Ingrid Baker, Director of Recruitment Resources for TVC

Technology Ventures Corp. and New Mexico WIRED are planning a job fair March 15 to March 19, but it won’t cost job seekers a penny in gas to get there. Appropriately for two organizations that focus on high tech and green tech industries, TVC and New Mexico WIRED are hosting this job fair in cyberspace.

Participating companies host “virtual booths” at the job fair web site, and they accept résumés during the event. Company recruiters will respond directly to each applicant and offer an assessment of the applicant’s skills in relation to the desired job.

Applicants can apply for jobs without having to show up and stand in line for a limited number of openings, and this saves time for applicants and recruiters, organizers say. The virtual mode also helps company recruiters narrow the applicant field quickly and efficiently.

What kinds of jobs

The fair is limited to high tech and green tech companies in New Mexico. Organizers want to help these industries grow because the jobs they offer provide opportunities for professional growth and higher-than-average pay. Not all the available jobs are technical; many companies need sales and marketing support as well as administrative staff.

A niche job fair calls attention to the groups working in high tech and green tech ventures and focuses the job seeker pool — an advantage for small, focused organizations that need to make the most of recruiting efforts.

Twelve companies with about 100 open jobs participated in the first fair last fall, and nearly 100 job seekers applied online.  About a third of those applicants landed follow-up interviews.

Alex Padilla of APJet attended that first virtual job fair. At the time, APJet was looking for engineers and technicians to help the company begin production of fabrics treated with the company’s breakthrough stain and water-repellant technique.

The three physicists who started APJet in 2003 had found a commercial use for a technology developed at Los Alamos National Laboratory. Using plasma, or ionized gas, in combination with other chemicals, they discovered that the character of fabric could be altered to repel moisture. Better yet, their technique didn’t require bathing fabric in environmentally harmful chemicals and polluting large quantities of water. APJet is working with a company in South Carolina to produce fabrics using its technology.

“For us, a small company with limited resources, the virtual job fair is a valuable tool,” said Padilla, director of business development for the Santa Fe-based venture. “I don’t have a full day to do résumé-gathering.”

While it’s true that virtual job fairs deprive both employer and potential employee of fact-to-face contact, Padilla said, in-person meetings can be arranged for candidates whose professional skills clear the first hurdle.  In all, he said, it’s more efficient than a traditional job fair.

For more information, visit www.nmvirtualjobfair.com

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by Teala Kail, Public Information Officer, NM RLD

The New Mexico Regulation and Licensing Department’s Construction Industries Division (CID) is considering two rule changes to the New Mexico Administrative Code (NMAC) that would increase reinspection fees and clarify the ratio of journeymen to apprentices in the construction industry. The agency wants to hear from the public before making the rules official and has scheduled five public hearings around the state to take public comment.

New Rules

One reason the agency wants to increase reinspection fees is to cover the cost of these services. The fee increase applies only to construction projects that require reinspections because they failed the first inspection.

This rule change is expected to encourage contractors to have their construction projects in their appropriate phases before requesting inspections. If the rule change takes effect, reinspection fees will rise from $45 to $80 for a second inspection and to $120 for a third or subsequent inspection.

In addition, CID wants more clarity in the administrative code as it pertains to the ratio of journeymen to apprentices in the building trades. The new rule spells out the appropriate numbers of journeymen to apprentices for each of the trades and aims to bring the rules in line with state statutes.

The journeyman-apprentice ratio rule addresses issues of safety and professional qualification in the industry. Improperly trained, unregistered apprentices can result in an unqualified work force, more construction code violations and hazardous environments for both workers and the public.

To develop the new regulations and seek industry feedback, CID formed a Journeyman Ratio Subcommittee. Various segments of the industry, including the commercial and residential construction industries, were represented on the panel.

Public Comment Wanted

Individuals are encouraged to attend one of five community hearings planned for early March to solicit public testimony on the proposed rules. Written comments are also welcome at the hearings.

