September 2, 2024 • 10 mins
On this episode of Our American Stories, Tom Golisano and his team serve over 680,000 businesses with payroll, HR, and benefits support.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:10):
And we continue with our American stories and up next
an American Dreamers story. And the series is brought to
us by our great friends at Job Creators Network, who
work hard every day to help small businesses become big
ones by fighting for policies that make it easier to
do just that. Today, Alex Cortez brings us a unique
(00:31):
American voice.
Speaker 2 (00:33):
Okay.
Speaker 3 (00:34):
I was born at an early age in Rochester, New York.
Speaker 4 (00:39):
We're listening to Tom Gallisano.
Speaker 3 (00:43):
My father was from the Old Country Sicily. My mother
was born in the United States, had an older sister
and older brother. When I was in high school, my
mom and dad had their financial difficulties.
Speaker 2 (00:56):
They had to go through bankruptcy.
Speaker 3 (00:58):
My father, after a World War two, went into a
business converting coal furnaces to gas and oil furnaces, and
my brother, older brother Charlie, also worked for my father.
Then he got called off to the Korean War and unfortunately.
Speaker 2 (01:13):
He didn't come back. He was there three days.
Speaker 3 (01:17):
Was put up on the front lines and he was
with a company of men that was attacked by a
battalion of Chinese and didn't come back. So after that event,
my father's business kind of went to Hell. He went
to work for a macaroni company that was based in
Rochester as a salesperson, but as a salesperson also drove
(01:38):
a truck and delivered to these small grocery stores. One
day I went out with him, I think I was
a junior senior in high school, and before he went
out at his route, we stopped in at the corporate
office and his boss came out in front of me
and several other people completely laid out my father verbally,
(02:04):
very nastily. And I observed that and it made a
lasting impression on me. One of the things that came
out of the course, I said, Gee, if I ever
get in the management position.
Speaker 2 (02:14):
I'll never treat people like that.
Speaker 3 (02:15):
It was the worst thing, and of course the fact
that he did it in front of other people.
Speaker 2 (02:21):
I also kind of made.
Speaker 3 (02:22):
The decision that I think I wanted to have my
own business, freedom, control my destiny, maybe unlimited earnings.
Speaker 2 (02:32):
That type of thing were the things that interested me.
Speaker 4 (02:35):
Tom put himself through college, worked several jobs, and at
nineteen sixty eight landed at EAS Electronic accounting service, which
processed peril for larger companies in an era before the Internet.
Speaker 3 (02:48):
They did several things different. One, they didn't take phone calls.
You had to fill out forms all the time, and
then you had to get them to deliver to the
payroll company or they picked them up. And they've had
very high minut of them charges. So I'm thinking about
that as I'm driving down Main Street anywhere most businesses
had less than one hundred employees. Went to the library
(03:10):
and found out ninety eight percent have less than one
hundred employees, ninety five percent with less than fifty employees.
Speaker 2 (03:18):
Also, EAS was.
Speaker 3 (03:20):
Not doing the payroll tax returns, So I said, Diaz,
there's whole untapped market out there that somebody should go after.
So I started thinking about the phone call, the tax
returns and the lower pricing. Could we make money? So
I went to them one day and I said to
(03:40):
the manager team and I said, look it, let's form
a division. I'd love to run it, and we'll go
after the lower end of the market. I think we
can do really well with it. We don't think CPAs
will like us doing payroll tax returns, I said, I
think you're absolutely the wrong. They will appreciate us doing
the returns because payroll tax returns are very timely they're tedious,
(04:02):
they can't build out their time at the value they
think it's worth, and.
Speaker 2 (04:05):
They don't like doing them.
Speaker 3 (04:07):
So my thesis was that they would be a very
strong referral point.
Speaker 2 (04:14):
They turned me down and said, now it's not a
good idea.
Speaker 3 (04:16):
So I sat out of it for a couple of months,
went in again, same reaction. So now I'm a little determined.
