How do we convince the mayor and economic development group?

Big old factory buildings can be intimidating to revitalize. Should you start with grants? Make a presentation to the economic development leaders? The Idea Friendly Method can help. Photo by Deb Brown

The empty factory building

A reader wrote in to ask about converting and dividing up a huge old building. Because my answer isn’t quite what the reader asked for, I’ve taken the details out. This could be your town, too, couldn’t it?

I absolutely love your articles about turning vacant buildings into small shops and creating a retail space to revitalize small towns. Honestly, I have long thought something like this would do well in my small town. There was once a manufacturing plant that has been shut down for years. The building is huge, yet it is slowly falling into disrepair because it has been sitting empty.

I think this would make a wonderful shopping area if it were broken up into smaller shops. Not only that, but there is a large covered area that would make a great covered farmer’s market.

However, we live in a small rural town where most of our officials in the city office as well as the economic development authority, do not really think outside the box. I would like to pitch this idea to them; however, I do not think they will be receptive if I do not have information such as possible grants or an expert’s advice.

So my question to you is:

1) Can you give me some ideas on where to search to find grants for vacant building restoration?

2) Can you give me examples of other towns/cities that have offered incentives to potential businesses to fill up the spaces? and

3) If the first two options are not persuasive enough, would you be willing to come in and give a presentation to the economic development association and mayor?

Any assistance you can lend would be greatly appreciated. I would really like to help our town become a better version of itself for my children to grow up in.

Where not to start

Starting a business means a need for money

Potential business owners often struggle to find those first dollars.

Asking for help to find grants, or ‘free money,’ is a common request. While there may be some small grants, these are not common and the bottom line is that the business owner needs to have funds available to invest in his or her business idea.

So how does the business owner get the cash he or she needs?

Bootstrapping a business startup, or using some simple means to finance the business, is common. People might rent or lease or barter. They make-do or go without. Owners are always looking for ways to get something at reduced price or free.

Successful business owners offer the following ideas:

•  Use personal savings. If the perspective business owner does not have any savings, he or she may need to first save enough money to cover some or all of the startup costs..
•  Maintain some cash flow by continuing to work at your existing job while starting your business at night and on weekends. During that time, you also can focus on building a savings account. In addition, staying in your current job means you’ll keep your health insurance benefits, giving you a feeling of security.
• Do consulting working while working on opening your business.
• Have family members in the work force. This means discussing your idea of being an entrepreneur with your family and making sure your family understands and supports your business idea.
• Home equity or cash from a retirement plan are possible funding sources. However, you must understand the risks. If the business fails, you may lose your home or have little or no savings to provide retirement income when you want to quit working.
• Turn to family and friends for startup funding. The cautionary note with this method is to make sure you put all agreements in writing. You do not want misunderstandings to cause a problem in the future.
• Use credit cards. However, you should do this cautiously for two reasons. The first is that you may need those funds to help you through the initial period when your business generates little income. Also, you are putting your credit history at risk, and you may need good credit for a future business or personal loan.

Remember that usually the first dollars into your business are yours. At the startup stage, angel investors are hard to find. And getting a banker or investor is also difficult and the cost of their money can be high. If a banker does decide to give you a loan, they will probably ask for a personal guarantee and may want your house or other personal financial assets as collateral.

So build some savings. Get your credit score in good shape. And be prepared to be creative in funding your business.