How to Start a Small Businesss from the Tennessee Small Business Development Center

How to Start a Small Businesss from the Tennessee Small Business Development Center


This is Joe. Joe is a hard working individual with a wife,
two kids, a mortgage, a white picket fence and a lab. And Joe’s got big plans. Oh yes, for Joe is following the American
dream of starting his own small business. Now he can run things the way he wants to
run it. No more Reports. No more spreadsheets. No more time cards and no more bosses. Yep, Joe’s future is looking pretty bright
and he can’t wait to get started. Hello. My name is Charles Alexander and I am the
director of the Small Business Development Center at Volunteer State Community College. And Volunteer State Community College is one
of several small business development centers across the state. And for those of you looking to start you
own small business, I have good news and some bad news. The good news is that starting a small business
is a life changing experience. The bad news; starting a small business is
a life changing experience In fact the Small Business Administration
estimates that only 50% of small businesses succeed in the first five years, due to a
lack of capital, experience, and a lack of planning. We’ve always heard, do what you love and you’ll
never work a day in your life. Well unless you love reading financial management
statements, bookkeeping, management, and marketing, you’re going to be doing somethings you don’t
like. Also, Joe needs to into consideration the
amount of hours it takes to run a small business successfully. In the first year or two, 70 – 90 hours a
week are not uncommon and it can take an emotional, mental, and physical strain on you. Now I don’t want to discourage Joe, however
a lot of serious thought is required, research must be done, and before he starts his own
business. Business Planning
Now let’s take a look at business planning. It’s pretty simple really. It’s that blueprint for your business that
we were just talking about. You wouldn’t just rush out and start buying
lumber and appliances and start building. You would need a blueprint, with a layout
and a budget and milestones. Small businesses are not different. Yet I see people on a regular basis start
a restaurant, by buying some food, signing a lease, and voila, they are in business. Does this mean that someone needs to have
50 pages full of charts and graphs? What Joe needs to do is create a plan that
will address marketing, management, and financial needs. How much money does it take to start your
business and how much will it make. Financing
So, how will you finance your business? He needs to figure this part out, before he
gets started. 1. Personal savings – The most common way people
start a small business. 2. Family or friends – If you do this, make
sure you still use a contract. Going to MeMaw’s house for Thanksgiving won’t
be nearly as comfortable if he doesn’t. 3. Credit cards – Be careful with these! You know what never mind. Just don’t. We’re not saying don’t ever use credit
cards, just not to start a business. 4. Commercial loan from a bank – For this you
traditionally need some capital and collateral. 5. Investors – The least likely, however there
may be people that believe in your business that want to invest. 6. Small Business Administration Loan through
a bank – The government doesn’t loan money directly. This is the government cosigning with you
at the bank. You notice we didn’t say grants. There are grants however, they are primarily
for educational institutions, non-profits, and local government projects. I’ve never seen someone get a grant to start
a small busines. It doesn’t mean they are not out there, I’ve
just haven’t seen it. Lastly, let’s discuss what the requirements
are to start a business. Joe lives by the motto that it is better to
ask for forgiveness, than to ask for permission, Generally I like that motto, however I would
abandon that thinking for this last section. Always ask before just assuming anything regarding
licenses, taxes, codes, permits, or zoning. You need to select a legal structure. This is where an attorney comes in very handy. Legal Structure
• Sole Proprietor • Partnership
• LLC – Limited Liability Company • S Corp
• C Corp Government Requirements
Taxes – There are federal, state, and local taxes that are usually applicable to
most businesses. This is where a good accountant comes in handy. Licenses – You may need a county and city
business license. Codes, Permits, Zoning – Just give your
city hall and county zoning board a call and they will put you in the right direction. Although small business ownership has its
challenges, it can be very rewarding and allow someone like Joe, an opportunity to turn his
dream into a reality. If you have any questions or would like any
additional guidance go to www.tsbdc.org and find the closest, Small Business Startup workshop
that’s right for you..

2 comments

  1. Great tips for opening a small business. Strategic planning and keeping an open mind will take your brand to greater heights in the market.

  2. Add the http:// to the url in the description to make it a functioning hyperlink: i.e. http://www.tsbdc.org I'm considering moving from Michigan to the Volunteer State to start a business. I appreciate your content.

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