Small Business, Big Energy

Being well informed is one of the best tools in starting a small business. When I was young, I had the opportunity of buying a coffee franchise for about $15,000, plus stock. For me, this was a lot of risk capital. I dropped in on my banker - a good place to start - to see what he thought about the deal. He asked me what I knew about the coffee business or retail and I answered, “Not much.”

“You’re a journalist, right?” he said.“Isn’t that a lot of work? Do you really want to serve people coffee and dessert standing behind a counter for 12 hours a day to make money? You have to think about what it is you’re actually going to do in the business.” I told him I just wanted to be an investor and work maybe on Saturdays. If I wanted to do it, even though I didn’t have the credentials, he advised me to go to the mall where the proposed coffee store would be located and count the traffic.

I thought, ‘ Wow, he’s smart.’ I thought his suggestion was the best thing that could have happened. I tore
apart that franchise deal piece by piece and happily moved on. A business school graduate would be a
hundred steps ahead of me, you would think. But, would a business school graduate start a coffee shop? And if General Motors can fail? I can think of several people who didn’t graduate from business school who have opened their own shops and one, in particular, has done very well, even when a Starbucks opened across the street. Everyone has the equivalent of Starbucks opening across the street because you’ll always have competition, no matter how small.

No matter what business you’re contemplating, you have to have a good‘business head’ on your shoulders and need all kinds of backing from others who are in it, too. Do it, but don’t expect easy money from the banks, or credit unions, or your friends. People who lend money don’t like to be at risk and a small business is a risk to start with. So business plans and perspectives are key. A lawyer who did work with small business said anyone can make money at a small business if they want to work hard 12 hours a day. It’s not for everyone. But every way there is to earn a piece of the big economic pie takes energy and skill, unless you inherit a successful business and that’s a rarity.

What type of business you should be thinking about starting or buying really depends on what makes you go. Entrepreneurs just do it. They think clearly, know their sector and what it will take to make it work. So in the end, I wound up in a business close to my skill set and the rest came with hard work and lots of surprises. We all spend many more hours in the office than others, but most of us wouldn’t have it any other way. If you’re in a small business, drop me an email about your

September / October 2009