Chris Blees President & CEO Send Email View Full Bio

Kurt Kofford Director Send Email View Full Bio

Austin Buckett Manager Send Email View Full Bio

BiggsKofford was happy that three members of the management team got the opportunity to speak to many of Colorado Springs’ top businesses at the Revenue North Small Business Growth Summit, which was held January 20 and 21.

If you missed their presentations, you can find them here:

• Chris Blees, Strategically Preparing and Optimizing Growth Prior to Implementing an Exit
• Kurt Kofford, Use Pricing to Maximize your Profits and Stop Leaving Money on the Table
• Kurt Kofford’s handout
• Austin Buckett, Growth by Acquisition: Understanding the Acquisition Process

If you have any questions about how you can take your business to the next level of growth, value and success, please feel free to contact us.

Chris Blees President & CEO Send Email View Full Bio

Austin Buckett Manager Send Email View Full Bio

An Interview by John Gachiri

Editor’s Note: Entrepreneur Richard Branson regularly shares his business experience and advice with readers. What follows is the latest edited round of insightful responses.

Q: What are some of the most common mistakes entrepreneurs make when starting out? — John Gachiri

A: Making mistakes is part of the process of building a company; quickly recovering from them is what’s most important. It’s all part of the adventure of entrepreneurship, which will require all of your stamina, drive and determination.

But your way forward is not entirely uncharted: When you notice an opportunity that has never occurred to anyone else, there are certain steps to turning your vision into reality. You must formulate an innovative business plan, find funding, hire the right people to carry out the plan, and then step back from your role in the business at exactly the right moment.

Let’s take a look at these steps, and also at ways to avoid some of the most common mistakes new entrepreneurs make.

Step 1: Stay on Target
A mistake often associated with the first step is signaled by an entrepreneur’s inability to clearly and concisely convey his idea. You have to be able to generate buy-in from investors, partners and potential employees, so nail down your “elevator speech” — what you would say if you ran into an important potential investor in an elevator. Try using a Twitter-like template to refine the essence of your concept into just 140 characters. Once you’ve done that, expand your message to a maximum of 500 characters. Remember, the shorter your pitch is, the clearer it will be.

An associated error is lack of focus. If your start-up has been tagged as “the next big thing,” the adrenaline rush that comes with building buzz can lead to impetuous decisions and a loss of a sense of purpose. Many entrepreneurs end up sprinting in many directions instead of taking assertive steps toward their target. Clearly define your goals and strategies, then establish a timeline. Don’t let the other possibilities or hazy dreams distract you from achieving your goal.

Getting too far ahead of yourself is also dangerous. If your product or service is still on the drawing board, don’t get sidetracked by plans for future versions. As a general guideline, looking two or three years ahead is best, but the nature of your business and feedback from your investors will help you determine just how far ahead you should plan.

Be flexible, because just as a lack of planning can be a problem, adhering blindly to your plan is a surefire way to steer your company off a cliff. A successful entrepreneur will constantly adjust course without losing sight of the final destination.

Step 2: Be Realistic About Costs
Don’t shortchange your start-up when estimating the funds you will require — you’ll just diminish your chances of success. Keeping your expenses under control is vital, but don’t confuse capitalization with costs. The playing field is littered with undercapitalized start-ups that were doomed from the outset.

In the late ’90s, David Neeleman told me he needed $160 million in start-up capital for JetBlue — a huge sum, far more than most entrants to the industry manage to raise. Most of the so-called experts scoffed at the notion that he would be able to find the money and launch a low-cost airline when established companies were failing one after the other, but he stuck to his guns and raised the money. As a result, JetBlue had one of the most successful airline launches of all time, and turned a profit only six months after its launch in 2000.

Step 3: Hire the People You Need, Not the People You Like
As tempting as it may be to staff your new business with friends and relatives, this is likely to be a serious mistake. If they don’t work out, asking them to leave will be very tough.

When Virgin starts any new business, we always hire a core team of smart people who already know the industry and its inherent risks. Take full advantage of the knowledge pool you’ve created; when a problem comes up, remember that nobody has all the answers, including you._One of your goals should be to find a manager who truly shares your vision, and to whom you can someday confidently hand the reins so that you can carry out the next step.

