Small Business 101

What You Should Know

If you are thinking about starting your own business, you probably have tons of questions about where to start. Get advice from Small Business 101 to learn more about the basics of entrepreneurship.

Cheryl A. Mills is the associate deputy administrator, entrepreneurial development for the U.S. Small Business Administration (SBA). In her job, she manages SBA's technical assistance programs providing information, training and business counseling for over two million small business owners nationwide.

Cheryl was online to answer questions about what you should know before starting a small business.

The transcript follows below.

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Cheryl Mills: Good morning everyone. It is so nice to join you this morning and I hope that I can be helpful so that we can have many new entrepreneurs or existing entrepreneurs successfully start or grow their businesses.

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Brandon, Miss.: I am starting a small business, which consist of cleaning new construction, commercial and residential. I registered with the Secretary of State, and my credit is fair. How would I obtain a loan from SBA? What steps do I need to take so that I can purchase equipment, such as ladders power washing and etc. to make my business move forward?

Cheryl Mills: Please visit our Web site at www.sba.gov/ed to locate one of the SBA resource partners in your local area (Mississippi). We have Small Business Development Centers, SCORE, and Women's Business Centers located throughout the country. This will enable you to find the closest center. My recommendation is that you speak with one of our counselors who will help you with loan preparation and assessing if you are ready to apply for a loan successfully.

Your counseling time is free so please take advantage of this terrific resource.

Also, you may wish to visit www.sba.gov/financing where the SBA outlines its menu of loan options.

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Alexandria, Va.: Does the SBA have resources in my community that can assist me with getting my small business started?

Cheryl Mills: Absolutely.

The SBA maintains Small Business Development Centers in Alexandria and at George Mason University; we also have a Women's Business Center in Northern Virginia.

These SBA resource partners have both individual counseling and also group training sessions to help you assess your business idea and to help you develop a business plan which is critical.

Please visit our Web site at www.sba.gov/ed to locate the resource partner closest to you.

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Vienna, Va.: How do I get the name of my business out there? I am starting a business that provides services.

Cheryl Mills: The key to getting your business name out there is to network at organizations where your customers will attend.

Also, another idea is to write an article in your local newspaper and try to be a regular columnist relative to the service you provide. That way you develop your credibility and raise awareness about you and your product or service.

Of course, advertising is certainly an option, but it costs money. I would think you are looking for ways to advertise that do not cost money or are relatively insignificant in cost.

Joining chambers of commerce, trade associations, and professional organizations are ways to network and get the word out.

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Washington, D.C.: I have chosen a name for my company, however, the Web site is taken by that name. So, I have to choose .us instead of .com for my business Web site. What do you think I should do? I love the name but the .com is taken. The only way I can use it is by .us or .biz. Please give me your advice on what I should do.

Thanks.

Cheryl Mills: There are several options for you. I would first check to see if the .com web site is available for sale by the owner.

Then I would suggest seeing if .net is available for use.

Lastly, I would look at .biz.

Also, you might want to research if there is a trademark issue with your business name. Usually you need a trademark attorney to do that kind of a search, but you do want to start a business that is well thought out.

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Brandermill, Va.: Ms. Mills, would you do a service for those wanting to start a business by dealing forthrightly with the subject of grants? Many would-be entrepreneurs spend a lot of time searching for grants or even paying unscrupulous firms to "find" grants for them. Their time and money would be better spent on developing their business plan and attracting customers.

Cheryl Mills: Thank you for this important question.

The SBA does not give grants for business start-ups. We do guarantee loans that you can apply for through our banking partners across America.

I would spend my time finding a counselor through the SBA resource partners, doing a credible business plan with the help of the counselor, potentially seeking financing through an SBA lender.

The counseling is free of charge. Please visit www.sba.gov/ed to locate the closest counselor.

This is much more productive use of your valuable time.

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Woodbine, Md.: I'm to the point where I have a concept for a new business. I've discussed it with a few professionals that feel that the idea is sound and has potential. I've even gone so far as to apply to trademark the name. I've read several articles on what I perceive to be my next goal -- a business plan. Is there a "blueprint," so-to-speak, for a business plan? And, just as important, would you discuss obtaining financing for a start-up company. Thank you.

Cheryl Mills: The SBA provides several business plan templates online.

Please visit www.sba.gov/training and www.score.org. These should both be very helpful to you.

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Hyattsville, Md.: What is the most inexpensive method of patenting a product and how do I go about it? How do I also attract funding for my project?

Cheryl Mills: For complete information, I would recommend contacting the US Patent and Trademark Office.

You may also talk to one of SBA's counselors for finding a patent attorney in your area.

To find a counselor, please visit www.sba.gov/ed.

