Editor’s note: This is the first of a two-part series with nine local stakeholders discussing their industries and how they’re preparing for the next economic downturn.
It’s an interesting time to live in Colorado Springs, let alone to run a business.
Though the city’s booming economy might encourage increased investment, many fear the next economic downturn is right around the corner.
A recent Business Journal website poll revealed 97 percent of nearly 1,000 respondents believe a slowdown will occur this year.
The Business Journal asked local movers and shakers what went right in their industries this past year, what’s in store for them in 2019 and how to prepare for the next recession.
Luke Hutchison, founder and CEO of Perfect Venue
What’s something exciting that happened in the local startup industry in 2018?
A healthy startup ecosystem is critical for any startups growth and I think the launch of Exponential Impact this year along with the announcement that they received a large grant will go along ways towards growing a more robust startup ecosystem of founders, investors and advisors in Colorado Springs.
What’s something you are excited about for the startup industry next year?
It will be exciting to see more and more startups get traction, build momentum and expand to new markets.
What’s a challenge facing the local startup industry in 2019?
Building a density of software engineers that have the right skill set and interest in startups I think will be an ongoing challenge.
What advice you have for other leaders in the startup industry as the New Year approaches?
Be excited! The barriers to entry for getting a startup off the ground have never been lower and the ability to access resources online has never been easier. With the last big wave of startups starting to mature and most likely IPO in 2019 — Uber, Lyft, Airbnb and others — it will be exciting to see what startups are built in this next wave.
How are you preparing your company for the next economic downturn?
We’re hoping it is still a ways off and when it does come that it is mild, but we’re ensuring that we’ll be insulated by offering our customers performance-based pricing so that we’ll be able to serve them and create win-win value even if their budgets are squeezed.
Amy Reid, CEO of Pikes Peak Association of Realtors
What’s something exciting that happened in the real estate industry last year?
Not only is the Colorado Springs economy strong, which is attracting businesses and people to the area, our city is frequently named one of the top places to live in the United States. The Pikes Peak Region continues to be an attractive place for people to relocate to, and stay long-term, due to the economy, beauty and quality of life. Our Realtor members can share all the wonderful aspects of our community to not only new comers, but also long-time Colorado Springs residents looking to make a move within the area.
What’s something you are excited about for the real estate industry next year?
It is exciting to have such national and global recognition of the Pikes Peak Region as a fabulous place to live. The popularity of the area should help support the real estate market.
What’s a challenge facing the real estate industry in 2019?
Inventory continues to be a challenge for our market, and many markets across the state and country. Colorado Springs still faces historically low inventory; however, active inventory is slowly on the rise to a healthy level. Housing markets need about a 12 months supply of available homes. Colorado Springs had a low of about a one-month supply and is now inching up to two months’ worth of homes available for purchase. For our market the rising inventory is a good thing, but it is still low. Low inventory, high demand, and rising interest rates impact home prices and affordability.
What advice do you have for other leaders in the real estate industry as the New Year approaches?
Leaders need to be proactive in their the efforts to promote homeownership and find solutions for attainable housing. The Pikes Peak Association of Realtors works diligently to promote and protect homeownership and the industry. Leaders need to be aware of policies that may negatively impact the housing market and be mindful of other economic indicators.
How can Realtors prepare themselves for the next economic downturn?
Like any business owner, our members should be prepared and have a plan for their future. They need to be mindful of the market and be aware of indications of a slow down or troublesome trends. PPAR, as well as the state and national associations, monitor markets and trends and provide information to our members to assist them in their efforts to be prepared and informed.
Robin Roberts, president and CEP of Pikes Peak National Bank
What’s something exciting that happened in the local banking industry in 2018?
The Colorado Springs banking industry experienced remarkable change in 2018. Several banks were purchased or merged and we’re seeing significant expansion by some financial institutions in the area. These changes inject new energy and change into the region’s banking industry, which will most likely result in improvement in banking options for the people who live here.
What’s something you’re excited about for the local banking industry next year?
The investment in institutions in 2018 should yield visible results in the region in 2019. The regulatory environment is stable with some relief provided by the recent S 2155 passed in Congress in May 2018. Digital channels will become increasingly important moving forward for all banks, and the use of artificial intelligence is being explored in some customer-facing and back room functions. In a nutshell, change is happening in a very mature business model. This will result in an improved customer experience and the demand for new skills in bankers.
What’s a challenge facing the banking industry in 2019?
The demand to implement digital solutions carries significant cost and risk. Smaller banks will be challenged to meet the expectations of customers who desire the convenience provided by non-banks and online-only institutions. Digital banking requires strong risk management processes and substantial financial investment. Balancing the investment in products and the risk management required will continue to be a challenge for bank management.
What advice do you have for leaders in the banking industry as the New Year approaches?
