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“We can’t really compete with cupcakes,” says Ryan Coonerty, a trifle wistful. The former mayor and current City Council member is sitting downtown at NextSpace, the shared office space and networking center he co-founded with Jeremy Neuner. He’s here to talk about their newest project, a series of classes for freelancers, consultants, and entrepreneurs, meant to teach people how to create and grow their businesses. They’re being held at NextSpace, through a partnership with Cabrillo Extension. But he acknowledges that they’ve got serious competition from other extension courses: “The cupcake decorating class has, like, 70 people already.” Business classes are always going to be a tougher sell than sweet treats, but Coonerty is hopeful that these courses will provide needed training and education for Santa Cruz’s self-employed entrepreneurs, as well as the city’s small-business owners. He says that as more people become self-employed, the need becomes greater for them to learn how to manage all aspects of their professional lives.

“In the past,” he explains, “corporations traditionally provided an infrastructure in terms of offices, job training, health-care, all these different pieces. Now, we’re moving towards a more freelance, outsourced economy, so we have to create this infrastructure ourselves.”The self-employed are a huge proportion of the Santa Cruz workforce – the Cruz Business website estimates that of the city’s 6,000 business licenses, 4,000 are held by solo entrepreneurs. “Santa Cruz is a beautiful place, and you have a lot of people who try to figure out how to make it work here so they can live here,” Coonerty says. “One of the ways they do that is by piecing together a bunch of different gigs. There are not a lot of big companies here that provide an employment base, so people have to be pretty creative and entrepreneurial in order to keep their business going.

“But if you’re going to be a successful consultant and freelancer, you have to be good at marketing,” he adds. “You have to know how to do accounting. You have to know how to set up a legal corporation.”

The courses begin in late September; they will be “Start-Up 101″, taught by Jim Weisenstein, who serves on the NextSpace board of directors, “Using Social Media to Grow Your Business” and “Freelancing & Consulting 101: Law, Accounting, Finance & Insurance,” both taught by Neuner. With small class sizes and a focus on strengthening students’ individual business plans, it may not be dessert, but it still sounds pretty sweet.

For more information, visit http://www.nextspace.us, or the Cabrillo Extension course catalogue online at http://www.cabrillo.edu/services/extension/business.html.

Courtesy of goodtimessantacruz.com.

Save money and invest early.

Those were the two most important delivered during Thursday night’s community class on the basics of saving and investing hosted by Bay Federal Credit Union. It was part of a series of free financial education seminars hosted by Bay Federal that are open to the public.

Angelica Reyes, Bay Federal’s youth financial education coordinator, gave tips to the class on how to effectively save money: save 10 percent of everything you earn, including bonuses and tax refunds, set aside an emergency account and use automatic transfers to put money aside.

Investment adviser Paul Clark outlined the basics of investing for the group of 17 in attendance. The most important principles of investing are to begin early, focus on accumulating shares, diversify investments and, most importantly, to keep a long-term perspective if the market begins to decline.

“It’s not timing, it’s time in the market,” he said during his presentation.

Felton resident Jordan Howard went to the class to learn more about saving money, but ended up singing praise for investing that money instead.

“You can save $10 now and it will be gone tomorrow,” he said. “But if you invest that $10 it can turn into $80 over time. That’s great.”

The credit union began hosting classes on various financial topics after Reyes, who travels to local schools to teach finances, began to see a demand for financial education for adults. Now, she said, the economy has made such community outreach more important.

“This is a really tough subject, especially during these times,” she said. “It’s not only tough for people to come and listen, but for people to do — they say I can’t even pay my rent, how can I invest?’”

Bay Federal’s next financial class, titled “Yours, Mine, & Ours — Budgeting for Couples,” is a hands-on workshop for partners to build a budget together.

Aptos resident Stela Fenwick, who attended the Thursday class, said she might be at the next class as well — even though she said her daughter had to drag her to the investing class.

“I came to keep her company but I learned more about stocks and mutual funds,” she said “It’s a pretty comfortable atmosphere. I would come back.”

