Need help with your business loan?

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.

Four Ways to Grow Your Business

It wasn’t long ago when it seemed that the answer to every business challenge was to “get out and sell more”. Now, business owners are scrutinizing their operations for ways to squeeze out every last drop of profitability. This is a healthy exercise for any economy to undergo and the surviving businesses tend to emerge from difficult times as leaner, more disciplined enterprises poised to take advantage of every opportunity as the general market conditions improve. Let’s look at four ways to increase your profitability and grow your business.

Increase Average Price

The classic example of increasing prices was when Starbucks turned the 25 cent cup of coffee into a $3.50 specialty drink. Part of their success was with branding and perception, which can both be powerful tools for increasing your prices as well. Do your customers treat you as a low-cost provider in your industry? How can you change that mindset? One of the best ways to overcome the customers’ arguments to paying a higher price is with value-added services. While “value-add” is tossed around an awful lot these days as a buzzword for consultants and marketing spinsters, savvy entrepreneurs develop ancillary services around their core products to differentiate themselves from their competition and justify higher average prices. Whether your barista takes an extra few seconds to smile and ask about your day or your key supplier includes your marketing on their website, these services set their businesses apart and keep you happy paying a higher average price because you actually receive more value. Do the same for your customers to increase your profitability.

Increase Average Transaction Quantity

Assuming your products and services generate more revenue than they cost to produce, increasing the quantity each customer purchases also increases the average sale and is another way to improve profitability. Offering discounts at certain volumes is a great way to convince your customers to buy in bulk. A small discount at 5,000 units and a larger discount at 10,000 trains them to think in bigger numbers and to find ways to use more of your products. Choosing your discount carefully will ensure you improve your profitability at the higher volumes.

Increase Number of Transactions

Once your average transaction value is where you want it to be, increasing the number of transactions is your next challenge. Marketing is the key here, both to your existing customers and to potential new customers. Highlight your value-added services, find your target market and get in front of them consistently, sell, sell, sell. Customer loyalty cards are often a great tool to increase the number of times your existing customers purchase. If they only need three more purchases to “get one free”, the motivation is strong to keep buying.

Reduce Costs

Cost reduction tends to be the default for business owners when pressed to increase profitability and most businesses are ripe with opportunities to streamline operations. Costs generally fall into three categories:

Reduce Average Cost of Goods Sold

Cost of Goods Sold consists of those expenses that vary directly with the volume of revenue generated. Gross Profit equals Sales minus Cost of Goods Sold and is the revenue left over to cover selling and administrative functions and to pay yourself. Reduce variable expenses with improved engineering, outsourced manufacturing, less expensive materials and streamlined delivery.

Identify and Reduce Direct Costs

Direct Costs are those overheads that can be easily traced to a revenue generating activity but not always to a specific unit of product. Examples are advertising, sales salaries, and location-specific overhead in a business with multiple locations. The important thing to remember when reducing direct costs is that these costs generate revenue. Cutting advertising to save a dollar today can come back to haunt your business in the form of reduced sales tomorrow.

Reduce Overhead

Overhead is that administrative function that is necessary for running a business but not tied to revenue in any way. These are expenses such as rent on corporate headquarters, administrative salaries, insurance, attorney fees, etc. Reducing your overhead is only limited by your imagination, frugality, ability to maintain compliant and risk tolerance. Perhaps you don’t really need a full-time CFO and can outsource that function to your CPA; you find your IT administration can be handled more efficiently by a third-party; or your insurance agent can restructure your policy to provide coverage targeted to your specific risks at a lower cost. Savings in overhead generally roll directly to your bottom line to improve profitability.

There are many other ways to grow your business during tough times, so keep working on your business and thinking forward. When the economy booms again, your business will be well structured to maximize all of the opportunities to grow and profit.

PTAC Comes to Colorado Springs

Original article published January 22, 2010 at Colorado Springs Business Journal

In case you haven’t heard, Colorado was recently awarded a Procurement Technical Assistance Center (“Center”) in September 2009.  The Center’s office is located right in Colorado Springs, at 6 South Tejon.  Getting a Center in Colorado was a long, difficult two year process led by several key members of the local business community.  I have the honor of serving as the Chairman of the Board of the Colorado Center, and I wanted to tell the community more about who we are and what we do.

What is a PTAC?

You’re thinking, ‘Okay, great.  Colorado now has a Center, but what is it and what does it do?’  Procurement Technical Assistance Centers (PTACs) are offices (over 300 nationwide offices) that form a nationwide network of procurement professionals working to support small businesses seeking federal contracts from the Department of Defense and other government agencies.

During the 1980s, Congress became concerned that small businesses were not able to compete effectively against larger businesses for federal contracts.  The Procurement Technical Assistance Program (PTAP) was authorized by Congress in 1985 in an effort to expand the number of businesses capable of participating in the Government Marketplace.

PTACs are the bridge between buyer and supplier, bringing to bear their knowledge of both government contracting and the capabilities of contractors to maximize fast, reliable service to our government with better quality and at lower costs.  PTAC counselors have backgrounds in government acquisitions, and virtually all receive ongoing training to keep pace with continually evolving acquisitions procedures and policies.

Colorado PTAC

Our Colorado PTAC is a non-profit entity, and operates under an agreement between the federal agency that administers them nationwide, the DLA, and Colorado’s Office of Economic Development & International Trade (OEDIT).  Both the DLA and the OEDIT allocated funds for the operation of the Colorado PTAC.  Additionally, several El Paso County local businesses funded the remaining required amounts to operate the PTAC for its initial year.

The Colorado PTAC’s mission is to provide Colorado small businesses with training, support, and counseling, on government contracting, with the ultimate goal of assisting these small businesses in being awarded federal contracts.  In addition, the Colorado PTAC will also help small businesses do the same for Colorado state government contracts and local government contracts.  The Colorado PTAC is organized to provide this support to small businesses throughout the state.

Why is the Colorado PTAC important and how will it impact the local community?

The small business community here in Colorado that sought to do business with the federal government have been at a distinct disadvantage for many years.  Small businesses in other parts of the country that have PTACs have been receiving support from their local PTAC and were better prepared to win federal contracts.  Our Colorado small businesses were left without this critical support, trying to compete with small businesses outside our state that had PTAC support.

One of the reasons the Colorado PTAC was located here in Colorado Springs was the understanding of how important government contracts are to the local community.  The business community in El Paso County relies heavily on federal contracts.  The critical assistance provided to local small businesses by the Colorado PTAC will help increase the number of federal contracts awarded to them, by making them better able to compete with small businesses outside the state and win these contracts.

The Colorado PTAC also helps large government contracting businesses.  These businesses often need to partner with small businesses as part of the contract requirements they are awarded by the federal government.  So, they need small business partners who understand government contracts, have experience with government contracts and can help them meet their contract requirements.  The Colorado PTAC helps these large businesses by training and supporting their small business partners.

The director and counselors at the Colorado PTAC are experienced government contracting experts.  They are providing invaluable government contracting support to our local small businesses.  They have been in operation for only a few months, but their results so far have far exceeded targeted expectations.  We fully expect their results to continue to exceed targets, meaning local small businesses will be better at getting government contracts.

If you think the Colorado PTAC can help your business, call (719) 434-3470 or stop by their office.  They are ready and waiting to help you meet your government contracting goals.