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The Beltway Junkies ONE COMPANY'S TALE OF GROWTH USING FEDERAL PROGRAMS
(FORTUNE Small Business) – Can you actually build a business on the back of the U.S. government? Let's take a look at Cor Productions, a St. Louis video production company that started at ground zero and ended up with revenues of close to half a million just seven years later. In the beginning, the partners could pay themselves only $12,000 salaries. ("There was one person who had a house payment that we needed to make sure got paid," says 32-year-old co-founder Helen Hempstead.) To be sure, the foursome--Hempstead, John Leimkuehler, 36, Jorge Riopedre, 34, and Steve Schoen, 37--had a little going for them. They produced television programming for a ministry in town, but had no clue about how to run a business. Hempstead had to start somewhere, so she signed up for a course for women entrepreneurs. The accounting lectures were handy enough, but the names of a couple of government programs held more promise. The first was SCORE (Service Corps of Retired Executives), a group of retired business people who help with basics like applying for loans. The second: the Small Business Development Centers (SBDCs). Hempstead and Leimkuehler dropped into a SCORE office, and they were paired up with Robert Dierkes, who had 40 years of experience in sales. The payoff: Dierkes helped them set up a fee structure and showed them how to market the business. But the biggest plus was access to other government programs--work with one and it can connect you with others. Example: Cor's next stop was the Small Business Development Center at Saint Louis University. Their counselor there hooked them up with loan officers he knew at Boatmen's Bank (now Bank of America). Nice break. Working with SCORE and the SBDC gave Cor added credibility, and soon the company had a fat $100,000 SBA-guaranteed loan coming its way. But Cor's founders weren't done with the government yet. By 1996, they had roughly doubled their revenue to $250,000 in one year. Still, the company wasn't growing as quickly as it should have been. The founders had developed a solid business creating informational videos for nonprofits and corporations, but they hadn't established a niche business that could help the company boom. "We sat down and asked, What is it that makes us unique?" Hempstead says. Well, one founder was Hispanic, so they figured they could tap into businesses that have either Hispanic employees or customers. They contacted the U.S. Department of Commerce, and Kristi Wiggins, a trade specialist from the U.S. Export Assistance Center, paid them a visit. "What I was thinking was, They've got a Spanish speaker, and I'm dealing with companies who want to get into Latin America," Wiggins says. "So why not help people learn about how they can export without leaving the area?" She provided a list of companies that might need Spanish-language services, and advice on how to connect with organizations in different countries. Cor now produces well over $50,000 a year from the niche. These days, Cor gets along well without any direct help from government programs, but they still keep in touch with former counselors, and it pays off. In 1999, Cor was one of two businesses honored by SCORE for outstanding achievement--and they even got a trip to the White House out of it. Says Hempstead: "You never know where that next opportunity is going to come from." |
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