Courtesy of santacruzsentinel.com

At our Real-Time Stream CrunchUp in July, 12seconds previewed a new iPhone application to send video messages to your Twitter and Facebook followers. Today, the app, called 12mail Video Messenger, is finally live in the App Store.

To refresh your memory, basically, the app allows you to send short videos to your friends in the same way that you might send them text messages. Once you download the app, you simply input your Twitter or Facebook (or both) credentials and you have access to your contact lists from those services. From there, if you want to send a message to someone you’re connected with on Twitter, simply enter in their name, record the video (or use a pre-recorded one) and it will send them a direct message with a link to the video.

If you send a message to Facebook friends, it will post the video on their Wall. You can also mix and match contacts to send the videos to from within the app. And you can send the videos out publicly to all your Twitter followers. If your contacts also have the 12mail app, they can see the message right from within it on the iPhone. And it will send a Push Notification when new messages come in.

12mail is a big part of 12seconds’ new strategy to use existing social graphs (Twitter, Facebook) for its video platform, rather than trying to build out its own. That makes sense as obviously those are much, much larger than 12seconds.

Interestingly, the app will also work with non-3GS iPhone (meaning ones without video recording capabilities) but it becomes a dumbed-down version of the app. Users of 12seconds’ first iPhone app will remember that it involved still pictures and audio; this dumbed-down version is basically the same.

You can find the free app in the App Store here.

Also kind of humorous is Apple’s list of warnings for the app: “Frequent/Intense Sexual Content Or Nudity,” “Frequent/Intense Realistic Violence,” etc. Apple clearly loves the possibilities of video messaging!

Courtesy of techcrunch.com

Market Tech boosted sales by changing the product mix to suit customers. Ameri-Kleen emphasized customer retention, with bonuses for employees when they meet company goals. The Armada Group, recognizing customers were more cost-conscious, offered services to reduce costs for clients.

With a laser-sharp focus on customers, all three kept revenues on the fast track despite the downturn. They earned a place on Inc. magazine’s fast-growing 5,000 list for a second straight year while two other local companies on the 2008 list did not repeat that feat.

Market Tech

Market Tech, the smallest of three locals recognized by Inc., built up its revenues over three years from six figures to seven figures.

“It’s easy to do when you’re small,” said Phil Crowley, who founded the Scotts Valley company in 2002. “Once you get to $10 million or $20 million, it’s harder to double sales.”

He has five employees selling measurement and fiber optic products to companies in biotech, aerospace and research.

“We’re not selling to industries like automotive,” Crowley said, referring to a sector hard hit by the recession. “We’re diversified. We didn’t rely on one market sector.”

The company is always refining its list of products, adding new those in demand and dropping others with less potential or fewer sales. As a reseller, that’s easier to do, compared to a manufacturer committed to products it has designed or has in the pipeline.

Crowley didn’t add sales staff in the past year but that could change.

“The first quarter was a little scary but things are looking good for the rest of the year,” he said. “We might have to add people. It seems like we always have more work than time in the day.”

Ameri-Kleen

Ameri-Kleen started out as a small cleaning business but since Brett Meyers, 35, son of the founder, took over in 1998, the Watsonville company has expanded into Arizona and New York. The growth spurt started in 2002 with acquisition of a company in San Luis Obispo.

“We’ve continued to add positions at all levels,” Meyers said, including management, accounting and human resources. “We’re hiring frontline employees all the time.”

Employees not only follow a set of procedures for vacuuming, carpet-cleaning and restrooms, they also get a list of requirements for each specific worksite. One client may insist on all interior doors being locked but another may prefer they stay open.

Employee turnover is a quarter to a third of the industry average, Meyers said, citing a companywide bonus plan that depends on everyone working as a team.

“We report on it daily,” he said. “We have a weekly conference with the manager. Everybody knows the number.”

Meyers, who worked for his dad as a teen before attending Cabrillo College, gathers ideas at conferences and trade shows.

