Lexington, KY - When Gordon Garrett, the associate director of the Kentucky Small Business Development Center (KSBDC), thinks of his organization's network of business consultants, he feels like he's standing in front of a massive crowd of not-so-inconspicuous team members, like the one seen in Verizon's television commercials.
Garrett and Director Becky Naugle make it their organization's mission to help businesses across the state from the KSBDC's 18 business centers, each staffed by one or two trained professionals with MBA degrees. But behind the consultants in the KSBDC offices is "a highly linked network of consultants around Kentucky," Garrett said.
"We are a very capable organization, capable of dealing with companies worth $50 million and under. We offer assistance with a myriad of their management issues, whether a company's trying to grow or it's a start-up," Garrett said.
The statewide statistics tell the story of KSBDC's work statewide. Last year the organization's consultants arranged for $52.5 million in loan financing and $6 million in investment funds. A total of 2,142 clients received 12,500 hours of consulting. Clients who are owners of existing businesses created 900 new jobs and increased their sales volume by $11 million.
Garrett, a member of the family that owned Garrett's Orchards (Õ"That's where I learned to work so hard," Garrett said), was a software entrepreneur. "I launched and grew several technology-related companies from the 1980s to 2000. Then I became interested in businesses in general," he said.
That interest led to several more years of travel and long hours as a technology consultant to other businesses. Eventually, the stressful schedule caught up with him.
"I decided I was not willing to keep on working 80 hours a week, so in 2006, I started as the associate director here," Garrett explained.
He still works long hours, but he's enjoying his work and he's home with his family almost every night.
And what's the best part of Garrett's job?
"When we can hit a home run with a client, either a start-up or an existing business, taking it from chaos and turning it into an orderly system to make money for the client," he said. "I enjoy the challenge, and it is satisfying to see clients realize their dreams."
While anyone with either a business or an idea for one can consult with KSBDC at no charge, the center requires a lot from its clients in exchange for help from its experts. They have to come to meetings having done their homework, ready to report on the results of having followed the steps suggested at their previous meeting.
"They have to invest time. We put together a letter of engagement saying what we expect them to do as clients," Garrett said.
"We like to stay deeply engaged with our clients. We're definitely not one [meeting] and done. We develop an ongoing personal relationship so that they feel comfortable calling if there's a problem," Garrett explained.
KSBDC counselors help new entrepreneurs avoid spending time and money on businesses that have little chance of success.
"They've made an emotional decision, going with a gut feeling that their idea will be successful," Garrett said. "We want to make a fact-based decision, to be thoroughly convinced that there is a market that will buy your solution."
Using databases and market research, Garrett and other clients evaluate start-up ideas carefully. "It doesn't pay to short-circuit the process. Sometimes we will morph their idea, through our research, and find a different opportunity for them. We're looking for differentiation, to set the business apart," he added.
Garrett and his client, Pat Lawless found that differentiation for Biological Prospects (see accompanying article in this issue). Its niche is the heretofore-ignored animal health care market for resveratrol-based products and, as Lawless uses his education and training, more nutraceuticals for animals in the future.
KSBDC helps existing businesses with problems, many caused in part by the slowed economy.
"Some of the business owners in trouble weren't managing their businesses well, weren't adapting to the changing [economic] situation. Well-run businesses do all right anytime, but when the economy slows down, marginally run businesses are the ones that go under," Garrett explained.
He suggested that business owners having trouble should acknowledge problems as early as possible.
"We see people with their heads in the sand, hoping the trouble with go away, assuming that the economy will turn around and save them," Garrett said.
When businesses are doing poorly, their owners "need to start analyzing cost, marketplace strategy, pricing models, inventory controls, and other components, one at a time, to see where they can save money and find opportunities to make money," Garrett said.
Business people who can't meet their financial obligations should engage their lenders immediately, as opposed to ignoring them.
"Generally lenders will work with them, if they know there's a problem," Garrett said. "But if the lenders don't hear from the business owners, they think the worst."
Garrett has helped KSBDC clients in a wide range of businesses, including manufacturing, suppliers of parts to automobile companies, a commercial greenhouse, pharmaceutical research and production, software, a wholesale meat operation, commercial real estate, health care, and home products for kitchens and baths.
KSBDC's central office is in the University of Kentucky's Gatton College of Business, and a second Lexington office is located in the Commerce Lexington building downtown on Main Street.
For more information on the KSBDC or to find your local office, check online at www.ksbdc.org.