Brent M. Eastwood, PhD, Director of Business Advocacy, NM EDD
To launch a business in New Mexico, an entrepreneur needs a legal structure, business name, employer identification number (EIN), state registration, business license and other permits. As complicated as it sounds, it takes most entrepreneurs only a few days to obtain what’s needed.
Paul F. Goblet, Financial Advisor, NM SBIC
While national indicators show unemployment beginning to ease and consumer confidence rebounding, the depth and duration of the recession that began four years ago exacted a heavy toll on businesses as sales revenue plummeted and cash flow dropped to a trickle.
Traditional bank lending dropped by $1 billion annually since 2008, and companies have seen their lines of credit reduced or eliminated during the banking crisis – just when they needed them most.
But 2011 was not all gloom and doom in New Mexico– Continue reading
Andrew Siegel, Owner, Payday Inc.
Hiring a new employee is just the beginning of the company’s relationship with this member of its work force. An employee who seems ideal during a job interview might prove a poor match for the job once the probation period ends and he settles into the workplace routine. Studies show that over 70 percent of workers are disengaged. Much of that is because of mismatch between a person’s natural talents and the requirements of the job.
While a small-business owner who asks questions tailored to the behavioral and professional requirements of a specific job improves the odds of recruiting the right person, hiring isn’t an exact science. Human resource consultants who use job benchmarking tools can improve the odds; but in the long run, matching employees to the right job in a small business requires ongoing involvement in workplace dynamics and a willingness to make adjustments where needed.
Trevor Loy, Partner, Flywheel Ventures
When searching for investors, many entrepreneurs and inventors first present their product or technological innovation and then vaguely present the target market as “people who need this product.” But this isn’t how customers think when deciding whether to spend money.
Consumers start with a problem or “pain point” they desperately want to go away. They watch for anything that proposes to solve this problem. Discovering it, they decide whether it’s affordable or whether another product offers a better or cheaper solution. They might even decide they’re willing to live with the inconvenience if the solution is too costly.
Kim Blueher, Director of Lending, WESST
WESST is a statewide small-business development and training organization that works with many small-scale entrepreneurs who have never accounted for all the underlying costs of getting their product or service to market. Some haven’t asked themselves how to know they’re operating at a profit and how few sales they can make and still break even.
Monica Abeita, Regional Development Corp. for NNM Connect
New Mexico innovators will pitch their discoveries to a panel of experts — and get a shot at up to $10,000 in funding — at the next HD3 Discovery Day on Dec. 8 in Santa Fe. The event takes place at the Railyard District headquarters of the High Desert Discovery District (HD3), a nonprofit entity that helps entrepreneurs give their discoveries a better chance at success in the marketplace. Discovery Day is a collaboration of HD3 and the Northern New Mexico Connect program’s Los Alamos National Security Venture Acceleration Fund (VAF).
Betsy Gillette, Director of Market Research & Planning, TVC
Technology Ventures Corporation exists to help innovators find investors for technology-based products they hope to bring to market. In January, 2012, the Albuquerque-based company will select up to 20 entrepreneurs with the most commercially marketable ideas and help them prepare business plans to pitch in April to funders at TVC’s Deal Stream Summit, formerly called the Equity Capital Symposium.
Most of the scientists and engineers who become clients of TVC are sophisticated about technology but novices when it comes to selecting target markets, appraising market needs and attracting venture capital funding. Entrepreneurs interested in being coached by TVC should prepare now by developing the marketing aspects of their business plans. The more realistic they are about the need for their product, market size, customer base and branding, the more likely they are to draw investors.
Monica Abeita, Regional Development Corp. for NNM Connect
Economic developers Robert Naranjo and Lucia Sanchez were pleased to see boutique wineries spring up along the high road to Taos. But when they discovered that grapes were being sourced from outside the immediate area, they jumped into action. With funding from Northern New Mexico Connect and the county of Rio Arriba, Naranjo and Sanchez helped organize local micro-growers – those with one quarter- to two-acre plots – into a grape growers association. Barely a year later, the group has received advice from multiple experts, pooled funds to order root stock in bulk and planted thousands of vines. In two years, when the vines reach maturity, the association plans to begin selling their combined harvest to local wineries.
Holly Bradshaw Eakes, Principal, The Holly Company Business Consultants
The greatest challenge an entrepreneur may face is finding capital to launch a business, especially when the business idea is related to high-cost startup such as that found in the technology sector. For an entrepreneur with realistic plans for rapid business growth and the potential to scale to larger markets, trading partial ownership for capital may be the only option.
Venture capitalists currently fund about one out of every thousand startups. With the odds stacked against obtaining equity capital, an entrepreneur must identify the investors most likely to invest in his business. Determining which source to pursue depends largely on industry focus, business stage and the amount of money needed. A handful of equity investors have offices in New Mexico and actively pursue investments in the state.
Kim Sanchez Rael, General Partner, Flywheel Ventures (at time of writing)
Jim Collins, author of Built to Last and Good to Great, and an old friend of mine, has written that the critical questions in life are who-decisions, not what-decisions. “The primary question is not what mountains to climb but who should be your climbing partner,” he writes. As professional investors, our evaluation of each potential investment opportunity emphasizes the entrepreneurial team more than market strategy, technology or financial projections. When evaluating the pros and cons of bringing on an investor as a partner in your business, your considerations should be similarly weighted toward who-decisions. Professional investors should provide assistance and value in many areas beyond financial resources. Here are some key areas to consider when selecting an investment partner: