According to Slee’s research, the United States economy experiences a recession (or other economic downturn) during the first three or so years of every decade.  The capital supply to the private markets becomes restricted, primarily because lending is restricted, which reduces the leverage a buyer can achieve and lowers valuations as well as limiting access to working and investment capital.

This begins to transition around the fourth year as companies improve profitability which leads into a period of free-flowing capital into the private market.  Humans are creatures of habit, so we quickly forget the recession we recently survived and continue to spend and invest until we are over leveraged and over invested.  At this point, parts of the economy begin to feel the strain and the economy as a whole is affected by the end of the ten year period.

Why will such a cycle be expected to continue?  Because the nature of people, namely, the private business owners, bankers, investors, and politicians in America, is to be overly optimistic in the good times and overly pessimistic in the bad times.  We also take a predictable amount of time to adjust to changing conditions and we can be counted on to react in certain ways.

Today, the catalyst for our recession was sub-prime mortgages followed by complete financial system meltdown, bankruptcies, and major fiscal policy changes.  Impending commercial mortgage uncertainty will help us to remain in a deal recession for the next several years.  Business values will remain flat or fall further as we struggle to adjust.  But adjust we will (or go bankrupt) and the survivors will profit again.

In my last post on business value, I mentioned that you can expect to achieve the highest return when selling your business at the right market timing.  If the transfer cycle holds, the best time to buy a business will be any time from now through 2013 or so.  The best time to sell a business will be toward the end of the prime selling time, or roughly 2016 – 2018.  Obviously, businesses will continue to be bought and sold every day, but a savvy business owner will look to exploit this cycle to his or her advantage.

• A couple of guys are writing a “Google killing” search engine.  Glad they hooked up with Shaun McNerney!
• A young man just graduated from CU with a degree in marketing was looking for opportunities.  His dad was in tow as a potential investor and owner of several businesses himself.
• A client needed some tax advice (to which I was fortunate enough to know the answer – given that I’m not the tax expert at our firm!)
• A couple of high powered managers were bored at their current positions and looking for new challenges.
• Davin owes me a lunch (not sure why, but I’ll never turn down a free lunch!)

All that was in just 30 minutes and as I peeled myself away, I’m sure there were more interesting discussions and connections that I missed.  Next social is probably in the Fall sometime, so stay tuned and I’ll keep you posted!

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Etienne Hardre is a CPA with BiggsKofford Capital specializing in helping entrepreneurs answer these questions: How do I sell my business, buy a business, or grow my business?

Best Accounting Firm (Runner Up)

Best Business Consulting Firm (Runner Up)

Best Business Leader: Chris Blees (Runner Up)

Best Place to Work: Mid-sized 16-50 Employees (Runner Up)

Best New or Re-Launched Website: www.biggskofford.com (Runner Up)

Special thanks to everyone who voted and if you are not yet a client, we would be happy to prove to you why we earned these distinctions by assisting you with your accounting needs.

The presentation began with the usual role call by Shockley and a rather impressive group was in attendance: Mike Kazmierski and others from the Economic Development Corporation, Dave Csintyan and his team from the Colorado Springs Chamber of Commerce, Jan Martin and others from the Colorado Springs City Council, representatives from several chambers of commerce from the surrounding areas, the full Operation 6035 Implementation Team, heads of various Colleges at UCCS, Michael Semmens and others from El Pomar, and many respected business leaders I at least recognized by name if not by face. Whether the goal was to find the people with the money or to find the people interested and able to make a difference, the right folks were definitely in the room.

Lane, the volunteer executive director of Operation 6035, spoke about why he is convinced that events are lining up to prepare Colorado Springs for a “renaissance”. His energy and “let’s just do it” attitude are infectious and I’m personally looking forward to his leadership. He mentioned the dialogue the city has been having over the strong mayor proposal and the proposed restructuring of city revenue sources as being the kind of conversations that make things happen one way or another. He vowed not to research issues to death but that he and the Implementation Team will select 5 or 6 issues to be dealt with first and then to either do them or not. He also discussed point 1 of the Angelou Report that criticized the region for a failure to collaborate effectively. After doing his own due diligence, Lane says he sees plenty of collaboration and that it’s only ineffective because people either aren’t collaborating in the right way or on the right things.

Pike Powers, the man credited with the vision that helped Austin, TX become the city it is today and now the consultant hired to impart some of that same structure to the revitalization efforts of Colorado Springs, shared the highpoints of a good vision. In his opinion, a community must connect globally, statewide, and locally to be successful and he offered some inspiring video clips to drive his point home. He also called out some of the present leaders to discuss a couple of good projects in the works such as the joint summit of the areas chambers of commerce and the conference on energy. His presentation was commanding and yet humble and self-deprecating.

Shockley closed with the fundraising call, asking that donations be limited to $1,000 per person or company to allow more people to become tangibly invested. The fundraising goal is $100,000 to match the original funds pledged by El Pomar and will pay expenses for another year. Shockley is convinced that one or two of the issues currently being discussed by the team could be solved within the next 12 months.

I am inspired by the healthy turnout and that the focus of the Implementation Team is not on “fixing” the existing groups but instead on fostering collaboration between them and on filling the gaps that exist in our community’s connections globally, at the state level, and even locally. By checking their agendas at the door, I hope they will succeed in surmounting these challenges.

I am personally involved in several groups offering solutions to some of the issues raised in the Angelou Report. The Peak Venture Group’s Blue Spruce Project and Middle Market Entrepreneurs are both helping businesses grow and communicate with one another. Additionally, I’ve been reaching out to my peers in the “young professional” category to help them connect and find that transcendent cause in which to invest their intellectual and social capital. Small as these efforts are, I hope they will contribute to building a great community in Colorado Springs.