He’s part of the ISSA, a worldwide cleaning industry association, and is working toward certification to the Cleaning Industry Management Standard.

“We’re reviewing every process we do to see if this is the best way to do it,” he said.

The Armada Group

The Armada Group, an information technology consulting firm in Santa Cruz, anticipated the market would contract, creating more competition for clients.

“In the fourth quarter, we knew it was coming,” executive vice president Dan Mickwee said. “In a time like that, you can’t take any business for granted. Employees need to talk to clients differently. Clients expect a lot more.”

He compared the situation to the switch in the real estate market from agents expecting multiple bids to agents working hard to attract a buyer.

Mickwee focused on evaluating existing services and finding ways to improve, which led to new services built around cloud computing, an advanced technology that can cut costs for customers.

He credited Jeff Tavangar, founder of The Armada Group, with establishing a cost-effective internal operation so when the downturn hit, the company could still focus on helping customers instead of cutting costs.

“We have no debt,” Mickwee said. “Any company that came into this recession with a lot of debt is having trouble.”

The Armada Group is taking advantage of the shifting job market to attract talent.

“We’ll be making hires on the consulting staff, some internal hires as well as sales,” Mickwee said. “We think the skies are opening up — not a boom, but things have leveled off.”

INC. 5000

Three local companies made Inc’s 2009 list of 5,000 fast-growing companies based on growth over three years. Market Tech and Ameri-Kleen made the list in 2008; this is The Armada Group’s third year.
No. 104 Market Tech Specialty: Distributor of lasers and fiber optics
Location: Scotts Valley
Founded: 2002 by Philip Crowley
Growth: 1496.5%
2008 Revenue: $5.2 million
2005 Revenue: $325,403
Employees: 5
Information: markettechinc.net or 461-1101
No. 1,688 Ameri-Kleen Specialty: Janitorial services for offices
Location: Watsonville
Founded: 1969 by Steve Meyers
President: Brett Meyers
Growth: 189.4%
2008 Revenue: $9.5 million
2005 Revenue: $3.3 million
Employees: 275
Information: ameri-kleen.com or 722-8888
No. 3,711 The Armada Group Specialty: IT consulting and staffing
Location: Santa Cruz
Founded: 1997 by Jeff Tavangar
Growth: 61.5%
2008 Revenue: $13.3 million
2005 Revenue: $8.2 million
Employees: 95
Information:
thearmadagroup.com or 459-6550

Courtesy of San Jose Mercury News

An intensive all-day workshop to position and promote profitable and sustainable growth for your business. Craft your company’s Unique Selling Proposition — your promise to the marketplace — what separates you from the competition; develop and articulate the story behind your USP worth tens of thousands of dollars of media coverage and credibility; discover how to use the power of your USP in social media, promotions, networking, presentations; and write an effective elevator pitch.

Led by veteran marketing professionals Mark Oman of Detours to Success!, Patti Bond of Bond Marketing Communications, and Kathryn Gorges of Marketing Possibility.

COST: $79.

WHEN: Sat., Oct 17, 8am-4pm

WHERE: NextSpace, 101 Cooper St., Santa Cruz

INFO/REGISTRATION: www.DetourstoSuccess.com/Marketing_Bootcamp.html

Registration deadline is Monday, Oct. 12.

Questions: call Patti Bond 831-464-7748.

Website is here: www.DetourstoSuccess.com

With the trailing impacts of recession still in the foreground of our day-to-day workscape it is encouraging to see some positive local news.

Encouraging developments include:

Sentinel Building

New capital investment is a key indicator of business confidence. The commitment of an investment group including Ecology Action, Cruzio, and Joe Appenrodt submitted the high-bid to acquire the Sentinel building. They propose to retrofit the structure to meet Platinum LEED Certification standards and to move Cruzio and Ecology Action, both strong and growing local enterprises, into the space together with other commercial offices.

Tannery Arts Center – And Protection of RDA Funding.

