Entrepreneurship: Dream to Reality
By Martha A. Walker, Ph.D., CFP®
Many of us are searching for ways to increase our income by starting a part-time business or turning a hobby into a profitable enterprise. I’ve often thought, “Someday I will open the best hot dog stand on the East Coast!” After all, I have made hot dogs at football games, church socials, and community fundraisers. I make them to order – fast and delicious. With experience and talent, my new business should be an easy venture that will supplement my income with no problems…. Well, not exactly.
More than 80 percent of small businesses fail within the first five years. When starting a business – to supplement or replace your current income – a business plan is the secret to transforming your dream into a reality. Planning helps you ask the right questions and make the right choices.
Most of us cannot write a plan by ourselves. The Virginia Small Business Development Center and other agencies can help! Not only should you create a business/financial plan, but you will also need a marketing plan for promoting your product or service and generating sales. Together, these plans will guide you in determining the amount of money needed to open and run your new business.
For most of us, business start-up money comes from personal savings, family or friends, credit cards, or commercial or government-guaranteed loans. However, with limited credit options, entrepreneurs must be prepared to fully explain their financial needs. To improve your chances of obtaining a loan, prepare a written loan proposal containing:
- general business information;
- a description of your business;
- a profile of each position in your company;
- market information for the company’s products or services; and
- projected balance sheets and collateral.
For a food-based business, you also need to work with the local health department or the Virginia Department of Agriculture and Consumer Services for the required inspections.
Am I ready to open my hot dog stand? No, I haven’t created my business plan. But YOU are ready to proceed with YOUR dream: you know your potential market and your competitors; you itemized the cost of doing business, including items needed to keep the doors open until you make a profit; you have a vision; you have a plan; AND you did your homework!
Resources for Small Businesses
Virginia Cooperative Extension (VCE):
Question and Answer Guide for Starting and Growing Your Small Business, VCE publication 310-100; www.ext.vt.edu/pubs/homebus/310-100/310-100.html
Starting a Food Processing Business in Virginia, VCE publication 348-963; www.ext.vt.edu/pubs/foods/348-963/348-963.html
Virginia Small Business Development Center (offices located throughout Virginia): www.virginiasbdc.org/contactus.asp
Guide to Starting a Small Business in Virginia; www.virginiasbdc.org/VASBDCPubs.asp
Department of Minority Business Enterprise: www.dmbe.virginia.gov and www.eva.state.va.us
Dr. Alex White, Virginia Tech, College of Agriculture and Life Sciences: http://faculty.agecon.vt.edu/alexwhite/SmallBusinessManagement.html
Martha A. Walker is a community viability specialist in the Virginia Cooperative Extension Central District Office.