Karen Lloyd waded through three years’ worth of bureaucratic red tape before opening Karen’s Kare Bears day care.
Between bureaucracy and building renovations, costs of opening her business soon escalated beyond prior estimates.
“I was going to give up on the dream,” she said.
But Lloyd was working with Ron Nielsen, who runs the Small Business Development Center (SBDC) at Gila Community College.
“He helped start to finish,” said Lloyd. “That was a godsend.”
The local SBDC is one of a national network of organizations aimed at helping small businesses. The federally funded network sits under the auspices of the Small Business Administration (SBA).
In 2008, Nielsen says he helped create 53 local jobs, and in 2009, he helped create or save 59 jobs.
Local Realtor Betty Gooder also worked with Nielsen. At first, she had trouble with finding financing. “They told me that in order to get a small-business loan, you have to have a track record, which is a laugh,” Gooder said. “If you have a track record, they say you didn’t make enough money in the first year.”
Finally, Gooder and her husband leveraged his business line of equity, but eventually had to borrow more when the economy tanked.
“Prayer and meditation,” she said, laughing. “That’s how I handled it.”
Gooder had already opened a business selling fabricated aluminum horse and utility trailers in Iowa, so the process was not entirely foreign.
With Nielsen’s help, however, she wrote a business plan and priced office furniture, computers and rent to determine start-up costs.
“The first time we just took a flying guess,” said Gooder. “I think the SBDC could be very beneficial with helping people avoid pitfalls.”
Nielsen, who started his first business as a teenager, has run Gila County’s SBDC for three years.
“The majority of people, by the time they come to see me, they’re looking for answers,” he said. The services are free, and Nielsen helps people looking to start or expand, or just looking for business-smart counseling.
Nielsen helped Lloyd find money for financing, figure out costs, and develop balance sheets to analyze profit and loss.
“If you have a problem, you can call him,” said Lloyd. Karen’s Kare Bears finally opened in January 2009, and Nielsen still checks in on her.
More recently, when the recession forced Lloyd to layoff employees and raise rates, Nielsen helped her make those difficult decisions from a business perspective.
“I wasn’t able to make my bills,” said Lloyd. “Sometimes people just tell you what you want to hear,” she added.
Nielsen isn’t in the business of flattery. Yet, his mode of delivery is soft. He wants to help, but avoids sugarcoating.
“If there’s something you need to know, he’ll tell you,” said Lloyd. “He just says it tactfully.”
Business owners invest more than money. “When you start a business and grow it, it’s like raising a child,” said Nielsen. And a person will sometimes do anything to avoid the feeling of personal failure associated with a failed venture. But, sometimes a person takes on too much debt to bounce back.
“This recession was not started here in Payson,” said Nielsen. “In many cases, there was nothing they could do.”
Gooder has cut, too. She’s been smarter about spending advertising dollars, investing in Phoenix listings and focusing on the Internet.
“In a better economy, you can be kind of sloppy with your ad money if you want to do well. But when the economy is not doing good, you want to conserve your money,” she said.
But by growing leaner and more efficient, many local businesses survived the Great Recession, helped by an organization with roots in the Great Depression.
In 1932, then-President Herbert Hoover created an organization to essentially loan money to businesses hurt from the economic crisis.
In 1953, Congress passed the Small Business Act, which created the Small Business Administration to continue helping small businesses.
The network of small business help centers began 27 years ago as a pilot program. Usually associated with a college, Arizona chooses to affiliate its centers with community colleges.
Today, SBDC clients nationwide create a new job every nine minutes, according to the national organization.
In 2008, the organization received $97 million in federal money, but generated nearly three times that much for the federal government, and almost twice that much for states.
In Gila County, the SBDC is currently working with 100 businesses.
In 2009, 116 local people requested business counseling, up 30 people from the year before. Nielsen attributed the increase to the recession.
The majority of the businesses — 59 percent — he sees are existing operations, and the rest are start ups.
Rural businesses have unique challenges. For instance, they draw from a smaller pool of customers and so 80 percent of a rural small business’ customers are repeat clients.
Nielsen, 53, started his first small business after reading about ultralight hang gliders in Popular Science magazine at 19.
“I thought it would be great,” he said. He went on to run a bowling alley and a movie theater, and has also served on an economic development committee in Okanogan County, Wash.
He moved in Payson in 2007 to head the SBDC.
“It’s very rewarding,” he said. “It’s a part of economic development that allows me to see the results of my work almost immediately.”
Lloyd says the SBDC is a great asset. “If they’re struggling, an existing business, or a new business, they should call,” she said. “They can help.”
More information: http://www.gccsbdc.com/Default.htm.