Monday, September 23, 2013

Don't Be Ashamed of Asking for Help as a Startup

Is your city struggling to survive? It might not be the next Detroit, but a number of metropolitan areas like Oakland, California, are having a hard time, still leaking funds and people through the bullet holes left over from the machine gun fired by the recession. According to Jack Dorsey, a founder of the social media giant Twitter, small business may be what saves these cities. Another company he founded has been sponsoring a series on local entrepreneurship called "Let's Talk" and it recently visited the largest city to ever declare bankruptcy: the Motor City.

It's hip to be Square | Photo courtesy of Square
There, the conversation turned to several local business owners who use Square, a device that allows owners to accept credit card payments on their tablets and smartphones. This has given many companies a convenient way to facilitate operations, allowing them to grow much easier. Speaking of growing, one of the women spotlighted on the panel at "Let's Talk" owns several cupcake shops in downtown Detroit. Her sales have grown from when she opened her first shop--called Just Baked--in 2009 to more than $3 million as of late, making her one of the most successful female business owners in the nation. Interestingly, all of the other panel participants were women as well. One of them owns a boutique, another runs a letterpress studio, and the last makes jam. Each of them have taken a chance at doing what they love and have been successful so far. Though they are all successful now--partially due to innovative devices geared toward small businesses--they have all probably been through their fair share of failures. Successful entrepreneurs do not let failure scare them from chasing success--they use it as a learning experience and move forward with their new knowledge, instead.

Back to that founder from Twitter, though: Dorsey was also in attendance at another small business conference called Techonomy Detroit on the same day, as was Rick Snyder, the governor of Michigan and former head of computer hardware company Gateway; Dan Gilbert, founder of Quicken Loans; and Chad Dickerson, the CEO of Etsy. These goliaths of business were talking about startup boosters and how they could contribute to the recovery of a city that is known throughout the country as troubled. Their goals include bringing the style of entrepreneurship seen in Silicon Valley to the Motor City. Gilbert is already doing this, using his venture fund to contribute to the furthering of several startups located in the downtown area.

The moral of the story is that if your business is struggling, you should seek out assistance from other entrepreneurs and organizations that focus on bringing small businesses out of the home and into the neighborhood. Getting that little boost could be what you need to keep your operations flowing and growing for years to come. Who knows? If someone who sells cupcakes can cross the $3-million threshold, you too could have a chance at denting whatever market - green transportation, family portraiture, office furniture - you are considering.

Wednesday, September 18, 2013

A Great Business Owner Will Use Whatever Resources Are Available

Good ideas are hard to come by, but even harder to find is the motivation to take the epiphanies that precede a company and bring them to fruition. The government of the state of Michigan wants to help facilitate this process and has done so by providing a website that gives relevant information about starting a business to everyone with Internet access. This means that people from all income levels can chase their dream of becoming an entrepreneur, of becoming their own bosses, of bringing themselves and their loved ones out of poverty.

A lot of people are saying that the American Dream is dead. I agree that the traditional concept is gone--it's flown (or maybe it was thrown?) right out the window. Still, government programs like the aforementioned one--which is known as Michigan Business One Stop--are trying to centralize the necessities of starting, opening, and running your own company, whatever it might be. Visitors to the website will notice plenty of information, including guides to starting a small business, resource navigators, county clerk directories, business plan tips, Employer Identification Number applications, and a plethora of other helpful links. There is even tax information here--perfect for people who don't know how to get around in the world that opens up when one tries to own their own business.

Visionaries and entrepreneurs can explore the website while they let their business ideas ferment in their heads--it will definitely take some serious virtual spelunking to grasp the vastness of this resource. But when you're ready to move on to one of the toughest hurdles for a business--finances--MBOS even has a list of options that can help you push forward and turn your idea into a reality. These include programs from the U.S. Small Business Administration, venture capital financing, state loan programs, and demographic-specific business centers. The best part of these options is that a business doesn't need to be new to use these avenues; current owners can use the same routes to expand existing businesses.

Cities like Detroit need potential business owners to step up to the plate and take a swing. | Photo courtesy of Shakil Mustafa
But like most things that the government works on, this website has its flaws. As mentioned, there is a lot of information here--too much even. Navigation seems simple but I've found myself lost on this platform several times, especially when I was trying to start a business of my own. Fortunately, there is a help center and a virtual tour for this resource. Even with these though, the site is still rather confusing. A redesign of it may be helpful for both potential and current business owners in the state of Michigan. I've got my fingers crossed that this program will get better with time. Although the American Dream as we have known it may be dead (was it the Great Recession that killed it?), there is still hope for those who are willing to put in the time and effort it takes to make something from scratch, to build a business from the foundation up.

Monday, September 9, 2013

Could Your Business Handle a Disaster or Another Economic Downturn?

