By Editor Terry Hagerty
How going on vacation relates to starting up a business got a quick link during the recent Small Business Workshops & Luncheon at the Bastrop Convention Center. Carleton Smith, a Small Business Mentor with SCORE, queried the several dozen workshop attendees, “How many of you have been on a vacation?” He waited a few moments while many hands were hoisted. “Before you left, did you have any idea where you would go or how you would get there?” There were a few chuckles heard because it seemed obvious questions to have answered before going on vacation. Smith also asked, “And any idea of the amount of money you would spend?” He paused a few moments, then added, “If you can do a vacation plan, I’m pretty sure you can do a business plan.” Smith was making the point that too many people start businesses without having the answers to some fairly basic questions mapped out. And the result is that they often fail and their business is shuttered.
Distinguished Lineup – The Small Business Workshops & Luncheon, hosted by the Bastrop Economic Development Corporation and the Bastrop Chamber of Commerce, was an enlightening half-day event for numerous area small business owners and those considering opening up a business. Besides Smith, speakers included Bill Thompson, with the Small Business Development Center of Texas State University at San Marcos, and a panel of five financial/lending experts who spoke on the subject of “Small Business Access to Capital.” The panel consisted of Julia Dunn, PeopleFund Chief Financial Officer; Rene Flores, Woodforest National Bank/Bastrop Bank Manager; Michael Moctezuma, BiGAUSTIN Lending Manager; Miguel De La Riva, LiftFund Business Development Officer; and Rosa Rios Valdez, CEO of Business & Community Lenders of Texas.
Starting Up/Maintaining Businesses – Thompson spoke about several key areas for starting up and maintaining a business. He cautioned that about 80 percent of all businesses that start up, then fail within three years. He detailed a Business Model Brochure that he said was “important to have out in front of you…on a regular basis.” Among several important items for a successful business, he cited “Understanding your customers,” how much capital is needed for starting a business, and who your “key partners” are. Regarding customers, he said, “Get out and talk to present and potential customers.” As an example of key partners, he said they should be “people who can create synergy with you,” and not just your current business accounts/customers. He cited the Milan (Italy) fashion industry as an example of businesses which have strong relationships with one another, in that “they make referrals to each other.” He said when explaining your business and/or product(s) to people, “Don’t give the secret sauce away.” He said let people know “what your product will do, not ‘how’ it does it.”
Loans/Financial Planning – For the panel on Small Business Access to Capital, Valdez said while a good credit score is important for a business seeking financial assistance, other factors are also crucial, such as a business’ net worth, indications of “whether you manage your business well,” and having available for loan officers, business financial records that are “no older than 90 days” in order to have a current indication of a business’ performance. One audience question asked the panel to give their opinions on “the biggest mistake” that small businesses make when it comes to seeking loans. Valdez replied, “Not knowing the real project cost,” which means loan applicants “haven’t done their homework” and are “not preparing far enough into the future.” She added, “We want to see you open a long time.” De La Riva recommended, “Always be on growth mode if you are operating a business. If your business is not growing, it’s dying.” Flores recommended that businesses approach banks for a loan before they are “already in trouble.” However, one audience member called out, “Why would you come for a loan when you’re not in trouble?” But the question wasn’t directly addressed. Valdez said that for Community Lenders of Texas, “Right now our loans are under 10 percent.” She said the average loan her company approves is $200,000. “We can go as high as $10 million,” she added. “The business has to demonstrate they can support the debt” before a loan is granted. She said an entrepreneurship team with her institution helps coach a business for the life of the loan.
Audience ‘On Board’ – Audience member Anne Lehnick said she found the workshop quite valuable. Lehnick said she had lost her administrative job with the State of Texas and was seeking a new career. “I’m here to learn the basics of starting a business – we don’t even know the first step,” Lehnick said of the efforts of her and her husband to start a resume-writing business. She said she was particularly impressed, and personally encouraged by Carleton Smith, after he had introduced himself to Lehnick, chatted briefly with her moments before taking the podium, and also offered to help by leaving his business card. She was even more impressed after Smith had finished his talk. “I learned the importance of having a solid marketing plan, then taking action,” Lehnick said. “He’s pretty funny, too!” Bastrop realtor Jana Hellbusch said, “What I learned is to keep updating my marketing plan.” She said she had also taken away that “social media is very important in today’s marketplace.” Hellbusch, with All City Real Estate, said she already stays pretty active with social media by using Facebook, Twitter, Instagram, having her own website, and sending a newsletter twice per year to clients.