SBA budget an icebreaker?

It would be ironic if the 2012-2013 budget for the U.S. Small Business Administration were to break the partisan gridlock in Congress during this election year, but House Republicans have offered the Obama administration and Senate Democrats just that opportunity.

I rely on Robb Mandelbaum's reporting yesterday in the New York Times small business blog, You're the Boss, to bring you this pleasant political development. "In all," Mandelbaum writes, "House Republicans have proposed appropriating $1.16 billion to SBA ... about $40 million more than the Obama administration has sought and $237 million more than the agency received this year."

For a variety of reasons, usually philosophical bordering on radically ideological, SBA funding -- most of which goes to guarantee small-business loans that help the nation's business owners make more money -- has been a partisan battleground where the ideologues win and small businesses are left to gasp over a lack of capital.

But the House Republican proposal here, at least on its surface, suggests a mutual understanding that SBA is no evil wielder of reckless deficit-producing government spending. And that small business could use the government's help to pick itself up from the Great Recession. The confluence of good vibe over SBA was further reinforced on Thurday when the Senate Appropriations Committee proposed a similar total spending bill for SBA at $1.12 billion.

Any senator or representative could legitimately share a drink with a lobbyist over such legislation. And maybe the Great Partisan Divide in Congress will grow a little narrower when the three parties discover how good it feels to be both doing their jobs and some good for the commonwealth at the same time.

NIMBL, like Jack, jumps to $6 million in three years

"Be like Jack," NIMBL exhorts visitors to its website, www.benimbl.com. Its logo incorporates a man in a business suit jumping over the company name as if it were a candlestick, a necktie flying away as if the action were real.

The image is appropriate. Yosh Eisbart and Michael Pytel have built their SAP software boutique to an expected $6 million in revenues this year -- only its third in business -- by "being agile and being flexible and trying to break ... the previous paradigm of one size fits all," Eisbart said in an interview, where he spoke without a tie and without a suit for that matter.

NIMBL is one of the companies that populates 2,500 square feet in Taxi, the mixed-use commerical development west of the South Platte River near the RiNo art district that I wrote about in April.

Eisbart wanted me to come out and see what the company was doing because its early success brought it to the casual atmosphere of Taxi but also branded it as a local software-implementation company with a national customer base that specializes in SAP: "the largest business software package on the planet," Eisbart says.

That's right. SAP AG, based in Germany, rival to Oracle, IBM, Accenture and smaller computer giants, with $17 billion-plus of revenue, 53,000 employees around the globe, and an icon of  German international business interests. Which explains the well-suited figure in the NIMBL logo.

Michael Pytel and Yosh Eisbart

But if uptight is what you might expect from an SAP specialist, Eisbart doesn't bring that to NIMBL. Instead, he brings expertise. His is a "new-economy business," which is what Kyle Zeppelin called his Taxi tenants last spring, and Eisbart explains with conversational ease how that can save his clients money. Big money.

Big companies familiar with the software-implementation routine know the pattern for these transactions is to sign one of the big-company service providers to a sometimes millions-of-dollars contract, and have an army of consultants (or employees) of the provider descend upon your headquarters and work for months installing and "implementing" the new software.

Gambro USA, a medical-device manufacturer headquartered in Lakewood, signed up for an SAP installation whose end-users would be 400 North American employees spread across the continent from Daytona in Florida to Tijuana, Mexico and 12 other plants. The large provider had already spent nine months on the project but Gambro "didn't feel like they were getting the traction or meeting the goals  of their implementation," so, because of an earlier relationship with NIMBL, "they brought us in tactically," said Eisbart. Within a year, 10 consultants from NIMBL had reduced the 40 original implementation consultants significantly.

Eisbart and NIMBL leveraged that success by making presentations about it at several SAP-customer conventions as the company has grown: from $2 million in revenue in 2009, to $4 million in 2010 and an expected $6 million for 2011. Customers now include Exxon Mobil, Pepsi and Nestle, and in Colorado: Newmont Mining, ULA (United Launch Alliance), and Gambro.

