The irony wasn’t lost on him. After 10 years of helping people find work, Eloy Rodriguez of Parkland was laid off from his job at a staffing company. He turned in his keys, went home to his wife, Rosalina “Rosy” Rodriguez, and asked, “What are we going to do?”
With experience as a district manager running seven South Florida locations of a staffing agency, Eloy Rodriguez, 39, felt he knew the business. So with his wife’s support, in December 2010 he struck out on his own. Since he had a non-compete agreement with the staffing company — he could not reach out to his old clients — Rodriguez started anew, cold-calling businesses and working out of Burger King and Starbucks parking lots
The SCORE tune-up team included David Harris, director of marketing, Greenway Golf Course Management, whose expertise is in operational management, fiscal controls and marketing; Carla Dorsey, a certified public accountant and consultant with The Dorsey Group; and Michael Bush, a franchise broker with Transworld Business Advisors.
“The most important thing is to have control over your finances before you get ahead of yourself,” Harris said
Here is the SCORE team’s advice:
Write a business plan. “Put it in writing so you have a management structure for growth,” Harris said. “You may have a big plan in your head. You need to put it in writing to have guidelines so you can refer back and see if you’re on track.” Lenders will want to see a written plan if you want financing, he said. Create a mission statement about what your company is about now, Harris said, and a vision statement about your goals for the future. Eloy and Rosy used a business plan template from SCORE to craft an overview of their first business plan.
Prepare a financial projection/budget. Analyze your client base to forecast sales, Dorsey said. Categorize them by new, recurring, past and one-time. “This will help you to understand your client base and provide insight when forecasting sales,” she said. Do a one-, two- and five-year projection, with and without outside funding. Eloy and Rosy say they realize they need to track more data in order to better forecast their sales. They are working to revamp their accounting procedures.
Keep more-detailed financial records. Financial data are tools that management should use to plan, drive, understand and evaluate their company, Dorsey said. “Without clear, accurate and timely financial data there is no true means to make management decisions,” she said. Because Rosy is doing most of the financial record-keeping, the team suggested that the couple hire more accounting help to input and track revenue and expenses. Dorsey suggested a firm, rather than a part-time chief financial officer, to get the supervision and full range of services they need. Eloy and Rosy said they are ready to take the next step in financial record-keeping as their business grows.
Plan for a management restructure. Eloy Rodriguez oversees operations, field work and outreach efforts. Rosy handles the back office, payroll, funding and overhead. Because growth is the main goal, “determine who will oversee and be responsible for the increase in sales,” Dorsey said. “Often, growth depends upon your ability to manage and secure new business and the ability to motivate and supervise staff to do the same.” In order to grow, Xpand needs to put a mid-level management system in place, Rosy Rodriguez said. Eloy said they have started to sketch out a branch manager system.
Look for a capital infusion. Xpand Staffing relies on factoring companies — which provide shortterm financing to provide cash flow — to make its payroll, and has been unable to secure a bank loan or line of credit from its bank, Wells Fargo, because it is a new company. Harris said banks typically need three to five years of financial statements before they will consider a loan. Bush said to tweak the approach by packaging the application with a snapshot of what the business has accomplished, and what its goals are in a mini-business plan. Smaller, community banks also could be more amenable to growing with a small business. Try three or four banks, Bush said. “Big banks are really tough. Look at smaller, local banks that can grow with you,” Bush said. Independent consultants also can help package a loan application to appeal to Small Business Administration lenders, he said. Eloy and Rosie said they would expand their reach and get their financial records in order to put together a solid application.
Consider other funding sources. Harris suggested alternative funding sources that favor minority-owned businesses. Apply for a Small Business Administration 8(a) certification, because Xpand is a female-owned/minority-owned business. The certification will open the door to financing options and government contracts. Other sources include Accion, www.accioneast.org (http://www.accioneast.org/), an agency that makes loans to minority entrepreneurs. The Minority Business Development Agency, www.mbda.gov (http://www.mbda.gov/), part of the U.S. Department of Commerce, has a network of lenders, Harris said. Though the initial paperwork for SBA certification is lengthy, Eloy and Rosy said they would consider it in their long-term plans. They have begun researching other programs.
