Looking up in down times

   When the economy slows, many companies scale back operations, downsize staff, cut marketing and advertising. Others approach deflated consumer confidence as a time to jump ahead of the competition by accelerating business. They increase exposure, aggressively chase clients, set higher profit goals.

   The growth strategy is working for several Colorado Springs companies, which are expanding and making money despite the economic slump.

ONLINE OPPORTUNITIES

   "There's a lot of doom and gloom in business right now, but you need to look at the upside of what's happening and tap into the way the market's going. There are a lot of opportunities because of the changes in the way people live and work," said Artie Romero, who has tapped into what he calls the "insatiability of online publishing."

   Along with identifying a hot market, Romero's strategy is to diversify - he has about eight businesses that continually launch new products. Earlier this year, he started an electronic cards and games site that now gets 73 million hits a month.

   "Our strategy is to get ahead of the game," Romero said. "We think everything is going online because people don't want to drive places. They want to shop, pay bills, play games online - and we have benefited from that."

   He started his first company, a graphics and cartoon animation service called ARG! - short for Artie Romero Graphics - in 1994. Business was terrible - he didn't have any.

   The next year, he ventured into Web design. After a while, "we were an Internet company and did animation on the side."

   Another company he formed, City-Star Group Inc., introduced an online city business directory to Colorado Springs.

   In the past three years, the concept has ballooned from 33 online city directories in Colorado to 202 directories in the United States, Canada and Great Britain.

   One of Romero's tactics was to court Google, which is now his biggest advertiser and is responsible for most of the site's traffic. Last year, the city directory sites averaged 7 million hits a month, Romero said and up to 12 million a month this year.

   And every city directory is profitable, he said. Businesses pay to be listed in various categories, from $5 to $535 a month. Listings now number 45,000.

   Romero's animation service, which does television commercials, cell phone downloads and holiday cartoons, has gained strength. Sales are up 41 percent, and gross profit is up 160 percent this year over last year, Romero said.

   "We don't put all our eggs in one basket, and we avoid fixed costs that can't be adjusted," Romero said.

   Gross sales are just shy of $2 million annually; Romero has 30 employees plus contract workers.

   "Businesses are naturally losing customers to belt tightening so they need to bring in new customers to grow their business," he said. "Some of it's fortuitous - being in the right place at the right time."

PROACTIVITY PAYS OFF

   With local new-home construction and sales down, Roger C. Powell and business partner Jon Herman could have been facing a brown season for their company that specializes in landscaping new developments.

   Less available work means more competition, but Powell wasn't daunted. "Looking at a phone book full of landscapers didn't scare us," he said. "We knew we could outdo them."

   The veteran businessman, formerly a homebuilder and owner of the Colorado Springs Business Journal, in February hired an ad agency to attract customers to Backyards Only, now in its third year.

   "In the past, we advertised in the phone book and on our Web site. Now, we need to work harder at getting those new yards, and we wanted professional advice on what to do in a market like this," Powell said. "We wanted to not just survive but grow."

   The suggestions to be proactive have paid off: "We're already busier than we've been in the past. We're running two crews now, when last year at this time we were running one."

   Among a host of strategies, the company contacted previous customers and asked for referrals and testimonials. The reception, Powell said, was immediate and translated into new clients.

   Powell put his boots to the streets, erecting yard signs and placing door hangers on new homes.

   Powell familiarizes himself with each builder's style and the landscaping requirements of homeowners' associations in neighborhoods he targets. Then, he does mock designs for a prospective client's yard - before he approaches the client.

   "So everything is ready to be approved, and I deliver the plan to the homeowners' association as part of customer service," he said.

   Powell strives for professional, personalized service and quick, competitive bidding. "Networking is always the key," he said, "because regardless of the economy, a good reputation will keep you growing."

   Backyards Only also landscapes front yards.

FINDING A NICHE

   Eric Umenhofer never intended to start a business when he bought a commercial-size coffee roaster several years ago. The java connoisseur was looking for a premium cuppa joe, which he said he couldn't find in Colorado Springs.

   He already worked as a Colorado Springs firefighter and ran a mobile oil and lube service on the side.

   But when he rented a small space on East Fillmore Street and fired up the air roaster, people knocked on the door. They wanted to try some of the beans he was roasting purely for personal use.

   On April 1, 2004, Umenhofer opened Colorado Coffee Merchants, offering roasting, packaging and wholesale and retail sales. He sold his mobile lube and oil gig but still moonlights as a firefighter and works as the sole bean roaster.

   His business model - provide a superior product and customer service that matches the product's quality - has led to steady growth.

   "We want to maintain strong customer service; we're not a superstore. We say hello and goodbye to everyone who walks in our door, and we spend time with new wholesale accounts, training them to brew correctly and make coffee drinks," Umenhofer said.

   Sales doubled after the first year of business. Umenhofer then installed an espresso bar and tripled the size of his store to add seating and meeting space. Sales jumped from 80 pounds of beans a week in the first year to 1,600 pounds, with projections of a 50 percent sales increase this year.

   Word-of-mouth marketing has worked: "I only wanted people that wanted this quality, not discount coffee. It's a niche market that's developed nicely."

   He doesn't consider coffee shops competition; in fact, he sells his roasted beans wholesale to coffee shops and restaurants as part of his marketing strategy. Then he refers customers to other businesses that carry his coffee. "It's not about us hoarding all the customers," Umenhofer said. "We help their business grow - and ours."

   Umenhofer is purchasing a second roaster to boost production from 6.5 pounds per batch to 38 pounds at a time.

   He hires staff who have good attitudes and enjoy coming to work. "We take care of them, treat them as family, not as a commodity," Umenhofer said.

CONTACT THE WRITER: 636-0235 or debbie.kelley@gazette.com