The ballots have been cast. They are either already counted, being counted or being recounted. Regardless of the election results, we will all experience the “lame duck” legislative session. As elected officials finish their terms, those not re-elected tend to transition out of office without much legislative action. This will likely result in continued debates about another federal coronavirus aid package for small business owners. As the programs from the first federal CARES Act have either expired (such as the Paycheck Protection Program and Pandemic Unemployment Assistance) or will sunset in the next few months, the economic fallout of the COIVID-19 pandemic still remains.
Cases are spiking to new highs in Flagstaff and Coconino County, exactly as predicted by medical professionals, with the traditional cold/flu season combined with the holiday season. As communities, organizations and families prepare for the coming winter months with the hope of renewed legislative vigor, warmer months, a vaccine and increasing commerce, there are still resources available that are effective in helping small businesses insulate against the icy effects of a “COVID Winter.” The regular monthly articles during the next several months will focus on the programs, resources and actions that are proving effective for Coconino County businesses to maintain profitability and adjust to the economic downturn.
Working directly with dozens of business owners across Coconino County and having heard from hundreds of business owners about their business situation, it is clear that they are dedicated to their employees, responsive to their customers and always on the lookout for whatever new program or help that can be extended. When it comes to helpful business programs, there have been dozens of grant opportunities, business relief loan programs and wage subsidizing work programs, all of which have been helpful with quick injections of cash, but many of which are now expended. There is, however, a business program that is available now, free and operated by experienced staff across Coconino County, which is helping businesses to access not only these financial relief programs but to develop sustainable operations that will increase profitability.
The Coconino Small Business Development Center (SBDC), hosted by Coconino Community College and powered by the Small Business Administration is the resource highlighted this month.
A recent example of a Coconino County business owner who began working with the SBDC illustrates the difference between financial relief programs and programs that increase operational efficiencies. This owner, who operates several small retail shops, was experiencing a 25% drop in annual sales as a result of COVID-19. Working together, the owner asked the question, “How does my inventory turnover ratio compare with industry standards?” As a result, a full analysis of inventory purchasing history and a review of supplier credit terms was conducted. It became clear that the inventory purchasing practices needed to change. The bottom line immediately improved. What shocked the business owner was that total net profits increased to record highs, despite the drop in sales. Many local business owners have made similar improvements to their operations.
The next business owner’s experiences reiterates the benefits of partnering and asking the right business questions. This owner asked the SBDC to help them identify cost reduction items by asking, “What general business expenses tend to creep while the economy is good?” The answer became clear after a historical review of expenses. The costs that crept up the most were the small ones. In this business owner’s case, it was the merchant services charges from their banking partner. Slowly through the years, they had crept up to more than 5.5%, which equated to a full year’s salary and benefits package for one and a half employees. Changing financial transaction accounts was the obvious answer, but it took a long, detailed look, which was only possible with the free support from the business analysts at the Coconino SBDC.
There are other questions business owners are asking and getting profit-raising answers when they identify and implement the solutions.
These often-overlooked questions are worth asking and definitely worth investing your effort into finding the answers to. How do my labor costs compare with like-sized businesses across my industry? Where will my cash be needed in the next two, four and X months, based on worst-case, current-case and better-case scenarios? How can I maximize my credit terms to my advantage? How do my operating expense line items compare with industry benchmarks? These are some general business questions to consider investigating yourself, but often, the expert help of a business analyst is what is needed to expand a business owner’s thinking patterns and put the business on a new path to profitability.
Coconino business owners are encouraged to reach out to Executive Director Gina Couillard and her team of business analysts, located across Coconino County at the website below. This dedicated team serves clients in Flagstaff, Williams, Cameron, Page, Fredonia and all of the rural unincorporated region of Coconino County. If free one-on-one consultation is not desired, the SBDC offers step-by-step, virtual classroom style programs as well. Register for a consultation or check out the program training calendar at coconino.edu/sbdc.
Coconino County’s office of Economic Development continues to offer support during the holiday season. We will continue to keep you informed of programs and resources available for business owners across our county. Should you have questions, please feel free to contact me directly. FBN
By Chris Pasterz
Chris Vasquez Pasterz is the economic development manager of Coconino County. He can be reached at 928-679-7134 and 928-699-8361 or