Starting a business the old way is hard

On an Idea Friendly visit to Jackson County, Kentucky, I visited with a group of artists/entrepreneurs. This group had created a loose organization called the Jackson County KY Creative Community. They wanted to start businesses, but were not ready to get a building and go through the extensive process of starting a business. Some needed to see if their work had a market and value to the customer. They felt stuck. Product and excitement, but no money to get their businesses off the ground.

Smaller steps to try first

We had gathered in an art studio in McKee, KY. There was lots of discussion around taking smaller steps to start your business.

• You could sell online in places like Etsy or eBay.
• You could ask a local business if you could have just one shelf to sell your product on.
• Or showcase your artwork on an empty wall in a place like the bank, or the insurance agents office.
• You could set up a card table at an event and sell from there.

Downtown McKee, KY, car show photo by Anthony Jackson

Try using an empty lot

The group shared there was a car show coming to town soon. How could they piggyback on that event? There was an empty lot right downtown on the main highway, right across from where the cars would be parked. It wasn’t the best looking lot, it needed some attention. There was kudzu climbing the walls of buildings next to it, graffiti on the same buildings and the weeds needed some major whacking.

Ask

Kathy Spurlock owned the empty lot. I had already visited with her. I knew her time was already stretched thin, and her funds were being used for other community projects. Still, there was this empty lot waiting to be filled.

I asked her if the artists in the Jackson County KY Creative Community could possibly use it for a popup.

She said yes

The empty lot pop up was created! One artist’s husband took his weedwhacker and cleaned out an area just big enough for pop-ups. Everyone in the group spread the word a pop up was coming through social media and word of mouth. Other artists were invited. Signs were posted around the county. No one person was in charge, everyone participated as best they could.

Empty Lot Pop Up photo by Greg Lakes

It worked!

There were many entrepreneurs set up with their works displayed. Folks came and bought from them, enjoyed the car show, and ate some food from local vendors. The Jackson County Creative Community added more artists as members too. There were lessons learned.

• You can pop up anywhere.
• It’s a good idea to join in another event and promote them both for more attendees.
• People are looking for something new and unique to do. Your excitement brings them in.
• Entrepreneurs come in all shapes and sizes and offering this kind of small step helps create more businesses in your community.
• Business can be conducted in unusual locations and empty lots are great testing grounds.
• It’s a small step. If it doesn’t work, you haven’t lost anything.

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Photo: Randolph, Nebraska, converted a dilapidated property into a new energy-efficient spec home financed by local investors. Photo provided by Gary A. Van Meter, Revitalize Randolph.

By Becky McCray

Small towns need good housing to retain population and to attract new residents, new industries and new entrepreneurs.

There’s growing interest in living in small towns and rural communities, making good rural housing even more important. You might have heard about Zoom Towns, as more people choose remote work and live in small towns. If you don’t have a good place for people to live, they aren’t coming.

If you want to retain your young people, you’ll need housing options for them. Walkability and livability are huge factors in where people choose to live when they have a choice.

Communities without good housing can’t stay communities for long.

Rental houses can become a source of blight and dilapidated housing if they aren’t well managed.

Keeping your town’s rental housing in decent condition can require a little economic self defense as a community. Right now, corporate real estate investors are buying up rental housing even in tiny towns. They have a terrible track record when it comes to maintenance and tenant relations.

One solution is to create a local investment team to buy up rent houses before corporations snap them up, or buy them back. You could do this on a community ownership or cooperative model.

Making a spec home out of a blighted property

Revitalize Randolph, Nebraska, (population 944) used local investment to transform a dilapidated property with an $8000 assessed value to a new home even before a buyer was found.

In 2015, Gary A. Van Meter, Community Development Director in Randolph, told me about the project. It was the first spec home in Randolph in recent memory and was funded by individual local investors.

It certainly drew a lot of interest, with 150 visitors to the open house, including a city administrator from a nearby community.

They did their homework to make it an attractive house to buyers, including super energy efficiency, custom touches like cabinets, and additional storage and workshop space in the garage. They also put in a concrete-cast FEMA approved safe room.