Step 4: Know When to Say Goodbye
A great entrepreneur knows when the time has come to leave the CEO role. It’s seldom easy, but it has to be done: few entrepreneurs make great managers. In my own case, managing the daily operations of a business simply isn’t in my DNA. (Or, as I’ve said to friends, “It’s not bloody likely.”)

Stepping back doesn’t mean turning your back on your business. At Virgin, I’m always involved in the launch of a new business, and then I gradually hand over control to the new management team as it starts to jell. But no matter how long it has been since I was at the helm, if I see something that I don’t like, I’m not at all shy about making my thoughts known and asking some very pointed questions.

Founders shouldn’t hesitate to re-insert themselves into their businesses when necessary — look at Larry Page, who temporarily returned to the CEO role at Google in April. That said, I had to laugh when I heard this news, wondering how many managers at Virgin businesses had thought, “Wow, I hope this doesn’t give Richard any ideas.”

This article was published by Stellar Risk Report & Journal.

If you have any questions about what it takes to start a company, please contact us.

Chris Blees President & CEO Send Email View Full Bio

Austin Buckett Manager Send Email View Full Bio

Recently, a very informative white paper was published that covered what every entrepreneur or family business owner in the process of selling their business should know.  To get the full article, click here. 

If you have questions about selling or valuing your business for sale, contact Chris Blees or Austin Buckett.

Chris Blees Director Send Email View Full Bio

Austin Buckett Manager Send Email View Full Bio

In case you missed Rob Slee’s engaging presentation about “How to Build Value in Your Company” on Tuesday, you can find the presentation materials here.

If you were unable to make the presentation or have questions about the value of your business, please contact Chris Blees or Austin Buckett.

Interested in attending our future events? Contact Stephanie Johnson.

Call or e-mail Stephanie Johnson at (719) 579-9090 or sjohnson@biggskofford.com for more information or to reserve your seat!

Chris Blees Director Send Email View Full Bio

Austin Buckett Manager Send Email View Full Bio

Last week at BiggsKofford’s monthly breakfast, Entrepreneurial Corner, Chris Blees, CPA, CM&AA, and Austin Buckett, ACA, CM&AA, presented on how to garnish the most value out of your business when the time for transition is right.

You can find the PowerPoint presentation here.

If you were unable to make the presentation or have questions about preparing to exit your business, please contact Chris Blees or Austin Buckett.

Interested in attending our future events? Contact Stephanie Johnson.

Chris Blees Director Send Email View Full Bio

Kurt Kofford Director Send Email View Full Bio

Recently, BiggsKofford hosted an event highlighting the various topics that are essential to The Mayor Project, which is slated to be on November’s ballot. In case you missed this event, a copy of the presentation handouts can be found here:

The Mayor Project: A Perspective on City Governance 

Funding is imperative for this initiative to be successful, and we believe that this is an issue our city must pass. We are requesting that you join us in contributing to this extremely important cause. We would be happy to discuss with you why we believe so strongly about this issue. Feel free to call Kurt, Chris or Jerry if you need more information before you decide to donate.

Jerry Biggs – (719) 661-1202
Kurt Kofford – (719) 661-9091
Chris Blees – (719) 649-8749

To make a donation to The Mayor Project, please make your checks out to The Mayor Project and mail to BiggsKofford, P.C., 630 Southpointe Court, Suite 200, Colorado Springs, CO 80906. You may also make online donations here.

Chris Blees President & CEO Send Email View Full Bio

Austin Buckett Manager Send Email View Full Bio

Recently the Colorado Springs Business Journal published an article entitled “Delinquent loans hurting local banks”, giving a good perspective of what businesses and banks are facing alike when it comes to financing in this economy.

If your business is facing any of these issues:

• You can’t renew your line of credit.
• Your loan has a balloon payment, but the bank won’t extend.
• You have an opportunity to expand your business, but you can’t get the financing.
• What are you to do to keep your business afloat?

BiggsKofford has developed solutions:

• We can help you develop, plan and present your financial story for lenders and capital sources.
• We have successfully placed clients with new lenders, when others have turned them down.
• We have identified alternative capital sources – when traditional lenders won’t do the deal.

For more information on how BiggsKofford can help, contact Chris Blees or Austin Buckett. You can also find more information on capital sources here.

