Author Archives: Admin

Sizing Up the Competition

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Betsy Gillette, Director of Market Research and Planning, TVC

Betsy Gillette, Director of Market Research and Planning, TVC

The first step for an aspiring entrepreneur is to determine who the competition is. There are several categories to consider: companies with similar technology, companies with different technology and companies that represent indirect competition because they solve problems in a novel way. Companies in each of these categories have products that promise to solve or address the same customer problem. Another form of competition comes from the customer, who can decide to live without a product or service.

After collecting the names of competitors, an entrepreneur needs to investigate each and consider how his or her company compares with these rivals in the following ways:

Product features: How similar are products offered by these competitors? Does the competition offer some features and benefits that are better than the prospective newcomer’s?

Competitor size: Who’s the biggest competitor and how does its size impact its market position? If it’s a big company, is it focused solely on one industry, or has it branched out into others as well? Who are the smaller rivals? What is the mix of large vs. small companies? How can the new company position itself against big and small rivals?
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Embracing Adversity Can Build a Business

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Julianna Barbee

Julianna Barbee, Director, NMSBDC at NNM 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. Continue reading →

Keeping Heart When Times Are Hard

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Roberta Scott, Director, NMSBDC at UNM-Valencia

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.

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Signs of Tough Times

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Julianna Barbee

Julianna Barbee, Director, NMSBDC at NNM 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: Continue reading →

Recovery Act Invests in Small Businesses

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John C. Woosley, CPA and US Small Business Administration New Mexico District Director

John C. Woosley, CPA and US Small Business Administration New Mexico District Director

Small businesses throughout New Mexico are feeling the effects of various government initiatives designed to stimulate borrowing and lending in the nation’s weakened economy.

The American Recovery and Reinvestment Act authorized $730 million to cover the costs of temporarily eliminating loan fees and raising guarantee limits on some loans; to fund Small Business Administration-backed micro-lenders; and to create a new loan program to help struggling businesses pay existing loans. In addition, the Treasury Department earmarked $15 billion in Troubled Assets Relief Program funds to help unfreeze the small-business lending market, which will benefit community banks, credit unions and other small lenders. Treasury will purchase existing and new SBA-backed loans made by banks, freeing up more capital so banks can restart SBA-backed lending to local small business.

Here’s some of what the federal legislation provides:
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Making the Most of Every Investment

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Sandra Taylor Sawyer, Director, NMSBDC at Clovis Community College

Sandra Taylor Sawyer, Director, NMSBDC at Clovis Community College

Making money is the reason most people start a business, but when the economy sours, just covering expenses and staying solvent can be challenging enough.

Business owners who are wondering whether to invest in their business or elsewhere during a recession have many tools at their disposal, but one of the most helpful is the return-on-investment ratio.

Do the math

Determining a realistic return on investment, or ROI, is a matter of numbers. A prudent business owner will consider the ROI when preparing a business plan, reviewing year-end financial statements, evaluating the effectiveness of marketing and deciding whether to add or drop a product or service.

When considering if more money should be put into a business, the goal for return on investment should be to exceed the average certificate of deposit rate for one year. Return on investment is determined by dividing net profits (sales minus expenses) by total assets (what the business owns).
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Road Show Aims to Open Eyes to Opportunities

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Paul Goblet, Financial Advisor, NMSBIC

Paul Goblet, Financial Advisor, NMSBIC

The New Mexico Small Business Investment Corporation and its partners will take to the road this month to let New Mexicans in the southern part of the state know where and how to get the advice and the money they need to start or expand a business.

“Financing Your Business” is the topic of the event planned for 5:30 to 7 p.m. Monday, April 27, in the Tularosa Room, Hotel Encanto, 705 S. Telshor Blvd., Las Cruces. It features presentations by representatives of the New Mexico Small Business Investment Corp., the U.S. Small Business Administration, The Loan Fund, the New Mexico Gap Fund and the New Mexico Small Business Development Center network. There is no charge for admission.

Lt. Governor Diane Denish, who ran her own business before being elected in 2002, spearheaded creation of the SBIC in 2000 on the premise that small businesses employing 25 or fewer people are the engine of New Mexico’s economy. Through financial partners like ACCION New Mexico, WESST Corp. and The Loan Fund, NMSBIC has helped more than 1,600 businesses get the capital or equity investment they need to get started or to grow. And five equity funds now have headquarters in New Mexico.
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Birth of the Buzz

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Julianna Barbee, Director, NMSBDC at NNM College

Julianna Barbee, Director, NMSBDC at NNM College

Creating excitement — or “buzz” in marketing lingo — about products or services is a matter of survival in a competitive market — especially when most consumers are spending only on essentials until the economy shows signs of recovery and stability.

Buzz describes the positive word-of-mouth marketing or hype among consumers that often precedes the release of a much-anticipated product. Real-time, portable communications technology facilitates the building of buzz by allowing rapid exchanges of information among large numbers of people.

Even though buzz can spread like a contagion, it needs a point of origin and a carefully crafted plan for dissemination. Creating buzz requires time, energy and innovation.

Social networks

Buying or using a service is part of a social process. Entrepreneurs who understand that customers belong to networks or market niches can efficiently use these links to spread the word about their products or services.

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Going With the (Cash) Flow Even When the Going Gets Rough

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Sandra Taylor Sawyer, Director, SBDC at Clovis Community College

Sandra Taylor Sawyer, Director, SBDC at Clovis Community College

Business failure isn’t always the fault of bad planning or mismanagement of money or resources. When markets freeze and retreat as they have around the world, many businesses fail for lack of credit, loss of consumer confidence and other reasons over which an individual business owner has no control.

Cash-flow imbalance is the leading cause of business failure in a healthy economy, according to the U.S. Small Business Administration. So when the economy is ailing, it’s more urgent than ever to maintain a balance between what’s flowing into the business and what’s flowing out.

Cash rules

In business, cash truly is sovereign. It’s used to pay short-term bills, cover unexpected emergencies and invest for future business needs.

The way cash flows into and out of a business — the operating or cash cycle — is a matter of timing. Here’s how it’s supposed to work: Cash enters the business as capital through loans from creditors and investment from owners. Cash then is used to produce goods or services; it flows out to pay wages and purchase buildings, equipment, materials and supplies. Next it flows back to the business as payment for goods or services. Finally, it flows out again to pay taxes and debts and return money to owners before starting again at the beginning.

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Owning a Business Without Being on Your Own

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Roberta Scott, Director, NMSBDC at UNM-Valencia

Roberta Scott, Director, NMSBDC at UNM-Valencia

Now might seem a risky time to start a business, but there may be good reasons to do so. Prospective business owners might be among the millions who have lost jobs as a direct result of the faltering economy and see little hope of finding another job anytime soon. They might be retirees eager to supplement their incomes or people with novel ideas or products they believe can find buyers even in today’s market.

Whatever the impetus, no one starts a business to lose money or to fail.

Be prepared!

Opening a new business can be exciting and stimulating at the same time it’s frustrating and frightening. To increase the chances for success, planning and preparation are essential. A prospective owner should identify each step involved in starting a business, avoid shortcuts and consider getting advice from the experts at one of the state’s 19 Small Business Development Centers.

Small Business Development Centers offer one-on-one counseling at no direct cost to the client. All centers are connected with a local community college. (The program exists in all states but actual funding differs state by state. In New Mexico, centers get most of their funding from the state Legislature and some money from the federal Small Business Administration.)

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