Getting personnel: Moresource growing at age 15

Kat Cunningham sizes up her surroundings: the shelves overflowing with MU Tigers memorabilia, the community service awards, the desk completely covered with files and paperwork. She seems almost in awe of her own accomplishment:  Moresource, which celebrated its 15th anniversary on Friday.

“Some weekends when I walk around here, I say ‘Wow. This is really mine. We really did build this,'” Cunningham said with a proud smile.

Cunningham, 49, is a self-described Army brat who put down roots in Boone County, a former trucking company receptionist who was promoted to personnel director before deciding to launch her own human resources service business in 1994. In 2004, she nearly lost the company, but she rebuilt it and is watching it grow, even during the recession.

During this down economy, Cunningham still doesn’t have much down time, working 50 to 60 hours a week. She lost some of her clients due to downsizings and closings, but observers of the business say her persona, community involvement and networking skills continued to attract more business.

“I was a little worried, but then the flood gate opened up and more clients started signing up,” Cunningham said.

Within the past month, Moresource has added 10 clients, including Families and Communities Together, Sweet Tooth Bakery, Tiger Turf, Jakes, United Way, Neighborhood Direct, Just What the Dr. Ordered and Real World Financial.

Cunningham predicts that this year’s annual revenue might reach $60 million. The company finished 2008 with nearly $50 million, up from about $45 million in 2007.

In May, Cunningham received an Entrepreneurial Excellence Award certification and was nominated for CBT Entrepreneur of the Year.

“Her qualities of charm and charisma are only outshined by her ability to network and serve her local community,” James Gann, a Small Business and Technology Development Center counselor, wrote in his nomination letter. “These traits, along with her innate business sense and capacity for attention to customer service make her a well-deserving candidate.”

Cunningham said the award application process was “an enlightening experience. You learn a lot about yourself and your company because you examine areas of your business that you haven’t looked at in a while.”

Moresource serves more than 200 companies, about 3,000 professionals and files withholding taxes in 12 states. The company provides services in human resources, employee benefits, payroll, employee training, bookkeeping and insurance (homeowners, life, auto and business).
Much of the new business comes from referrals.

“Networking, getting involved and giving back to the community are really important,” Cunningham said. “You need to make people aware of you and what you can do for them.”

Cunningham grew up in Germany while her father served in the Vietnam War. When he died, she was 11. Her mother decided to settle down in Fulton, where her grandmother lived.

Cunningham graduated in 1982 from (what’s now) Missouri State University in Springfield with a bachelor’s degree in recreation and leisure studies. “I wanted to be Julie on ‘The Love Boat,’ but that job was taken,” she said. “So, I became a receptionist at a trucking company.”

As a receptionist, she slowly stepped into the area of human resources and administrative services. Interest in her work soon became passion, and then she became the personnel director.

Cunningham’s potential did not go unnoticed, especially by her boss who wanted to discuss her personality test scores.

“He ended up calling me back to his office and said that I would make a better president of his company than he would,” she said. “When he said that, it pushed me into the direction that I could be anything I want to be.”

At that defining moment, she realized it was time to start her own business on her own – without a partner.

“I don’t think I could take direction from anyone else,” she said with a laugh.

She did get some help, though. MU business experts helped her apply for a loan and design a business plan. She established Moresource in 1994 with five employees.

The company, which originally played off the state abbreviation (MoResource), was structured after the Professional Employer Organization model, a co-employment agreement between Cunningham and her clients.

“(Clients) were the employer that hired, fired, directed and controlled while we were the employer recognized by the Internal Revenue Service and did the wages, payroll and payroll taxes,” she said.

At the time, the company offered its services, including its worker’s compensation policy, only as a package deal. The clients either chose to take all of the services or nothing at all.

Between 2004 and 2005, the insurance market hardened because of catastrophic losses, which included the World Trade Center destruction and natural disasters such as Hurricane Andrew. When people began to rebuild, they started collecting on their insurance policies. These claims caused huge losses for the insurance carriers which ultimately resulted in hardships for Cunningham.

“To renew my workman’s compensation policy, I had to come up with a half of million dollars collateral,” she said. “This was the first time I had been asked to come up with this kind of cash. I didn’t have $500,000, so we lost our ability to offer a worker’s compensation policy.”

Without this worker’s compensation policy, over half of the clients left.

Some clients, such as Stewart Scott, owner of Cevet Tree Services, decided to stick with Moresource and find a new company to provide workers comp. Scott has been using Moresource for about 12 years for its services in payroll, human resources and benefits administration.

“We’ve been with them this whole entire time,” Scott said. “It’s easy. They are friendly and help us out with any problems we have. If you have no issues and no problems, why go anywhere else?”

After the loss of the work comp policy, Cunningham was forced to downsize the company from 24 to seven employees, who were asked to share in cost-saving measures, including 10 percent pay cuts. Consultants from a local accounting firm advised her to close the company.

Instead of taking their advice, she started to research ways to reinvent her business and build back her company. She found the answer while attending a conference in New York City: Human Resource Outsourcing.

The HRO model lets a human resource company offer the same administrative services as before, but it does not make them a packaged deal. Clients can choose the services they want – just one, some of them or all of them.

“Pick what you want. Take what you need,” Cunningham said.

A staff of 14 women – 13 in Columbia and one in St. Louis – manages the workload. They’ve all been cross-trained, so if someone takes the day off, another person can take over.

“When we say we don’t call in sick, go on vacation, or take personal days, we are serious,” Cunningham said.

Each employee also answers to a supervisor. This level of management was established, so “the world does not revolve around Kat Cunningham,” she said.
“If you want your company to grow, that’s how it has to be; otherwise, it could bottleneck at the owner. I don’t want our business to be bottlenecked with me,” she said.

But Cunningham said the real secret to her business success is her primary support network-her husband and two sons.

“If it wasn’t for them, I wouldn’t be here,” she said. “They’ve watched me laugh and cry. They’ve helped me get through the good and the tough times. ”

Her husband of 23 years, Kent, backed her from the beginning, she said: “He has always been there for me and understood my dream of one day being my own boss.”

Moresource Inc.
401 Vandiver Dr.
Columbia, Missouri 65202
573-443-1234
http://moresource-inc.com/