If you want to get involved, even in a small way, please don’t hesitate to call me at 719.579.9090.

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Etienne Hardre is a CPA with BiggsKofford, P.C. specializing in helping entrepreneurs answer these questions: How do I sell my business, buy a business, or grow my business?

MIT ENTERPRISE FORUM

The Clean Energy Revolution
Monday, May 3rd
2:15 p.m. to 5 p.m.

Part of the MIT Global Broadcast Series held at the Colorado Springs Technology Incubator. Registration includes the broadcast and a light dinner.

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PVG BREAKFAST

Alumni Session
Friday, May 14th – networking begins at 6:30 a.m.

What happens to companies after their 5-Minute presentation? Where are they now? Where are they going? Imagine what you could learn from those who have been there, done that. Reserve your seat.

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M-ME BREAKFAST PANEL

Product Pricing in a Challenging Economy
Friday, May 21st
7:00 a.m. to 9:00 a.m.

Economic value is a key component in the entire marketing mix of price, product, promotion and place. Take an in depth look at the process for modeling economic value. Advance registration required.

You must enter at least 25 options for the vote to be counted, so here is a list to get you started.  Feel free to choose your favorite if you have one!

Best Business Leader: Chris Blees
Best Women Owned Business: Sales Department
Best Place to Work – Small Business under 15: The Doodler
Best Place to Work – Mid- Sized Company under 16-50: BiggsKofford
Best Place to Work – Large Company over 50: Reach Local
Best Photography Service: Megan Hardre Photography
Best Business Consulting Firm: BiggsKofford
Best Staffing Service: AccountAbilities
Best Executive Search Firm: AccountAbilities
Best Document Copying, Scanning Company: DocuCents
Best Accounting Firm: BiggsKofford
Best Electrical Contractor: Foster Electric
Best Telephone Equipment/Systems Provider: West-Tech
Best Nonprofit Organization: Peak Venture Group
Best Property Management Company: London Group
Best Employee Benefits Provider: Moody-Smallwood
Best Insurance Brokerage: Six & Geving
Best New or Re-launched Local Web Site: BiggsKofford
Best Blog: Springs Real Estate Network
Best Twitter: TweeterBargains
Best Facebook: Springs Bargains
Best Internet Service Provider: TW Telecom
Best Business Bank: Chase
Best Corporate Financial Services: Strategic Financial Partners
Best Networking Group/Event: Strictly Business

CREATING VALUE THROUGH SUSTAINABILITY

MIT ENTERPRISE FORUM
Tuesday, April 20, 2010
4:45 p.m. to 7 p.m.

Broadcast begins at 5 p.m., held at:
Colorado Springs Technology Incubator
3595 East Fountain Blvd., Colorado Springs, CO 80910

Reservations:
$15 includes the program and a light dinner. Reserve online now….

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PVG VOLUNTEER RECRUITMENT BREAKFAST

Wednesday, April 21st
7:30 a.m. to 9:00 a.m.

PVG is run by volunteers and we want you to join our ranks. Join us for breakfast at Marigold Cafe & Bakery to learn about volunteer opportunities and PVG committees. Register now for this free event.

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PVG SOCIAL
April Fool’s Party at Hondo’s

Thursday, April 29th
5 p.m. to 7 p.m.

Kick back and relax with Colorado Springs’ top entrepreneurs and business leaders. RSVP for this free event.

I love Colorado Springs because for a region of just over 600,000 people, we have a surprising amount of innovation and new business support.  For example, head over to the Colorado Springs Business Journal and read about the mentoring program Peak Venture Group has been offering for years.  Business advisors, successful entrepreneurs, educators, and seasoned investors all come together to support new business ventures and guide them toward growth, funding, and on to the next stage of their life cycle…nearly for free.

Check out the Middle Market Entrepreneurs, an exclusive program for executives of companies with either revenues of $5 million or more; or more than 50 employees.  These semi-monthly breakfasts are generally packed, which should give you an idea of the number of businesses based in the Pikes Peak Region that meet those criteria.

Shaun McNerny, a successful entrepreneur in several ventures including BitWeld, is running CXO Connect where executives of high tech companies can come together for a high caliber presentation and networking, again, typically for free.

I don’t even need to get into the Technology Incubator, Leadership Pikes Peak, Center for Creative Leadership, Tri-Lakes Business Incubator, High Altitude Investors, Manufacturing Task Force, the Bachelor of Innovation program at UCCS, Small Business Development Center, or a host of other groups, organizations, and programs all directed at fostering innovation, supporting small and mid-sized businesses, and developing the next market leaders in just about every industry.

If you’re an entrepreneur looking for the support of your community, come to Colorado Springs and we’ve got more support than you can handle.  If you’re already here, please get plugged in!  We have access to more knowledge, business acumen, and entrepreneurial power than most places in the world.  At the very least, give me a call and I’ll try to point you in the right direction.

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Etienne Hardre is a Senior Associate with BiggsKofford, P.C. specializing in helping entrepreneurs buy, grow, and sell businesses.

If you are a large government contractor and need to make sure your small business partners are meeting their contract requirements, give us a call.

If you are a small business just getting into government contracting, give us a call.

Check out our government contracting services and the press release on the BiggsKofford & McNew alliance.

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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  general market conditions improve.  Let’s look at four ways to increase your profitability and grow your business:

1. Increase Average Price
2. Increase Transaction Size
3. Increase Transactions
4. Reduce Costs

Head over to the Colorado Springs Business Journal to see the rest of the article.