1-stop start-up aid for small business
So you want to start a small business. Should you sell pizza or hardware, or stoneware pottery and baseball caps decorated with wings? What's the best way to obtain financing? How do you set up an accounting system?
For large corporations such questions are answered by in- house planners or expensive management consulting firms. For the small-business man, they're often settled through trial and error -- lots of trials, and sometimes fatal errors.
But a program now spreading across the country aims to provide the little guy expensive advice at budget prices.
Small Business Development Centers -- joint ventures of the US Small Business Administration, state departments of commerce, and universities -- are intended as "umbrella" agencies. They'll dispense marketing advice from university professors, tips on personnel management from retired executives, and federally sponsored classes on financial packaging.
"The idea is to bring state, federal, and local resources into one location," says Hardy Patten, program manager at the Small Business Administration.
When an SBDC opens later this month at the University of Massachusetts at Amherst, there will be 17 such centers throughout the country -- in Maine, New Jersey, Pennsylvania, Washington, D.C., South Carolina, Georgia, Florida, Alabama, Arkansas, Wisconsin, Minnesota, Iowa, Nebraska, Vermont, Washington, and Missouri. All are based at large state universities, with suboffices at branch universities and junior colleges throughout their respective states.
"The problem has been that small business can't purchase consultation," says Gerald Hayes, director of the UMass center. "Our services will run the gamut from accounting to loan planning, and we're committed to providing service to all who call."
Mr. Hayes says his center will mount a three-pronged attack on the problems of small businesses. The first will be direct counseling, with experts advising prospective businessmen on the virtues of inventory control, or the inadvisability of opening a health food/candle store in their aunt's basement.
The second approach will be continuing education seminars that will "take basic business themes and scale them down to the size of small business," Mr. Hayes says. Participants would learn of such organizational options as partnerships, or study more in-depth marketing.
The third slant will be a limited number of research projects, undertaken by graduate students and professors to help solve snags unique to small operations, where solutions scaled down from corporate size won't work.
"We might study whether there are additional opportunities for tourist-related businesses in the Berkshires, for instance," Mr. Hayes says.
The center's first-year, $400,000 budget will be split three ways, with the federal Small Business Administration providing $200,000, Massachusetts providing $100,000, and the university putting up the rest.
The first SBDC opened in early 1976 at California Polytechnic Institute, but it was shot down a year later by the blazing guns of Proposition 13.
The rest have sprung up over the last four years, often at universities where such programs already existed on a more informal basis.
At the University of West Florida, small-business assistance was begun in 1972. When the school was officially designated a Small Business Development Center four years later, it gained national exposure and a broader range of programs, says Jerry Widman, assistant state coordinator of West Florida's center.
"It gave us total coverage," he claims, "and made us a catalyst for mobilizing other programs."
Mr. Widman points to the salvation of a village feed mill as typical of his center's efforts. "They were competing with one other feed mill in the area. But the two mills looked at each other for pricing, so they were going broke together. We told one fellow to raise prices, the other followed suit, and both were saved. It was a problem that only an outsider would have been able to spot."
For the individual or institution looking for government assistance, finding the right program is often more difficult than walking through a maze with their eyes closed. SBDC officials admit that defining their role in relation to other government programs is an important and difficult process. But they claim their centers have succeeded in simplifying small business's search for federal help.
"We call it 'one-stop shopping for management aid,'" says Wes Mott at the University of Wisconsin center.