PaperWise Inc., 2005 Small Business of the Year Finalist

PaperWise, a digital document imaging company owned by Dan and Shelley Langhofer, recorded nearly $1 million in first-quarter revenues, triple the results in first-quarter 2004. Officials project a robust $5.5 million for the year, which would more than double 2004 revenues.

The Langhofers’ company is building revenues selling software that 30 Springfield employees write, install, support and maintain. The software manages business documents digitally to improve office efficiencies and reduce paper storage.

“There’s no longer frustration in the dead of winter going out to a trailer looking for something stored on paper. Instead, they’re a keystroke away and everything is instantly in front of them,” Dan Langhofer said.

The company’s client base of nearly 200 is rooted in the transportation industry, but is growing in other fields, primarily insurance.

“It’s across all industries. Everybody has issues with efficiency,” Chief Financial Officer Shelley Langhofer said.

The company’s client roster extends beyond North America’s borders, with customers in Africa, India and the United Kingdom, Dan Langhofer said.

Locally, transportation companies Prime, Transland and Wil-Trans are clients, while other users are Lowther Johnson Attorneys-at-Law, Employee Benefit Design, Commer-cial Insurance Underwriters and Herschend Family Entertainment.

National names include Tyson, Perdue Farms, Thomson Learning, Texas Depart-ment of Health, Central Michigan University, Merle Norman Cosmetics and Central Freight Lines, the largest user. PaperWise stores 75 million documents for Central Freight and adds 100,000 documents daily.

All data is housed in SpringNet, City Utilities’ ultra secure data center at Springfield Underground.

Setting a nearly $6 million annual revenue goal did not happen overnight for the Langhofers. It’s been a work in progress since the pair acquired PaperWise from publicly traded Bell & Howell Co. in May 2000.

Dan Langhofer’s road to ownership began in 1992 as a Prime programmer working on PaperWise software. In 1996, Bell & Howell recruited him and a year later Langhofer became general manager of PaperWise, then based in Utah.

When company ownership began to focus more on shareholder value and less on customers in the late 1990s, Langhofer left PaperWise to work as an independent consultant. PaperWise became his client, and he was asked to perform due diligence for a pending sale. When Langhofer learned that sale was to his main competitor, “Shelley and I put a package together and we bought it. It was quick.”

The Langhofers opted not to sell the product because its code was very old, Shelley Langhofer said.

So for two years, the PaperWise staff, led by Chief Scientist Markus Pope, rewrote the software. PaperWise released a subscription model in late 2002, which charged customers a monthly fee rather than a sizable up-front purchase price.

Then the management group asked, “What do we want to be when we grow up?” Shelley Langhofer said. “Do we want to stay at that level, which everybody was very comfortable with, or take it to the next level, which would require a pretty big step?”

They decided to take a leap.

In December, the Langhofers moved PaperWise from its 5,000-square-foot Woodhurst Office Park office to 20,000 square feet at 3171 E. Sunshine.

“We’re at 300 percent growth, which is painful. Fun, but painful. It’s a whole different set of challenges,” Dan Langhofer said.