Public hearings on proposed amendments to NMAC 14.5.5 and NMAC 14.6.6 are set for the following dates and places:

• 1-4 p.m. March 1, McGee Park Convention Center, 3041 E. Main St., Farmington
• 9 a.m. to noon March 2, CID Conference Room, 5200 Oakland Ave. N.E., Albuquerque
• 9 a.m. to noon March 2, CID Conference Room, 2550 Cerrillos Road (third floor), Santa Fe
• 9 a.m. to noon March 3, CID Conference Room, 505 S. Main St., Suite 150, Las Cruces
• 9 a.m. to noon March 4, City Council Chambers, 425 N. Richardson Ave., Roswell

Members of the public who can’t attend one of these hearings can send written comments by 5 p.m. March 3 to the Construction Industries Division, 2550 Cerrillos Road, P.O. Box 25101, Santa Fe, New Mexico 87504, Attention: Public Comments. Fax 505- 476-4685. More details about the proposed rules can be found at http://www.rld.state.nm.us/cid/news.htm.

By Teala Kail, Public Information Officer, NM Regulation and Licensing Department

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Candice Lee of Sommer, Udall, Sutin, Hardwick & Hyatt, P.A.

One of the first considerations for the owner of a new business is what form that business should take. The most common options are sole proprietorship, partnership (general and limited), corporation (C corporation and S corporation) and limited liability company.

Most businesses begin as a sole proprietorship, which makes sense for the startup and new business owner. Many sole proprietorships consist of a single individual working at home, developing a product in the garage or writing software code on the home computer. These businesses have few assets other than the equipment and tools used — and usually owned — by the individual. Any assets acquired by the sole proprietor are purchased in the owner’s name, although some sole proprietors use a “doing business as” or “d/b/a” name following their own names. 

In a sole proprietorship, the business does not exist apart from its owner. All of the profits, losses and deductions for the business are reported on the owner’s personal tax return, and the owner of the business is personally liable for all of the business’s debts, obligations and liabilities, regardless of whether the owner is using a trade name as a “d.b.a.” No regulatory filings are required to establish or create a sole proprietorship, but entrepreneurs should check with local and state tax authorities to ensure the business is in compliance with local and state tax laws. 

For most business owners and entrepreneurs, the sole proprietorship will only suit the business and its goals for a limited time. At some point, the business will expand and the owner will be looking for ways to limit his or her personal liability, bring in new partners and seek outside investment. At this point, the business owner needs to consider how — and in what form — to move forward. These are the kinds of questions legal counsel will ask a business owner who is trying to decide whether to become a partnership, corporation or LLC:

• What is the expected or planned growth of the business in the next year? The next three years? The next five years? 
• Does the business plan to hire employees or consultants? Will the business pay the employees or consultants in cash or in equity?
• What are the business’s financing requirements in the next year? The next three years? The next five years?
• Where will the business have offices? Will they be in state, out of state or both?
• What material contracts does the business anticipate entering into in the next year? The next three years? The next five years?

The answers to these questions will determine what entity is best for the sole proprietor to assume in order to build the business and to meet its evolving goals.

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Lloyd Calderon, Director, New Mexico Veterans’ Business Resource Center

The stories we hear about veterans tend to be heartbreaking ones that demand the attention of a nation at war in two countries — stories about veterans who are debilitated or made homeless by service-related physical or psychological injuries. But there’s a success story involving vets that few people hear. In New Mexico, that story involves the 22,600 businesses owned by veterans — fully one out of seven of the 158,200 small businesses based in our state, according to the Small Business Administration.

New Mexico is home to 180,000 veterans, 30,000 of whom have served in Iraq and Afghanistan. Many of those former soldiers hope to draw on the same commitment, dedication and courage that served them in battle to operate businesses that serve community needs and provide jobs to other Americans.

