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Money Talks News founder Stacy Johnson opened a restaurant in 1994, and of all his adventures in business – including time as a stock broker and in real estate – he regrets that one the most.
“Other than my first wife, it was the stupidest financial decision I’ve ever made,” he says. “I was working my butt off for a business that, as it turned out, was doomed to failure from day one.”
But it took him four years and more than $100,000 to realize that.
“I ended up taking a course in restaurant accounting and that’s when it became apparent to me that this business was structurally unsound. There was no way to turn a profit with our costs,” Stacy says.
He says it’s a mistake he’d never make again. Not opening a business – doing it without seeking a mentor or any of the other valuable services often available free to the budding entrepreneur.
U.S. Small Business Administration data show that Stacy’s restaurant survived longer than many new businesses do. Nearly a third of small businesses fail within two years and half are gone within five. Only a third are left standing after a decade.
But despite their struggles, small businesses accounted for 65 percent of the new jobs created between 1993 and 2009, according to the SBA. Maybe that’s why there are so many resources to help new entrepreneurs – a lot of them free.
“It’s stupid to invest money without bothering to invest a little time in checking out free resources,” Stacy says. In the video below, he shares a few opportunities you should know about if you’re thinking about a start-up. Check it out, then read on for more.
“I didn’t know about these things when I started Money Talks in 1990 or invested in a restaurant in 1994,” Stacy says. “Well, maybe the SBA. But I didn’t get help from them.” You don’t have to make the same mistake. Get all the help you can, from resources like these…
1. Enterprise Development Corporations
These nonprofits are spread across the country to help entrepreneurs get started. They’re not all the same – services and focuses vary. For instance, the EDC in South Florida helps early-stage science and technology companies. This EDC in Ohio focuses on helping businesses owned by low- and moderate-income people, especially women and minorities.
What they have in common is that their help is usually free, whether it’s searching for money or pairing you up with mentors. Some also run small business incubators, which can include low-cost office space, advising, and a chance to network and work literally side-by-side with other start-ups. This can be a good way to pool resources, find leads, and make connections. An EDC can also point you to other business resources in the region.
2. Small Business Administration
A common scam is to suggest you can get free government grants for business. That’s bogus, but there are a lot of things the government can do to help – including finding other people who will give you money.
The U.S. Small Business Administration has lots of guidance on thinking through new business ideas and learning how to operate one. If you need funding, they can help you find loans, as well as contract work. They also offer counseling, mentoring, online training, and frequent local workshops through business centers and their SCORE program. The workshops often carry a small fee, but many of their services don’t. Visit SBA Direct to locate your nearest office.
3. Startup America Partnership
The privately run Startup America Partnership started up itself just last year. It should not be confused with Startup America, a government initiative to accelerate small business growth that President Obama touted earlier this year, although it shares some goals. SAP is run by Scott Case (who helped found the name-your-airfare company Priceline) and Steve Case (who started AOL). They don’t share blood – just good business sense, which they want to share with you too.
SAP has a substantial business resource directory that includes offers for free advertising, preferred credit rates, analytics and research tools, payment platforms – all kinds of stuff. They host start-up business events and conferences across the country. And those who sign up for free membership get access to a lot of networking opportunities and experts who host webinars – check out the online learning sessions.
These are only a few of the biggest organizations that help start-ups get going. Here are more stories we’ve done about resources for would-be entrepreneurs…
- Five Steps to Turn Your Hobby Into a Business
- How Should You Set Up Your Business?
- Getting Microloans for Your Small Business
- 4 Ways to Bring Customers to Your Small Business
If you like the idea of being your own boss but aren’t sure you can make it alone yet, maybe franchising is the answer. Check out our story, 5 Things to Know Before Franchising. And you can learn from other mistakes Stacy made in My 10 Dumbest Money Moves – and How to Avoid Them.