A retired pipefitter and welder said he wanted to gather information that would “help my grandchildren get something better than I’ve got.” Others in the room were considering starting businesses such as a second-hand boutique, a construction company and an environmental consulting firm. What they all had in common was a desire to find success owning and operating their own business.
About 30 people gathered in January at the Small Business Administration office in Harlingen to listen to retired entrepreneur and SCORE volunteer Lionel Levin talk about myths and realities of owning a business, and give advice on how to lay the groundwork for a new venture. SCORE is a nonprofit organization dedicated to helping small businesses get off the ground, grow and succeed through education and mentorship.
“When you have a job you don’t take home the worries of the business. When you start your own business you take on all those worries, extra hours and stress,” Levin said as he opened his presentation with a dose of reality to counter some of the myths often held by aspiring entrepreneurs.
For example, people with a business idea may think that’s the main ingredient to becoming their own boss and working independently at what they love. “A good idea is a great start,” Levin said. “But is takes hard work, research, planning and successful implementation strategies to turn your idea into a profitable enterprise.”
U.S. Department of Commerce statistics show that 31 percent of small businesses with two or more employees fail in the first two years. That number jumps to 49 percent after five years.
Levin said recent legislation to overhaul the tax code has advantages for start-up businesses, although it is complicated and requires research and guidance from a professional. “The new tax law makes starting up a business very attractive,” he said. “But taxes are very complex and drive much of your business. Get a good accountant who can advise you on strategies.”
Understanding tax law is only one of many critical areas with which a new business owner must become familiar. Formulating a realistic business plan, understanding the competition, obtaining financing, marketing and sales strategies are only a few of the complexities that often mean the difference between success and failure. “If you start out undercapitalized you will probably fail,” Levin said. “And you have to do your due diligence. If you can’t do it, hire someone who can.”
Turning to others for help was a piece of advice Levin repeated throughout his talk. “The biggest problem in starting your own business is having to wear many, many hats,” he said. “You are going to either do it all yourself or pay someone else to do it.”
Levin said SCORE is an organization that can offer help to entrepreneurs at no charge or at very low cost. SCORE, headquartered in Virginia and supported by the SBA, boasts a nationwide network of some 10,000 volunteers like Levin who can mentor and advise small business owners and individuals wanting to start their own enterprise.
Volunteer mentors work with new business start-ups as well as existing ventures looking to grow or expand at no cost. SCORE also offers publications that can guide a new entrepreneur through the process, including worksheets to help determine the feasibility of a business idea, understand financial considerations, develop marketing strategies and many other aspects involved with becoming a business owner.