By Cathy Sorenson, Loan Officer for The Loan Fund
When the Atrisco Heritage Foundation lost a significant annual contribution to its Legacy Fund in the 2008 recession, CEO Peter Sanchez was thankful his foundation had an existing relationship with the state’s oldest and largest nonprofit community lending organization.
“We had started to forge a business relationship with The Loan Fund,” he said, “so they got a chance to know us not in distress but in a building mode.”
That connection was critical when SunCal, a major real-estate developer, defaulted on the loan it secured with Barclays bank to purchase 57,000 acres of land from Atrisco’s earlier incarnation, Continue reading
Jennifer Sinsabaugh, Operations Director, NM MEP
In today’s ultracompetitive environment, businesses need to get their product or service to customers faster than ever. Shorter delivery times aren’t just good for customer satisfaction; the longer it takes to get a product from the order desk to the customer, the longer the business waits to be paid. Meanwhile, the company has its own bills to pay, including loan interest and materials invoices. The briefer an order is in production, the better. Knowing this, savvy companies implement lean manufacturing techniques to periodically evaluate their product flow and processes – and adjust as necessary for maximum efficiency.
J. Roy Miller, State Director, NMSBDC Network
As recently as a few years ago, when a customer had a bad experience and moved his business elsewhere, he shared his story with neighbors or business associates. These days, online social networks provide forums that can spread both facts and rumors to many more people at cyber speeds.
Bad customer service today can cost a business not just one customer but potentially hundreds or thousands more who decide not to try a product or service based on one customer’s negative experience. That’s why it’s more important now than ever to retain existing customers and keep those customers happy so negative comments never have the opportunity to spread.
James Hernandez, Vice President at First Community Bank in Santa Fe
When the economy sours, many businesses cut back on services they consider nonessential. The most shortsighted companies lump customer service into the “expendable” category.
What these businesses don’t understand is that consumers tend to remember the people and businesses that help them through tough times. It might be a business that provides a vital, one-time service or it might be a store the customer visits often, such as a grocery or hardware store.
The store that employs enough people to prevent backups in the checkout lines and to answer customers’ questions is the store most likely to survive a recession because it’s demonstrating a respect for its customers’ time and energy at a time when many stores are trying to limp along with skeleton crews.
In an economy struggling to right itself, just about any service business can distinguish itself from the competition by ramping up the customer service.
What constitutes service
In a global marketplace where local merchants are competing with Internet-based businesses around the world, outdoing the competition means offering customers good value for their limited dollars. That value includes the service and support the customer gets before, during and after the sale.
David Valdez, Vice President Small Business Lending, Century Bank
Despite signs that the recession is easing in some quarters, many small businesses continue to struggle to pay off business-related debt. America’s Recovery Capital Loan Program — better known as the ARC loan program — can provide up to $35,000 in short-term relief to help qualified small businesses return to profitability.
The program was authorized by the American Recovery and Reinvestment Act, which became law in February. ARC loans are being offered by various Small Business Administration lenders until September 30, 2010, or as long as the money lasts.
How to qualify
To qualify for an ARC loan, the business must have been in operation for at least two years and have financial statements or tax returns showing profitability or a positive cash flow in at least one of the past two years. The business must be able to project sufficient cash flow to meet its business-related debts in the future.
ARC loans aim to help small-business people pay down or refinance existing business loans so they can redirect cash flow from making loan payments to investing in their businesses. The borrower must not be more than 60 days past due on any loan being paid with ARC funds. The business owner also must prove immediate financial hardship in the form of declining sales, frozen credit or difficulty meeting payroll or payments on rent or loans.
Leslie Hoffman, Vice President of Lending and Client Service, ACCION New Mexico
Those who spend their careers watching the economy contract and expand agree on at least one thing: a person’s credit score is important in any economic cycle. Before extending credit to an individual or business, bankers want to review the borrower’s credit report and know their credit score.