I went into ES with my resignation and said, I'm
going to start a company called actually it's called paymaster. First,
I like the term paymaster back fifty years ago because
(04:38):
everybody generally knew what it meant. The armed services always
got paid by the people in the services called the paymasters.
Today nobody knows the term.
Speaker 4 (04:49):
Eventually, they landed on a name that you might have
heard of, hate checks.
Speaker 3 (04:54):
Not to pick on our major competitor, ADP, which nobody
knows what that means, but.
Speaker 2 (04:59):
At least everybody understands the word paychecks.
Speaker 3 (05:02):
If you were a five person company, the minimum charge
for you, probably in nineteen seventy would have been twenty.
Speaker 2 (05:10):
Eight dollars a p period.
Speaker 3 (05:12):
That's a lot nineteen seventy dollars, and we came in
at about a dollar apiece five to seven dollars. I
think it was we were able to really cut the price. Plus,
all our competitors are going after the one hundred person payrolls.
They know who all the hundred person plus companies are
in your community, so you're always fighting those guys. Nobody
(05:34):
was interested in at least the fifty below. I decided
to start. I had three thousand dollars a few credit cards.
I said, now I'm going to use that three thousand dollars.
Speaker 2 (05:46):
I'm going to send out a bunch of direct mail
in November.
Speaker 3 (05:49):
Let's see if I can sign up sixty clients, which
is what I needed to sort of get by to
start processing.
Speaker 2 (05:55):
The first of January. Well, I sent out the direct mail.
I sold six. So there I was with six clients.
Speaker 3 (06:03):
Needless to say, the credit cards got used, very much utilized.
In fact, they eventually got all taken away and there forget.
I took a bunch of employees out at dinner one
night at the stake stackade my handed to my American
Express card. He came back, is torn in half and
he said, sorry, they made me do this. I said, well,
(06:25):
I'll tell you about your client. We bill you every month.
How about if you take my bill and give me
credit got to your bill and he said okay, But
it was embarrassing in front of the employees.
Speaker 2 (06:37):
But anyway, we struggled through.
Speaker 3 (06:40):
Fortunately I had some friends and the banking business. They'd
helped me get consumer loans, which were really business loans,
but they called them consumer loans because they can't make
business loans.
Speaker 2 (06:48):
To a guy like me.
Speaker 3 (06:50):
And EAES was doing our processing the company I worked for,
and the reason they liked the deal and I liked
the deal.
Speaker 2 (06:57):
The reasons I liked it are obvious.
Speaker 3 (06:59):
The reasons they they were taking all of our little
clients and treating them like one large client, and it
was very profitable to them too, because they had no
customer contact and zero sales expense.
Speaker 2 (07:11):
One day we.
Speaker 3 (07:12):
Decided we were going to get into our own equipment,
so I hired a contract programmer. We were writing our
programs around the IBM system. Three got in a little
over our head with the cost of producing the software
and so forth, and I was really up against it.
Speaker 2 (07:27):
Again.
Speaker 3 (07:28):
Went over to my sister, who was a widow with
three kids. Her husband died at the age of forty one,
and I said Maria, I need some help. She says,
Tom's insurance money. Her husband's insurance money is in the bank.
It's forty one thousand. Take what you want, just like that.
Now here's a single woman with three kids and a handicap.
(07:49):
She lost her right hand when she was working in
the meat department of a supermarket, which she was fifteen
years old anyway, So she loaded the money we got
buy the program her and the kids. Now we're else
significant shareholders of paychecks. You can guess how that happened.
(08:11):
Now it's time to convert. He says, it's ready.
Speaker 2 (08:16):
It can't.
Speaker 3 (08:17):
We can't run it. It doesn't run. We can't produce
the checks of all things, the most important thing. So
we got IBM engineers and other outside programmers. Everybody's working
on a simple program. But they couldn't solve it right away.
