Dear Dan: Call us crazy, but my partners and I are planning to start a new business in spite of the recession. We're short on funds, but...
Dear Dan: Call us crazy, but my partners and I are planning to start a new business in spite of the recession. We're short on funds, but long on enthusiasm. Are there places that offer free help to startups? -Crazy Startup
Dear Crazy: America's nationwide network of Small Business Development Centers (SBDCs) - which offer free help to business owners and startups - is seeing an uptick in entrepreneurial activity. Despite the recession (and sometimes because of it), more people are moving forward to start their own ventures.
"We're certainly still seeing individuals interested in starting businesses, and I can't say we're surprised," says Christian Conroy, State Director of the Pennsylvania SBDC, a network of 18 university- and college-based centers providing help to new and existing businesses in that state.
Helping new businesses start is a hallmark of the SBDC program, which counts roughly half of its client base in the startup category. On-Site Heavy Equipment Repair in Clarence, PA is one example of a startup that forged ahead despite a dubious economy. Husband and wife team Don and Coleen Reese began their business just after the collapse of Bear Stearns in 2008. Working through the Penn State University SBDC, the Reeses received help developing a financial model and doing market research that helped them secure startup capital.
"Their services are phenomenal. We could not have started without their help," says Coleen Reese. The owners have continued to tap the center's services for help with such things as using QuickBooks accounting software and developing a marketing plan.
SBDCs offer one-stop assistance to individuals and small businesses by providing a wide variety of information and guidance in central and easily accessible branch locations. They offer counseling, training and tech help in all areas of business management, including finance, marketing, production, engineering, and feasibility studies.
The U.S. Small Business Administration (SBA) runs the program - sponsored jointly by private enterprise. There are SBDCs in every state, with a network of over 1,100 local offices based at colleges, universities, vocational schools, community colleges and economic development corporations.
Greg Buckner of Bradford, PA began seeking financing to start his business at the height of the financial collapse in late 2008. He worked with the nearby Clarion University SBDC to develop a business plan and conduct market and competitive analysis, which supported financial projections presented to the bank and angel investors in the area. Buckner secured total funding of $119,000 and began his crematory service in late October. The business is already above the projections, and Buckner has since hired a part-time employee. "I would recommend the SBDC to anyone starting a business," he says.
SBDCs are also seeing a surge of interest in starting a business from people recently laid off. Sharon and Frank Gundy of Hazleton, PA, looked at a new venture as a way to make up lost income. Frank had been laid off, and Sharon, a real estate agent, was seeing a substantial decline in her business. The couple sought assistance from the Wilkes University SBDC in early 2009 for guidance in launching their novelty gift business and building an online presence.
And Kelly Schick joined the entrepreneur ranks after being laid off from her job at Osram-Sylvania, the giant lighting manufacturer. The Gannon University SBDC helped Schick take over a former sports bar in downtown Warren, PA, after navigating her through the loan process. "I might have given up without help and encouragement from the SBDC," says Schick, now the proud owner of Kelly's Pub.
The same SBDC also helped a retired Navy veteran buy a three-business operation that included a beverage company, pizza shop and combination video store and grocery. Mark Zofcin secured $400,000 needed to supplement the purchase, relying heavily on SBDC consultants to help prepare a financial pro forma. "The SBDC was there when we needed a business plan," he says.
Tapping the SBDC network's treasure trove of expert advice and information is easy. You can locate the nearest Small Business Development Center or your state's SBDC network headquarters by checking the SBA website for a list of offices and contact information. That will reveal a list of lead centers in each state, with address, phone, email and web links. Visit the state SBDC website listed to find the location nearest to you.
The Association of Small Business Development Centers (ASBDC) - which represents America's network of SBDCs - is also a terrifically helpful website and organization. Their site also features a clickable map that will reveal SBDC locations in your area, with contact information. In addition, the ASBDC site offers news, resources and helpful articles.