Santa Cruz SBDC


“Working with the SBDC has been invaluable both for practical advice and know-how and for moral support and encouragement”

All Client Stories

Bagito is a company started by Mitch in hopes of bringing awareness to environmental sustainability. In order to fund the Power2Sustain project, the Bagito team came up with the idea to sell shopping bags made from sustainably sourced materials. Composed of problem-solvers, designers, and systems thinkers, the team’s goal is to assist other companies in becoming resource-efficient and transitioning from sustainability to restorativeness.

However, like many small businesses, Bagito faced challenges, particularly in the areas of financial management and accounting. When the pandemic hit, Bagito experienced financial setbacks and began to accumulate debt. Mitchell considered closing the business but decided to seek help from the Small Business Development Center (SBDC) instead. He hoped to learn strategies for operations, management, and marketing to keep Bagito afloat.

Larry, an advisor at the SBDC, worked closely with Mitchell. He conducted a thorough analysis of Bagito’s financials and identified key issues. One significant problem was that all inventory purchases were being placed in Cost of Goods Sold (COGS) rather than as an inventory asset and transferred to COGS when sold. This accounting practice was causing a significant loss on the Profit/Loss statement, which didn’t accurately represent what was actually sold.

Larry also noticed that Bagito was not charging enough for its products while increasing overhead without the expected results. He suggested speaking with an accountant and creating a four-year financial analysis to gain a clearer understanding of the business’s financial health.

Beyond financial advice, Larry provided moral support and encouragement to Mitchell, helping him process the emotions around running a small business. This support was invaluable to Mitchell, who gained more clarity and confidence in his ability as a business leader, while also developing a better understanding of accounting principles.

With the SBDC’s help, Bagito was able to turn things around. They increased sales significantly, expanded their full-time staff, and rectified their accounting issues. Mitchell’s number one goal now is to continue increasing sales and generating more revenue. The team is also working on new product development for new single reusable products.Bagito’s success story continues to unfold, and we’re proud to be part of their journey towards environmental sustainability and business growth.

“Working with the SBDC has been invaluable both for practical advice and know-how and for moral support and encouragement.”