Commitment Is Key to Starting a Business
“Do I need a business plan?” “How do I introduce drug-testing for my employees?” “Where can I get legal advice on a merger?” Small-business owners often have questions about how to run their companies. This column will attempt to provide answers from a variety of experts. Consultants were interviewed by free-lance writer Karen E. Klein.
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Q What do I need to do to start a small business?
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A Before you get into the nuts and bolts of licensing, organization and everything else, you need to have an idea, a passion for and a commitment to your small business. You must think about how you are going to make money from your idea: Who is going to buy your product or service and how long will it take you to get going? Also, you need to find a person or organization who can help you with your new business.
Determine this: Are you really ready to stand alone, against family perhaps, go without income for a certain period of time and do the hard things that entrepreneurs must do to be successful? Once you have found answers to these questions, then it’s time for strategies and concrete planning on how to operate your business.
--Dr. Philip Borden
Executive director,
California American Woman’s
Economic Development Corp.
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Q What can I do to prepare myself to start my own business?
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A In any industry, there are many nuances you need to understand. If people are not aware of those nuances, I often advise them to work for somebody else in that industry so they can learn them. For example, a woman came to me who wanted to open a bridal salon. We decided that she should work at two bridal salons before going into business for herself. That way, she got a firsthand look at dress styles, inventory, relationships with employees and relationships with customers. What she learned was that relationships with certain dress customers were extremely important to that industry. So when she was ready to open her own business, she decided to acquire a salon with an established customer base rather than start a new one. If you do work for someone else in the industry, you should walk in with a clear set of goals and design your own business plan while you are employed for them.
I also tell potential small-business owners to go to trade shows. They are fantastic sources of information and contacts and there is such a concentration of people there that your learning curve is accelerated. --Peter Cowen
Consultant with StratePlan,
an entrepreneurial consulting
firm in Westwood
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Q What professionals should I consult before I start my business?
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A There are four people you need to work with before starting a business:an attorney, a CPA, a banker and an insurance agent. After you interview some of these people, make a careful selection of the ones you want to work with. If you come up with the right four people in those categories, they will be like an advisory board to steer you through the rough waters and help you chart the right course.
--Betty Jo Toccoli
President, California
Small Business Assn.
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Q Is government funding available at no cost to start a small business?
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A Our center gets calls two or three times a week from would-be business owners asking this question. Unfortunately, the answer is that there are no federal government grants available for small businesses. Only businesses or organizations with nonprofit status are eligible to apply for free government money.
--David Ryal
Manager, Pasadena
Small Business Development Center
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Q Then how can I fund a business start-up?
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A You need to look at your own assets. Even if you are able to secure a loan from a bank or from the Small Business Administration, they will expect you to contribute 30%to your start-up costs. For example, if it will cost you $50,000 to start your business, a loan officer would ask you to put in at least $15,000 before you could get a loan for the remaining $35,000. And you would have to show that you have collateral, like real estate or stocks and bonds, that would act as a secondary source of repayment for the loan. At a workshop we teach, we recommend turning to family and friends for assistance with financing, checking to see if you can borrow against a cash value on your whole life insurance policy or selling off collections or hobbies that may have value. --David Ryal
If you have a question about how to start or operate a small business, please mail it to Karen E. Klein in care of the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia 91016 or e-mail it to business@latimes.com. Include your name and address. The column is designed to answer questions of general interest. It should not be construed as legal advice.
