There are certain businesses where doing your job well means making yourself surplus to requirements and thus cutting off your income stream. This was the paradox faced by Adam Coleman, chief executive of Interventions, the HR consultancy he set up in 2004.

“If we engage in professional services, a company should be our client for no more than two years,” he says. “Our onus is to look at existing processes, make them simpler, help roll them out and provide the capability for companies to do it themselves.”

Coleman found that retaining clients for only a limited period meant constant pressure to win new business, a necessity made more acute in an organisation with high operating costs. Consultants are expensive and need to be billed out to enough clients, enough of the time, to cover their salaries.

“It’s easy for a consultant to work on their own and make money,” he says. “But when you add overheads and start employing people, it’s difficult to maintain growth.”

By 2007, Coleman knew his business model needed to change. “I realised it was better to build lots of clients spending little amounts rather than one client spending a big amount. It was evident that there was a need to change the business from consultancy to product.”

Recurring revenue streams
Product, in this case, meant HR tools designed for clients to use – and, crucially, pay for – on an ongoing basis.

“The idea of having recurring revenue streams is important; it gives you more confidence in order to expand. With consultancy, your revenue can fall off a cliff. It’s more sustainable with a product.”

Interventions lacked internal software development expertise and so Coleman partnered external companies to secure two products: ExecPass, an online professional networking system that was developed exclusively for Interventions; and HR Locker, a cloud-based HR system for which Interventions became the sole reseller.

Around 65 per cent of Interventions’ clients now come into the business through product rather than professional services, which Coleman says helps him to look long term. “The lifecycle of our customers is about three to five years. Product becomes the stickiness with the client and it gives us the opportunity to talk about other stuff,” he says.

As the success of HR Locker has grown, with more companies using the software to manage employees’ records, timesheets and time off, so has its partnership with Interventions. In 2011, HR Locker won emerging company of the year from the Cork Chamber of Commerce and, in 2012, Interventions assumed responsibility for sales, operations and development support for HR Locker.

Having a different method of entry into the business also means the pressure is off for Coleman to work personally on every account.

“I was out getting contracts and, if I won a contract, the client would expect me to deliver on it. It’s difficult to be MD, business development and senior consultant.

“There had to be an easier way to bring people into the business at a lower level, pay salaries and grow the business.”

With 40 per cent of turnover currently coming from product, Coleman says there is still room to grow. “In the next three to four years we’re focusing on licensed product until it’s about 80 per cent of turnover,” he says. “After that licenced income is there, it’s time to start looking at professional services. Hopefully it will balance out to about 50 per cent revenue.”

There are also plans to grow the business in overseas markets, although Coleman says the lessons he learned early on means he is conscious of keeping overheads low.

Export market
He credits Enterprise Ireland's international selling programme with giving him the confidence to tackle the export market. "It helped me to take the company and look at it from all angles. I wouldn't have had any idea of how to appoint a distributor in the overseas market. It took me away from being an HR professional to whetting my interest in international sales."

With more certainty in the revenue stream, Coleman is working on growing the Lahinch-based team from eight people to 13 by next March. Naturally, all the corresponding HR records are managed on HR Locker. “We do eat our own dog food.”