Saturday, March 27, 2004
An unprecedented influx of experienced business minds could transform entrepreneurship in Steamboat Springs, Scott Ford said.
Ford runs the Small Business Development Center at the Alpine Campus of Colorado Mountain College.
Ford said he conducted nearly 400 meetings with 125 distinct business entities in 2003. The sheer demand for business counseling is outpacing his ability to provide it, he said.
Now, Ford has a new team of allies in his quest to make the Yampa Valley a more nurturing place for entrepreneurship. A new chapter of the "Service Corps of Retired Executives" or SCORE is actively counseling local businesses. And the service is free.
"From an economic development standpoint, our strongest asset is the ability to coach entrepreneurial skills," Ford said. "But we were having a capacity problem. Getting an appointment with me was like getting an appointment with the dentist to have your teeth cleaned. We were looking two weeks out."
Now, Ford's office can refer entrepreneurs to one of a half-dozen SCORE counselors. They are certified to advise business people, and if they don't have sufficient expertise in a specialized area, they can tap into more than 90 SCORE counselors in Denver.
Ford credits Steamboat Springs insurance executive Georgia Taylor with becoming the first local business person to obtain SCORE certification and push for establishment of a local chapter.
Mike Forney, a SCORE counselor, said he and other counselors serve as mentors to local businesses. They help solve challenges such as understanding a customer base, accessing capital, managing risk and growing sales.
"If they take the advice we offer, it could mean the difference between success or failure in their businesses," Forney said.
Forney's experience is typical of the retiring baby boomers who have achieved enough success in the business world outside Northwest Colorado to retire but haven't been able to get the excitement of building companies out of their blood.
"We came here six years ago as second-home owners," said Forney, whose family has roots in Montana's Paradise Valley. "I wanted to get out of New Jersey. We looked at (Steamboat) as a place we wanted to retire to."
Forney polished his business skills during 18 years of working for AT&T in New York. He oversaw public affairs and advertising for the company's long distance division. In his early 40s, he left the security of AT&T because he wanted to build personal wealth by leveraging his skills through ownership of his own company. He grew accustomed to multi-million dollar deals while negotiating commercial mortgages for projects such as shopping centers and multifamily affordable housing projects.
Forney retired at the age of 62, and today, when he isn't piloting his Cessna on "Angel Flights" for medical patients, he is actively counseling six businesses.
Among the six is Epilogue Book Co., which opened in May 2003. Owners Erica Fogue and Whitney Kaaz had a business plan that focused on selling remaindered books -- books held by the publisher after sales have fallen off -- at discounted prices.
Forney found the two women had a finely tuned understanding of the book industry, and he approved of their marketing and merchandising plans.
He has been able to lend expertise in managing their inventory and raised their awareness of the challenges of budgeting for Steamboat's up and down resort economy.
"We were aware of the cyclical economy and the need to plan for it, but we just didn't understand how difficult it would be," Fogue said.
"It's the operational aspects of running the business that he helps us with -- inventory management and spread sheet analysis. We are in a better position than we would be in without his help."
Fogue said that because she and Kaaz are consumed with the daily details of running the bookstore, Forney's visits serve as a form of external discipline.
"When he calls and makes an appointment with us, we know we have to do things to prepare," she said.
Ford said SCORE has the potential to catch on in Steamboat because in addition to providing a service for small businesses, the program provides retired business executives with an opportunity they seek -- a means of belonging to the community.
Recalling a recent counseling session, Ford said Forney made a critical recommendation he would not have caught himself.
A typical mistake made by businesses in the early stage of growth is that they underestimate their need for capital.
Forney recognized that an enterprise was in danger of becoming undercapitalized down the road.
It's a big advantage to anticipate your future capital needs and negotiate for that money in the initial stages of planning a business, Forney said.
Negotiating an extra $10,000 or $20,000 later, "when you're already at a disadvantage," is far more difficult and costly.
Ford said Forney also is an expert at preparing new businesses to answer the questions lenders will ask in a financing meeting.
Questions such as: Can you define your business? What is your competition? What environment will your business be competing in? What makes your service or product special? How will you put together a team?
Often, Forney said, when asked why they chose their business partners, entrepreneurs respond by saying something such as, "We're friends, and we have a lot in common."
That simple answer could be a sign of trouble to come. Everyone brings a set of strengths and weaknesses to a business, Forney explained. Choosing a business partner whose strengths match with one's own weaknesses is ideal, he said.
"Putting together the right team is absolutely essential to your success," he said.
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