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Published November 2000
Workshops help entrepreneurs plan
for success
By
Kimberly Hilden
Herald Business Journal Assistant Editor
Bob Wydro wanted to do something different with his professional life, but as a vice president of research for a pharmaceutical company, the Snohomish resident said he “knew zero about business,” especially about running one for himself.
So he got on the Internet and found out about Small Business Development Centers (SBDCs), which are resource centers co-funded by the U.S. Small Business Administration and a host partner.
He contacted the one nearest him, located at the Edmonds Community College Business & Technology Center, and hooked up with SBDC Director Ron Battles.
“I started taking their courses and doing counseling with Ron Battles, and he helped me put my business plan together and get my thoughts together,” said Wydro, now the owner of Guntown in Lynnwood. “We picked banks, and I approached a bank and got my financing.”
Sounds easy, but Wydro is the first to say that a lot of planning went into the financial proposal and business plan that Cascade Bank reviewed before approving a $125,000 loan so he could purchase the firearms store.
For a lot of entrepreneurs, producing a financial proposal and business plan can be a stumbling block to securing financing. That’s where the SBDC comes in with its nominally-priced business development workshops and free follow-up counseling.
“If you’re looking for money based on collateral, the bank definitely wants the business to demonstrate they’ll be profitable,” Battles said. “So what we do in our workshops is have the business owner perform a break-even analysis to demonstrate when his income and expense forecast will indicate a profitable business. Will it be in six months? Twelve months?
“And I think that’s the toughest part, because a lot of business owners will come in, and they’ll have a profit-loss statement, they’ll have cash flow, they’ll have a balance sheet. They read all the numbers in a row for three years out and say, ‘I’m ready to go. I just want you to look at it.’ Well, when are you going to be profitable? And they’ll say, ‘Well what do you mean? I’ll be profitable because I’ll be able to earn an excess over expenses.’ ”
But the question banks and other lending institutions want an answer for is “When?” said Battles, whose SBDC has helped small businesses secure $2,165,000 in loans and lines of credit so far this year — a record for the center.
Business planning also keeps business owners on track, said Roland Chaiton, a community development specialist with DownHome Washington, an intermediary for the SBA’s MicroLoan Program.
“People who do business planning and/or take a class in business planning, such as one we offer, ... the results that we’ve tracked so far show 60 percent of those who go into business after taking a business planning course are still in business after three years, compared with national figures of 70 to 80 percent (of new businesses) no longer in business after two years,” Chaiton said.
As for Wydro, since buying Guntown last December, the longtime sport shooter has expanded inventory by 30 percent, put in a computerized inventory system and is expanding his retail space. He has received an additional line of credit to create a cash reserve and is considering moving to a new site.
“I’m learning a lot,” said Wydro, who considers the SBDC a long-term resource.
“I look at Ron as somebody that if I ever have a problem or question about anything, I could call up and make an appointment or talk to him over the phone, and he’ll try to help me through that,” Wydro said.
Related: SBA 7(a) program opens doors
Related: 504 loan aids companies in growth mode
© The Daily Herald Co., Everett, WA