The blow of the State’s ‘piracy’ of $3.7 million in Redevelopment Funds from the City of Santa Cruz RDA has been largely offset in the current fiscal year by two grants. Each grant permits the other to be counted as match. This and some other internal savings will free-up enough RDA reserves to cover the agency’s current operations. These grants will help fund the construction of Phase II of the Tannery Arts Center, the project’s studio space and the piece likely to have the greatest economic impact. This very positive bit of news was followed by another: the Hewlett Foundation has notified the City of a $2 million grant for Phase III of the project, the first major contribution to the development of a performing arts center at the Tannery.

AMGEN Tour of California 2010.

Local sponsors led by the Santa Cruz Seaside Company have committed enough private contributions for the City to proceed with an expected contract for the May 2010 AMGEN Tour of California bicycle race. As of this writing the contract has not been offered by AMGEN but the local sponsors believe that this will be forthcoming soon. Last February’s AMGEN Tour finished a stage in Santa Cruz, impressing local businesses with the marketing and sales opportunities. Moving the Tour to May should improve both the race and the crowds turning out to watch it.

Monterey Bay Marine Sanctuary Visitor Center.

The City has moved closer to closing the budget gap for the proposed $16 million Monterey Bay Marine Sanctuary Visitor Center with a fiscal year 2009 budget appropriation from the National Oceanic Atmospheric Administration (NOAA). Working with NOAA, the city anticipates closing the remaining budget gap by next spring with Federal funds and through a capital campaign spearheaded by the National Marine Sanctuary Program.

Local Lending Programs.

The Santa Cruz Community Credit union is working with the City to develop a micro lending program for business loans under $35,000. The Redevelopment Agency has also made progress on the creation of a Grow Santa Cruz Fund for loans larger than $35,000 and up to $1 million. Working with National Development Council (NDC), the program would provide SBA guaranteed bank loan underwritten by NDC. Available to businesses within the city, these loans would feature a write-down of interest, longer payback schedules, and easier underwriting standards. These programs are both hoping to support entrepreneurship and local business growth opportunities and, pending council approval, should be available by early fall.

Pilot Entrepreneur project with UCSC.

The Pilot Project for Innovation and Entrepreneurship (PPIE) will drop one of ‘P’s, ending its “pilot’ status in 2010. A partnership between the City Economic Development and Redevelopment Agency and UCSC , the project co-sponsored a business plan competition which awarded a $12,000 first prize this spring for the best proposal and resulted in at least one business start-up in Santa Cruz. PIE will again seek interns and proposals for presentations to participants, and provide project mentors and weekly presentations to the participants this fall.

Beach Area Roundabouts.

The City’s Public Works Department expects to begin construction of roundabouts in the beach area this fall with completion by late spring. Included in the Beach Area & South of Laurel plan adopted a decade ago, these improvements are designed to significantly improve the flow of traffic, especially at the intersection of Pacific Ave, Beach Street, West Cliff and the Wharf. Each of the roundabouts will contain an ocean-themed public art sculpture vetted by the city public art commission.

COPS Funding.

The City of Santa Cruz was one of the few cities to have its proposal for a Federal COPS grant funded in full. This program will pay for five officers for the next three years, reversing planned layoffs. This will support in part the continuation of increased police presence in the downtown area.

Hotel Projects.

Santa Cruz has one approved and two pending hotel projects. The Courtyard Marriott in the Beach area has been approved, the La Bahia project has been approved by the City and will go to the Coastal Commission this fall or winter, and a Fairfield (Marriott) has been proposed for Shaffer Road on the Westside of Santa Cruz.

All in all, this is a great deal to be grateful for in a difficult time.

Courtesy of Santacruzchamber.org.

The luster is returning to Silicon Valley’s economy even while much of California is likely to stay stuck in recession through next year, according to a report released today by a California economic research team.

High tech is a relative bright spot in a state still caught up in the bursting of the housing bubble, according to the UCLA Anderson Forecast.

The report is another confirmation that the valley is gaining strength. Its high-tech companies are reporting stronger earnings, their CEOs have become more bullish and their stocks have soared in recent months. Even the local housing market is improving.