Hundreds of the warrior-entrepreneurs doing business in New Mexico find assistance in their quest at the Veteran’s Business Development Office, an office of the New Mexico Department of Veterans’ Services. State Secretary of Veterans’ Services John Garcia started this office about two years ago to help returning veterans establish new businesses or expand existing ventures — but he especially aimed to help eligible vets take advantage of new federal laws that set aside 3 percent of federal contracts for businesses owned by vets who were disabled during the course of their military service.

The Veteran’s Business Development Office works with regional offices of the Small Business Administration, the state’s Small Business Development Centers and the Albuquerque Hispano Chamber of Commerce to help veterans draw up plans and marketing strategies for the enterprises they want to start or expand. The office’s staff will even help with such basic work as deciding on a company name or securing a Data Universal Numbering System, or DUNS, number, which is essential when bidding on a government contract or applying for a grant. The office also assists vets who want to apply for low-interest Patriot Express loans specifically designed to help veterans, and it educates federal contractors, purchasing agents and veterans themselves about the new set-aside laws. During its brief existence, the office has helped service-disabled veterans secure federal contracts worth more than $35 million.

Veteran entrepreneurs are behind many successful businesses, including Federal Express and Little Caesar’s Pizza. Closer to home, Hacienda Home Centers, Crystal Clear Maintenance, SDV Construction and Brocon Inc. are just a few examples of some home-grown ventures launched by veterans.

For more information, contact the Veteran’s Business Development Office at (505) 841-2956.

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Wayne Unze, Director of Business Brokerage at Maestas & Ward Commercial Real Estate

Pricing a business for sale requires evaluating its cash flow—another name for a business’s earnings before interest, taxes, depreciation, amortization and owner’s compensation are subtracted.  Cash flow is then multiplied by a number that falls within a range appropriate for the industry and market—a number that takes into account other variables that affect the business.

But unlike multimillion dollar enterprises, small businesses often find much of their cash flow goes toward the owner’s compensation (salary and benefits).  To accurately determine a small business’s true cash flow, its owner’s total compensation package must be removed from the equation to reveal essential operating expenses and thus avoid undervaluing the business.

The easiest and most widely accepted way to do this is to add all components of the owner’s compensation — things like health insurance premiums, salary, auto lease and profit sharing — to the earnings before interest, taxes, depreciation and amortization (known as EBITDA).  Other additions might include non-recurring expenses such as one-time moving expenses; however a seller must be able to prove all the cash flow components.  This means any expense he maintains is not business-related or is personal compensation must have a receipt or other validating document supporting the claim.

This revised cash flow sum is multiplied by 2.0 or 3.0 to arrive at a range of business value; if the resulting number is less than the current value of the business’s assets, the asset value then becomes the company’s true value. The cash flow multiple can be increased somewhat if cash flow exceeds $300,000 and even more when it passes $500,000 since more debt can be serviced at that level.

Other factors that can influence the value of a business are age and condition of equipment, real estate owned by the company, age of business and history of profits, among other things.

Here’s a sanity test to employ when trying to decide if a business is fairly priced: After a typical down payment of 30 to 35 percent, the business’s cash flow should be able to retire the balance of the debt while providing the buyer an adequate living wage.

To illustrate this equation, let’s say ABC Inc. has a net profit of $30,000 on sales of $600,000. For an accurate number of this business’s value, consider that the business’s operating expenses include the owner’s salary ($50,000), his health insurance premium ($5,000), his profit sharing ($20,000) and his leased company car ($7,000 per year). Other cash flow components in the operating expenses include interest payments of $10,000, depreciation of $25,000 and amortization of $3,000. When these operating expenses are added to the net profit, the cash flow of this business is a respectable $150,000. Multiply that number by two or three, and ABC Inc. is worth between $300,000 and $450,000.

If the buyer put down $150,000 (one-third) on an offer of $450,000, the debt service would be about $4,528 per month on a seven-year payout at 7 percent annual interest (standard terms). After servicing the $54,300 annual debt, the buyer would still have about $96,000 remaining as his compensation package and return on his initial investment.

