New businesses are beginning to blossom as the post-recession economy recovers, but some may fall victim to their own lack of business experience.
The nonprofit economic development organization alt.Consulting hopes to prevent businesses from making common mistakes by spending some quality time with them.
“There are lots of agencies where you can get mentorship or counseling or workshops, but not someone who’s really going to evaluate your system, give recommendations, and provide training,” said Cynthia Norwood, managing director of alt.Consulting.
“There’s a shortage of agencies which provide the intensive, one-on-one, customized management training for any small business.”
Norwood said the one-on-one approach takes more of an investment on the part of the business owner, but that it pays off.
After an initial assessment, consultants compare the clients’ financials to industry standards and target areas for improvement.
Dana Cawthon, from left, Cynthia Norwood and Tina Powis-Dow are part of the team of alt.Consulting.
(Photo: Lance Murphey)
There’s also time built in for clients to explain why they think their business isn’t taking off.
Norwood said that businesses often think they have not done enough marketing for their products, when actually hidden costs have been adding up and chipping away at profits.
“One of the most common things is poor cash flow management skills,” said Norwood. “They’re not spending the business’ cash appropriately. Many don’t have internal bookkeeping systems in place at all. We use QuickBooks more often than anything. Teaching them how to track their income and expenses is key.”
Alt.Consulting was established in 1989, co-founded by its current executive director, Ines Polonius. The Memphis office is company headquarters though the organization also has locations at Mid-South Community College in West Memphis, and in Jonesboro and Pine Bluff, Ark.
There are 13 employees in total, and consultants may work with as many as 12 clients at a time.
Consultants will work with businesses in any sector of the market, though they specifically target women-owned, minority-owned and rural-based businesses. Many are repeat customers. Norwood said she has had one client since she began working for the organization in 2004.
“The one-on-one has been the core service of our organization,” said Norwood. “Startup businesses and those who are early-stage business owners really like the one-on-one support – especially first-generation businesses.
“They don’t know what to do and they like having someone they can trust. It’s like you’re an extension of their staff.”
The one-on-one does come with a cost, though. Norwood said that many business owners choose workshops and mentorship programs for their business training simply because they don’t have the time to work with a consultant individually.
“It is expensive and that’s the downside of our model,” Norwood said. “We do have to charge an hourly rate, however being nonprofit, we try to solicit grant funds that will buy down our hourly rate and make it affordable.”
Alt.Consulting also does consulting work for other nonprofits such as the Downtown Memphis Commission, which hired them to review retailers applying for forgivable start-up loans of up to $40,000.
The loan program is currently in moratorium, but alt.Consulting reviews the financials of recipients twice a year to make sure that they are in good health.
Recently, alt.Consulting also began screening applicants for city-sponsored, business pop-up events like one that took place on Overton Square in December.
So far Norwood has not had to advise a client that it’s time to close their business, but on occasion she has to tell clients things they’d rather not hear.
“You learn a knack for it,” Norwood said. “We feel that our role is to be straight forward and help them understand.”