ISO a Go-Go

More companies comply with ISO than ever before-not necessarily because they want to. What will pleasing your clients cost your business?
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3 min read

This story appears in the December 2001 issue of Entrepreneur. Subscribe »

It was July 2000 when John Fris' biggest customer dropped the bomb: By the end of 2001, Holland, Michigan-based Fris Office Outfitters Inc. would have to comply with the international quality documentation standard, ISO 9000. Otherwise, the customer would start looking for another office products supplier.

"The first thing we thought was the terror of possibly losing them," says Fris, 46. But after researching the request, he decided his company would make efforts to become compliant with ISO 9000 but stop short of certification. "I had originally thought we'd just get certified and there would be nothing to it," Fris says. "But after asking around, I decided that the costs associated with certification aren't necessary at this point."

Fris isn't alone. Figures from the International Organization for Standardization (ISO), based in Geneva, show 408,631 companies worldwide were certified in December 2000. That's up 64,988 from 1999, but the annual growth rate was down more than 10 percent.

The main reason small firms consider ISO 9000 certification is because customers demand it. However, many decide it isn't worth the cost, paperwork, time and bureaucracy.

It costs a company with 26 to 29 employees $9,600 to register, says Edward Baclawski, president of Quality Systems Innovations Inc., an Effort, Pennsylvania, ISO consulting company. Becoming compliant can cost anywhere from $3,000 to more than $100,000, he says.

Time is another issue. In small firms, where the work of designing processes and drafting manuals and other documents generally falls to the CEO, it takes six to 18 months to become compliant. "I'm basically doing the bulk of it now," Fris says. "It would be nice to turn it over to somebody else."

Because the standard is designed for large companies, the paperwork is a reasonable fear. Says Baclawski, "Most of our potential clients are deathly afraid of the paperwork when they first make contact with us."

Decision Time

If ISO does make it onto your agenda, consider seeking compliance rather than full-fledged certification. Fris spent just $2,400 on his company's compliance effort. He hopes it will be enough to satisfy big customers without having to lay out several times that for a certificate.

However, many large automotive industry firms are in Fris' home market, and they require that all their suppliers be ISO certified. Fris may eventually go for a certificate so his company can sell to them. Be aware that if you decide not to seek certification, you may be in the same boat-shutting yourself out of some promising opportunities.

The good news is, even if you decide not to get ISO certification today, you can start the process anytime. And most customers will be satisfied in the short term with a promise to become compliant or certified at some future date.

Whatever you do about ISO, do it with your eyes open and all options on the table. "If you just want the certificate on the wall, chances are, you will create a paper system that doesn't have much to do with the way you actually run your business," says ISO's Roger Frost. "And, in that case, you are definitely heading for disappointment."

Austin, Texas, writer Mark Henricks has covered business and technology for leading publications since 1981.

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