With that list of clients, you would not expect a busy Eisbart to be leading his company's pro-bono work for a non-profit, the Center for Immigrants and Immigration Services, as it helps asylum seekers, torture survivors and war victims, and victims of human trafficking, mostly from Africa, stay in the United States and gain the computer skills needed to hold down jobs here.

"These guys are doing God's work," Eisbart said of the group which he discovered when it applied for a grant from the Rose Community Foundation.

Eisbart sat on the evalutation committee for the grant; after it was awarded, he went further to offer CIIS pro-bono help with setting up a data base for the group's clients, and recruited more pro-bono work from Evolution Marketing Group, which is housed within NIMBL's office space at Taxi. EMG remade the immigration organization's website and is teaching CIIS volunteers how to manage it. NIMBL is providing basic computer classes to CIIS clients.

Frederick Jayweh, the volunteer executive director of CIIS, said the free work Eisbart's companies have contributed to CIIS probably would be valued at $15,000 to $20,000; but more importantly it puts the group in a position to apply for a federal grant next year that might provide some of its volunteers with a bit of salary for the work they do.

A "new-economy business." Helping to get God's work done with computer software.

How does government money create jobs?

A question that has lingered through the debt-ceiling debate fiasco, specifically related to the need for stimulating a weak economy, is how can government money actually create jobs?

Gov. John Hickenlooper's administration is working hard to find an answer. It has applied to the Treasury Department for $17.2 million it wants to spend with lenders in Colorado to break their reluctance to fund small-business growth.

Small businesses grow by hiring people to produce and sell more of their product or service, increasing a firm's revenue and profits. The longest running complaint small businesses have had with state and federal policy makers has been that banks refuse to lend businesses money to achieve that growth.

Alice Kotrlik, a long-time valuable asset of the Office of Economic Development and International Trade and director of its Business Finance Division, is in charge of Colorado's application to the State Small Business Credit Initiative, and expects to hear a "favorable" response from Treasury very soon, perhaps within days.

She said the 2010 Small Business Jobs Act, signed last September and so far apparently in no danger from projected deficit-reducing budget cuts, requires the programs using the federal money to be started by states within 90 days of receiving a grant. All of Colorado's $17.2 million, if it gets it, will have to be deployed within two years. So the money will be going to businesses fairly quickly once the state gets its check.

That's good because business finance is a top-of-mind issue in Colorado not only because of political pledges to get people back to work -- create jobs -- but also because past efforts to fund small-business startups with government money have been dismally unsuccessful.

Kotrlic's office crafted her application for the small-business federal funding through Hickenlooper's "bottom-up" economic-development process, resulting in the release last month of the Colorado Blueprint, a document that amounts to a master plan for state governance.

The application calls for distribution of the $17 million through three programs: an existing loan-loss/reserve program run through the Colorado Housing and Finance Authority (CHAFA); an expanded pilot program started last summer that offers angel investors a tax credit for investing in Colorado small businesses; and an altogether new program designed to distribute $14.2 million of the funds by depositing cash certificates of deposit in banks that want to loan money to a small business but are hesitating because of a borrower's shortfall in the value of collateral being used to support the loan.

Kotrlic described the program for me in detail, and it sounds like the only kind of government effort a Colorado bank would be willing to sign up for to loosen up its lending to small business: direct cash infusions of government money they can take if a loan goes sour.

The banks aren't crazy. The reason a Small Business Administration emergency loan program failed in Colorado and around the country in 2008 and 2009 was because the loans -- $35,000 max -- weren't large enough for the bankers to bother with, and because the people who needed them, small businesses already in trouble and at risk of survival because of the economic collapse, were too risky to lend to.

Kotrlic's new program will provide up to 25 percent of loans from $75,000 to $1 million in a cash CD that can be deposited in the lending bank and dedicated as collateral for the loan. The small business owner then can use the full amount of the loan to grow his or her business by hiring new workers and increasing sales and revenues, and pay back the bank over a three-year term.

The state will provide a collateral shortfall for loans up to $5 million, but the percentage of state-supported collateral will drop for bigger loans to the amount needed to cover the borrower's shortfall up to about 10 percent of the loan. Kotrlic points out that 10 percent of a $5 million loan would still amount to a $500,000 cash CD, and she seemed to think that was plenty for the state to give a bank to cover the risk of an otherwise credit-worthy borrower.

