Category Archives: Articles

Event/Competition Offers More Tools to Woman-Owned Businesses

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Catherine E. Zacher, NM State Coordinator, Count Me In For Womens Economic Independence

Catherine E. Zacher, NM State Coordinator, Count Me In For Women's Economic Independence

New Mexico is committed to the success of the tens of thousands of small businesses that drive the state’s economy, including the 62,710 owned by women, according to Lt. Gov. Diane Denish.

Lt. Governor Denish ran a successful research and fundraising business called The Target Group for 12 years before embarking on her political career. As lieutenant governor, she has championed initiatives to attract capital investment in New Mexico businesses, including an upcoming event/competition that aims to increase the percentage of woman-owned New Mexico businesses that generate $1 million or more in revenue.

The national organization Count Me In for Women’s Economic Independence meets Sept. 18th in Albuquerque, and its goal is to inspire female entrepreneurs to transform their fledgling businesses into million-dollar ventures.

According to the 2004 census, only 1,655 of the state’s woman-owned businesses reported annual revenue at or above $1 million. If that number grew to 6,800 by 2010, the state’s economy would grow by $6.8 billion and 46,000 more jobs would be created.
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Speeding Up Startups in Northern New Mexico

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Tatjana Rosev, Los Alamos National Laboratory Communications Office

Tatjana Rosev, Los Alamos National Laboratory Communications Office

The gap between the early stage funding needs of a startup company and the expectations of a typical venture-capital firm can prevent many innovations from growing beyond a concept into a commercial commodity. Because venture capitalists and angel investors tend to support products and services in intermediate, less-risky stages of development, numerous government and academic institutions have created “pre-seed” or gap funds to accelerate the creation of new companies and sustain developing companies through the research phase so their owners can focus on preparing their businesses for later-stage equity investments.

Los Alamos National Security, the public-private partnership that runs Los Alamos National Laboratory, sponsors the Northern New Mexico Connect Venture Acceleration Fund to support businesses with lab affiliations. While such funding is rarely enough to carry a company all the way to profitability, it bestows credibility, public exposure and access to venture firms and allows an entrepreneur to reach critical commercial milestones that demonstrate to a potential backer how the company plans to deliver an attractive return on an investment.
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Credit Crunch Isn’t Squeezing Equity Lenders

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Jarratt Applewhite, Founder, NM Community Capital

Jarratt Applewhite, Founder, NM Community Capital

Sandy Weill, the billionaire tycoon who built Citigroup into the largest financial institution on the planet, was asked by TV interviewer Charlie Rose how much his net worth had declined during the ongoing credit crunch. Weill said he was probably “25 percent to 30 percent” poorer than he had been six months earlier.

Before you weep for Weill, consider how much “poorer” he would be if he lived in New Mexico and had to do the kind of driving most of us do every day.

But even billionaires aren’t immune when the economy is ailing. Policy wonks and economists can argue endlessly about whether today’s economy meets the definition of a recession, but outside the Beltway it’s clear to most people that these are the roughest financial seas in decades. When our homes, the biggest assets most of us own, are losing value, it’s hard not to worry.

Eyes on the distant prize

Living in a “flat” world of interdependent nations and economies accentuates the turbulence of global markets. Rising oil prices, falling employment and a weak dollar make most investors nervous enough to seek new ways to protect their capital. Instability creates anxiety, which leads to tightened credit and more restrictive access to debt capital.

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Are You Ready to be Your Own Boss?

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J. Roy Miller, State Director, NMSBDC Network

J. Roy Miller, State Director, NMSBDC Network

It’s often said that more people start businesses during economic slumps than when the economy hums. This seems counterintuitive because when recession seizes the economy or seems to be stalking it, consumers limit purchases, businesses slow production and workers lose their jobs. But after an extensive job hunt, many laid-off workers see starting a business as a lot less risky than working for someone else.

The dream of running one’s own business has been part of American culture for centuries, championed in films, music and literature. Small business drives the U.S. economy, employing half of all private-sector workers, according to the latest statistics from the U.S. Small Business Administration. All of those businesses started with an individual who envisioned doing things independently.

How do you know if you have what it takes to be your own boss?  Consider the following questions, and be brutally honest with yourself when answering.

Do you have the right character to start a business? Are you a leader and self-starter? Can you handle stress? Are you and your family prepared for the likelihood that you — and they — might be working long hours?

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Free Money for Your Business? Yeah, Right!

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Sandra Taylor Sawyer, Director, NMSBDC at Clovis Community College

Sandra Taylor Sawyer, Director, NMSBDC at Clovis Community College

With lenders becoming less willing to extend lower-interest credit in an unpredictable economy, it’s understandable that entrepreneurs might be tempted to respond to one of the offers of “free money” that are ubiquitous on late-night or daytime television.

Many of us have seen the commercials starring the guy in the question-mark suit and polka-dot bow tie who has been a mainstay of non-prime time television for years. This guy has made a fortune writing numerous books that claim to direct readers to “free” government money to start businesses, build homes, pay bills and so on.

And he’s not the only one making such assertions. Plenty of lower-profile hustlers claim inside information about free money that’s available to help people start a business. Their advertisements include enticements to send money or attend a seminar to learn where and how to get these grants (for $399.95 to $900 or more!). Once hooked, the hapless prospector learns that the “inside” information originated on the Internet or in government records that outline technical-assistance programs for businesses or money for nonprofit organizations that provide health services, business advice or community activities for young people.

