“Purchasing Network Solutions was a good fit for us since it provided us an established customer base."
Background: Michael Cortez with Tech Pro Source approached the Solano College Small Business Development Center (SBDC) after being laid off from an IT position in the mortgage industry. Rather than seeking a new job in the IT industry, Mr. Cortez decided to start his own business providing technology management services for small to medium sized businesses. The company’s slogan is “The IT Department for Small Business.”
Problem or Challenge: When Mr. Cortez first met with the SBDC Director, he only had a few clients. However, he did have a fairly well developed business plan and vision of where he wanted to go with the business. His challenge was how to build up the business quick enough to generate cash flow so that he could start implementing some of the ideas in his business plan. Mr. Cortez also needed to raise capital to hire staff and free up his time to work on building the business.
Assistance Provided: The SBDC met with Mr. Cortez to review his business plan and begin working on a plan to raise capital for the business. Rather than secure debt financing, Mr. Cortez wanted to pursue equity financing for the business. The SBDC assisted him in developing a PowerPoint pitch for investors. By chance the Solano SBDC had also been working with another SBDC client who was retiring and interested in selling his IT business. The SBDC suggested Mr. Cortez consider purchasing the business as a way to jump start his business with an established customer base.
Results: In October 2006, Mr. Cortez completed the purchase of Network Solutions. He was able to secure seller financing for a portion of the purchase price and secure a private investor for the balance required to buy the business. The company has now hired two full-time employees and will be moving into a new location in the next few months. Mr. Cortez has also become active in the Vacaville Chamber Technology Committee, chairs the Fairfield Chamber Technology Committee, and participates in a networking group. Through word of mouth referrals, the business has begun to experience rapid growth. He has now gone from having not enough clients to a new challenge of keeping up with all the new clients the business is attracting.