That's how government money can create jobs and stimulate the nation's lagging economy. It's government at its best, helping private small businesses break through big-business bankers' reluctance to help Main Street get back on its feet.

South Metro SBDC unveils remodeled website

Check it out: http://www.smallbusinessdenver.com/; it's a breezy read through what looks like everything you might need to know, and every source you might want to access, if you want to start or grow a small business.

The Small Business Development Center is hosted by the South Metro Denver Chamber of Commerce, that whacky crew that holds the most entertaining of business-awards lunches each year.

But the chamber is a separate entity, serving a larger audience of large, medium and small businesses across the south metro region from its offices at 6840 S. University Boulevard in Centennial.

The SBDC, located in the same office, specifically serves small-business owners and is part of a statewide network of business development centers that serve small-business owners across Colorado.

About the remodeled site: It is not only elegant but extremely efficient, starting from the first link to a "Start-Up Checklist" on its welcome page, to an exhaustive "Business Resource Links," that can send you to that entire statewide network of SBDCs or a specific website to help veterans get the information they need to start a business.

The South Metro SBDC premiered the new site over the weekend. It's worth a look if you want to cut through the blizzard of information that can boggle the mind of even the smartest entrepreneur seeking to become his or her own boss.

End 30 years of anti-tax rhetoric

In Wednesday's newspaper, a Doonesbury character, Havoc, tries to convince an Afghan warlord to stop making money from the Taliban through the drug trade, and suggests the warlord tax his people instead.

"Taxes!" Havoc says. "That's it -- taxes!"

But the warlord responds glumly: "I don't believe in them. Reagan changed my life."

I laughed because the comic strip so fit my frame of mind chasing down an interview with Carol Hedges, right, senior fiscal analyst for the Colorado Fiscal Policy Institute, an organization that recently raised a minor ruckus on the ColoradoBiz website where the institute posted a piece it titled: "Maybe Colorado's taxes aren't so taxing after all."

In a comment stream, one of the magazine's conservative readers questioned the politics of the institute as hardly non-partisan, as it described itself, and questioned the magazine for not "calling out" the group as a "liberal think tank."

I asked Hedges whether her group was liberal or not, and she said she had taught her children that labeling people was intellectually lazy. "Do they mean that the organization ... [believes] that we have to have a strong public sector in order to support the private-sector activities of the market? Well, if that's what they mean by liberal call me a liberal, rock on, that's who we are," she said.

"But what I find so interesting is that I was at a presentation recently and somebody said that in Colorado we have a broad political spectrum: We have the far right that doesn't believe in government, and we have the far left who believe that government is the solution for everything.

"And I stopped that person," Hedges said. She asked, "Who would that be? Who is that far left that thinks government is the solution to everything? ... I don't think there is an organization in Colorado that that would be descriptive of, and I know it isn't a label that would be descriptive of our organization."

The Colorado Fiscal Policy Institute is a unit of the Colorado Center on Law and Policy, which describes itself as nonprofit and nonpartisan. The institute started about ten years ago, in Hedges' words, "to find justice and economic security for all Coloradans."

"We originally got started as a volunteer organization that was helping folks understand sort of the unique budget and fiscal constraints in Colorado, to help them do their advocacy work on behalf of families and economic justice, etc.," she said.

I was interested in the group after reading the ColoradoBiz piece because it seemed to be stating what is obvious to me but which never seems acceptable to conservative business interests in Colorado. Government services cost money, and people and businesses that pay taxes fund those operations, much like sales fund a business operation.

Taxes are the government's revenue stream; without them there would be no government. That's why the warlord's comment in the Doonesbury strip struck me as funny. Reagan was the American leader who turned the nation against being taxed for services government provides. Here's more from Hedges:

"We've had basically thirty years of anti-tax, anti-government rhetoric, which has been the predominant narrative in this country around how we support one another....

