Tag Archives: entrepreneur

Get Insight from a Debt Schedule

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Leslie Hoffman

Leslie Hoffman, V.P. of Lending and Client Service, ACCIÓN New Mexico ∙ Arizona ∙ Colorado

The last few years have been a bumpy ride for many small businesses. Sales may have slumped. Costs could have gone up. Small business owners have weathered this economic storm with a courageous combination of resilience, creativity, clarity and passion. Those who have been able to keep their doors open understand that important fundamentals about how to manage money in a small business are as true today as they’ve ever been.

Financial institutions do not want saddle people with loan payments they cannot afford. Community-based lending organizations, such as ACCION New Mexico •Arizona •Colorado, are in the business of helping people understand their financial health and providing access to healthy business credit.

That credit is a tool, and like all tools, performance must support its cost. Lenders do not want credit to become overwhelming and prevent a small business from reaching its goals. Continue reading →

Budgets Matter to Business

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Bobbi Hayes

R.A. Bobbi Hayes, CPA, CITP, CFE, CFF, CCIFP, Partner, Accounting & Consulting Group LLP

Business owners striving to make it through the tough economy need to know how cash flows in and out of their business. A good place to start is with a budget – a basic tool used to forecast when cash will be collected and when expenses must be paid.

Many owners of small and midsize businesses don’t take the time to create a budget, or they neglect to update the one they have. In this slow economic recovery, every dollar is precious and it’s more important than ever to know where money is going. Financial institutions also want to know; banks are beginning to require that borrowers include a budget with their loan requests.

Since a business budget is such a valuable tool, understanding how to create a good one is vital to obtaining successful results and improving a business’s chance of survival.

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Veterans Get Help in Business

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Lloyd Calderon, Director, New Mexico Veterans’ Business Resource Center, and Director, VBOC

When Freedom Construction of Edgewood was hired by the U.S. Army Corps of Engineers to upgrade the electrical system at Conchas Dam, the job was the first federal contract the company had been awarded. One of the reasons Freedom’s owners, Mark Beasley and Steven Tenorio, got the $1.1 million job is because they know what many veteran-owners of businesses do not: Federal laws set aside 3 percent of federal contracts for businesses owned by veterans who were disabled during the course of their military service.

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Entrepreneurs Beware the Valley of Death

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Richard T. Meyer

Richard T. Meyer, SCORE

Business owners know it takes money to make money; production expenses must be paid before products are sold and revenue is received. Entrepreneurs with a business idea have an even greater need for up-front cash. They must have enough capital to cover negative cash flow in the early months or years of new business creation and growth. Without adequate initial investment, they risk falling into the so-called valley of death – the deep and wide gulf that separates a company’s need for capital and investors’ willingness to supply it.

Also known as the grand canyon of capital need vs. availability, the valley can be shallow or deep depending on the amount of money needed to develop the idea or product. Continue reading →

Don’t Risk Business Success With a Poor Presentation

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Bay Stevens

Bay Stevens, DTM, District Governor, Toastmasters Int'l District 23

Entrepreneurs looking for startup capital, expansion funding or customers are often the best spokespeople for their business or idea. Knowledge of their business plan or product is deep, and they are passionate about their business.

But not all entrepreneurs are good communicators. And when it comes to speaking in front of a crowd, few are born with the skills needed to keep an audience engaged. Fortunately, effective public speaking can be learned.

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Be Ready When Banks Step Up Lending

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Paul Goblet

Paul F. Goblet, Financial Advisor, NM SBIC

Tight credit markets of the past few years have made it difficult for business owners to obtain loans to expand their business. Getting a loan is still as hard as ever, even though most financial institutions have plenty of capital to lend. With the interest rate charged banks by the Federal Reserve Bank at almost zero, it’s surprising so little capital is moving around.  Loans, as a percentage of deposits, are very low.

Credit will loosen eventually because banks can’t survive long-term without making loans. Stung by losses when loans defaulted, banks are understandably more conservative; but they need interest revenue from loans to grow.

Recent financial activity suggests money might be starting to flow again. Continue reading →

Grant Expands New Mexico Education Success

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Monica Abeita

Monica Abeita, Regional Development Corp. for NNM Connect

When Taos-based Imagine Education received a Next Generation Learning Challenge Grant from the Bill & Melinda Gates and William and Flora Hewlett Foundations this summer, the award was not just a triumph for middle-school students struggling to learn math. It also marked an achievement for theNew Mexico programs that grow the state’s economy by helping small New Mexico businesses.

Imagine Education’s founders credit economic development initiatives with helping them win the grant, one of nineteen awarded nationwide for innovations in teaching literacy and mathematics. The grant will allow Imagine Education to pilot its educational math game, Ko’s Journey, in ten middle schools nationwide.

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Consider Strategy Before Seeking Equity

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Tom Stephenson

Tom Stephenson, Managing General Partner, Verge Fund

Once an entrepreneur decides that equity capital is the best way to finance his business, the next questions are how much and when should it be raised? One approach is to determine from the business plan how much cash shortfall is projected early on and raise that amount. But raising money in multiple rounds is often a better choice, allowing the entrepreneur to retain a greater portion of ownership.

If a business plan calls for $3 million in total financing to achieve profitability in three years, a startup raising that money all at once will give up a large portion of the company — perhaps as much as 75 percent. New companies are high risk; if investors put in less at the beginning, they will be willing to bet more money on a promising venture later, taking fewer subsequent shares of the business in the process. Continue reading →

Businesses, Like Life, Have Stages

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Paul Goblet

Paul F. Goblet, Financial Advisor, NM SBIC

Few businesses follow a predictable path and timeline from one stage of life to the next. Some linger for a long time as startups, while others dash directly from startup to rapid growth. Knowing the life cycle of a typical business can help an entrepreneur know where to find capital to reach the next stage.

The seed or startup stage starts with an idea or a prototype for a product or service. At this stage, entrepreneurs either tap friends, family members or other personal contacts for funds, or they seek angel investors, SBIR grants, micro loans or very early stage venture capital.

When a company is preparing its product or service for a market launch, it’s in the early stage of life. Continue reading →

Investors Bring Benefits Beyond Capital

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Les Mathews

Les Mathews, Mesa Capital Partners

Business owners who obtain outside equity – whether from family, friends or institutional investors – quickly learn money has strings attached.

Most outside equity providers want to get repaid over a reasonable period of time and at a very good rate of return. In exchange for providing capital, they obtain a piece of the company, thereby becoming business partners.

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