(April, 2001)

The following are several examples of companies who have been helped by PACE Business Development Center over the past 2 years:

Fashion Design and Manufacturing

In 1996, AL founded a company devoted to the design and manufacture of high-end women's apparel. Her clients were mainly celebrities and models. When she first came to PACE BDC, her company's average sales were approximately $150,000, with 2 full time employees. Her main problem was that she didn't have enough cash flow to purchase the raw materials she needed to manufacture her products.

To rectify this problem, a two PACE BDC business counselors packaged and placed a $55,000 SBA guaranteed loan for working capital and to purchase inventory. The result is that within one year her company tripled its sales volume, and her products have been featured in national fashion magazines such as Vogue, Cosmopolitan, Los Angeles Times Magazine, Glamour, Seventeen. Her celebrity clients include Ellen Barkin, Meg Ryan, Liv Tyler, Tori Spelling, Sigourney Weaver and Winona Ryder.

With the proceeds from the SBA loan, the company was able to extend the lines of her products to include fashion accessories as well as her famous apparel designs. She now employs 12 full and part-time employees and her company is averaging sales of $550,000/yr.

International Touring Company

M. C. founded her international tours company as a Nevada Corporation. When the business began to suffer due to a downturn in the economy, she moved to Santa Monica, California, focusing on tourism in Los Angeles. Initially, she had one part-time employee and one driver for her Los Angeles tours. At the time PACE BDC did its initial assessment, however, the company had been experiencing losses for the previous three years.

With 20 years experience in the business, this energetic client had numerous contacts and ideas. Our initial role was to help organize her thoughts and find ways to implement her many marketing ideas. To begin, we developed a marketing plan outline, fleshing it out during the next four months. During this time we began developing a full business plan as well. Once completed, M. C. put her plans to work, hiring an additional driver, 2 interns, and a marketing coordinator. Since PACE BDC has been working with her, she has expanded her tours to include Las Vegas and Grand Canyon.

Recently, we also assisted in arranging $50,000 in financing from a private company for the business to purchase a tour bus. MC also decided to change the name of the company to become more "Internet friendly." The result of these interventions is that she now projects an $80,000 profit this year.

Embroidery House

The initial assessment BK's business revealed that its production process was very costly and time-consuming, owing to the fact that the company had only one embroidery machine. Large production runs would tie up the machine for sometimes days, delaying the completion of smaller orders. A PACE BDC counselor advised the client that the best solution would be to purchase another embroidery machine, so they could be more responsive to taking on large and small orders.

Complicating the situation, however, was the fact that the business' tax returns and financial statements were not showing enough cash flow to justify the purchase a new machine. To resolve this situation, PACE BDC staff worked with the client to secure commitments from existing vendors for future orders; we also suggested diversifying into other industries such as "garment manufacturing/production embroidery". This would stabilize the workflow over the months, increase production and justify the necessity for another machine. After these suggestions were implemented, we extended $100,000 in financing for the new machinery acquisition through our loan fund, the Asian Pacific Revolving Loan Fund of Los Angeles. We utilized this avenue of financing because traditional banking would not be able to qualify the loan based on prior year's tax returns.

Eighteen months later, as a result of our technical assistance and financing, the company has gone from $145,000 in gross sales to $250,000 at the end of the year 2000. Employment as well has gone from three (3) full time employees to six (6). Because of the expanded capacity, the workflow is no longer dependent on one machine. The clients are able to get their orders out in a timelier basis and the volume of work has increased substantially. The ability to do larger production runs has brought the company into new market niches such as band promotional items and garment "cut piece" embroidery.

Biomedical

MJ's dental and lab supply company was founded in 1990, purchased by the current owner in 1997. Prior to acquiring the business, M J worked as a sales manager at the company from its inception. Thus she was very familiar with the operations of the business. However, the company was facing several problems including competition from large dental supply houses, as well as dwindling markets.

When the owner first came to PACE BDC, her company was generating $1.5 million in sales with 5 full-time employees. To boost sales, PACE BDC determined the best route would be to access the sometimes-tricky government procurement market, via an SBA 8(a) Certification.

Working with the client, PACE BDC completed all of the required paperwork, and the SBA certified the company in June of 1999. Since that time, BDC counselors have worked with the company to add secondary and tertiary SIC codes into the SBA file, enabling the firm to bid on projects outside of their Primary SIC code. The company recently bid and was awarded a $2.2 million dental services contract from VA Medical Center in Tennessee, which will boost sales to $3.5 million with an increase to 6 full time employees and 2 part-time sales representatives.

Garment Making Success: From Two Machines to 25 Employees

Having had only a third grade education in her native country, Mexico, Mrs. M.J. could read and write very little English when she arrived in Los Angeles. Attempting to launch a small garment sewing business, her lack of fluency, plus a dishonest accountant doing her bookkeeping resulted in her business being shut down. With nowhere else to turn, she ended up on the welfare rolls, her self-confidence lost as well as her trust in people. Then in September 2000 she heard about PACE NewStart Business Training Program (Welfare-to-Business Entrepreneurial Training).

Three months later, as a result of attending classes and intensive one-on-one business consultation, Mrs. Jimenez learned about marketing, business planning, record keeping, customer service, and legal aspects of the business, which inspired her to pursue her business dreams once again. She reestablished relationships with her previous contractors and started providing garment sewing from her home, using two old sewing machines from her original business. Because of her ability to turn orders around very quickly, very soon bigger contracts were being offered to her - so big that she has had to move into a larger building. Mrs. MJ has now enough sewing machines, cutters, and irons to employ 25 employees working 12-14 hours a day, including weekends. Combining her talents with the new marketing ideas learned at PACE NewStart, she wants to do her own labeling next year. She also wants to return to PACE NewStart - this time to offer jobs and training, in gratitude for what the program has done for her.

Day Care

For the last three years R had been working as a caregiver in a day care center. Although working full time at the facility, she was struggling financially and had to rely on public assistance to raise her family of four. With her dedication in working with children and a strong desire to achieve self-sufficiency, she hoped to open a day care of her own. But without a background in business, her dream of becoming a business owner remained just a dream.

In October 2000, R attended an orientation of PACE NewStart Business Training and Mentoring Program hosted by the Department of Public Social Services in Los Angeles. Excited about the prospects of starting her own business, she immediately signed up to participate in the program. Three months later, she graduated with a marketing plan, childcare license, business license and registration. She also has her own business card ands marketing flyers, which were created during a hands-on exercise in class to promote her business. Her day care center opened on March 1, 2000. Through R's own initiative and the assistance of her counselor, she has built and maintained a relationship with the Department of Public Social Services, Crystal Stairs, and other Food Programs to get referrals for her business. During her first month, these agencies referred her three children - her first-year goal is eight children. As she continues receiving guidance and consultation regarding her business from PACE NewStart business counselors, she is currently searching for a bigger building to accommodate her expanding business.

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