That workshop and garage space makes the home a good match for makers and crafters looking for a live-work space. Those potential entrepreneurs might be your existing residents or new artists to attract to the community.

Improving Rural Housing: An Idea Friendly Approach

There is no one solution (not even local investing!) that can solve every housing challenge in rural communities. Since your situation is different from other towns, the Idea Friendly Method helps you test any idea to make sure it will work for your community before you commit to expensive plans that will be hard to change.

Deb Brown and I put together a 24 minute video at SaveYour.Town that shows you how to apply the Idea Friendly Method to improving housing and shares the most promising ideas that almost any community could adapt.

Learn more: Improving Rural Housing: An Idea Friendly Approach

This is a short sample from the SaveYour.Town video “Refilling Your Business Pipeline” featuring Deb Brown and me.

Small towns and rural communities will need new business startups to revitalize their local economies, but not many people have the resources today to do a startup the way it’s traditionally been done.

Part of what holds your potential new entrepreneurs back is thinking that going into business has to be a big and difficult and long project.

Imagine all the work that “everyone knows” is part of starting a new business:

If you decided to open a retail store, you have decide on your specialty and what kind of merchandise to carry, deciding or guessing whether your town will support it, finding a location and remodeling it or even bringing it up to code, decorating, finding suppliers and getting started with them, getting your local banking established, securing financing, hiring staff, advertising and marketing, and all that before you even know whether your initial concept is actually sound.

In small towns, those problems can be magnified where you may face a shortage of usable buildings, long distances to suppliers who don’t pay attention to small accounts like yours, few local banks, no chance of local financing, few choices for potential workers, and a smaller potential market. It seems like it takes a lot of time, money and work just to get into business.

You have to get all your ducks in a row.

What if I told you there was a much easier way to get into business?

Just get one duck and go from there. 

Imagine building some steps in between. If you could buy just a few products and test them by running a temporary business inside another business for a month or two, you’d learn a lot about what sells in your local market right now. If that works, maybe you could rent a small booth in a shared retail building. If something doesn’t work, you can fix it and try again.

From there, jumping up to starting a traditional store doesn’t seem as hard. You’ve learned what people want to buy. You’ve established relationships with suppliers. You’ve gained a loyal following. All those smaller steps lift you up closer to jumping over that hurdle of starting a traditional business. And if you miss a jump at a smaller step, it’s easier to recover and try something new.

Why this works

That’s the purpose of the innovative rural business models. They put people in a much better position to succeed, or to fail in a manageable way. It cuts time and money off the process of getting into business. 

For economic developers, these give you an easy way to add entrepreneurship promotion to existing projects and activities. It’s not about starting new things from scratch. It’s about finding and building on the small steps that already exist in your area.

Get the full video

The entire 30 minute is available for purchase at SaveYour.Town: Refilling Your Business Pipeline.

Learn more

Before you write that plan, why not try a pop-up of your business idea? Even in your own front yard you can learn more than you will staring at a computer screen. Photo courtesy of Shawn’s Kettle Corn, Webster City, Iowa. 

by Deb Brown

At least, the old way of doing them

Writing a business plan is an intense project that takes up a lot of your time. You spend weeks and weeks on it, and you’re not even sure everything in it is correct. Your financial projections are just wild guesses. You’re not even open and they want you to guess how much money you’ll make! You can find out the amount of traffic that goes by your proposed location. But just because 10,000 people travel down that road doesn’t mean any certain percentage of them will be guaranteed to stop. 

What if you waited and wrote your business plan after you’ve run a few tests? 

How do you test out your products and market without having a brick and mortar business? 

Participate in a pop up event or two

Small towns have these kind of events. Car shows, town fairs, three day events for fun, goat eating contests, celebrations and many other kinds of parties. You can set up a table and a covering and sell your product. 

Do track your sales! It’s as easy as counting inventory at the beginning and at the end. Write down if you had to drop the price. Write down suggestions people give you for similar products they’d like. You’ll begin to get an idea of what products people like.

Try a longer pop up.