So we were supposed to cut off with the eas
(08:37):
fourth of July weekend.
Speaker 2 (08:39):
It was there. It's now Wednesday.
Speaker 3 (08:42):
Fourth of July is Friday, so everybody's got to get
their payroll by Thursday, and we're really up against them.
So I called up aas and I said Ed and Jim,
they were two partners.
Speaker 2 (08:55):
I said, we need your help.
Speaker 3 (08:57):
He says, Okay, we'll send somebody over, and they were
going to run our perils instead of us converting to
our system.
Speaker 2 (09:04):
So we got through the night.
Speaker 3 (09:05):
I had about ten relatives and friends delivering checks on
Thursday morning, including one guy in a motorcycle. That was funny.
I don't know who brought him anyway, but we got
them all delivered. We didn't lose any clients, but it
was a hell of an experience.
Speaker 2 (09:21):
That whole week. I never went home.
Speaker 3 (09:23):
I slept right on the floor in my office, and
I lost about ten or twelve pounds. The pressure when
you can't deliver payroll checks, that's pressure, you know, cup
clients are calling, it's pressure. So we finally got it fixed,
and I came home and I just fell right on
the bed.
Speaker 2 (09:41):
I think it was three o'clock in the morning, and.
Speaker 3 (09:44):
I'm sure I just cried, so I know. I got
into conversation with Gloria says, I think we I don't
know if I want to keep going with this, and
she just said, one foot after another, just keep going
to have to your mother. That's great advice. Pretty simple,
with great advice. My original goal was three hundred clients
(10:07):
in Rochester, New York. It took me four years to
get there. Now paycheck sells two thousand a week. Now,
that's no representation of my sales ability. But obviously we
have over three thousand salespeople.
Speaker 1 (10:24):
Now and great work is always by Joey and Alex
on that piece. And you've been listening to Tom Gallasano's story.
He's the founder of Paychecks. Tom Gallasano's story a true
American dreamers story, as always brought to us by the
great folks at Job Creators Network. Here on our American
(10:47):
Stories
And we continue with our American stories and up next
an American Dreamers story. And the series is brought to
us by our great friends at Job Creators Network, who
work hard every day to help small businesses become big
ones by fighting for policies that make it easier to
do just that. Today, Alex Cortez brings us a unique
(00:31):
American voice.
Speaker 2 (00:33):
Okay.
Speaker 3 (00:34):
I was born at an early age in Rochester, New York.
Speaker 4 (00:39):
We're listening to Tom Gallisano.
Speaker 3 (00:43):
My father was from the Old Country Sicily. My mother
was born in the United States, had an older sister
and older brother. When I was in high school, my
mom and dad had their financial difficulties.
Speaker 2 (00:56):
They had to go through bankruptcy.
Speaker 3 (00:58):
My father, after a World War two, went into a
business converting coal furnaces to gas and oil furnaces, and
my brother, older brother Charlie, also worked for my father.
Then he got called off to the Korean War and unfortunately.
Speaker 2 (01:13):
He didn't come back. He was there three days.
Speaker 3 (01:17):
Was put up on the front lines and he was
with a company of men that was attacked by a
battalion of Chinese and didn't come back. So after that event,
my father's business kind of went to Hell. He went
to work for a macaroni company that was based in
Rochester as a salesperson, but as a salesperson also drove
(01:38):
a truck and delivered to these small grocery stores. One
day I went out with him, I think I was
a junior senior in high school, and before he went
out at his route, we stopped in at the corporate
office and his boss came out in front of me
and several other people completely laid out my father verbally,
(02:04):
very nastily. And I observed that and it made a
lasting impression on me. One of the things that came
out of the course, I said, Gee, if I ever
get in the management position.
Speaker 2 (02:14):
I'll never treat people like that.
Speaker 3 (02:15):
It was the worst thing, and of course the fact
that he did it in front of other people.
Speaker 2 (02:21):
I also kind of made.