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Getting Help When Going Solo

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Kim T. Blueher, Director of Lending, WESST Corp.

Kim T. Blueher, Director of Lending, WESST Corp.

When you work for someone else, the job comes with a boss and co-workers. It might include people to supervise. You get a paycheck every two weeks. If you need something — envelopes, printer cartridges, gas for the company vehicle — you ask the person in charge of supplies. If you have trouble with a customer, you ask your boss for advice. You probably spend lots of time commiserating with co-workers about all sorts of things — the cranky receptionist, the dirty bathrooms, the broken air conditioner — or celebrating a major achievement or each other’s birthdays.

It’s an entirely different world when you’re self-employed. If you need envelopes, you have to go to the store and buy them. You have no one to commiserate with, and that paycheck might not be so steady.  And guess who gets to soothe the unhappy customer?

Working solo, it’s up to you to offer the best possible product or service. You alone are responsible for developing and implementing a marketing plan. You spend hours building and maintaining relationships with customers and researching, purchasing and maintaining your own equipment. It’s your job to keep the office clean and the lights and air conditioning working and to pull the weeds that grow around your building, whether you own it or not.

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Improve Business Performance With Flexible Budgets

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Leslie Hoffman, Director of Lending and Client Service, ACCION New Mexico

Leslie Hoffman, Director of Lending and Client Service, ACCION New Mexico

Have you ever gotten midway through a vacation to discover you’ve already blown through most of the money you saved for the trip? You probably didn’t pack up your bags and go home. Instead, you may have taken a look at your trip budget, compared it against what you had actually spent and made some adjustments in your personal finances to enjoy the rest of the journey.

Owners of small businesses can run into the same problem. By keeping an eye on monthly changes between budgeted costs and what is actually spent, adjustments can be made to improve the situation.  Budgets can help determine how well a business is performing by comparing expected costs with actual costs. It is important, however, that you adjust your budget to reflect actual sales so that you will be comparing apples to apples. This is called flexible budgeting and it can illuminate changes you can make that may improve the performance of your business.

For example, let’s say the owner of a gift basket business is having a hard time figuring out how to make more money on her high-end baskets. She planned to sell 1,000 baskets last month but only 900 were sold. Midway through the month when she saw sales were lagging a bit, she reduced her price to try to boost sales. She didn’t think the reduction in price would hurt too badly because she was also able to reduce some of her costs by making fewer baskets. So why did her revenue turn up shorter than expected?  To find the answer, she must adjust her budget to the actual sales volume of 900 baskets before comparing it to her actual costs.
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Cash Flow: Timing Is Everything

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Leslie Hoffman

Leslie Hoffman for DreamSpring (formerly known as ACCION New Mexico)

Ever had a friend who seemed to have it all – high-paying job, nice car, beautiful home and plenty of toys to fill the garage? But at the end of the month, your successful friend doesn’t seem to have $10 to his name. Turns out he has been pouring all those earnings into the house, the car and the toys. Perhaps he can afford them all, but he could certainly use a lesson in cash flow management.

This illustrates a critical lesson for business owners: profitable companies can go bankrupt. It may seem counterintuitive – a business that lands in the black can simultaneously be putting itself out of business.  But business owners who fail to manage cash flow can find themselves much like that friend – with positive earnings but no cash to pay bills. Continue reading →

Cost Behavior: Turning Your Small Business into a Profit Power-House

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Leslie Hoffman

Leslie Hoffman for DreamSpring (formerly known as ACCION New Mexico)

One certainty in the life of a small business is change. Today, business people are riding the wave of economic change, looking for ways to maximize the profitability of their business amid lower consumer spending and higher prices from suppliers.

Every small business has powerful information at its fingertips that can assist them in adjusting to change. The key is costs. Entrepreneurs who understand how the costs of their business respond to changes can make more informed decisions, allowing them to better utilize limited resources.

The first step is to explore the two basic types of costs in a business – fixed and variable. Continue reading →

Marketing: The Sum of Your Parts

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Mary Schmidt, Marketing Advisor, The Loan Fund

Mary Schmidt, Marketing Advisor, The Loan Fund

Marketing means more than coming up with clever, eye-catching ads. If you don’t also ensure that your target market sees and remembers your ads and if you don’t deliver on what those ads promise, you’ll find yourself investing large amounts of money trying — and failing — to attract and retain customers.

Because marketing encompasses everything you do as an entrepreneur, a marketing plan — and a budget to support it — is essential to your success. This is especially true when economic times are tough for you and your customers: The less money your customers have to spend, the more they insist on value, not pretty words. But where and how does such a plan begin?

Marketing is defining business goals. Before you start getting quotes for “branding,” marketing campaigns, Web sites and brochures, clear your mind and desk and write down the three most important goals you need to accomplish in the next 30, 60, 90 and 365 days. Keep the list simple but specific. “Get more customers” is too broad: What kind of customers? Where will you find them? For what products or services? How will you keep them? How will you know if you’ve reached your goals? Once you’ve determined your goals and how to measure whether you’ve reached them — X number of new customers for X product in X location by X date — you can think about how to budget for all that marketing stuff.
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