Does your town do seasonal popups in empty buildings? It’s worth asking the building owner to do that! You could partner with other entrepreneurs and give it a try.  

Again, track sales, price drops and suggestions. If possible, track the  number of people who came in the building. 

Let’s not forget online selling

Etsy, Amazon, eBay, Poshmark, Craigslist, Facebook Marketplace, eBid, and Ruby Lane are a few places. Be sure to choose the right site(s) for your type of product.

Many of these sites will do the tracking for you! If not, track them yourself.

Shared spaces

Is there a place in your area that has more than one vendor in the location? See if you could join them. This is a shared space, and they are operated in different ways. Some have one cash register, some have each vendor with a cash register. Both have been known to work. Get the details and see if they work for you. 

As you track results, don’t forget to write down your market

Who is buying your product? 

As you are trying these ideas (and making money) pay attention to the people who shop with you. Do they fall into a certain age category? Are they male or female? Of a certain social strata? This is all research for the kind of people who make up your market. 

Where do these people live? What do they look like? How old are they? What gender are they? Are they different nationalities? Where are they shopping for similar products? Are you satisfying a need in the marketplace? 

After this time of tracking sales, places, and people you’re really ready to begin writing a plan.

The difference is you’ll have actual figures and not made up ones. You’ll also want to write about your products, competition and staffing. You’ve already got the answers for these topics too.

You have everything you need for a simple business plan. You can show the banker, if you need one, exactly what you’ve been doing as you build your business. You’re not putting your dreams and wishes on paper. You’re putting facts and figures and proof that your business is working. 

Our next video is Before You Write Your Next Plan and you’ll hear about real people in real towns who are not writing business plans the old way anymore. 

Photo by Becky McCray.

Ask yourself:

1. Who are your regular customers? What do they buy and why do they keep coming back?
2. Who are the customers you no longer see? Why aren’t they returning?

Why is it important that you can answer these two questions? It’s simple. Regular customers form the base of your business. And customers who have left are key informants. Knowing why they left is knowing where you need to focus your efforts.

The loss of regular customers can have a substantial impact on your bottom line. That loss comes in three ways. First, you have the lifetime loss of sales. You may see only a $10 a week loss but that represents over $20,0000 in a lifetime.

The second loss is the cost of obtaining new customers to replace those who leave. It costs maybe $3-5 to keep a customer but at least $20 to obtain a new one.

The last, and greatest, loss though is losing the regular customers who are often your greatest ambassador. Their stories and testimonials are invaluable. And they do it often and are highly trusted within their networks and circles.

So it is to your advantage to be able to answer those first questions I asked. You probably have a great deal of this information already in your head, in your employee resource, and in your business records.

Once you have determined who is in each group, the hard work begins. Take the time to determine why some people stay and why the others have left. Today, social media offers a great resource to get some of this information. But having a conversation still remains key. Meet for coffee. Try some cold calling. Network.

Some of the most common reasons you will get as to why people leave include:

• They found a competitor. If so, find out why they switched and what you need to do to get them back.
• Your product or service was difficult to understand to make work.
• Your product or service didn’t perform. And your customer service did not fix the situation.
• Some may have forgotten about you. In today’s world of unending media and communication channels, your message has gotten lost. Keep your name in front of your customer.

It’s important that you take action; know your customers by staying in contact and listening; and keep your regulars aware of what is going on in your business.

Remember that your base is built on your regulars.

Water pipes break in your computer room. Your freezers break down. The electricity goes out for an extended period. A key player in your business dies. Someone hacks your data.

Big disasters and small disasters. Your business faces them all. Understand that the issue of a disaster happening in your business is not an if, but when.

The question is are you ready?

By their nature, small businesses, with limited resources, are more vulnerable to events that interrupt their routines. Yes, you may have insurance for a fire but what about a coffee spill on your data server. And does that insurance you have cover the loss of income you will have until your business is up and running again?

You can’t protect yourself from every possibility, but, you have take some simple steps that will get you back in business as quickly as possible with the smallest amount of interruption in time and money.

How?

