Robin Burtner, a business consultant at the Small Business Development Center at Shippensburg University, is in the field of making dreams come true. But sometimes, she has to be the one to dole out harsh reality to enthusiastic potential startup owners who haven’t thought of everything that goes into opening a new business.
“I had one woman last year who when we started was very happy and telling me all about her idea,” Burtner said. “By the end of the meeting, she was crying. It happens sometimes.”
Of the 400 meetings the center has each year, about 240 of them are with people who have an idea for a startup business. Only about 50 of those businesses ever start after the potential business owner does research, seeks financing and gets a general idea of what it takes to start a business, Burtner said.
To get people ready for those challenges and possible pitfalls, Burtner led an informational workshop on the first steps to starting a small business Wednesday at the Ben Franklin [email protected]. The workshop included representation from the banking community as well.
The workshop — attended by midstaters with ideas for a wedding planning business, a home-flipping business and others — was held in conjunction with National Small Business Week 2014, which ended Friday.
The two local chapters of the SBDC — the other one is at Kutztown University and covers Dauphin, Lancaster and Lebanon counties — hold this “First Step” seminar throughout the year. It will be held May 21 in Exton, June 3 at the York County Economic Alliance, June 11 in Reading and June 19 at the Chambersburg Chamber of Commerce.
The SBDC chapter at Shippensburg covers Adams, Cumberland, Franklin and York counties.
Some highlights from the seminar for startup candidates:
• Don’t think you have no competition. It’s one of Burtner’s pet peeves. Even though your business idea may be taking you into a certain niche that may be underserved, that doesn’t mean you’re outsmarting the whole world by coming up with an idea that’s never, ever been done in any way. “If you’re starting a French restaurant in Shippensburg, you’re right, there may not be any other French restaurants in Shippensburg,” Burtner said. “But that doesn’t mean they have to come to you for food. They can go anywhere. … That’s your competition.”
• Don’t believe everyone is your customer. If you’re selling an accessory for a car, just because everyone drives, that doesn’t mean everyone with a car is your customer.
• Have knowledge of the field you’re getting into. Burtner related the story of a woman who came to her with an idea of opening a bike shop, but had no business ownership experience and no retail experience, let alone experience in a bike shop. But as they talked, the plan started to come out. She was a competitive biker. She was going to hire someone to manage the store. “And then we were getting somewhere,” Burtner said. “Then you can see the vision.”
• Know your credit score. Under 600 and “it’s not happening” when it comes to getting financing for a business startup, said Chris Fitting, small-business relationship manager in Cumberland County for F&M Trust. Before you think you’re ready to open a business, pay off bills, eliminate some of the bad pieces of your credit report and get your personal finances in order, Burtner said.
• The most frequent, immediate thing Burtner said she gets asked at every meeting with a new client: “Where are the grants?” The short answer is there are none. When it comes to financing, you’re mostly on your own. Know where to go for lending, and where to go for special low-interest small-business loans. The Small Business Administration has them, the Pennsylvania Department of Community and Economic Development has them, local economic development organizations have them and there are other lending resources as well. Some banks and credit unions also have specific loan programs for small businesses.
• Know the secondary operational costs. It’s not just about employees and rent at a space you love. There are myriad of taxes you may not have ever even heard of before — business and self-employment taxes among them — and secondary costs like hiring a lawyer, accountant or consultant to help you along in the process.
• Do an Internet search. Just a simple Internet search to see if you’re correct about things like the local level of competition, the local need for your idea or even whether someone already has the business name you’ve picked out.
• Know what you’re getting into. It seems short-sighted, but Burtner said people don’t realize when they start a business, it leads to 12-to-14-hour days, holiday and weekend work, and constant contact with customers. It also means extra time away from your family, which means the commitment to a new venture should come from everyone involved, she said. “Everybody thinks it’s going to be easy,” she said. “Let me tell you, it’s not.”
There is no way you’re ever going to be prepared for every kink that will go in to starting your business. But there is no reason for not finding out what could happen, which is why the SBDC exists.