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Paul Goblet, Investment Advisor to the New Mexico Small Business Investment Corporation

In the midst of the credit crisis, foreclosures and bank closings, it’s certainly understandable that some businesses have a harder time getting a loan than they did 18 months ago. Yet New Mexico has been spared much of the financial pain being experienced in Florida, California and elsewhere.

In many cases, failure to qualify for a loan has more to do with a person’s business or personal credit than it does with the nation’s economy.  No one today wants to lend to businesses with these problems:

• A history of being late on interest and principal payments to creditors
• A prior foreclosure or debt settlement
• Little or no means to support the consistent repayment of the loan
• No collateral of any merit or value to support the loan
• A poor debt service coverage or debt-to-equity ratio, which leads to a low credit score

Compounding the problem is that many business owners don’t know where to turn for information, assistance or training to fix a credit problem.  Small Business Development Centers are among the most helpful resources in the state for this type of guidance.  Similarly, WESST provides technical assistance and training to business owners and those looking to start a business.

Sources of savvy

With 20 locations scattered around the state, Small Business Development Centers exist to help business owners. They have classes on many subjects that can help people manage and run a business more effectively, but they’ll also help a business owner with more basic skills, such as creating a business plan that can help the business owner speak more confidently with a lender about the prospects of his or her venture.

In a time of global competition, information is empowering if a businessperson knows where to find it. One source of basic business information is the Finance New Mexico web site (www.financenewmexico.org), which features more than 120 articles on business issues written by local experts.

Sources of money

As the commercial banking sector faces new challenges, alternative lenders like the Loan Fund, ACCION New Mexico and WESST are even more valuable to people in need of credit.  Since 2004, these organizations have loaned more than $24 million to nearly 1,800 businesses (that translates into 350 loans per year).

All three organizations have excess capital to lend, but they, too, have imposed stricter credit policies to address higher-risk investments.  These organizations are willing to lend money when they have a high expectation of being repaid.  Business owners can meet that standard if they:

• Provide tax records for the past two to three years.
• Create a business plan.
• Explain why the money is needed and how the loan will be repaid.
• Explain past credit problems and how they’ve resolved them.
• Are serious, honest, passionate, professional and prepared.

Here’s how to reach the primary organizations mentioned in this article.

The Small Business Development Centers:  800- 281-SBDC

The Loan Fund: 866-873-6746

ACCION New Mexico: 800-508-7624

WESST: 505-246-6900

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Mark Walztoni, Human Capital Advisor at Flywheel Ventures and Managing Director at Sustainable Ventures Alliance LLC

Given that 60 percent of an angel investor’s decision to invest is based on the strength of the management team, according to the National Angel Association, an entrepreneur or investor needs to get the right people on the management team — in the positions that match their talents — and get the wrong people off the team.

Identifying and retaining top talent can be more challenging in New Mexico than it is in other places, judging by the numbers of reports about the dearth of top talent here.

It’s all in the specs

While candidate identification largely occurs online, the first step is to develop a clear job specification, including clear objectives and responsibilities for each job on the management team. The most effective companies use behavior-based questions about past situations to identify the cultural requirements and expectations of the prospective hire’s internal and external customers, peers and staff.

These expectations should form the basis of a clear and measurable “First 100 Days Onboard” plan to ensure that the newly hired or promoted team member can and does meet performance and cultural expectations and build a foundation for future success.

An early-stage company can put itself out of business through one or two poor hires simply because a do-over isn’t practical or tolerated by external investors.  An investor’s due diligence will likely include reviewing a business’s organization chart, advisory team, résumés (looking for clear accomplishments and responsibilities), employment contracts and non-compete provisions, as well as job specifications for planned hires.

It matters even without investors

These principles apply even for businesses that plan to build a sustainable organization without outside investors.

