By Jason Hunsicker Kirksville Daily Express, Mo.
WWR Article Summary (tl;dr) Small Biz counselor Anastasia Tiedemann shares her best advice for budding business owners.
Kirksville Daily Express, Mo.
Have an idea for a small business but don't know what to do next?
Maybe 2018 is your year, and maybe Anastasia Tiedemann can help.
Tiedemann is the small business counselor with the Small Business Technology Development Center and Missouri Rural Enterprise and Innovation Center.
Question: What are your hopes for your office and organization in 2018?
A: For my office, my hopes are we get a lot of businesses started, but started on the right foot. Not a lot of businesses that are still questioning who their market is, things like that. Really successful businesses that can really make an impact here in Kirksville and provide great service for Kirksville and the surrounding areas.
Question: What are some of the services your office offers?
A: Our office offers a lot of services to small businesses, not only people who are starting up a small business but for people who may already have a small business.
For those starting up, we can do research, we have access to different databases, we can help with the business plans, we can help with financial projection.
For those who already have a small business, we can help with marketing, we put together trainings every month.
Right now, for example, we're doing cyber security. We have informational stuff like the I-Corps program, which helps you figure out if your product is viable to bring to market.
We do pretty much a lot of information and education in small business.
Question:If people are going to make 2018 the year to start their own small business, what are some things they should have worked out before they come to see you?
A: They need to think about their business and think about their idea. Just because you have a really great idea doesn't always mean it's something the consumers want, or that consumers need.
Really think through their idea. Who is their target market going to be? If there is competition in the area, if you're opening up a restaurant or something like that, how is it going to be different or better than what is already existing? If it's going to be the same thing, why are people going to want to pick you over something that is already here?
So when you're thinking about your idea, also think about your competition. Evaluate what is already being offered and at what prices. If your value proposition is that you're going to be cheaper than everybody else, really examine why the price structure is that way. Maybe you can't be cheaper than everyone else and it would save you a lot of time and energy to do a lot of this research and legwork before you start sinking money into actually starting a business.
Research and planning out everything is probably the most important thing before you start the business.
Question: Statistics show that starting a new business is risky, correct?
A: It is risky. I believe the SBA (Small Business Administration) website, the statistics are 96 percent of small businesses fail in the first 10 years. That's really scary, and that's the reason a lot of banks don't lend a lot of money to startups.
That brings me to No. 2, as far as my list, which is to get your financial house in order. If your plan is to get a grant to start your business, there are not a lot of grants out there and they're really competitive. A lot of the grants might be geared toward nonprofits, or they might be geared toward education. There are grants out there but I would say 99 percent of the people I talk to have to bootstrap their startup, and that means it's their savings, it's their credit cards, it's their funds funding the start of their business.
If you have bad credit, pull your credit report. Write to the credit agencies. How can you improve your credit rating so a bank might look at you and lend you money? Pay your bills on time. Do those things, take those steps so you can build credibility to lenders or investors to start your business.
Question: I would think that also lends itself to looking at the expenses you will incur with a business. When people come in with ideas, are there certain expenses people are overlooking?
A: If they want to incorporate, there is always the incorporation cost. Any legal fees or anything like that if they want to work with a lawyer. Sometimes they underestimate if they are looking for an office space or retail space, sometimes they see the rent will only cost them $500 to $1,000 a month, but that does not include your insurance, and do you need shelves, a desk, does it need to be painted or carpeted? All of the things that go into that, whatever they need for their business, it adds up and gets expensive.
It is so sad to me, they get started on the project and are excited, and then the project stalls because they're out of money. I would always overestimate the amount of money you're going to need. Always have extra on hand, or a way to access it.
Question: How can the incubator space help bridge some of these gaps?
A: If you are a service-related business, or even a retail business, maybe you just need some place to plan, or you can start your business down there. It is a space that is not your home, that you can use to work out of.
We have wi-fi down there, printers, computers and office equipment. You can have meetings down there. It is really great, flexible, shared space with other entrepreneurs. You can bounce ideas off other people so you're not living in your little bubble. You can get some advice, resources, directions, not only from our office up here, but from the people sharing the space downstairs, too. That can really be a great bridge before you can afford to move into your own office.
Question: There's a lot of risks, but how about the rewards?
A: It is so exciting and rewarding when your small business is successful, when you get that first customer, when you start getting feedback from the community.
The way to really ensure that is careful planning, do a business plan, get the word out, talk to people. What do people want? What need are you fulfilling? If you're not fulfilling a need people have, people aren't going to come to you. Careful planning is really the key to starting a business.
Question: Is there anything else you'd like to add?
A: If you need help writing a business plan, or financial projection, or you just want to bounce some ideas around, please feel free to give our office a call -- (660) 665-3348 -- or visit us on the web -- www.mreic.org.