Preparation, preparation, preparation.
Anyone wanting to start a small business needs to follow that simple guideline, and a few more, in order to have a chance to succeed. Business consultant Randy Thomas with the Tarleton State University Small Business Development Center told a group Friday that 66 percent of all small businesses fail within the first three years because of a failure to plan as well as inexperience and poor location.
“Between 2008 and 2010, 200,000 small businesses failed in this country,” Thomas said.
Small business is the “backbone” of most economies, Thomas said. Getting a small business started requires some advance work, but is well worth it in the long run.
Getting things going will require a business plan, which most banks will want to see if you need a loan. It helps reduce the risk by analyzing all aspects of the business.
“It’s kind of your resume,” Thomas said.
Once someone has an idea, a SWOT (strengths, weaknesses, opportunities, threats) analysis should be done to help focus on potential problems and advantages of the business and to determine if such a business is feasible.
There is software available with templates to help you, but much of your plan should be written. Including a business description, management, a marketing plan and strategy, a table of contents and a business summary will all help a bank see what you are about and give a clearer picture of whether your plan is feasible, Thomas said.
If a bank denies your loan, the Small Business Administration offers loans of up to 75 to 80 percent of what is needed.
Business owners then have to become either a sole proprietor, forming a partnership, or become an LLC. Each has its advantages and disadvantages, Thomas said. He urged checking the tax implications with an attorney or accountant before deciding.
New businesses also need a Tax ID number, which is a business’ social security number, Thomas said. Contacting the State Comptroller’s office for a sales tax permit might also be necessary.
The Texas Workforce Commission can also help small businesses by providing grants to help train employees and is willing to hire veterans. Local officials encourage contacting their offices to see what kind of training is available.
Those wishing to start a small business should also visit www.business.texonline.com to see what kind of licenses and permits are needed on the state level, depending on the type of business. Visiting the local county clerk’s office to register for a DBA permit is vitally important. While it is not required to do business in Texas, it is important if you ever need legal recourse against someone.
“Without (the DBA) you will not be filed as a business in the state,” Thomas said. “If you ever need to sue someone, you won’t be recognized by the State without a DBA.”
Thomas’ office offers help with a number of things to get small businesses off the ground. Though his office is based in Granbury, the Weatherford Chamber of Commerce has offered space for small business owners to meet with Thomas on a one-on-one private basis.
For more information, contact Thomas at 817-573-7681.