The University of California-Los Angeles economists said the valley’s exports are growing; infusions of capital from a federal stimulus package and investments in technology will combine to pull the region, and high tech in general, out of recession faster than much of the state. Silicon Valley’s economy is expected to gather strength late this year, they said.

The report follows Federal Reserve Chairman Ben Bernanke’s declaration Tuesday that the U.S. recession is “likely over.”

Separately, the U.S. Commerce Department reported that retail sales were up 2.7 percent in August, partly due to the government’s popular Cash for Clunkers program. Auto sales were up 10.6 percent. But consumer spending will probably shrink again now that the program has ended, economists warned.

The UCLA forecast said California won’t recover as quickly as the nation and can expect double-digit jobless rates until 2011. But in the rarified microclimate of Silicon Valley, some good weather is coming, said Jerry Nickelsburg, a senior economist with the Anderson Forecast and author of its California Report.

“We’re already seeing funds come in from the stimulus package for green technology, propulsion technology and medical technology,” Nickelsburg said. “These are growth areas. In addition, we are starting to see high-value experts go up through San Francisco International Airport as our trading partners start growing again. So we expect that Silicon Valley will do better than some other parts of California.”

Stephen Levy of the Center for Continuing Study of the California Economy said he sees the Bay Area and Silicon Valley outperforming the U.S. economy over the next year, and continuing to do so over the next five years.

The region’s Pacific Rim location and “a national agenda laser-beamed on technological innovation” will help spur growth, Levy said.

“None of the really difficult trends are affecting Silicon Valley. We don’t have an overbought home market and the whole national agenda is going to help,” Levy said. “The stock market is coming back, and there’s a resurgence in China and Asia.”

But the news for other parts of California, especially the Inland Empire — Riverside and San Bernardino counties — “is not so good right now,” Nickelsburg said.

The jobless rate in California will jump to 12.2 percent by late this year, up from the 11.9 percent recorded in July. Unemployment across the state will remain in double digits throughout 2010 and into 2011, Nickelsburg said.

“California will not recover as quickly as the nation in the near term,” Nickelsburg said in an interview.

That’s because so many of the problems that unleashed a savage recession on the nation — the slumps in housing, manufacturing, retail and financial services are major industries in California.

The Anderson economists likened California to someone left behind at an airport, watching a departure.

“Will California once again be waving from the tarmac as the U.S. economy takes off?” the Anderson report asked. The study’s response was grim: “The answer seems to be, at least initially, yes.”

California in the next year or so must also face the onset of job losses for state government, Nickelsburg said. Budget constraints are anticipated to trigger a loss of employees at state agencies.

The Anderson economists warned that, even nationwide, the effects of the recession will linger and taint consumers’ and lenders’ habits and attitudes for years to come.

Because of the downturn, the vast majority of consumers appear to fall into two major categories, David Shulman, a senior economist with the Anderson Forecast, said in an interview.

“You have consumers who can’t spend, can no longer buy houses, are maxed out on credit cards, or have had their credit card limits severely cut back,” Shulman said. “Then you have consumers who have the ability to spend, but won’t do so.”

Courtesy of San Jose Mercury News

The BBC says that the G20 group of countries shelled out $10.8 trillion bailing out global economies. The U.S. spent the most overall: $3.6 trillion, breaking down to $10,000 for every single American. Stephen Beard reports.

BILL RADKE: The global cost of fighting the financial crisis is a little clearer today. The BBC has figured out the world’s largest economies have spent more than $10 trillion bailing out the system. From London, Stephen Beard has the details.

STEPHEN BEARD: The BBC says that the G20 group of countries shelled out $10.8 trillion fighting financial meltdown. The U.S. spent the most overall: $3.6 trillion. That breaks down to $10,000 for every single American.

Britain, with its much smaller economy, was proportionately harder hit. The U.K.’s bailouts come to $50,000 per head. Much of the money was spent propping up the banks. As they pull out of trouble, governments should get back most of the cash.

