How expensive are the services at the Small Business Development Center?
All of our counseling services are free of charge. Some classes, such as Quickbooks and Microsoft software training, as well as some specialized workshops, are offered at a nominal fee.
Who can use the services of the Small Business Development Center?
Any Illinois resident or entrepreneur moving their operations to Illinois.
Where can I find more about grant money for my business?
The Small Business Administration and the Illinois Department of Commerce and Economic Opportunity provide various resources to find grant money, depending on what type of business you will start. Grant funds are mainly available to start community-wide service-type businesses and not-for-profits. Grants are generally not available to help you create a for-profit business. The initial investment in your business needs to come from you—it’s your skin in the game!
What are the pros and cons of owning a business?
Owning a small business is not just another job; it’s a different lifestyle. You have to ask yourself whether you’re ready for a commitment to the success of your business. As a small business owner, you’ll have less time for your personal life, and you’ll probably use much of your own as collateral to raise money for the business. If you are willing to make those sacrifices, it’s time to evaluate the advantages and disadvantages of owning your own business.
You have the chance to make a lot more money than you can make working for someone else. You’ll be your own boss and make the decisions crucial to your business’s success or failure. You may be the boss of other people. You’ll have job security – no one can fire you. You’ll have the chance to put your ideas into practice. You may participate in every aspect of running a business. You’ll learn more about every part of a business and gain experience in various disciplines. You’ll have the chance to work directly with your customers. You’ll be able to benefit the local economy, such as by hiring other people to work for you. You’ll have the personal satisfaction of creating and running a successful business. You’ll be able to work in a field or area you enjoy. You’ll have the chance to build real retirement value (for example, by selling the business when you retire). You’ll have the opportunity to put down roots in a community and provide your family with a sense of belonging and stability.
You may have to take a significant financial risk. You may have to work long hours and have fewer opportunities to take vacations. You may spend a lot of your time attending to the details of running a business and less time on those things you enjoy. You may find that your income is not steady and that there are times when you don’t have much income coming in at all. You may have to undertake tasks you find unpleasant, such as firing someone or refusing to hire a friend or relative. You may have to learn many new disciplines, such as filing and bookkeeping, inventory control, production planning, advertising and promotion, market research, and general management.
Special pros and cons of the home-based business:
Your startup costs will be lower, and your operating costs will be lower than they would be if you rented space and paid utilities. Your commute will be shorter. If your location is unimportant, you can theoretically live anywhere and still operate your business. You can have a more flexible schedule if your business can be conducted at your convenience or outside “normal” weekday business hours.
On the other hand, you’re much more vulnerable to interruptions from family members, neighbors, and door-to-door salespeople. You may have trouble attracting qualified employees and may be less accessible to suppliers. You may have an image problem, although the growing popularity of home businesses that’s less common. You may run out of space at home if your business grows. Check your city’s zoning; you may not be able to operate a business out of your home.
What are the most important things would-be entrepreneurs need to do before they quit their day jobs?
Make sure your financial house is in order. Be certain you have enough money in the bank. A conservative estimate is six months' living expenses, which doesn't include start-up capital. Also, make sure your credit record is strong. Pay off your debts, or at least as many as you can. Do your homework. Plan to succeed.
Be sure you've researched your product or service idea, tested it through an informal focus group, and that a market for it exists. Have a written business plan with a complete financial analysis.
While enthusiasm will carry you far, don't expect it to replace sound business practices. Many self-help businesses and legal and financial books on the market can take you step-by-step through the process.
Test your business savvy by starting your business as a hobby in your spare time while still working at your regular job. Doing this allows you to test your business idea safely while earning an income. Strategize the transition.
Think through all of the personal and professional support services you need. Have plans for health insurance, etc. Take an entrepreneurship training class—go through this process with a cohort group.
What are the biggest challenges to starting a business?
Having to wear all of the hats yourself — from CEO to Janitor — whether or not they are the areas you’re strongest in.
Having to learn everything FAST — is another reason preparation is so necessary.
Cash flow, as seasoned entrepreneurs know, being busy doesn’t guarantee that there’s money coming in. And you may have to purchase necessary supplies and equipment for a project upfront, often before clients have paid you anything.
Time management, with everything vying for your attention at once, it’s hard for solo entrepreneurs to know what to do first, let alone ever have the time to get “caught up.” Entrepreneurs become experts at prioritizing and pacing, understanding that just because something is urgent doesn’t mean it’s essential.
There are many demands of owning a business, and it’s easy for entrepreneurs to lose sight of what motivated them to start one in the first place. Protect your time. Make sure you take adequate time out for resting and recharging. Remember, you are your business’s most valuable asset. Protect it.
What are the biggest mistakes new business owners make?