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Virginia: SBA used to have a handicapped loan program. Do you have anything for people with disabilities now?

Cheryl Mills: SBA loans are for all small business owners.

Please touch base with one of SBA's counselors to help you with loan preparation. Your local counselor would have a handle on what some of the local banks would be offering.

Please visit www.sba.gov/ed to find a local counselor.

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Ashburn, Va.: Hi Cheryl,

I am a successful IT consultant looking to expand my business to bring in employees beyond myself.

Right now, I'm doing well working as a sub to various primes but I want to move my business to the next level and deal directly with the government.

What is the best way for a small firm to make that leap?

Thanks.

Cheryl Mills: First, you are going to have to get GSA qualified. While the paperwork for this may seem daunting, it is well worth doing. So many businesses have expanded dramatically by selling to the government.

It takes persistence and patience. I would suggest contacting one of SBA's resource partners to locate one of their counselors in your local area to help you with the paperwork. To find a local counselor, please visit www.sba.gov/ed.

Also, for more information on selling to the government and on contracting opportunities, please visit our "Government Contracting and Business Development" web site at www.sba.gov/gcbd.

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New York, N.Y.: I would like to set up a high tech business to take advantage of the SBIR (small business innovation research) program. I know about the grants and have experience with the proposal process. What I don't have is a lot of knowledge about the nuts and bolts of setting up such a business -- how to set up accounting, legal issues etc. The sites I have gone to talking about setting up a business seem to be filled with "fluff" such as personal inventories as to whether you have the "right stuff" to be an entrepreneur, not this practical information. Can you tell me where to go for this? Thanks.

Cheryl Mills: First, you have a capital intense industry that you are thinking of starting a business. So my first question is do you have enough capital for a couple of years in business to get started.

Second, this is a competitive industry. Have you researched your competition and do you know if what you are offering is that much better or different than the competition?

Finally, you do need to sit down with one of our counselors to walk through the above and to also develop a thorough business plan. SBA's counselors have a multiple-week training course on developing a business plan. It is a nominal cost but worth the investment of both time and nominal cost.

My recommendation is to find that counselor as soon as possible and take your information and your due diligence and develop your business plan.

You can locate a counselor from one of SBA's resource partners at www.sba.gov/ed.

Also, please visit www.sba.gov/sbir/indexsbir-sttr.html. This provides information on the SBIR and STTR programs.

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Munich, Germany: How do you address the ever changing small business landscape as the Internet takes an ever more prominent role? The Internet seems to be changing the potential for and challenges to entrepreneurs on a daily basis.

I presume that an entrepreneur would have to try to assess the potential competition from Internet vendors, present and future, before starting up a small business. Does an emphasis on customer service provide a strong and reliable selling point versus eCommerce?

Cheryl Mills: Thank you for your question.

The Internet provides certainly an open forum for new customers and new competition. I think good service is always tantamount to excelling and being a #1 business.

Anywhere in the world, quality product and good service is a good business basic.

ECommerce is important in today's world in selling as the world is getting smaller. But, again, customer service and timeliness will keep customers coming back and word-of-mouth giving you additional market share.

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Woodbine, Md.: From your professional perspective, what are the typical hurdles one encounters in starting their own company? Your insight may help us get over those hurdles. Thanks!

Cheryl Mills: First of all, businesses need to have a business plan that is a working document. This is a roadmap that you need to follow and regularly check to ensure discipline and strategic planning.

Next, under capitalization is another challenge and without necessary capital you will burn through your working capital too quickly and be constrained to grow your business and reach your potential.

At some point, the entrepreneur has to employ people smarter than them in order to grow. Knowing that you don't know all the answers is important. I would recommend having an advisory board along with a business plan so that you don't make mistakes that are costly in both time and money.

Your advisory board should be people who have succeeded in a variety of businesses who will help you so that you won't repeat the same mistakes that they made.

I would also add someone from the legal and accounting profession on your advisory board.

Lastly, I would use your advisory board regularly and have meetings. Have breakfast roundtable meetings. Use their time wisely and then thank them in many ways.

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Cheryl Mills: I appreciate the invitation to join you this morning. I love helping entrepreneurs.

Before I was appointed to this position by President Bush, I was an entrepreneur. I understand the challenges and excitement. I want you to know that the President has place entrepreneurs at the top of the SBA so that we can help with the regulations of government and creating an environment that will support you in any way that we can.

I wish all of you success. I hope you will visit one of the SBA resource partners in your area. We have over 16,000 counselors and trainers across the country. So please find the one or two that are closest to you and feel free to talk to several of them.

Thank you again.

[All information on SBA's programs and services can be found online at www.sba.gov. And also, the web site specific to finding a counselor is www.sba.gov/ed.]

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