the People. All proceeds go to local food banks. In 2016, the company collected 10,000 pounds of food for the Barry, Ontario food banks. This is only part of the 20 tonnes the company has collected over the last 12 years.
Nerds on Site’s target audience is small to medium-sized businesses, but they also have varied solutions for both residential and corporate clients.
The company essentially offers to be a company’s IT department. They provide small to medium-sized businesses with the following services: managed IT services, 24/7 proactive monitoring, disaster recovery and business continuity, hosted email solutions, hybrid IP phone solutions, IT assessments and consulting, IT help desk and outsourcing services, meraki, mobility solutions, network solutions services, onsite SMB IT support, ubiquiti, web hosting, wireless networking and web, application and database development.
A business’ service starts with a free technology assessment, which includes an inspection, cataloguing and analysis of the current technology environment, an examination of the security systems in place, the creation of a disaster recovery plan and suggestions on how to better utilize the current technology environment. Nerds On Site is also able to find ways to reduce a company’s technology costs by 25 to 50 percent through this assessment.
Nerds On Site offers a complete residential service package that includes full hardware, software and consulting offerings, for which they charge by solution, and not by the hour. The company utilizes their eNerds collective knowledge to find various solutions for common computer problems such as virus removal, data and photo backups, hardware setup, software management and keeping your devices and personal information safe. The eNerd will come to an individual’s house to assess and then implement the solution needed to get that individual back online.
Partnerships and Clients
Nerds On Site has formed partnerships with big names in the IT and technology industry to ensure that they are capable of providing the best IT solutions and experiences for their customers. Some of these companies include Google, Microsoft, Dell, Amazon and Cisco, among many others.
While Nerds On Site primarily serves SMEs, they have also been able to capture the attention of big corporations as well. Nerds On Site proudly helps Canadian Tire with their IT needs.
Nerds On Site is partnered with industry leaders to ensure that their Nerds are qualified to handle issues on any user interface or technology. The company also became Apple mobility partner (NASDAQ:AAPL) and will be working with other Apple Mobility partners to help small and medium sized businesses increase productivity, efficiency, and ease of collaboration using iPhone and iPad .
Charlie Regan — CEO and Director
Charlie Regan is an experienced entrepreneur, business coach and speaker. He studied Systems Design Engineering at the University of Waterloo and Business and Commerce at MacMaster University.
John Harbarenko — Co-founder and Director
John Harbarenko co-founded Nerds on Site and was responsible for overseeing a variety of aspects of the company’s operations and development, including the training of employees, client development and marketing. He received a degree in business information systems in 1994 from Fanshawe College in London, Ontario.
David Redekop — Co-founder and COO
David Redekop co-founded Nerds on Site and was responsible for overseeing various aspects of the company’s operations and development, including IT infrastructure and operations management, employee training, client management and dealt with contractors. He studied computer and actuarial science at the University of Waterloo.
Rakesh Malhotra — CFO
Rakesh Malhotra is an experienced CFO, accountant and finance professional who has acted as CFO for various companies listed on the TSXV and OCT. He has his CPA designation in both Canada and the US and is proficient in IFRS and GAAP.
Kevin Ernst — Director
Kevin Ernst has 28 years of extensive capital market and banking experience in the public and private financial sectors. He has held senior level positions at Merrill Lynch, UBS, Amex and the NYSE. He has a MBA in finance from Rutgers University.
Eugene Konaryev — Director
Eugene Konaryev is an experienced business developer and private entrepreneur that has executed numerous small and medium business transactions. He a partner and co-founder of Go Capital, a Toronto-based private equity firm. He also has a B.Sc. in computer science from the University of Toronto.
Nicole Holden — Director
Nicole Holden has extensive accounting and auditing experience in the US. She is the Chairman of the Audit Committee, Technical Director of the Professional Practice at the Center for Audit Quality and is the Assistant Chief Auditor for the Office of the Chief Auditor at PCAOB. She has a MS degree in accounting and information systems from the Kogod School of Business at American University.
Jack Smit — Director
Jack Smit was the President and CEO of Libro Financial Group for 23 years. He is a Certified General Accountant and graduated from Queens University’s Executives Program.
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