"We think that the public sector is important. We think it is the most efficient and accountable way to provide certain foundational services upon which people and businesses rely: education, transportation, higher education, to some extent health care. But we want a system, a public system, that is accountable, is effecient, is effective. We believe that the market economy can't work if we don't have a strong public partner to match up with the private sector."

"In Colorado," Hedges said, "our public officials are actually not the decision makers on this stuff. That's one of the most interesting things about Colorado, from my perspective. The decision makers on taxes are voters. And I think that the pendulum has swung so far on the anti-tax message, particularly as it relates to really large corporations, that voters are beginning to say: 'I do want higher ed, K-12, roads, clean air, clean water, access to the mountains when I want to get there. Is there somebody that's not paying their fair share?'"

"We're a think tank," Hedges said. "We do research, we do analysis.... As I said, it's been thirty years of anti-government rhetoric that we're combatting, and I think one of our big efforts ... is to help voters and to help citizens to connect up the benefits they get from private-sector and different public-sector investments.

"What did government do for you today? ... People don't think about things like: Well, they made sure my water was drinkable, and they inspected the restaurant where I grabbed my lunch to make sure everybody was concerned about my health. ... People generally don't think about government and education ... but it's what comes from your taxes."

That's the message Hedges' institute is going to be touting for the next year or so as Colorado voters try to dig themselves out of the fiscal hole the state has dug itself with tax-limiting state constitutional amendments like TABOR and three new proposed amendments that will go to voters in November. Hedges said her institute is not against TABOR, and would just as soon keep voters in charge of deciding how much they want to be taxed for government services.

"The real issue is," she said, "Are citizens willing to invest more in the public sector?"

Good roads, good schools and a good infrastructure for doing business in Colorado are the choices Colorado voters must address even beyond November elections. The state needs its voters and businesses to invest in themselves, to invest in Colorado. Its future is at stake.

New journalism: partisan but professional

My headline ought to get some of my journalistic colleagues' juices flowing, but according to a writer in The Atlantic's January/February issue, American journalists are going to have to make some accommodation with the concept.

In fact, I'm making an accommodation to the notion with this ongoing blog. I'm writing about small business and politics from a very liberal perspective. And I hope to attract advertisers to my readership.

Paul Starr, a professor at Princeton, wrote the Atlantic piece. In "Governing in the Age of Fox News," Starr states toward the end: "Although most American journalists assume that professionalism and partisanship are inherently incompatible, that is not necessarily so. Partisan media can, and in some countries do, observe professional standards in their presentation of the news."

I have always questioned the journalistic principle of so-called "objectivity" in news coverage because I know as a writer the way you put words to paper (or on a screen) is inherently subjective. What nouns you use, what adjectives are colored by the writer's choice of words.

There's no escaping the tinge except by the samurai editor's butchering sword.

Unfortunately, quality of writing often slides away with the fat of a trim; occassionally, however, the cuts can actually make the writing better.

I take my journalistic principles and professionalism to the writing of this blog. I mean for my profiles of small businesses to carry the good and the bad about a firm, although my advocacy for small business will emphasize the good over the bad in most cases. And I will always give a business owner the benefit of the doubt.

I will not, however, give business as a community a pass when it comes to the harsher side of issues. Colorado's current debate over the elimination of tax exemptions for business is an example.

The tax exemptions should be removed in an attempt to balance two state budgets (fiscal 2010 and 2011) despite any damage to the state's reputation as "business friendly." A "people friendly" business community will recognize it must contribute to fiscal austerity that requires Colorado to reduce services to all its citizens.

At the same time, legislators should not forget that business owners are citizens, too, and already share as much as anyone else in the general pain.

Tax exemptions can be restored as well as removed.

If the state would correct its budgeting problems, if it can regain some economic steam, and refuel its revenue streams, exemptions and incentives can be given back as easily as they can be taken away.

Business and the business lobby knows that. They should begin working for the common good rather than their own self-interest.

Small-business developer: David Laverty

Last week, President Obama reminded banks who receive bailout funds that they should be lending to small businesses, because small businesses are among the taxpayers who helped bail them out.

Small firms, the president said in his weekly radio address, "must be at the forefront of our recovery."