Evaluate franchising before proceeding. Starting a franchise takes money and time up-front to prepare guidelines for franchisees, Bush said. “The difficult thing is that it’s going to take you away from your business and force you to delegate to others,” he said. One successful franchising strategy is to build up locations and sell them with a few strong clients attached, Bush said. “Salt the mines with a couple of gems,” he said, which will help attract other franchisees. Eloy and Rosy said they believe the better option for them is to grow organically, starting with an office in Miami, than to try to overextend their reach.
Think before buying into another business. Although the couple is researching the possibility of buying an Orlando staffing agency, the SCORE team recommended looking at the pros and cons. “Buying a franchise can help in generating cash flow, which will look favorable to lenders,” Harris said. “But the magic of this operation is you two. Before I’d buy a business in Orlando, I would open a location here that you can oversee.” Eloy and Rosy say that they see buying into a business in Orlando would not synch well with their current business model.
Evaluate competition. Eloy Rodriguez, who grew up helping his dad run a used-car business, said he is undaunted by competitors. “We have been doing this for so long; we know the business, and our service sets us apart,” he said. Rosy Rodriguez said they spend a lot of time screening and interviewing applicants, and have lower turnover than typical staffing agencies. Harris said that though their competition is scattered among franchises and independent shops, they can’t ignore it. Eloy said he keeps tabs on recruiters and the pulse of local industry, and plans to increase that.
Fine-tune the market you serve. Xpand serves every industry, from agriculture to construction to administrative. Bush said they are clearly in a growth field. “Seven years ago, about 85 percent of employees were full-time. Now it’s 50/50 between full-time and temporary or contract labor,” Bush said. Harris suggested exploring a niche Xpand discovered when they rushed to staff Hurricane Sandy relief efforts: Create a game plan to follow if a natural disaster strikes locally. “This would put you well ahead of other staffing companies who will be disorganized and unable to handle the increased workload,” Harris said. “You have to constantly reinvent yourself so you have a competitive advantage.” Rosy said she would like to explore the disaster-assistance niche, and add it to their website.
Examine marketing efforts. Xpand gets most of its business through referrals and repeat customers. It also relies on cold-calling and its website, which ranks first in Google searches in its areas, Eloy Rodriguez said. “The most effective thing you can do for business-to-business [dealings] is stay high in those rankings,” Harris said. He suggested adding Google Plus and Facebook pages. Eloy said that because they place both laborers and executives, it’s difficult to pin down one audience. Though they never thought they did marketing, Eloy said he realized that the giveaways, group lunches and promotional items all contribute to marketing.
“As a small business, you get so caught up in the everyday,” Rosy Rodriguez said. “This definitely opened our eyes and helped us focus on what we need to do.”
The experts: David Harris, director of marketing, Greenway Golf Course Management, whose expertise is in operational management, fiscal controls and marketing; Carla Dorsey, a certified public accountant; and Michael Bush, a franchise broker with Transworld Business Advisors.
BY JULIE LANDRY LAVIOLETTE - SPECIAL TO THE MIAMI HERALD
Julie Laviolette can be reached at email@example.com.
“We were solving problems as they came along,” Rosy Rodriguez, 29, said. In May 2011, Xpand Staffing opened an office in Coral Springs. In 2012, the company added a Hollywood office, and in 2013 opened a satellite office at a Miami construction site. Xpand places temporary, temporary-to-hire and permanent employees. Nine employees handle Xpand’s sales, recruiting and payroll.
About 70 percent of its business is placing manual labor and light industrial workers, and about 20 percent is clerical. Xpand had $6.1 million in sales in 2013, and is on track to reach $7 million to $8 million in 2014.
Eloy Rodriguez is fired up to expand. “If it were up to me, we’d have 15 to 20 offices across the country,” he said. “But I don’t know what direction to go.”
Rosy Rodriguez balances her husband’s enthusiasm with a steady logic. “We haven’t figured out how to expand and protect what we have at the same time,” she said.
The couple pride themselves on their team efforts, making a habit of bringing in lunch for employees, or pizza to laborers on a job site, or distributing turkeys and trimmings to the people they hire.
“We want to build a brand,” Rosy said.
Eloy Rodriguez said they need a plan. “The sales are there. The numbers are there. What we need is structure,” he said.
The couple asked the Miami Herald for a Small Business Makeover, and the Herald brought in Broward SCORE, a nonprofit agency with volunteer counselors from the business community that mentors small-business owners.