COLORADO SPRINGS, Colo.—Davin Neubacher could have panicked when his business revenue nose-dived in the fourth quarter of 2008, from 20 percent growth to 7 percent.
“You can either throw up your hands or learn and adjust,” said Neubacher, who owns Navakai, an information-technology support company that opened in 2001.
Neubacher didn’t lay off staff or downsize or adopt a self-defeatist attitude. Instead, he said, he listened to what his 650 corporate clients and 11 employees wanted and set a new course.
Many small-business owners have been fearful and unsure of what—if anything—to do during the nation’s recession. As they’ve seen revenue shrink and expenses balloon, seemingly strong companies struggle and fold, and unemployment grow, some have developed new strategies to move beyond survival and thrive.
Whether it’s taking advantage of the competition going under, trying a new way of doing business or introducing a different concept to the market, many are getting creative and taking risks. What they’re doing, they say, is working.
Neubacher explored how he could deliver his product—computer support—more effectively with less money going out the door. He figured out how to automate his system and remotely fix thousands of computers to save time, fuel and manpower.
He also renegotiated his office lease in downtown Colorado Springs to lower the monthly rent and delayed major capital purchases that weren’t critical.
And as Neubacher watched a cleansing of the industry, with several of his competitors going out of business—or shedding staff to the point that it hurt their service and reputation—he worked on gaining the customers they left behind.
In February, Neubacher opened a second office in Denver and hired two sales associates.
“Some call it predatory selling, but people still need good IT support, and there are fewer good providers—so there’s still demand but less supply. Some people said, ‘you’re nuts to expand,’ others said, ‘I get it.'”
While he admits it’s tough to sell anywhere right now, he’s using the same sales tactics in Denver as in Colorado Springs: “We still sell based on building relationships, establishing trust and having a damn good product,” Neubacher said.
The new office required nearly no capital investment, as Neubacher traded office space for computer services with an existing client.
To keep customers satisfied, Neubacher added “more bang for the buck,” converting all contracts to monthly with no cancellation penalty, offering unlimited support instead of a certain amount of minutes, expanding office hours, lowering sign-up costs for new clients and creating a way for clients to track jobs.
Navakai reports annual gross revenue of about $1.4 million, and Neubacher is projecting 15 percent growth this year because this year’s first quarter also has been lackluster.
“We’re optimistic but realistic,” he said.
Dennis and Marsha Weets took a chance last year and invested in a new way of building homes. The husband-and-wife team now say the method is much better than the old, traditional business model.
The Weetses have built custom houses in Colorado for 25 years, completing two or three a year. The couple started seeing the market contract in 2007.
“I struggled as an independent homebuilder to grow my business. It got to where we had one house on the market for the whole year,” Dennis Weets said.
Weets was getting ready to plunk down a chunk of money to buy another lot to build another spec house when an alternative surfaced.
He was courted by worldwide homebuilding franchiser G.J. Gardner, which has offices in Parker and Loveland, along with California and overseas.
Weets liked the concept. As a franchisee, he could use the company’s accounting and marketing systems, deliver faster price quotes, take advantage of volume buying, have a scheduling process for contractors, offer fixed price quotes and complete a house in 12 to 16 weeks—while still peddling custom designs.
A year ago, he took the money he was going to spend on land and bought into the franchise. Franchise costs range from $70,000 to $150,000, depending on the location, according to the regional office.
“I looked at it as an opportunity to gear up for when the market recovers. I knew we’d need time to learn their business plan and computer system,” Weets said.
In March of 2008, the couple opened a showroom in a strip mall in Falcon and built two pre-sold houses in nine months.
Getting used to having an office was tough for the Weetses, who had always conducted business out of their home. But their business now has six to eight pre-sold houses on the books.
“I’m busier than I ever have been,” Dennis Weets said.
Mary Burton realizes now may not be the ideal time to start a new business. But she’s convinced the combination of an art gallery, gift shop, and massage and healing studio in one location on the west side is innovative enough to work. Plus, she said, it gives shoppers more than one reason to visit the shop.
Burton and her fiance, Everardo “Ed” Reyes, opened Nirvana on March 1. The shop offers pieces consigned by local artists, including leather masks, carved wood, fused glass, pottery, photography, jewelry, acrylic paintings and mixed media.
Reyes, a massage therapist for four years who had a studio at another location in Old Colorado City, set up a room for massage and healing therapy.
The venture is a dream come true for Burton, a potter since 2003, who also has kept her day job as a scheduler for a surgeon.
“I’ve wanted to do something that supports local artists, and Ed and I realized we could combine our different strengths,” Burton said. “We know it’s a scary time—but if we can do what it takes in the down market, we know it’ll just get better,” Burton said.
Artists have helped promote the business, family work in the shop and Burton is developing new concepts, such as imprinting company logos on original art.
The largest investments have been buying supplies and insuring the art, in addition to the lease.
“The best advice I ever got about business is ‘keep it simple and surround yourself with people who know about the things you don’t.’ That’s what we’ve done,” Burton said.