One way a business owner or manager can assess the capabilities of the leadership team is to draw a four-box matrix with “performance” labeled across the vertical axis and “leadership style” along the Y axis and then to decide where each member of the management team fits in the categories of “reward,” “coach,” “train,” or “remove.”

Leaders in the “reward” category may be ready for a greater role or appropriate recognition as they are most at risk of being recruited away by other companies. The “coach” category is for leaders who have the right skills but whose behavior undermines or alienates others. Those in the “train” category have the right leadership style but need specific skills (someone in the first 90 days in a new job would fall into this category). “Remove “is self-explanatory and typical after a “train” or “coach” development plan isn’t successful.

This combination of creating the right expectations and ongoing leadership team assessment creates a “virtuous cycle” of actions that help make sure the right person is ready at the right time for the right role.

Mark can be contacted directly at mark@markwalztoni.com or comment below.

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Deborah Peacock, Peacock Myers, P.C.

Consumer reliance on Kleenex as the colloquial term for all facial tissues and Fiberglas the generic term for glass fiber insulation is an asset of incalculable value to the manufacturers of both products because Kleenex and Fiberglas came to be seen as the very incarnation of their respective products, rather than specific brands. To continue in this vein, the makers of both protect these names with trademarks to distinguish them from imitators.

Anyone with a product that could set a standard in its class in commerce should consider obtaining trademark protection. Before proceeding further, she should consult a qualified attorney or legal expert.

A name with value

Trademarks and service marks are symbols, words, phrases, names and sounds that distinguish one manufacturer’s goods and services from those of a rival. Some familiar trademarks are the golden arches of McDonald’s, the chimes of NBC and the color pink for Owens-Corning Fiberglas. Anyone who uses one of these trademarked features on their goods or services in a way that is “confusingly similar” to the originator’s trademarked feature or product is infringing on the originator’s trademark rights.

To avoid such problems, innovators should search existing trademarks and trade names for those that might be confused with the mark or name they are considering for a trademark or company name. Trademarks can be searched in a cursory manner at the U.S. Patent and Trademark office website found at www.uspto.gov.

How to register

Trademarks should be registered with the federal government, which gives the trademark holder rights throughout the United States and the right to use the ® symbol. An innovator can use TM or SM on marks he considers proprietary, even if he hasn’t applied for the trademark or service mark. Ordinarily, the creator must have used a trademark in the marketplace before he acquires rights to it.

Federal trademark registration applications require a $350 filing fee for each class of goods and services being registered. The U.S. Patent and Trademark Office then searches for confusingly similar marks and examines the application for other irregularities. This can take 18 months to two years. Federal registrations last for 10 years, but an affidavit of continued use must be filed in the fifth year. Registrations are renewable. Information is available from the Commissioner of Trademarks, Washington, D.C. 20231; (703) 308-HELP.

One can also register a trademark in New Mexico for protection limited to the state. A federal registration supersedes any state registration, so a federal search is required even if a developer intends to use or register the mark only in New Mexico. Forms are available from the Office of the Secretary of State, Executive Legislative Building, Santa Fe, New Mexico 87503; (505) 827-3600.

A trademark can also be registered for global protection. The U.S. recently joined the Madrid Protocol, an international treaty that permits filings in a several countries simultaneously. Or trademark filings can be made in individual foreign countries and certain groups of countries (e.g., the European Community).

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James Hernandez, Vice President at First Community Bank in Santa Fe

When the economy sours, many businesses cut back on services they consider nonessential. The most shortsighted companies lump customer service into the “expendable” category.

What these businesses don’t understand is that consumers tend to remember the people and businesses that help them through tough times.  It might be a business that provides a vital, one-time service or it might be a store the customer visits often, such as a grocery or hardware store.

The store that employs enough people to prevent backups in the checkout lines and to answer customers’ questions is the store most likely to survive a recession because it’s demonstrating a respect for its customers’ time and energy at a time when many stores are trying to limp along with skeleton crews.