Speaker 3 (02:22):
The decision that I think I wanted to have my
own business, freedom, control my destiny, maybe unlimited earnings.
Speaker 2 (02:32):
That type of thing were the things that interested me.
Speaker 4 (02:35):
Tom put himself through college, worked several jobs, and at
nineteen sixty eight landed at EAS Electronic accounting service, which
processed peril for larger companies in an era before the Internet.
Speaker 3 (02:48):
They did several things different. One, they didn't take phone calls.
You had to fill out forms all the time, and
then you had to get them to deliver to the
payroll company or they picked them up. And they've had
very high minut of them charges. So I'm thinking about
that as I'm driving down Main Street anywhere most businesses
had less than one hundred employees. Went to the library
(03:10):
and found out ninety eight percent have less than one
hundred employees, ninety five percent with less than fifty employees.
Speaker 2 (03:18):
Also, EAS was.
Speaker 3 (03:20):
Not doing the payroll tax returns, So I said, Diaz,
there's whole untapped market out there that somebody should go after.
So I started thinking about the phone call, the tax
returns and the lower pricing. Could we make money? So
I went to them one day and I said to
(03:40):
the manager team and I said, look it, let's form
a division. I'd love to run it, and we'll go
after the lower end of the market. I think we
can do really well with it. We don't think CPAs
will like us doing payroll tax returns, I said, I
think you're absolutely the wrong. They will appreciate us doing
the returns because payroll tax returns are very timely they're tedious,
(04:02):
they can't build out their time at the value they
think it's worth, and.
Speaker 2 (04:05):
They don't like doing them.
Speaker 3 (04:07):
So my thesis was that they would be a very
strong referral point.
Speaker 2 (04:14):
They turned me down and said, now it's not a
good idea.
Speaker 3 (04:16):
So I sat out of it for a couple of months,
went in again, same reaction. So now I'm a little determined.
I went into ES with my resignation and said, I'm
going to start a company called actually it's called paymaster. First,
I like the term paymaster back fifty years ago because
(04:38):
everybody generally knew what it meant. The armed services always
got paid by the people in the services called the paymasters.
Today nobody knows the term.
Speaker 4 (04:49):
Eventually, they landed on a name that you might have
heard of, hate checks.
Speaker 3 (04:54):
Not to pick on our major competitor, ADP, which nobody
knows what that means, but.
Speaker 2 (04:59):
At least everybody understands the word paychecks.
Speaker 3 (05:02):
If you were a five person company, the minimum charge
for you, probably in nineteen seventy would have been twenty.
Speaker 2 (05:10):
Eight dollars a p period.
Speaker 3 (05:12):
That's a lot nineteen seventy dollars, and we came in
at about a dollar apiece five to seven dollars. I
think it was we were able to really cut the price. Plus,
all our competitors are going after the one hundred person payrolls.
They know who all the hundred person plus companies are
in your community, so you're always fighting those guys. Nobody
(05:34):
was interested in at least the fifty below. I decided
to start. I had three thousand dollars a few credit cards.
I said, now I'm going to use that three thousand dollars.
Speaker 2 (05:46):
I'm going to send out a bunch of direct mail
in November.
Speaker 3 (05:49):
Let's see if I can sign up sixty clients, which
is what I needed to sort of get by to
start processing.
Speaker 2 (05:55):
The first of January. Well, I sent out the direct mail.
I sold six. So there I was with six clients.
Speaker 3 (06:03):
Needless to say, the credit cards got used, very much utilized.
In fact, they eventually got all taken away and there forget.
I took a bunch of employees out at dinner one
night at the stake stackade my handed to my American
Express card. He came back, is torn in half and
he said, sorry, they made me do this. I said, well,
(06:25):
I'll tell you about your client. We bill you every month.
How about if you take my bill and give me
credit got to your bill and he said okay, But
it was embarrassing in front of the employees.
