Trimming Costs, Boosting Profits — and Growing a Business

Small Business Development Center hosted by Pacific Coast Regional
Jaba Trim • Los Angeles, CA

Before:
Eun Choi had more than 10 years of experience in the garment industry and a lengthy list of customers, contacts and business partners when she launched Jaba Trim in December 2008.  Thanks to her industry experience, the company, which manufactures garment trims such as elastics, bias and spaghetti, grew quickly despite the recession. In fact, her own employees couldn’t always keep up with demand, so Choi began using subcontractors. But in February 2010, she decided it might be wise to invest in additional machinery, and contacted the Pacific Coast Regional SBDC to investigate loan options.

Best Advice:
SBDC Business Advisor Martha G. Castro helped Choi develop a business plan, including three years’ projections; prepare a loan package and obtain a $25,000 loan; organize the business’s finances; and improve its marketing strategy.

Lessons Learned :

  • Simplify with technology. “Choi was so busy running her business that she had never put Jaba Trim’s financials into the computer system — everything was on paper. Castro showed her how to computerize bookkeeping, create Excel spreadsheets and make financial projections.
  • Think big picture. “I helped [Eun] review the financial projections and provided guidance on using the numbers correctly,” says Castro. “I also gave advice on how to figure out percentages, seasonal purchases and rotation of inventory.” Choi quickly saw ways to cut costs and increase profitability. She realized that the premium she paid subcontractors for complex jobs added up, and that buying just one more machine would decrease her reliance on subcontracting.
  • Start small. By proving she can handle a small loan responsibly, Choi is laying the groundwork if she needs to seek bigger capital infusions in the future.
  • Streamline sales. To reduce travel time and costs for the company’s sales agents, Castro suggested launching a website to show potential clients Jaba Trim’s capabilities and products.

After:
“The [SBDC’s] assistance was very helpful because I was able to obtain the loan,” says Choi, who used the funds to purchase new machines. “Production increased, and the business is growing.” Choi has brought more work in-house and has hired two additional employees. Since she visited the SBDC, Choi estimates sales have grown 20 percent.

Immediate plans for Jaba Trim include creating new manufacturing models, purchasing more equipment to increase production, and launching a company website. Depending on how quickly Jaba Trim expands, Choi may even need to move to a new, bigger location next year. “I am planning to apply for another loan in the near future,” says Choi. When that time comes, she’ll be heading back to the SBDC for help.