A Helping Hand For New Entrepreneurs
This is the third installment of a series of articles about how business and change happens in Superior. We’re already taken a look at the new younger generation that is gradually taking the reins at City Hall and elsewhere in town (see that article here.) Typically, a change of leadership brings change across the board as a matter of course.
Our second article was an overview of what organizations in Superior are available and dedicated to making development happen in our community (see that article here.) Now we will begin to look at each of these organizations individually in an attempt to divine how motivated entrepreneurs can start and grow businesses in Superior.
Small Business Development Center
As we spoke with various key contacts in the development and growth chain, one theme recurred time and time again…”go talk to Andy Donahue at the Small Business Development Center.”
Mr. Donahue is the director of the SBDC, which is located in Erlanson Hall on the UW-Superior campus. The stated mission of the SBDC is to support business success through a three stage process of Start, Manage, and Grow.
What Mr. Donahue does is instruct and assist new and expanding business owners in the creation of a thorough and focused business plan. No matter how passionate a prospective entrepreneur might be, they will need to have a detailed business plan in order to be “bankable.”
Prior to meeting with Mr. Donahue, I met with Bruce Thompson of National Bank of Commerce and he placed great emphasis on the need for a prospective business being bankable. According to www.businessdictionary.com, being bankable means that a “project or proposal has sufficient collateral, future cashflow, and high probability of success”…in order to be…“acceptable to institutional lenders for financing.”
Mr. Thompson then said…”go talk to Andy.”
SBDC Has State-Wide Impact
The SBDC at UW-Superior is part of a state-wide network, with fourteen locations throughout the state of Wisconsin. This network supports entrepreneurs and business owners through no-cost, confidential consulting and targeted educational programs.
In each regional office, the SBDC facilitate improvement and growth for small and emerging mid-sized companies, and also help launch successful new enterprises.
In 2016 alone, companies working with Wisconsin SBDC consultants obtained over $75 million in loans and investments, and started 238 businesses. Statewide, over 2500 clients used SBDC services.
Successful Track Record for Superior Office
The Superior office led by Mr. Donahue helped twenty two businesses get off the ground last year, with only one failure. He is already working with ten new businesses in 2017.
When a hopeful business start-up visits Mr. Donahue, he listens to their passion and dreams and helps them bring their idea to life. He asks what makes their business unique, encourages them to talk about themselves, and to imagine how they will market their business.
The goal is to construct a well-crafted business plan that will increase the chance of a new business being successful.
According to Mr. Donahue, his office takes the entrepreneur through the first steps of starting a business. During this process, the client is asked to explore their business idea and assess their readiness. Along the way they are aided in identifying their strengths and weakness as a business owner.
Everything from the prospective business owner’s personality traits, skills, and life situation are looked at when evaluating their preparedness to start a business. This all plays into whether or not the business concept at hand has a realistic chance of success, and if it can obtain financing.
What’s In a Business Plan?
A completed business plan includes a three year plan or pro forma, that will offer operational and marketing strategies. The services of SBDC are free, but do require a significant effort on the part of the business owner at the outset.
First, the business owner is expected to layout their proposed business in financial terms, its start-up cost, expected costs, and potential revenue. Along with a statement of purpose and a mission statement, financial plans help bring a business plan to life.
According to Mr. Donahue, the first stage of this process is done mostly by the business owner, with guidance from his office.
Upon completion of this portion of the plan, Mr. Donahue takes over and does a financial analysis of the plan using sophisticated financial tools and computerized data resources to finish the plan. In doing so, he will compare it to prevailing norms in that industry, and go back to the business owner with any recommendations for change.
At that point, the business owner may be encouraged to modify his or her plan to better represent the expected outcome. Keep in mind that bankability is a key component of these calculations. The entire process can usually be completed within thirty days from start to finish.
The ultimate goal of this exercise is to test the feasibility of a proposed business, and then to help create a LEAN startup model prior to seeking financing. Additionally, Mr. Donahue’s office will help the entrepreneur focus on how to attract customers, build sales, and to better understand the market place.
Business Training Through SBDC
The SBDC also offers an Entrepreneurial Training Program (ETP), an 8-10 week course with an easy to follow step-by-step process. The ETP is valuable in helping the prospective business start-up set specific goals, do market research, and advance towards financing.
The goal of the ETP is to test your business idea and improve your business model. The program does carry a price tag of $1000, however qualified applicants can receive grants covering 75% of the tuition, making the final cost only $250. For more on this program, please click HERE.
The Wisconsin SBDC network also uses a tool known as PROBE (PROmoting Business Excellence) that compares a company’s business practices to some of the world’s most successful companies, with the goal of giving the business owner insight into how best to manage and grown their company. For an example of what a PROBE report looks like, click HERE.
The Next Step
With a sound financial plan in hand, the inspired entrepreneur can then circle back to talk with the City Planning Department, the Development Association (DA), and the SuperiorBID (should they choose to locate within the district.)
After sharing their business plan with these organizations and collecting information as to location opportunities and possible supplemental loan sources, the aspiring entrepreneur will then be advised to meet with a banker to discover whether their dream is bankable in hopes of getting a loan to get started.
Watch for our upcoming articles about the Development Association, the SuperiorBID, City Planning, the Chamber, and more.
The local office of the SBDC can be reached here:
Explore Superior Economic Development Series
Business Incubator Hatches Superior Opportunities, August 21st
Why Develop In Superior? – August 18th
Earth Rider Brewery Construction – August 16th
What’s Happening at The Cedar Lounge? – August 14th
Important Economic Development Concepts – August 8th
Video Tour of Empire Block, August 7th
Superior-Douglas County Chamber of Commerce, July 1st
Superior Business Improvement District, June 30th
The Development Association “Grows Biz!”, June 29th
City Planning & Economic Development, June 27th
Small Business Development Center, June 26th
How Development Happens in Superior, June 23rd
Youth Movement Changing Superior, June 22nd