Wednesday, October 11, 2006
So You Want To Own Your Own Business!?

Welcome to part one of that journey. I thought my experiences might be of some help to others that want that dream of business ownership. I am going to be telling you what not to do based on my trials and hopefully exploding some of the myths that seem to always come round in discussions about business. I hope You can get something from this to live out your dreams.


Hello friends, neighbors, Uncle Sam, the IRS (oh yea. Real fun guys), and anyone else that I have had the good fortune to come across in my quest to own my own business. It has been a journey of about 4+ yrs now since that proud day in Aug 2002 that I signed the lease for the office space that was to become my financial empire. I was throwing off the shackles of my oppressive boss and the weight of building someone else's fortunes while I, the downtrodden, abused, underpaid but proud American worker got little more than Big Mac money for my efforts.

Well, no more of that existence for me. Now I am going to be THE MAN!!! I have an office (empty for now) address and little else. And even less cash lying around since I paid my first and last months rent to get the office. But I didn't care cause I had been reading up on this whole business finance stuff and had just finished this big book about Uncle Sam wanting to give me a bizzillion dollars to open up a coffee stand. Or write a book, or even buy new computers and such. And the best part of this deal is you never have to repay it because it is a big thank-you gift from your Uncle Sam called a grant! So the first stop I made was to my friendly old Uncle Sam's place the SBA.

Great folks at the SBA. They have article after article for you to read about getting your hands on the money to start and run your business. Just go to their website www.sba.gov/ and be prepared to find everything you need.......EXCEPT MONEY!!! Now what is up with that? That big book I mentioned before said that all I needed to do was ask and get out my wheelbarrow to carry it all home in. I was gently told by the SBA that I needed to see my friendly neighbors down at the bank of my choice because ....They do not give grants to "for profit business". I tried to explain to them that as of that moment I was a non-profit business. Hell I had no money, no clients, no furniture. How much more non-profit can you be? But it didn't matter. Now a little less excited than before I headed for the first bank I came across.

Now I don't know about you guys out there, but I have always found the old saying "banks lend money only to people who don't need loans" to be very true. And as I walked into Big Bank USA to ask for an SBA loan, that saying kept popping up in my head. The first hint of trouble I had was when I asked to speak to the loan officer at the receptionist desk. Now I admit I was not dressed for a funeral (felt like I was going to one) but I was not dressed down or sloppy. But the look the receptionist gave me, that "You'll never get a loan from us" look that makes you feel 2" tall caused me to be prepared for rejection.

As I sat outside the officers door waiting for him to conclude his business I could not help but overhear him speaking with a fellow loan seeker. He seemed to be quite happy to lend this person the money to start a small store in a mall selling table cloths, table settings and displays, and other room decor type items. I heard the person seeking the loan say that she got the idea to start this business cause she was just so bored staying at home while her husband ran his own business. She planned on opening her store in 3 weeks after she returned from Europe. From Europe? And she needed a loan? As she was leaving I heard her telling the officer that her husband would call him about the golf game they were planning. I really was starting to feel out of place and was about to leave but the loan officer asked to help me at that point so I went ahead into the lions den.

Hello Mr Loan Officer! I said with some forced confidence. I would like an SBA loan. Now my business is a....That's as far as I got for at that time the officer had pulled out a phone book sized bunch of papers and set them down in front of me. Before we get to far into this and so that we don't waste each others time, you can take these forms home, fill them out and come back with your tax returns for the past 3 yrs, anything you might have for collateral and any other forms of income you may be getting now. I asked what they would consider as collateral and he said something about the usual kind of things. Stocks, Bonds, CDs, savings accounts, property etc.
I said that I just wanted a small SBA loan and he said that the SBA requires 20% down and that I had to meet the banks lending requirements first. The SBA only guarantees to repay part of the loan if you default. I was in much pain now and as I picked up the mound of papers to take home, I began to understand how little I knew about starting a business.

So I think that for today The main theme I wanted to convey was to do really good research into and about finance and how to get it for your projects. If you are going to approach a bank, try to use one that you do business with already. Chances are the officers know you and you may have a track record with them. Contact the SBA and read their guides. But be prepared to have to use several funding methods to get your self going. Have all of your records handy as they will be needed.

Well thats all for now, but look out for the next chapter. I will be talking some about scams, poor marketing choices, and what poor financial stability really does to your dreams. Remember to keep researching and learn all you can whenever you can.

posted by drb | 11:06 AM