MoneyWeb Interview with Keith Levenstein: MD, EconoServ

By: Alec Hogg

MONEYWEB: Keith Levenstein, MD of EconoServ joins us now. I remember you phoned me a while ago, you sent me a package called Econoaccounting. I played around with it, it really is a useful little accounting package. Just from your own perspective – and this is focusing on small businesses – what made you decide to go into this line? It’s an accounting package that downloads bank statements from the Internet and makes it a bit easier to keep your books.

KEITH LEVENSTEIN: That’s the point, Alec. We saw a gap in the market, basically most the other accounting packages don’t allow you to easily download your financial bank statements directly from the internet. Our system allows you not only to download the bank statements, but import them directly into your accounting system, which means that it’s going to save the users huge amounts of time in data capture.

MONEYWEB: But your system and your company, how big is it, how many of you are working on it?

KEITH LEVENSTEIN: We are a very small company. I am the sole developer. We’ve got a three-man business.

MONEYWEB: And that’s exactly why we’ve invited you to come onto this programme and talk to us here, because you are, as a three-man business, taking on some of the giants?

KEITH LEVENSTEIN: Yes. It’s pretty difficult. We don’t see that we are competing directly against some of the bigger companies. Our market is the SME market. The users are going to be those people who don’t use accounting packages, or have accounting systems that aren’t working. And by far the majority of small businesses don’t have accurate and up-to-date accounts.

MONEYWEB: Would you for instance be able to oust a Pascal or Brilliant Accounting or Quicken, and those accounting packages which are overseas-developed for the most part, and then perhaps not as au fait with South African internet banking?

KEITH LEVENSTEIN: Pretty much so. We have taken some users from those packages. Because we are South African based, we work with South African banks. Every single bank Internet site does work with our particular package, and the various methods of downloading bank statements will work with our system. And if we have to make a change, as we did recently – some of the banks changed their websites – we updated our own package within literally hours, and put it on the internet for a free update.

MONEYWEB: From a broader perspective, as a small business in South Africa, are you finding that it’s a tough road to walk, or is this the land really of opportunity?

KEITH LEVENSTEIN: I do believe that this is the land of opportunity. I’ve a lot of positive sentiment about this country but it is very, very tough for us. So we are struggling to get ourselves into the market. It’s very tough to educate the users – that it is essential for them to keep their accounts up to date. So we find so many small businesses are unable to produce an income statement or a balance sheet. You cannot go to your bank manager unless you can give him a balance sheet and management accounts. So that’s what I’m really after, ensuring that the small businesses, who are 95% of the businesses in this country, are the future of employment in this country. And unless we can ensure that those businesses are going to succeed, we are not going to have the employment that the government talks about, that we all talk about.

MONEYWEB: So the way you’ve structured it is to make it pretty easy. What does your package cost?

KEITH LEVENSTEIN: It costs R2900.

MONEYWEB: So for R2900 you install the package, then you go to your internet banking, which most small businesses would surely be banking through the internet now, and press a few buttons, and back it comes and, by just a little bit of refinement, have that income statement that your bank manager needs?

KEITH LEVENSTEIN: Pretty much so. We’ve done exercises where we would take, for example, a company’s accounts for the past six months, download their bank statements, and some banks allow you to download six months or more worth of bank statements for just an income statement and balance sheet, in literally an hour or two.

MONEYWEB: And what about the future for your company?

KEITH LEVENSTEIN: We see ourselves as a software development company, producing niche market and specialised software. Econoaccounting is our flagship product, it’s the one that I’ve spent most of my life on over the past four years. I would like to see ourselves produce other packages, other add-ons to our Econoaccounting.

MONEYWEB: What did you do before the last four years?

KEITH LEVENSTEIN: I’ve been in the IT business for the past 21 years.

MONEYWEB: Working for other people?

KEITH LEVENSTEIN: I’ve had my own business most of the time. We sold our last business in 1999 to one of the last conglomerates.

MONEYWEB: So the idea then, if you are an entrepreneur, would you believe that you are “born”, or can you be made?

KEITH LEVENSTEIN: I think I’m maybe more an inventor than an entrepreneur. But I think that we can be made. I have a lot of passion for assisting people in small businesses, and I think we all have the potential to become our own entrepreneur.

MONEYWEB: And Keith, those people in small businesses that you are interacting with, are they finding the economy easier, in the same way that we hear on this programme so often from the big corporations?

KEITH LEVENSTEIN: No, on the contrary, most of the people we get to see are struggling. They are finding it very hard to make living. Maybe just the people I get to see, but “tough out there” is the term that I seem to hear a lot and I get to see a lot of very, very small businesses, home businesses, the business is in the garage.

MONEYWEB: There’s a bit of a disconnect there – that the big corporations are just pumping cash at the moment, and the little guys, where the employment has to be created, are not doing as well?

KEITH LEVENSTEIN: I feel very strongly that the SMEs, the small businesses, are not achieving what they need to achieve. Maybe we aren’t getting sufficient help, or maybe we aren’t good enough to do the job ourselves. That’s maybe where I feel I can come in. But I am an SME as well, and I feel the same strain as the other guys are feeling.

MONEYWEB: Well, part of the whole programme of looking at the SME scene is to help some of the smaller businesses in our country get a bit of a foot up – and Keith Levenstein is MD of EconoServ, which produces EconoAccounting. I played around with it, the package works, it really does. And certainly, if you are a small operation, it’s a pretty good investment at R2900.