The Business
Document Warehouse is a four-employee company that opened in February 1997 in Hanover County, with customers in the greater Richmond area.

The Players
Preston Campbell had a software development company before starting the business with co-owner Elizabeth Connolly, who was a senior salesperson at Open Plan Systems in Richmond.

The Problem
Convincing businesses that stacking boxes in a spare room or paying for "ministorage" was a waste of money. Campbell and Connolly had to show clients that they offered cheaper and better-organized storage.

The response was abysmal. Companies had no interest is paying Document Warehouse to do what they felt they were getting for free. "A company that is tripping over boxes somewhere might not really understand how much it's costing them," Campbell says.

"The first six months were very slow. We spent most of the money we had borrowed," he says, and the warehouse was still nearly empty.

That lack of momentum hurt. One potential deal fell through after the representative of a large company came to see the warehouse. "We had 200 boxes in a warehouse that will hold 100,000," Campbell says. The client got cold feet and backed out.

The Solution
Campbell and Connolly sharpened their sales pitch. With a worksheet on a laptop computer, they walked potential customers through the calculations to show that money was wasted in paying secretaries to dig through boxes, in renting storage space and in lost income because of office space they could use for business, not boxes.

The team also stressed their database management approach to show clients they could not only save them money, but help them find files fast. "We set up a fake client that had 1,000 boxes, and we said, 'Let's pretend we're John Smith in accounting.' And we'd show them how you could drill down to the document you were looking for."

Companies with the right software can manage their own document database. Through the company's Web site, they can search for records in a variety of ways — such as who packed it, the date it was stored or by the contents — and have a delivery order printed at the warehouse.

Document Warehouse charges a fee for long-term storage and $1.50 to pull a box off the shelf. "The trick is that we know exactly where [a box] is. It takes us about 30 seconds to find it," Campbell says. Boxes and shelf locations are bar-coded.

The business started turning a profit last summer. Campbell predicts this year's revenues will be 400 percent above 1998. About a third of the company's customers are medical practices; for those clients, Document Warehouse can scan in patient records and e-mail them as requested.

Campbell and Connolly still do cold calls, but they have an easier time convincing clients of their product. They don't have to carry the laptop computer on sales calls anymore, and the warehouse is nearly full. "Now we beg people to come out and look." A second warehouse is planned in Henrico County with up to five times as much space.

If you have a case study in small-business problem solving, e-mail cleitch@va-business.com.