Obama ought to recruit David Laverty to his cause.

Laverty is one of those entrepreneurs who believes the marketplace, no matter how distressed by slowdown or recession, still has room for him, and that his business-development skills can make a successful entrepreneur out of anyone with a good business idea.

Laverty is a business consultant. He advises prospective owners of small businesses on the basics of starting out: how to create a business plan that plots the way to bring a product to market; how to create a marketing plan that will sell the business; and how to design a website to help carry out a marketing plan.

He's learned over the last 24 months -- the months it has taken him to bring his own business to the stage where it can support him -- that a business consultant nowadays must also be ready to do the work required to back up his advice.

And so Laverty winds up writing much of the content for a new business's website, working with website-design specialists to produce a site worthy of his client-business's product or service, and actually writing the business plans and marketing plans the client has signed him up to devise.

That effectively is a redefinition of a business consultant. Often in the past, the consultant merely provided his or her expert advice to a new company, leaving the business owners to put the expert advice into play.

But the last 24 months haven't been easy for Laverty. He has been forced to use the tools he is urging on other small-business operators to create his own firm, which he calls Marketplace (the logo shown above).

Laverty says the economic downturn has had its impact on his own firm.

"Whenever there is kind of a national news story that casts doubt about the overall economy," he said, "I notice a tapering off in business-plan activity."

"I think the entrepreneurial dream is always there," he said. "It's just a lot harder to get money. It's almost impossible to get money through traditional lending unless you can back every red cent of it up with real-estate collateral."

Obama last week not only urged bailed-out banks to increase their lending to small businesses, but he announced a program to allow small, community banks to borrow TARP funds to lend to small-business customers, and he raised borrowing limits for U.S. Small Business Administration loans.

"Now it's time for our banks to stand by creditworthy small businesses and make the loans they need to open their doors, grow their operations and create new jobs," Obama said in his Saturday radio/Internet address Oct. 24.

Small businesses have often been cited as the nation's primary driver of job creation following an economic downturn. Downturns are also famous in Colorado for driving employees of down-sized companies into business for themselves.

Laverty hosts seminars for current and prospective business owners, gathering a mix of consultants together to share startup expertise with small audiences, almost creating one-on-one counseling. He earned his stripes for conducting such group sessions as a volunteer with the South Metro Denver Chamber of Commerce and as an employee of American Business Advisors, an established south Denver business consultancy.

Since then, he has taken on dozens of clients, many of whom are just starting out. Jess Tarin, for example, along with his partner Steve Niemczura, next week will officially launch BidPuppy.com, a website that matches service providers -- from home-repair contractors to lawyers -- with consumers who post projects for the vendors to make bids on.

Tarin said Laverty's help and advice was essential to the project. "He did good work for us," he said. The website firm is already registering vendors. Tarin said BidPuppy will go live signing up consumers' jobs on Wednesday.

For the first year Laverty worked on his own, he generated only about $30,000 in revenue and had to supplement his cost of living with other means, help from friends and family. In 2009, however, he is turning over about $70,000, which represents for him "a huge breakthrough. It means I'm viable," he said, "and paying my bills and paying my mortgage."

That's the way most entrepreneurs start out. With a dream and prayer. And often times, too, with a new product they can make or sell, or a service they are good at performing. But starting a business is much more complicated.

"The diversity of skills [required] to run your own business is huge," Laverty said. The entrepreneur's core strength is the making of their product or provision of their service, he says. "It's not a wise use of their time" to spend weeks and weeks on the minutia of business development. That's where the business consultant comes in.

Because of the Internet, Laverty works with both local and out-of-state clients. He recently wrote business plans for two separate customers in Kansas City, visiting each customer face-to-face over the past few weeks. He's also helping a Denver-area woman launch a dog-rehabilitation shelter, and he has written a business plan for presentation to an investor by another client who seeks funding to launch a smokeless, "nicotine-delivery" product.

And business has picked up with this fall, Laverty said. He still uses Craig's List and other free listing services to promote his firm, and recently took out an ad in Yellow Book -- marketing techniques he also advises clients to use.

That's what Marketplace is all about. Making a market and reaching a market for new businesses.