Speaker 2 (06:37):
But anyway, we struggled through.
Speaker 3 (06:40):
Fortunately I had some friends and the banking business. They'd
helped me get consumer loans, which were really business loans,
but they called them consumer loans because they can't make
business loans.
Speaker 2 (06:48):
To a guy like me.
Speaker 3 (06:50):
And EAES was doing our processing the company I worked for,
and the reason they liked the deal and I liked
the deal.
Speaker 2 (06:57):
The reasons I liked it are obvious.
Speaker 3 (06:59):
The reasons they they were taking all of our little
clients and treating them like one large client, and it
was very profitable to them too, because they had no
customer contact and zero sales expense.
Speaker 2 (07:11):
One day we.
Speaker 3 (07:12):
Decided we were going to get into our own equipment,
so I hired a contract programmer. We were writing our
programs around the IBM system. Three got in a little
over our head with the cost of producing the software
and so forth, and I was really up against it.
Speaker 2 (07:27):
Again.
Speaker 3 (07:28):
Went over to my sister, who was a widow with
three kids. Her husband died at the age of forty one,
and I said Maria, I need some help. She says,
Tom's insurance money. Her husband's insurance money is in the bank.
It's forty one thousand. Take what you want, just like that.
Now here's a single woman with three kids and a handicap.
(07:49):
She lost her right hand when she was working in
the meat department of a supermarket, which she was fifteen
years old anyway, So she loaded the money we got
buy the program her and the kids. Now we're else
significant shareholders of paychecks. You can guess how that happened.
(08:11):
Now it's time to convert. He says, it's ready.
Speaker 2 (08:16):
It can't.
Speaker 3 (08:17):
We can't run it. It doesn't run. We can't produce
the checks of all things, the most important thing. So
we got IBM engineers and other outside programmers. Everybody's working
on a simple program. But they couldn't solve it right away.
So we were supposed to cut off with the eas
(08:37):
fourth of July weekend.
Speaker 2 (08:39):
It was there. It's now Wednesday.
Speaker 3 (08:42):
Fourth of July is Friday, so everybody's got to get
their payroll by Thursday, and we're really up against them.
So I called up aas and I said Ed and Jim,
they were two partners.
Speaker 2 (08:55):
I said, we need your help.
Speaker 3 (08:57):
He says, Okay, we'll send somebody over, and they were
going to run our perils instead of us converting to
our system.
Speaker 2 (09:04):
So we got through the night.
Speaker 3 (09:05):
I had about ten relatives and friends delivering checks on
Thursday morning, including one guy in a motorcycle. That was funny.
I don't know who brought him anyway, but we got
them all delivered. We didn't lose any clients, but it
was a hell of an experience.
Speaker 2 (09:21):
That whole week. I never went home.
Speaker 3 (09:23):
I slept right on the floor in my office, and
I lost about ten or twelve pounds. The pressure when
you can't deliver payroll checks, that's pressure, you know, cup
clients are calling, it's pressure. So we finally got it fixed,
and I came home and I just fell right on
the bed.
Speaker 2 (09:41):
I think it was three o'clock in the morning, and.
Speaker 3 (09:44):
I'm sure I just cried, so I know. I got
into conversation with Gloria says, I think we I don't
know if I want to keep going with this, and
she just said, one foot after another, just keep going
to have to your mother. That's great advice. Pretty simple,
with great advice. My original goal was three hundred clients
(10:07):
in Rochester, New York. It took me four years to
get there. Now paycheck sells two thousand a week. Now,
that's no representation of my sales ability. But obviously we
have over three thousand salespeople.
Speaker 1 (10:24):
Now and great work is always by Joey and Alex
on that piece. And you've been listening to Tom Gallasano's story.
He's the founder of Paychecks. Tom Gallasano's story a true
American dreamers story, as always brought to us by the
great folks at Job Creators Network. Here on our American
(10:47):
Stories
Host
Lee Habeeb
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