October 24th, 2008 Posted in Business, Community, Entrepreneurship, Kelley, Marketing, Uncategorized | No Comments »
NOW can be a good time to start or grow a business. That’s according to a panel of banking, finance and business experts who talked about finding funding for business at the Main Street Institute today, sponsored by the Kelley School of Business Women’s MBA Alumni Advisory Board and the Indianapolis Chamber. I had the honor of moderating the event, and it was a really great discussion with the panel and then in small groups. Here are some of the highlights for current or prospective entrepreneurs:
NOW can be the right time and right opportunity IF you:
have a business or idea that can thrive in today’s economy;
know your market;
have an effective business plan;
have some of your own money to invest and have a good credit score;
have the passion; and
are a risk-taker.
Turns out these are the same things panelists said were needed in good economic times!
Finding Funds for Your Business
Good credit is critical, says Connie Shepherd, who leads M&I’s business banking division . If you don’t know your credit score; find out. It needs to be at least in the 650-680 range. Don’t max out your credit cards to fund your business. It will show up on the credit report and lower your score.
A fully developed business plan is a must when seeking capital from a bank. If you don’t have one and need help, the Indiana Small Business Development Center is a great resource with free services (we’re already paying for them with our tax dollars).
Form a relationship with a banker before you need the money for a business. Ask someone where you do your personal banking if you need a referral – or ask fellow entrepreneurs.
Family and friends can be sources of funding, but may come with a higher price than the bank.
At least at M&I, they are looking to make loans to small businesses, but no one wins if the business owner can’t pay back the loan. A loan of less than $50,000 can be secured based on your credit score alone. If you try for a loan and don’t get it, ask why.
Victoria Hall, regional director of the SBDC, dispelled the myth that there are lots of grants out there for small businesses. There aren’t many except for some targeted areas like biotech, life sciences and innovative new technologies.
Have You Got What it Takes?
In addition to the idea, business plan and drive, consider:
Formal education in business or an MBA provides a really great background in all the fundamental areas of business, some which may not be your expertise.
Experience in the field in which you want to start a business is helpful. If you want to open a coffee shop, but have never worked in retail or hospitality, get a job in a restaurant and learn about the customer-serving side as well as the back operations.
Sales and marketing experience – to be successful, you always need a pipeline of prospects. If you can’t or don’t want to work the market, then partner with someone who does.
Be prepared for the unexpected – you never know when you’ll find yourself stranded on the roof painting!
Lessons Learned
In addition to all the other advice, the two entrepreneurs offered some thoughts on things they wish they had known sooner. Gayle Ross, president of C.A. Ross Company, a 13-year old custom manufacturer or architectural woodwork and furniture, says they had a really good plan, but you don’t know your true cost of sales until you know how much you have into your product. Her advice: cut your revenue projections in half and double your expenses.
Liz Hoover, who realized her long-time dream of having her own business about 7 years ago, looks back and thinks that she could have started her business sooner than she did. The owner of Hoover Financial Services, Liz warns of the rising cost of health care and benefits, and stresses their importance to attracting and retaining great employees.
How are you finding the economic environment for growing your business? Let us know.
