Originally created 03/10/02

A foot in the door



Starting a small business takes more than a marketable idea. It takes more than hard work, sacrifice and perseverance.

Starting a small business requires a plan.

"If you're looking for funding, a plan is essential," said Jackie Moore, area director for the University of Georgia's Small Business Development Center in Augusta. "Nowadays, if you don't have a plan, the banks don't even want to talk to you."

Funding and planning aside, budding entrepreneurs also have bureaucratic hurdles to leap: applying for a business license; securing a federal tax number; paying the taxes and fees associated with owning a business; and, depending on the endeavor, coping with a litany of other bureaucratic wait-a-minutes.

"The whole licensing process went real smooth up until I applied for the beer license," said Charles Butcher, who recently opened Shuck's, a restaurant on Broad Street. "It's time-consuming. You think you're about to get it, but there's always one more person to talk to, one more form to fill out."

The task can be daunting, but being your own boss is a big payoff. Independent types should know there is a host of local resources available to assist suckling start-ups.

Where to start People with a good idea, but no idea where to begin, can attend small business seminars at the Small Business Development Center.

The Small Business Success Series, led by Ms. Moore, covers nearly every nuance of starting up, including taxes, licensing, marketing, funding and, ultimately, writing a business plan.

The two-hour classes cost about $35 and provide students with everything they need to know to write a business plan.

"That's the next big step," Ms. Moore said. "A business plan is like a road map: 'We're here; we want to get there. Here's how we'll do it."'

The business plan should cover three areas:

  • Marketing: Is there a need for this product or service? How large is the market? Who is the target market? How best can you promote your wares?
  • Management: How will you operate? Who will do what? How many people will you need? What kind of people are you looking for?
  • Financial: How much can you sell? If you're applying for a loan, what will the money be used for and how will it derive revenues?
  • "I'm not aware of any specific rights or wrongs for a business plan," Ms. Moore said. "You just need to cover everything. It helps you focus. Make your mistakes on paper instead of out there where it costs you money."

    Financing Banks want to be wowed by loan applicants. Loan officers look for people who are knowledgable in their fields, financially solvent and have developed a detailed business plan.

    "People need to have a background in what they're trying to do, and good personal credit is important, too," said Scott Edwards, small business banker with Wachovia. "Ideally, we'd like to see a person already have about 20 percent of capital they need to get started."

    Impressive applicants who are short on capital can receive assistance through the U.S. Small Business Administration.

    SBA Guaranteed Loans allow banks to take a chance on a promising business. These loans, made by the bank, are 80 percent to 85 percent guaranteed by the SBA.

    "An applicant may have knowledge and a good business plan, but not much in the way of net worth," Mr. Edwards said. "That's when we can make the recommendation to the SBA. If the SBA will back them, and we feel comfortable, then we'll make the loan."

    SBA Guaranteed Loan programs include the 504, which is for amounts more than $150,000 and generally used for buying land or erecting a building; the Lowdoc, which stands for low documentation and is used for loans less than $150,000; and the standard 7A, available for most any size loan.

    CSRA Regional Development Cos., a private, nonprofit loan organization that works in part with the SBA, has helped finance 185 projects in the past five years, accounting for more than $97 million in loans, said President Randy Griffin.

    The group's fingerprints are all over Washington Road, where it helped finance TGI Friday's, Famous Dave's, Masters Cleaners, Dunkin' Donuts and Pump 'N Shop convenience stores, to name a few.

    Mayor Bob Young's office has published a pamphlet to assist start-ups with legal arrangements.

    The pamphlet, which also details various loan programs, is available through the mayor's office, or online at www.co.richmond.ga.us.

    "We want to make it as easy as possible to go into business and sustain it," Mr. Young said. "We have a vested interest in everyone who gets a business license in this community; they're customers of this government."

    Reach John Bankston at (706) 823-3352 or john.banks@augustachronicle.com