In the past few years, several large corporations--mostly banks--have been called "too big to fail." This is the type of security that small business owners often wish they could have for their own operations, for their own peace of mind. But the tumultuous economy keeps slinging different statistics into the fold, reporting one month that everything is going swimmingly and then, in the following month, that everyone is in danger of drowning. Mix in the precarious nature of the planet and you have a recipe that could leave many owners without the ownership they once treasured.

So, we know this: The American status quo is uncertainty. With conflicting data and vague standards, economists and organizations are struggling to agree on the current economic state of the country. As scary as that might be, it gives some businesses the chance to thrive and others the chance to close their doors--not all owners can manage well under the chaotic reign of unpredictability.  (And obviously a blizzard can be a windfall for a snow removal business while being a mini disaster for a shipping company.) The anxiety caused by this may force an owner to shut down before becoming a victim of uncontrollable factors. But it is when owners are caught by the unknowable variables of the volatile world--be they related to money, weather, whatever--that their own determination and resilience can shine through.

Serious infographic on businesses
and disasters. | Courtesy of et al.
Let's say that a tornado hits your business. Or a flood. Or a drunk driver crashing through your storefront. Or an(other) economic downturn. In case you don't get the picture, there are a lot of independent elements in the world that can inflict damage upon your business. In order to counteract the consequences of such occurrences, small business owners should prepare. Euphemistic individuals often call these "rainy day" funds, but in reality, they are disaster prevention/reaction funds.

According to the U.S. Small Business Administration, an estimated 25 percent of businesses that have been struck by a natural disaster will fail due to the ramifications of such an event. This likelihood is too risky to leave to chance. In response, intelligent owners create a plan and tuck away money, providing hopeful longevity for the business. But what about economic issues? A recent report from payroll services provider ADP indicated that, in August, businesses with less than 50 employees added the least amount of jobs since May. But 71,000 jobs were still created; reports suggest that many of them were part-time positions. Meanwhile, a survey of members belonging to the National Federation of Independent Business indicated that hiring trends for small businesses declined for the fourth month in a row. Before you get worried, remember that uncertainty I mentioned earlier? Polling performed for the CBIZ Small Business Employment Index indicated that hiring trends for small businesses rose 1.23 percent, the first increase since May. Be sure to note that this index asks approximately 3,500 companies, each with less than 300 workers, about individual hiring trends.

With so much conflicting data, what is an owner to do? If you are holding the reins of a business, you should do your best to be ready for the worst while maintaining a positive attitude. If you get caught up in paranoid preparation, you may find yourself becoming resentful toward the world--this could get in the way of running a quality business. It's impossible to be ready for everything, so do your best with what you have to ensure that your business is protected to the best of your ability.

Tuesday, September 3, 2013

The Small Business Sector Has Risen

Saying that the recession trimmed the fat off the small business sector would be putting it lightly. Starting your own business is typically an up-hill battle but when the economic floor suddenly fell out from under the feet of so many Americans, a number of both new and old businesses came tumbling down, never to return. But now, data from several sources is showing that optimism regarding small businesses is on the rise with many owners estimating higher revenues and profits over the next 12 months.

According to a report from Wells Fargo and Gallup, the small-business optimism index for August was the highest it has been since the third quarter of 2008. A similar report from the National Federation of Independent Business indicated that last month's optimism was at the fourth-highest level it has been since the group started taking readings of the industry in December 2007. More detailed information from The Wall Street Journal/Vistage Small Business CEO Survey showed that 73 percent of the 678 participating business owners expected higher revenues in the subsequent year. Researchers with this outfit also found that 54 percent of small business owners expected profits to increase during the same time period. After analyzing previous data, it was determined that these are the highest proportions seen in these categories since June of last year.

So, what does all of this mean really? Well, it could mean good things are coming for many small businesses in Michigan and throughout the nation. But the recession is still having lasting effects in some areas, continuing to stop a fraction of business owners from getting on the ride of the recent economic resurgence--roller coaster that it has been in the past handful of years. For some owners, this might mean more cutbacks and closures in the future. But where I live, a number of small businesses have been taking a chance, opening, and subsequently thriving. In our downtown area, local residents can't stop talking about the new market that was built this year--it now houses a slew of entrepreneurs trying their hands at this and that. Elsewhere, restaurant options have been popping up left and right--the key to the food ventures that will last is three-pronged: good food, good service, and good prices.

Talk about a corny image: the key(s) to success! 
Substitute the word "product" for "food" and you have a solid business model for any up-and-coming company. It may seem like a no-brainer, but some owners neglect the obvious route of considering what customers enjoy in a restaurant or an auto shop or a grocery store or any other place of business. It's a rather simple formula and with it, many endeavors have gone far. With the effects of the recession dwindling, the playing field is leveling out and many more business owners will likely see their businesses blossom, as long as they understand their customers and the situations surrounding their businesses.