Entrepreneur - Part 2

 

The purpose of the grant is to provide educational opportunities to potential entrepreneurs as you look to either start a business or take an existing business and grow it. There are many examples of entrepreneurial businesses in our community that started small and have taken off. The size of the business is not the important part. Some entrepreneurs run a “mom & pop” shop, which is a small business with just a few employees. Some start small and grow like Ludlum Measurements Inc. which employs over 400 in Sweetwater. Both are very important to the viability of a community. Most of the new job growth in the United States comes from small business.

 

If you have ever started a business, you know about all the pitfalls attached. Is it the right type business, what does the competition look like, what type of suppliers are available for your service or product, and more? Another issue entrepreneur’s face is that “I’m doing this on the side or as a hobby. Can I make a living at it if I go full time?” These are real issues that individuals face every day. It may be fun as a hobby, but will it continue to be fun when you are doing it 50 to 60 hours a week, year in and year out. Will you be spending more time taking care of personnel, accounts payables, and insurance issue, than you will be doing what you love?

 

I was fortunate to be an entrepreneur when my brother and I started a construction company in 1983. I can also admit that I had no clue of what I was getting myself into. I liked the work and the results of the construction business, but I was less enthused about all the other “stuff” that came with owning your own business. Entrepreneurs must deal with a 3 legged stool when you start a business. First is the product or service you provide, second is the marketing side of the business, and last but not least is the financial side of the business. Most entrepreneurs have sufficient knowledge in one and sometimes two of the three important issues.   Almost no one has the proper skills in all three. When you work for someone else, they may or may not provide you a salary or you work on an hourly base. They provide you with a building to work in, vacation days, and maybe sick days. They pay for the insurance of the facility and may provide you with a health policy and pay for the utilities for the facility. These are all very important parts to look at as you are making your decisions. Can you do all the work yourself, pay all the bills, and do the payroll and IRS reporting along with marketing your product or services? What can you do and what will you need to hire out? Will you make enough to hire someone full time or hire a subcontractor? 

 

These points are not to discourage you; they are designed to make you think about your business as a whole package and not just small pieces of it. A large part of start up businesses fail because of two things; 1) undercapitalized (not enough working capital to carry you through the slow times) and 2) the business owner does not have a handle of all “3” legs of the stool. 

 

The good thing is that there are many resources available to you that can assist you in preparing to make your decision. The Small Business Development Center (SBDC) can help you prepare a business plan, do market studies and look into the feasibility of your business idea being successful. They also help you understand the risks involved, what your projected expenses could be, and what type of income would be required to “make a profit” above expenses.

 

A good example is that a hypothetical family wanted to open a restaurant in a small community and showed that they felt they could net $200,000.00 to $250,000.00 a year. The SBDC ran the projections and told the family that to net that much, you would have to feed every man, women, and child “3” times a day, “7” days a week. When the family was told this, they stated that was what they planned to do. This is when someone needs to bring in a little reality. As you can see, it was not possible to feed everyone every meal all the time. 

 

Other good sources of advice are from your friends, your banker, and an accounting firm. It is very wise to find a mentor. A mentor, as defined by Wikipedia; “is a trusted friend, counselor or teacher, usually a more experienced person.” A mentor is someone that has experience in similar areas to what you plan to do. Someone that will give you honest advice about what you want to do and not just want you want to hear.

 

I believe that there is a common denominator that links all, or at least most, successful entrepreneurs. It is the creativity and the excitement the entrepreneur has about their business idea. What you don’t want to happen is that you get caught up in the day to day operation of the business and loose the time for the creative side of you to flourish. When that happens, it just becomes another job that may or may not be successful!

 

SEED works to build a better community. We do that through business recruitment & relocations, business expansions, and business retention. We also work to provide the best trained workforce. We work with TSTC West Texas, Sweetwater Independent School District, and the Roscoe Independent School District. We work with our community partners such as the city, county, hospital, appraisal district, the Chamber, TXDOT, and others. 

 

If you have an idea to start a business, let us assist you in finding the right resources to make the best decision you can. Sometimes the best decision is “no” or “not at this time”. To find that out, you need to go through all the processes and do the best due diligence you can!

 

SEED is charged as the Economic Development agent for our community. We cannot do it alone. It takes key volunteers that are willing to assist in the process. If you have an idea, comments, or a contact of someone that is looking to locate or relocate a business, give us a call at 325.235.0555 or come by our office at 810 E. Broadway.     

 

As our slogan at SEED says, we are “the sweetest place in Texas for business”.

 

See you next time!