It starts with a disaster plan. You can get templates for such at: the Extension Disaster Education Network at http://bit.ly/EDENReadyBiz or FEMA at www.ready.gov/business

Next, take 3 simple steps:

First, plan to stay in business.

• Know potential disruptions
• Assess how your company functions
• Protect your employees
• Provide for evacuation and sheltering in place
• Prepare for medical emergencies (CPR, first aid, etc.)
• Train on using fire extinguishers and other prevention tools.

Next, talk with your people – staff, employees, key suppliers, key customers, bankers, family, etc.

• Create an emergency planning team
• Practice drills (fire, tornado, etc.)
• Encourage employees to make home emergency supply kits and develop family emergency plans
• Detail how you will be in contact with employees, suppliers, customers and others
• Talk to your employees, and your own family, about the need to balance family and business needs during disasters

Finally, protect your investment.

• Meet with your insurance provider to understand and review current and possible additional coverages, such as lost income or business disruption
• Prepare for utility outages and disruptions
• Secure physical assets
• Protect your data and IT systems (off-site backup, etc.)
• Perhaps even consider options for where you may relocate all or part of your business (i.e., what if you need cold storage or freezer space)

These steps are not inclusive but are provided to get you thinking about “what would you do if.” They show, however, that planning need not take a great deal of time or money but might save you such in the long run.

The Purdue Initiative for Family Firms recently had an article on protecting your firm from a natural disaster. They have done an extensive study of small business survival in the wake of Katrina (https://ag.purdue.edu/agecon/PIFF/Pages/newsletters.aspx).

You can’t protect yourself against all possible disruptions, but by taking a proactive approach, to the extent possible, you can have peace of mind and a quicker recovery if something does happen.

Photo (CC) by One Way Stock, on Flickr

Eureka!! You have found a great business idea and can’t wait to get started.

Enthusiasm is great but you need to do a couple of things before opening the doors. You are about to invest money and time. Taking time up-front will help ensure that your investment pays off. 

One such up-front task is to develop a business outline. It doesn’t have to be a complete business plan. Consider what your crucial elements are such as:

• Who is your market? Is the market growing? How many competitors will you have?
• What makes you unique from your competitors? Can you maintain that advantage or some other advantage?
• What is your pricing strategy and how does that match up against the competition?
• Bottom line: Do people have a need for your product or service? Do you solve a problem for your customer?

Once you have your outline, get as much feedback as you can. Family and friends can be part of this but the best people are those who will ask the hard questions and will not necessarily agree with all of your assumptions and ideas. You want people to challenge you.

Another task is to plan where you will find funding. Business owners often say that getting the doors open and keeping them open requires three times as much money and time as initially planned.  Before you start is the time to consider where you might get a business loan, how much you might need, when you’ll need it, and who, including yourself, has funds to invest immediately and in the future.

And this is the time to consider your market strategy. You have thought about your ideal customer but how do you reach that person? And more importantly, how do you keep them coming back? Don’t assume that the use of online marketing is all you need. Use any and all of the traditional and online tools available.

The final task before opening your business may be to do a test run. This may mean selling your product at fairs or shows before taking the final step. You also might want to keep your full-time job while you test the market to see if you have a viable idea.

These are just a few of the tasks you should undertake before starting your business.

Opening a business is risky. It will eat up your time and your money. The more you can minimize the risk, the better you will feel about your decision. 

Photo (CC) by One Way Stock, on Flickr

For many prospective business owners, finding the business idea is the most difficult task.

Theses individuals may have the desire to “be their own boss” but do not know what business will be successful. Some individual have an area of interest but cannot see how it can be turned into a business.

For example, an interest in public speaking could be translated into a business as a motivational speaker, instructor, speech writer, or even a radio or TV broadcaster. This individual even might turn this passion into becoming someone who portrays historical figures.

But what about a prospective owner who does not have any solid ideas? A step some individuals take is to drive to several towns and look around to see what businesses seem to be doing well. Once you do that, you need to ask these questions: Would this business do well where I live? What makes this business thrive here?

While on this road trip, you might come up with the “accidental idea.” That is seeing a need and thinking of a way to meet that need. The idea can arise at any time, so let your mind wander, then translate those thoughts into possible ideas.