In his Saturday address, the president also repeated the assertion that small business has created nearly two-thirds of new jobs over the past 15 years. David Laverty's Marketplace is just trying to do its part.

Marketplace
1601 S. Carr St.
Lakewood, CO 80232
David Laverty, owner
david@marketplace1.net
303-237-8838

The Low-down on Byte Technology

Clarence Low brought his family and his website-development company to metro Denver without much of a clue about the tech market here in 2003. The move, in fact, was primarily driven by a desire to join family already living in Evergreen.

But Low knew the Denver Tech Center was a big draw for tech workers, and he realized the Denver Metro Chamber of Commerce was much larger than the Monterey, Calif., chamber, which he and his brother Terry used as a source for leads when they founded their business in California in 2001.

From the start, "community involvement" was a staple of Byte Technology, the Lows' company.

So getting involved in the Denver chamber was a no-brainer for Low. He knew he could leverage his active participation in chamber programs into a list of customers -- even in a market thick with rival web developers.

"We have donated our time, money and services to local nonprofits, whether it's helping them with their online marketing strategies, or helping them build websites, or whatever," Low said in an interview. "We have worked with childrens' services, childrens' museums, foundations, philanthropic efforts or organizations, things like that."

"Through ... working with some of the executives in those organizations, we have been able to gather referrals," he said. It was the formula Low and his brother used to found their company, so here, he said, "We're leveraging that formula."

"It's not rocket science," said Clarence Low, who is a trained marine scientist.

He and his brother both rode the tech wave that blew up the bubble in Silicon Valley, and when it burst, in 2001, and each found themselves dripping wet and without a job, they decided to stake out their own niche in the tech market -- on the shores of Monterey Bay.

Literally. Byte Technology started in a storefront shop in downtown Monterey, and offered tourists to the nearby Fisherman's Wharf and Cannery Row computer stations to log on to the Internet. "It was actually really cool," Low remembers now. Tourists from overseas would come in to download photographs or to send e-mails back home. Then the visitors would ask what the brothers did to make a profit from the enterprise.

"So we actually got a couple clients that way," Low said. At the time, the company was setting up and servicing computer stations in small businesses and nonprofits, doing network support and designing websites as well. When Clarence Low moved to Denver in 2003, Byte sold off the network business and focused on website development.

Today, Byte Technology still has only three employees in both its location, although it supplements its workforce with contract workers. Clarence Low said each customer's project is tailored to the company's or organization's specific needs. Byte's prices are competitive but also tailored to each customer's needs, Low said. In 2008, which included a good chunk of the nation's economic downturn, Byte turned about $300,000 to $500,000 in revenues, he said, being purposely vague.

"Yesterday, I gave a presentation to a nonprofit in Aurora that specializes in providing services to refugees and recent Asian immigrants," said Low whose parents emigrated to San Francisco from Southern China. "They were interested in a multi-lingual component to their website," he said, so within his 45-minue presentation Low showed the group how to upload Korean on the site with ease. That, too, is one of Byte Technology's product offerings. It can show an organization how to self-maintain the sites it creates, adding to a group's or a small business's longterm savings even as it upgrades to the latest in doing business on the web.

Clarence Low's goals for the company are reaching $2 million in annual revenues and, perhaps, 10 employees in both the California and Colorado offices over the next five to seven years. "I give myself that timeframe," he said, because both he and his brother are committed to not growing so fast they begin to shirk ongoing services they provide to their oldest clients.

Check out Byte Technology's website here, and you'll find the kind of "strong, effective, refreshing" design Byte can provide, along with a row of fruit splashing into some clear water that is also emblematic of the company's work. Clarence Low said each employee adopts one of the fruit images to include on the back of a business card, and his is the kiwi. It's a good way for people to recognize him once they've seen the card or one of his business presentations, Low said.

"Hey, you're the kiwi guy!" he said one potential customer greeted him in an airport one day. "Yes, I am," Low said he responded. "You can call me the kiwi guy, as long as you know who I am," he said.

His brother, Terry, is the orange.

Byte Technology: a brand that refreshes your digital presence. Try a bite.