Ten years ago, the banking industry was a challenging environment. Many experienced bankers left the industry at that time and fewer young professionals chose banking as a career. Industry leaders should encourage the employment of young professionals in banking and develop strong mentorship and development programs within their institutions. In this changing business environment, bankers with specific skills related to product channels or specialized industry knowledge will be important for the future.
How can leaders in the banking industry in Colorado Springs prepare for the next economic downturn?
I imagine most of them already are. Regulatory agencies are paying attention to loosening credit underwriting for commercial loans as well as the increased risk around digital banking channels. Most recently, the Office of the Comptroller of the Currency (OCC) published their Semiannual Risk Perspective which identified increasing credit risk, increasing operational risk due to cybersecurity threats, and interest rate risk due to the rate environment. Economic gains have been made during this protracted economic recovery but it is prudent to review risk management practices at this stage to ensure the long-term health of financial institutions.
Jonathan Liebert, CEO and executive director of BBB of Southern Colorado
What’s something exciting that happened with the local small business community last year?
A number of exciting things happened this year in Colorado Springs’ small business community:
- 2018 brought a tremendous amount of collaboration between business organizations. BBB, Small Business Development Center and the Colorado Springs Chamber & EDC provided coordinated information and tools to help Colorado Springs’ small businesses succeed in today’s marketplace. These programs included numerous educational classes, training seminars and networking events. Additionally, BBB and SBDC contributed to Colorado Springs being home to the largest Small Business Week in the State!
- Here at the BBB, we saw a tremendous amount of engagement and participation from young, new and innovative business owners. They are either opening new businesses, transforming their existing business and/or finding meaningful ways to coordinate, connect and partner with each other.
- Social Impact businesses are on the rise; as is local marketing messaging that talks about sustainable business models and practices through social enterprise. The Colorado Institute for Social Impact (CI4SI.org) celebrated its one-year anniversary and has received a great response from this community regarding its business model. BBB of Southern Colorado is currently partnering with our national office, The Council of Better Business Bureaus, to begin to map out this sector, starting here in Colorado. We hope to learn more about these businesses, using our own community to gain valuable information that will be used to roll out a larger mapping strategy for the Nation.
- Overall, 2018 saw an increase in community excitement and involvement in the many small businesses in the downtown area. There were many exciting events and happenings that brought people downtown including an ever-growing collection of new restaurants, coffee shops and breweries.
What’s something you are excited about for the small business community in 2019?
We are excited about continuing the growth and expansion of new businesses in our region, including the expansion of businesses that have a social impact built into their business models. We are also excited to continue to build on the great business collaboration here in our community.
What’s a challenge facing the local small business community next year?
Cyber security continues to be an ongoing issue that all businesses need to pay attention to; but today’s small and medium size businesses need to make sure they are protecting their own consumer information more vigilantly than ever before.
What advice do you have for small business owners as the New Year approaches?
Colorado Springs is rich in business resources and is a very business friendly town. Small businesses should plug into this great business community and access many of the free and helpful business resources offered by our community.
How can small business owners prepare for the next economic downturn?
Businesses need to be prepared and look at data that suggests the next economic downturn may be coming within the next 1-2 years. Fortunately, there will be many educational offerings around this topic in 2019. We suggest that all small businesses attend forums that organizations offer such as UCCS and the Chamber. In addition, BBB and SBDC will have sessions dedicated to this topic at Small Business Week 2019.
Trevor Dierdorff, founder and CEO of Amnet
What’s something exciting that happened in the local IT industry in 2018?
Colorado Springs lags behind Denver and much of the rest of the country when it comes to technology adoption. What was exciting was that businesses got serious this year about cybersecurity. As home of the National Cybersecurity Center, we should be the model of cybersecurity. Yet, too many businesses think that if they have a firewall and antivirus software that they’re covered. That was enough for most businesses a few years ago but is far from adequate today.
What’s something you are excited about for the local IT industry next year?
Businesses are finally investing in cybersecurity. After so much press about ransomware and hacking, small businesses are finally realizing that they are targets and 2019 will see the greatest investment in security that we’ve ever seen. The Russians are coming, are you ready?
What’s a challenge facing the local IT industry 2019?
Finding qualified people with the right technical and soft skills to meet the market demand will continue to be our greatest challenge. We’re not just competing with our competition for talent but also DoD contractors and corporations are hiring the same people we’re looking for and they’re driving costs up. Colleges are not helping with talent shortage, they’re more focused on turning out programmers and cybersecurity experts rather than people who can become system administrators. Fortunately, Colorado Springs continues to get great press about what a great place it is to live. Attracting people here is much easier than many parts of the country.
What advice do you have for other leaders in the IT industry as the New Year approaches?
Turnover is a momentum killer for any business. By focusing on your company culture you’ll have greater retention of the people you need to deliver great service.
How are you preparing your business for the next economic downturn?
To prepare for the next downturn, we’ve been investing heavily in training and automation. In 2018, Amnet has invested hundreds of man hours in training and thousands of dollars in automation tools for our technical team to maximize our ability to do more with fewer people and do it faster.