In an economy struggling to right itself, just about any service business can distinguish itself from the competition by ramping up the customer service.

What constitutes service

In a global marketplace where local merchants are competing with Internet-based businesses around the world, outdoing the competition means offering customers good value for their limited dollars. That value includes the service and support the customer gets before, during and after the sale.

Customer service boils down to communication. Any business that deals with the public is usually only as successful as the first impression it makes on customers who visit the business or contact it by telephone or e-mail. Employees should be trained and empowered to help customers with all of their shopping needs, and managers should be close by to back up front-line workers as soon as the customer’s needs exceed their authority or expertise.

Businesses that rely on technology for sales or customer service need to be sure that online services and web sites are easy to understand and navigate. The best of these businesses distinguish themselves among competitors by providing telephone and online support — and it’s better still when the service people are based in local communities rather than in a country halfway around the world.

A world hungry for conflict resolution

Customers usually don’t care what went wrong or why it went wrong when a product or service doesn’t meet their expectations. They just want the problem fixed.

Businesses should make sure every employee is trained in conflict resolution skills and familiar with the business’s return policies.  Employees should understand that empathy goes a long way toward disarming an angry customer and that making excuses or trying to find fault only escalates conflict.

Dealing with unhappy customers is the least favorite part of the customer service job, but a business that can quickly solve problems or mistakes in a business transaction can defuse customer anger and often win a loyal, long-term customer.

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John Woosley, Director, U.S. Small Business Administration, New Mexico District Office

Most business owners are aware of the loan guarantees provided by the U.S. Small Business Administration (SBA) to help support and develop their businesses. SBA is also the agency that helps small businesses contract with the federal government, the largest customer in the world.  Included in that contracting role is the 8(a) program, which uses federal contracting opportunities to help socially and economically disadvantaged small businesses participate in the marketplace.

Under the program, SBA business development specialists provide a broad range of support such as mentoring, procurement assistance, training and other financial, management and technical assistance to help these businesses prepare to do business with the federal government and other customers.

Who is eligible

The general eligibility for the 8(a) program includes individuals who are “socially and economically disadvantaged.” This category includes people who are members of racial and ethnic minority groups and other individuals who can show individual social disadvantage.  A personal net worth of $250,000 or less, excluding the value of any residence and the applicant business, is one of the parameters for economic disadvantage for the purposes of this program.

Individuals must hold majority ownership in the business for which they apply for 8(a) status and work full time in that business. The business itself must not exceed specific size standards, be at least 2 years old, demonstrate it is under sound management and generate products or services that are needed by the government as determined by a history of federal contracts in that area.  Although the federal government purchases a very wide variety of products and services, in New Mexico we see a preponderance of federal contracts in the construction, information technology, landscaping, security and office-support industries.

Changes in the works

The SBA is considering modifications to the 8(a) program regulations and the public is invited to comment on those proposed modifications.  The proposed changes may be found at http://edocket.access.gpo.gov/2009/pdf/E9-25416.pdf.  A public meeting is set for 9 a.m. to 4 p.m. Jan. 15 in Room 100 of Smith Brasher Hall on the main campus of Central New Mexico Community College, 525 Buena Vista Drive S.E., Albuquerque. A separate meeting specifically for the Native American business community will be held from 9 a.m. to 4 p.m. Jan. 14 in the Pottery Room of the Indian Pueblo Cultural Center, 2401 12th St. N.W. in Albuquerque.

Preregistration by Jan. 11 is required for either meeting. To preregister, email Latrice Andrews in the SBA’s office of business development with the presenter’s name, organization, address, telephone and email address at latrice.andrews@sba.gov or fax the information to 505-481-4042. Presenters should indicate whether they intend to speak or offer written testimony.

A panel of SBA representatives will receive the public’s testimony, which will become part of the public record. The SBA requests that comments focus on the proposed changes and do not raise issues pertaining to other SBA programs.

For more information, go to www.sba.gov.

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