But the BBC’s figures highlight some long-term damage. A decade’s worth of bank profits have been wiped out. Despite the more optimistic mood in Washington, it could be years before lending returns to previous levels and the leading economies fully recover.

In London, this is Stephen Beard for Marketplace.

Courtesy of marketplace.publicradio.org

80 percent of all new startups fail within the first three to five years. Planning helps reduce the risk of failure. Entrepreneurs must thoroughly research their ideas to form realistic goals and to understand the true market opportunity, customer needs, and competitive landscape that they will be involved with.

As an entrepreneur, you can go through the following list of questions in order to validate the strength of your idea.

Solving a Problem

Ask yourself:

-       What is the problem you are solving?

-       Why does the problem exist?

-       What barriers exist?

Startups often lack the resources necessary for thorough market research. You should meet with prospective customers to tell them about your product and ask them if they would buy your product. Meeting with prospective customers will give you insight into real-world complexities customers face.

Your Customers

Ask yourself:

-       Who are your customers?

-       What are the verticals of your prospective customers?

-       What is the long-term vision of your customers?

-       Is this a problem worth solving?

It may be best for you to serve a niche market. Defining your niche customer will help you realistically forecast potential earnings as well as help you plan a price for your product or service.

Your competition

Ask yourself:

-       Who are your main competitors?

-       How are they currently addressing the problem you are solving?

-       What IP protection or barriers to entry do you have over them?

Ask yourself what solutions your customers currently have for their problems. This may reveal your competitors. Defining your competition helps you to differentiate yourself and better prepares you for the risks involved with taking a product to market.

Bulletproof Technology

Ask yourself:

-       What does your technology do?

-       How does your technology improve a customer’s business or processes?

-       Does your technology require major changes to your customers existing technology platform?

-       Are there adoption risks?

You should be sure that your product addresses a large percentage of your customers’ concerns. You must consider possible technological flaws. Word travels fast, especially when a product does not live up to expectations. Competitors will jump at the chance to improve your idea.

Go-to-market Strategy

Ask yourself:

-       How will you reach your customers in an economical way?

-       What is your distribution strategy?

-       Are you able to make a profit?

You must plan far ahead, taking into account the costs of getting your product onto the market. “Entrepreneurs should … analyze carefully the incremental costs of serving a niche and take into account their lack of scale and the difficulty of marketing to a small, diffused segment,” writes Amar Bhidé, an entrepreneurial expert.

Team Members

Ask yourself:

-       Who are your team members?

-       Do your team members have prior startup or domain expertise?

-       What relationships or successes have team members had that can be leveraged for the new company?

-       Are there any gaps in your current team?

Strong relationships among your co-workers are critical to planning your new venture. These team members will surely add value to your business. People with similar philosophies to yours and a passion for the product being developed could become excellent co-workers.

The Advisory Board and Support Team

Investors want to know how you leverage the people involved with your project. An all-star support team and advisory board is also essential for leveraging your new business to potential customers. Your banking partner, law firm, and accounting firm should also be involved with the planning process. They may provide you with a network of potential customers.

The Financial Roadmap

Ask yourself:

-       What are your five-year forward-looking projections?

-       What are your current revenues, costs, and margins?

-       How much money do you need going forward?

Entrepreneurs can make the mistake of overestimating the potential income from their product and underestimate costs.  Take a good look at market size and operational costs for strong financial projections. Planning may also reduce setbacks from any possible surprises.

The Right Investors

You can write a pitch to investors if you can realistically answer the above questions. Keep in mind each angel investor and VC is different and will thus bring different talents and resources to the startup.

Here are some questions you can ask the investor:

-       Does the investor specialize in or have specific experience in the segment of the industry in which I operate?

-       Does the investor bring special expertise to the table that I can leverage?

-       Can the investor share a strong network of connections that will help my company thrive?

-       Can the investor support me if additional rounds of capital are needed?

Planning, asking questions, and leveraging will provide steady ground to continue building your startup.