Another idea generation tool is digging into data. For example, the population in North Dakota and across the country is aging. What opportunities does that offer? Also, a generation of young adults who have needs is on the horizon. Would you have imagined a demand for learning skills such as canning and cooking? Finally, think about how technology is creating new global opportunities. Census data, at www.census.gov, is a great place to start.

A simple method of idea generation is reading. Take advantage of every source of news. Focus on the trends discussed. Think how what you are reading is creating needs among others.

Getting the idea though is not the end of this step. Often forgotten about in the idea generation segment is to also consider if the idea will result in a sustainable, profitable business.

To determine that, you must do your homework. Here are some questions to help you with your research:

• Can the idea be translated into an opportunity?
• Does a market exist for my idea, and will that market continue to grow?
• Can I make a profit by meeting the need of the market?
• Is my opportunity ahead of its time?
• Who is my competition and what unique advantages do I have over the competition?
• Will I be able to maintain those advantages?

The ideas are out there. They may not appear over night. Just take your time, look over the landscape, and dig deep and you will find a business opportunity that will achieve both your personal and professional goals.

Photo (CC) by Vee, on Flickr

Does your networking add power to your small business? Does it help set you apart from your competitors? Does it increase your visibility? Does it add to your bottom line?

If you answered yes to each question, congratulations. If not, could it?

Effective networking can:

• let people know you are in business
• keep customers aware of your business and the changes you are making.
• help owners find answers to questions and new resources
• find mentors and guides
• provide an early warning system of upcoming changes that might impact your business.

Research suggests that networking is one of the most effective marketing tools because it has little cost, other than time, and offers one of the best returns on your investment.

Yet research also shows that most of the networking we do is not very effective.

Why?

First and foremost, we don’t have a plan for why we are networking. And our plan does not define who we should network with. We tend to often pick those who are in our circles already. And while these individuals might not know everything about you and your business, they also are not completely unaware that you exist.

When networking we also tend to forget some of the important rules such as: decide what you want to get from each event before you walk into the room; get there early (your best contacts will usually come in the first 30 minutes of an event); be a host (meet people and introduce them to others); and it’s not just a game of who can collect the most business cards.

Then there is the follow-up after the event. If you made promises, keep them. It’s also important that you just get back in contact with the individuals you met who you see as a resource for you and your business.

Also, critique your networking. What worked, what didn’t, and what questions or information do you still need from a contact you made?

Effective networking means you have to give as well as receive. It also means follow-ups and building relationship over time. Networking rarely pays off in the short term.

Photo (CC) by Nikk, on Flickr

And lastly, stand by the food. Food draws people and you want to be in the traffic. Until your company is on the tip of everyone’s tongue, no one will be seeking you out.

This doesn’t mean you can’t talk with friends and people you know at an event. Just train yourself to not get into those conversations immediately. Give yourself those golden 30 to 60 minutes first.

Effective networking is a great marketing tool. It can add tremendous punch to your business growth curve. Take the time, do it right and make it work for you. 

Photo (CC) Mike Cohen, on Flickr

I am sure we all have been asked, “Do you want the meal deal?” 

And it doesn’t stop there. Deals surround us. Go for a simple oil change and you might be presented with a package deal that includes a new air filter, tire rotation, and more. Buy a car and get offered an extended warranty or free oil changes for life as a special deal. Last week I even had the opportunity to get free batteries for the life of an electronic device I bought all for a flat, up-front fee.

A place I frequent often offered me this opportunity:

Photo by Glenn Muske

Every time I have such an opportunity, I question, “Is it a REAL deal?”

What is a deal depends on the buyer? I might argue that chips and a pickle doesn’t make a sandwich a deal. Other places I go offer that as the basic order. Upgrading to fries and a drink are the standard upgrade deal. And this same idea holds true no matter what type of business you run. Something doesn’t make it a deal because you, the owner, tell me that. What makes it a deal is if I, as the customer, see it as one. It is much like the idea discussed when developing an effective rewards program.

So the next time you want to offer a deal, check with your customers to see what they might want.