Chris Blees CEO Send Email View Full Bio

The story is becoming all too common. The bank calls and tells you they are not going to extend your loan. The message comes in many forms: They won’t renew your line of credit. The loan has a balloon payment, but they won’t extend. They are willing to extend, but with draconian terms. They are now enforcing some deep-dark covenant that you’ve never complied with, but now causing a default. Whatever the reason, the effect is the same – they tell you to come up with $X million dollars, which of course you don’t have.

Why are banks doing this?

If you were the borrower who got 95 percent loan-to-value, non-recourse, 3-year balloon on your speculative land purchase, then you know why they’re calling your loan. But, many banks are calling the good loans too. Why? Especially when we hear the political Talking Heads tell us how the Federal Government is encouraging lending, it is difficult to understand why the banks are calling even good performing loans.

The problem boils down to banking regulations. Bank regulations are more heavily risk-weighting loan assets held by Banks. This causes asset/equity ratios to go out of balance. Banks have two options to correct their ratios, either raising capital or convert loans to cash – as cash assets don’t have a risk weighting discount. Of course the banks would like to start with the riskiest loans, but bad loans can’t be collected, so they are forced to call-in good loans.  And there you are, minding your own business with a perfectly performing loan. But the bank needs your cash – not your good loan.

What’s a borrower to do?

Real estate loans are the most commonly called. But, the loan collection push isn’t limited to real estate.  If your business line of credit is the target, you might be in slightly better shape (assuming your business is still performing well). Many Commercial and Industrial (C&I) borrowers that find themselves in this situation are able to move their lending relationship to a bank with less capital constraints. Refinancing is generally an option.

On the other hand, if your real estate loan is called and your first reaction is to seek a new banking relationship to refinance the loan, you’ll likely find every bank is in the same situation. They’re all calling loans, and trying to reduce their real estate exposure.  The local & regional banks, who have always been the leaders in local real estate lending, tend to be the hardest hit by this regulatory correction. But, the national banks don’t necessarily offer a solution, as they are either equally over-weighted in real estate, or they aren’t in the market for local real estate lending.

So, where do you go with your real estate loan? You might choose to do nothing, thus forcing your bank to “call their bluff” and foreclose on your property. If you have come to grips with walking away from any equity you invested, and either your loan is nonrecourse or you can negotiate your personal recourse with the bank, then perhaps handing them the keys is an acceptable solution.

But, they may not want your keys. The fact is that banks are in the business of lending money – not owning real estate. And, in many cases, they have already taken the financial hit to reserve much of your real estate loan balance. So, this might provide for an opportunity to buy-back your loan at a significant discount. This still leaves a big problem – where do you get the money?

Leave it to capitalism to find a solution. The vacuum in the commercial lending world has created a number of changes and opportunities in the capital markets. Specifically, many Private Equity Groups (PEGs), who have recently struggled locating quality traditional investments, are taking advantage of these lending voids. Other non-traditional capital sources are becoming more prevalent as well. (Asset Base Lenders, Sale-Leaseback Funds, Mezzanine Lenders, Real Estate Equity Funds, Hard Money Lenders, etc.).  Business and property owners are finding these alternative capital partners to provide the needed capital to re-work or payoff their loans. Clearly the cost of capital from these sources will eclipse that of traditional lenders. But property owners may find partnering with an alternative capital partner is the only way to locate the funds demanded by their lender and still hold-on to some of their equity.

Until the banking system returns to a normal state, we will continue to see loans being called by banks. If you’re the next victim of this new lending epidemic, at least you’ll know others have been there before you. And, hopefully you’ll find a marketplace that is adapting and providing alternatives as well.

Chris Blees Director Send Email View Full Bio

Austin Buckett Manager Send Email View Full Bio

BiggsKofford’s Entrepreneurial Corner for March 18, 2010 covered the topic of raising capital and how to handle your bank calling your loan or line of credit.

Presented by:
Chris Blees, CPA, CM&AA, CEO of BiggsKofford
Austin Buckett, ACA, CM&AA, Manager at BiggsKofford

A copy of the presentation can be found here:
BiggsKofford, P.C. Entrepreneurial Series March 18, 2010

If you are interested in attending or sponsoring a future Entrepreneurial Corner, please contact Stephanie Johnson at 719-579-9090.