Owning A Business Brings Many Challenges

By Sharon Myers
The Dispatch, Lexington, N.C.

According to Forbes Magazine, eight out of 10 entrepreneurs who start businesses see them fail within the first 18 months. One of the main reasons new businesses fail is because owners fail to develop a financially sound business plan. Many experts say to own a business a person has to use all the resources available and plan for every possibility.

It’s not a hobby
“You can’t come into owning your own business and run it like it’s a hobby,” said Toby Prince, owner of All About Education. “The common misconception is you make your own hours and that you are rich. It’s nothing like that. … It’s not like that movie ‘Field of Dreams’ where you build it and they will come. You have to work at it.”

Prince opened the store specializing in educational supplies for public school teachers, parents, day cares and churches on West Second Avenue in 2005. He said when he and his partners were first starting out, there were many things they learned about owning their own business, including sticking to it through thick and thin.

“There is much more to it than you think at first,” Prince said. “We sort of learned as we went. Many times we were not that busy, and we would have liked to close up and gone home, but I wasn’t going to risk someone coming by and not being open. If you can’t trust my hours, why would you trust me? Why wouldn’t you go somewhere else? Then you’ve lost a customer.”

He said it is important to build that relationship of trust with customers as well as with other merchants. He said using a network of support and resources is important.

“One of the best things I did was to talk to other business owners and get involved with other organizations,” Prince said. “I go to the merchants meetings and get involved with Uptown Lexington. I take workshops at the chamber of commerce. … Being involved in the community and networking really helps.”

It helps to get help
If you are someone with a dream of starting you own company, there are resources available to make sure you are successful. Martha Larson, director of the Small Business Center at Davidson County Community College, said opening a new business takes lots of planning, a sustainable cash flow and plenty of patience.

“There are so many considerations that people need to (think) through,” Larson said. “There are so many misconceptions about owning your own business. … It is so much more expensive than they imagine. They need to have enough capital to take them through at least six months. … The number one thing people need to consider is a solid business strategy before they obligate themselves financially.”

Larson said helping entrepreneurs is the reason community college leaders developed the Small Business Center. The mission of the SBC is to increase the success rate and the number of viable small businesses by providing high-quality, readily accessible assistance to prospective and existing small business owners and their employees.

It offers educational seminars, one-on-one meetings, business planning workshops, referrals and other resources. Larson said anyone thinking about starting a business needs to do extensive pre-planning before jumping in.

“We really like to see people examine the feasibility of their business and marketing plan,” Larson said. “The advantage of the Small Business Center is getting another perspective, getting other people to take a look and see what they think. It’s not always what people want to hear, but it is important to know what’s in store for them.”

Start small, think big
Benita Bennett of Lexington is taking advantage of the resources available through the DCCC Small Business Center. She is in the process of developing a taxi service that concentrates on transportation for day cares, medical offices, churches and schools. She said it was easy to come up with the idea, but it was all the other things about running a business she needed to work on first.

“You have the idea, but then how is it going to work?” Bennett said. “How can you run a business if you are not educated about it? You have to know every little nook and cranny. Even if you know someone who is in the business, it’s not the same as doing it yourself. You have to be focused. It can be discouraging, but I’m not a quitter.”

Bennett has been taking classes in how to write a business plan, accounting and many other subjects. She said she has spent hours in the library researching everything from price quotes on vehicles to the rules and regulations of owning a taxi service to payroll requirements. She believes many businesses fail because the owners don’t do enough research and preparation to be successful.

“The reason why I think a lot of businesses fail is because they don’t know the things they should have known before they went into business,” Bennett said. “They don’t know what to look for, what to expect, what you will get and what you won’t get. The Small Business Center helped me a lot. … If you have a problem, you can go to Martha, and if she can’t help you, believe me, she will find someone who can. … My suggestion is go slow and don’t rush into it. Before you get into it do research, take some classes. The classes are free, so there is no excuse. Just learn, learn learn.”

With a little help from your friends
One of the best friends any business can have is the local chamber of commerce. The Lexington, Thomasville and North Davidson area chambers of commerce have vast resources and educational opportunities for new and existing business owners. They hold counseling sessions, workshops, meetings and seminars throughout the year, but they are also finding new ways to support entrepreneurs.

Doug Croft, president of the Thomasville chamber, said besides working with the other community agencies, his office has started a business development program that includes a database with thousands of pieces of information that could be helpful to business owners.

“We have always been receptive to anyone who walks in our door; this is just a different approach to be more assertive about it,” Croft said. “The data helps identify potential matches for our community. It is unbelievably comprehensive. … We try to ask the hard questions, such as what is your competitive advantage. If the data reveals that a certain type of business is not in the top 50 percentile of what citizens want, based on this variable, it might not be a fit in that area. I would rather a business owner wait until the right time and place, rather than losing his life savings on a business that won’t exist in six months. We want our businesses to succeed, so we want them to do their research first.”

Burr Sullivan, president of the Lexington chamber, is hoping to start a mentoring program, or SCORE (Service Corps of Retired Executives) chapter, to assist business owners.

“We have looked into starting an advisory group of retired business people that want to mentor young entrepreneurs and small business owners,” Sullivan said. “All these people have time and a great amount of knowledge. … One of the reasons many businesses fail is they think if they have an entrepreneurial idea that is burning in their mind and all they need to do is put that idea out there and market it. There is more to it than that. It’s the things that they don’t know that trip them up. … All of us have different amounts of talent in various buckets. No one is born with the knowledge to do everything. Businesses fail because they don’t have the knowledge of all the different components it takes to be successful. We are trying to foster the growth of small businesses however we can.”

Small businesses run the economy
The 2014 annual report by the North Carolina Small Business Technology and Development Center states there are over 800,000 small firms in the state that employ 1.5 million people. They account for 45 percent of private sector employment and contribute nearly one-half of the gross state product. Small firms, which are those that have less than 500 employees, created more than half the jobs in North Carolina in 2012, and a majority of those employed between 20 to 99 people.

According to the report, researchers at George Washington University found that in addition to improving a business’ chance of survival, clients who received face-to-face counseling on business plans, marketing plans or financial strategy were significantly more likely to report positive financial outcomes. On average, DCCC Small Business Center clients have three times the revenue growth and six times the employment growth of North Carolina businesses that do not receive assistance.

Larson said between the Small Business Center and all of its local partnerships, there are plenty of resources to increase the possibility of the success of any new business.

“It is important for people to get in touch with us early before they do anything rash, like sign a lease,” she said. “We can refer you to CPAs, financiers, project managers and other professionals that can really take a look at (what) they need to make it. … Most businesses don’t make much, if any, money in their first year. It take lots and lots of patience and persistence to make a successful business.”



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