Financial institutions verify credit through reports that reflects how an individual has handled his debts. Three national companies – Equifax, Experian and Transunion – track credit and produce reports. All include similar information.
Report elements include personal information such as Social Security number and employment record, borrowing history, a record of creditors who have reviewed the credit history, and other public information such as foreclosures or bankruptcies.
Credit scores generally range from 350 to 850 points, with most people scoring in the 600 to 700 range. A high score indicates good credit. Lenders review credit scores to determine loan amounts and interest rates that will be charged, and a higher score usually yields more favorable loan terms.
Nina Anthony, SEO Consultant for WESST
As companies search for the most efficient ways to spend limited marketing resources in a weak economy, more and more are spending those dollars online. According to the Interactive Advertising Bureau, the third quarter of 2008 showed the second-highest growth period for Internet marketing revenues in the bureau’s history. IAB predicts total online ad spending of nearly $26 billion this year, and ZenithOptimedia likewise predicts that global Internet ad spending will surge by 28 percent in 2009.
Smart companies are turning to inbound marketing strategies: the kind where customers find the companies that are visible where they orbit, in cyberspace.
Why Internet marketing?
The Internet trumps traditional advertising in several ways. It’s cheaper, more measurable, more flexible and better targets potential customers, especially those between the ages of 18 and 34.
The Internet lets businesses promote their brands and products without spending a fortune. It goes where those who are actively seeking goods or services can find detailed descriptions about a company and its offerings and can contact the seller when they’re ready to buy.
Julianna Barbee, Director, NMSBDC at Northern NM College
While economic wizards try to rescue America from the worst economic downturn in 70 years, New Mexico is doing what it can to bolster small businesses, because the state’s recovery depends on it. The most recent data from the U.S. Small Business Administration’s Office of Advocacy show that New Mexico’s 36,430 small businesses employ 96.2 percent of the state’s work force and created 54.3 percent of new jobs between 2004 and 2005.
Many New Mexico businesses are suffering the effects of the high-risk business practices — easy credit and poor planning and oversight — that characterized much of the past few decades in our nation. Some have been destroyed, others merely wounded, by the contracting economy.
Whatever the future holds, businesses must end the reckless practices that got us in this mess. The expectations of easy money and instant gratification must yield to more sustainable and realistic attitudes and practices, including the following:
Return to common sense: Our ancestors made a living with the resources at hand. They worked hard, wasted nothing (including time) and were loath to buy nonessential goods on credit. Such old-fashioned virtues are helping families survive on reduced incomes.
Roberta Scott, Director, NMSBDC at UNM-Valencia
Raising morale while cutting costs during an economic downturn is one of the toughest jobs a manager can face. To succeed, managers must be honest with employees about the need to reduce costs, including those associated with wages and benefits.
Accurate information is imperative, and managers can pre-empt the toxic effects of speculation and rumors by being open and truthful about the company’s performance. Well-informed workers can focus on the company’s business rather than being distracted by anxiety about their future and the company’s.
Julianna Barbee, NMSBDC at Northern NM College
Attracting customers is a challenge for any business at any time, but during a recession, place-based businesses should pay extra attention to the outdoor signs they use to draw customers in.
An outdoor sign is akin to a silent salesperson; it’s how a business communicates its presence and its image to customers and the surrounding community. Research has shown that on-premise signs drum up between 20 and 50 percent of business traffic, regardless of whether the business is a family-based enterprise, a familiar franchise or a large corporation. That means a large part of a business’s success or failure can be attributed to a sign’s ability — or inability — to communicate with potential customers.
Professional-looking signage benefits an entire neighborhood’s economy. Having no signs or signs that are run-down or covered with graffiti, conversely, reflects poorly on a business and its surroundings. Businesses should consider the following points when planning outdoor signs:
Follow the rules: The size and placement of outdoor signs must comply with local ordinances. If the sign will be illuminated at night, the business must obey lighting regulations.