FAQs

• How expensive are the services at the Small Business Development Center?
• What business should I choose?
• Where can I find more about grant money for my business?
• What are the pros and cons of owning a business?
• What are the most important things would-be entrepreneurs need to do before they quit their day jobs?
• What are the biggest challenges to starting a business?
• What is a business plan and why do I need one?
• Where can I learn more information about starting a business?

Q. 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 training are offered at a nominal fee. A class listing is provided here.

Q. 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 may wish to consult 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.

Q. 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 many resources to find grant money.

Q. What are the pros and cons of owning a business?

Owning a small business is not just another job. It's a totally different lifestyle. You have to ask yourself whether you're ready for a commitment to the success of your business. Just as importantly, you have to ask your partner, if you're in a relationship, whether he or she is completely committed. As a small business owner, you're going to have less time for your personal life and you'll probably be using much of what you own as collateral to raise money for the business. If you are willing to make those sacrifices, then let's move on to some of the advantages and disadvantages of owning your own business.

Pros:

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 that are crucial to your business' 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 aspect of a business and gain experience in a variety of 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 that you really enjoy. You'll have the chance to build real retirement value (for example, by selling the business when you retire). You'll have the chance to put down roots in a community and to provide a sense of belonging and stability for your family.

Cons:

You may have to take a large financial risk. You will probably have to work long hours and may have fewer opportunities to take vacations. You may end up spending a lot of your time attending to the details of running a business and less time on those things you really 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. Your operating costs will be lower than they would if you were renting space and paying utilities. Your commute will be shorter. If your location is unimportant to your business, you can theoretically live anywhere and still operate your business. You may be more flexible in your 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. You may be less accessible to suppliers. You may have an image problem, although with the growing popularity of home businesses, that's less common. You may run out of space at home if your business grows.

Q. 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 6 months living expenses, and that doesn't include start-up capital. Also, make sure your personal credit record is strong. Pay off your debts, or at least as many as you can. Do your homework.

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 plan.

While enthusiasm will carry you far, don't expect it to take the place of sound business practices. There are many self-help business, legal and financial books on the market that can take you step-by-step through the process. Moonlight first.

Have the best of both worlds by trying your idea in your spare time while still working at your regular job. This allows you to test your business idea safely, while you still have an income. Strategize the transition.

Think through all of the personal and professional support services you depend on. Have back-up plans for health insurance, day care, etc. lined up.

Q. What are the biggest challenges to starting a business?

Having to wear all of the hats yourself -- from head of sales and marketing to janitor and bookkeeper -- whether or not they are the areas you're strongest in.

Having to learn everything FAST -- another reason why preparation is so important.

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 up front, often before clients have paid you anything at all.

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 important. Which leads us into the next item…

Maintaining balance. With all of the demands of the business, it's easy for entrepreneurs to lose sight of what motivated them go into business in the first place. Protect your personal time like you protect your business time. Make sure you take adequate time out for resting and recharging. Remember, you are your business' most valuable asset. Protect it. What are the biggest mistakes new business owners make?

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.

Thinking that business plans are only for the big guys. It's a sad fact that many new business owners don't see this obvious relationship between planning and success. They think they can "wing it" and make their 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, no matter what size it is. The process of making a plan organizes your thinking and helps you sort out your priorities.

Thinking you can do it all by yourself. Working solo is not working alone. Success depends on developing and using a network of colleagues, friends, mentors and professionals that can provide advice, assistance and direction in tough times.

Thinking that success will come quickly or easily. There are a lot of myths bound up with the concept of starting a business. Success takes long hours, strategic planning, and a commitment to the work involved. The rewards are great, but the effort is, too.

Q. What is a business plan and why do I need one?

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. Counselors at the Small Business Development Center can help you make a business plan. Call us to set up an appointment.

Q. Where can I learn more information about starting a business?

The Small Business Administration website offers free online courses.