The biggest mistake is not doing market research. Just because you have a great idea doesn’t mean you have a business. The Hollywood belief that “If you build it, they will come” does not apply here. Taking a business idea to an informal focus group of friends and colleagues is a good start.
Business plans are necessary for any size business. Sadly, many new business owners don’t see this apparent relationship between planning and success. They think they can “wing it” and make plans as they go along. Some feel that a business plan would limit their creativity or spontaneity or that their business isn’t large enough or complex enough to warrant a plan. Every business can benefit from a business plan; regardless of size, a plan organizes your thinking and helps you sort out your priorities.
You will need support. Even if you are working solo, you will need help. Success depends on developing and using a network of colleagues, friends, mentors professionals that can provide advice, assistance, and direction in tough times. If you are not the best at an aspect of your business, like marketing or accounting, find the best and hire that part out. If any aspect of your business is not structured correctly, it could lead to failure.
People think success will come quickly and easily, and many myths are bound up with the concept of starting a business. Success takes long hours, strategic planning, and a commitment to the work involved. The rewards can be amazing.
What is a business plan and why do I need one?
Failing to plan = planning to fail: A business plan precisely defines your business, identifies your goals, and serves as your firm’s resume. Its basic components include a current and pro forma balance sheet, an income statement, and a cash flow analysis. It helps you allocate resources properly, handle unforeseen complications, and make the right decisions. Because it provides specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan package. Additionally, it can tell your sales personnel, suppliers, and others about your operations and goals. The Small Business Development Center consultants can help you make a business plan specific to your needs. Call us to set up an appointment.
What business should I choose?
Usually, the best business for you is the one in which you are most skilled and interested. As you review your options, you should consult with local experts and businesspersons about the growth potential of various businesses in your area. Matching your background with the local market will increase your chance of success.
Why do I need to define my business in detail?
It may seem silly to ask yourself, “What business am I really in?” but some owner-managers have gone broke because they never answered that question. One watch store owner realized that he was spending a lot of time repairing watches while selling the watches did not bring in enough revenue to offset his costs. He finally decided he was in the repair business and discontinued the sales operations, and his profits improved dramatically.
Would a partner(s) make it easier to be successful?
A business partner does not guarantee success. Engaging a partner may be your best decision if you require additional management skills or start-up capital. Personality and character, as well as the ability to give technical or financial assistance, determine the ultimate success of a partnership.
How much money do I need to get started?
Once you have taken care of your building and equipment needs, you must also have enough money to cover operating expenses for at least a year. These expenses include your salary as the owner and money to repay your loans. One of the leading causes of business failure is insufficient start-up capital. Consequently, it would be best to work closely with your accountant to estimate your cash flow needs.
What are the alternatives in financing a business?
Committing your funds is often the first financing step, and it is undoubtedly the best indicator of how serious you are about your business. Risking your own money gives confidence in others to invest in your business. Consider a partner for additional financing. Banks are an obvious source of funds, and other loan sources include commercial finance companies, angel investors, revolving loan funds, and friends and family.
What do I have to do to get a loan?
Initially, the lender will ask three questions:
How will you use the loan?
How much do you need to borrow?
How will you repay the loan?
When you apply for the loan, you must provide projected financial statements and a cohesive, clear business plan which supplies the name of the firm, location, production facilities, legal structure, and business goals. A clear description of your experience and management capabilities, as well as the expertise of other key personnel, will also be needed. And you must have good credit. If you don’t have good credit, start with a plan to repair your credit.
What is a low interest loan, and how can I get one?
You incur an interest rate when you borrow money, and your credit score typically influences your interest rate. Low credit scores lead to higher rates, while higher scores lead to lower rates. Local community banks can help provide a loan; the interest rates on these loans will vary and again depend on your credit history. Other sources of non-bank financing are available as well.
Is it better to lease or buy the store (plant) and equipment?
This is a good question and needs to be considered carefully. Leasing does not tie up your cash; a disadvantage is that the item has no resale or salvage value since you do not own it. Careful weighing of alternatives and a cost analysis will help you make the best decision.
Are some locations better than others?
Location. Location. Location: Time and effort devoted to selecting where to locate your business can mean the difference between success and failure. The kind of business you are in, the potential market, the availability of employees, and the number of competitive establishments all determine where you should put your business. If you are a business with stop-in customers, check theIDOT traffic pattern data online.
What does marketing involve?
Marketing is your most important organizing tool. A significant part of marketing involves researching your customers, and finding out what they want, what they can afford, who their market is, and how best to reach that market.
Your understanding and application of the answers to such questions play a major role in the success or failure of your business. There are four fundamental aspects of marketing, often called the “four P’s” Product, Price, Promote, and Provide.