A word with Doug Covey, state director of Idaho SBDC

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Doug Covey became the director of the Idaho Small Business Development Center in July after working as southwest regional director of the organization for three years.

Covey is an Arizona native who earned undergraduate and graduate degrees in natural resource management before gaining business experience at REI, the distance learning company Blueprint, and Idaho-based LiveRez.

There are SBDC offices in every state. Idaho’s office includes 50 staff members, 35 of them business consultants, and an annual budget of $2.2 million. The Idaho SBDC is supported by state and federal money and by several Idaho educational institutions, including Boise State University, which act as hosts.

Idaho Business Review spent some time with Covey learning about Idaho entrepreneurs and SBDC services. The interview has been edited for length and clarity.


What does the SBDC do?

SBDC is a nationwide network that provides one-on-one, private, no-cost consulting to small business owners.

Any business that has a repeatable, scalable business model, from high-tech to Main Street to food and beverage, is suited to use our services. When I was at Blueprint, if I had known about the SBDC, I would have used them for marketing strategy, financial management, human resources, hiring … as a trusted source with confidentiality.

SBDC thrives with growth-minded companies. We’re working with companies that are beyond just a startup. We’re helping them navigate that next phase or next step of their company’s path.

What type of entrepreneur uses the SBDC successfully?

The owner has to be coachable.

We ask what your felt needs are, for example, “I need more people in the door; I need more customers.” And then we really try to get to core need, which is, “What are you really after? More revenues? You need to pay your lease?”

We meet them at their felt need to drill down into their core need. The individual needs to be willing to listen, willing to take direction, and willing to work on some of the strategies that we map out.

We spend time learning about the business model and the product or service, and then we start helping them to set a course and direction. But if they don’t take what we are advising them on, we’re not really helping. They will select out and won’t necessarily come back.

What’s the average size of the business you work with?

Usually it’s between one and 100 employees. We’ll work with people who are just starting out, with no revenue, to companies that are upwards of $30 to $50 million.

What are some typical questions you get from business owners?

Will my business succeed?
Should I keep doing this?
How should I incorporate my business?
What kind of permits and licensing do I need?

We ask a set of questions:

“What is the product and service you are offering?”
“Do you know who you are selling to?”
“Who are your customers?”
“How do you generate revenue?”
“Is there a license agreement?”
“How are you getting to people – what channels are you using? Is there a brick and mortar location? An online store?”    “What kind of relationship do you want to have with the customer? A Netflix model where you don’t talk to anyone? If not, what kind of customer service will you have?”

That’s the front end of the business model.

The other side is, “Who do you have that can help you? What are your key partners?”

Roughly 60 percent of the companies we work with have been around for probably at least one to two years, so they have gone through the right try/fail, try/fail and have actually now jumped that curve of, “I’m onto something, I am growing revenue.”

Now they have the question, “How do I scale this? How do I keep up with the demands?” Or they’re asking, “What key people do I need to hire? How do I find bigger space?” Or, “I need to start exporting, and I need help understanding the export trade.” But with folks who started from scratch, a lot of it is, “How do I hire somebody? What key roles do I need to have?”

What are some typical mistakes you see?

You may have somebody who comes in and says, “I don’t have enough customers. I was able to source a really good deal on supplies, and I’ve found a supplier, and I know there’s a need because I have been trying to get this widget; nobody else has it.”

We say, “How many people have you found who want this?” We are trying to help these clients reduce their risk.

And then the lifeblood of any organization is finances. You can have the most powerful staff, the best widget, you can have the greatest facility, the greatest retail space, but if you don’t know your financials and how you are doing from week to week, month to month, year to year, that becomes the root of the demise of a business.

We don’t do the bookkeeping; we’re not attorneys, and we’re not accountants. We can look at their financials and help them to help themselves to find a resource that can help them.

Doesn’t everybody want to expand?

No. There are a number of folks who have lifestyle businesses, and they are really content as long as the business doesn’t become complacent and obsolete. It’s not necessarily about growth, it is about staying current and relevant to customers.

What do you wish businesspeople knew?

If you don’t have the right people on your team, they’re not going to necessarily deliver the product or service you are selling. As a leader, you need the ability to help others achieve and help others be accountable.

The other thing is you need to know the financial side of it. And then the third is the feasibility of the business. Do you know that the customer really wants your new product?

What’s the most interesting lesson you have learned from this?

I’ve learned that the entrepreneur needs to be tenacious and have the drive, resilience and hard work so that when they are faced with a challenge, they can still deliver. It’s been eye-opening to see the effort it takes to continually drive your company. It’s not necessarily for everybody.