There is an estimated untapped $14 million “non-store retail market” in Northeast Arkansas. Trying to connect entrepreneurs and small business owners to such market potential is a goal of the Arkansas Small Business and Technology Development Center on the Arkansas State University campus.
Many people aren’t aware the center exists, or how viable their business idea might be, ASBTDC consultant Kelli Listenbee told Talk Business & Politics.
The organization won’t write a perspective client’s business plan for them, but it will help, she said. An untold amount of information is available including traffic counts, market research, census data, demographics, retail market place profiles, and others, she said. In Jonesboro, the primary startups are typically restaurants, small industrial manufacturers, and healthcare related businesses, she said.
Nearly all new businesses have the same problem – a lack of capital, she said. The business plan can be crucial when a startup asks lending institutions for money. A lot of wannabe business owners don’t realize that banks and lenders typically expect them to foot at least 20% of the initial costs.
“That can be a lot of money depending on the type of business you want to start,” she said.
A key tool utilized by the organization is a retail market place profile. This analysis shows what retail sectors have deficits between how much people spend, and the availability of that retail sector. The analysis shows that Jonesboro and its surrounding area have a potential $14 million non-store retail market that’s not being utilized. If a person wanted to start some type of online, electronic shopping center, there’s a market for it, according to the analysis. The analysis also showed the area has an $8 million untapped market for places to consume alcohol.
Other sectors show a retail deficit, meaning there are more businesses in that particular sector than the market can bear. For example, there is a $95 million deficit in the retail automotive sales sector. Starting a new car business in the Jonesboro area might be more of a struggle, than with another business, according to the data.
Just because there is market potential doesn’t automatically ensure success, and just because there is a glut, doesn’t mean a business, will necessarily fail, she said. A lot of it depends on the business owner and the quality of their plan. Often, it’s easier for them to aid a new business owner, than one already in operation, but struggling, she said.
Listenbee helps those with business ideas organize their idea. Once she runs the market research, she tells them how viable the business can be. Her organization works statewide to assist new business owners, but her office – located in the Delta Center for Economic Development Center on the ASU campus – part of the focuses on 16 counties throughout Northeast Arkansas.
Many who come through the door want to know how much they’ll make in the first year. Most will make little or nothing at all, she said. The average business doesn’t show a significant profit until its third year. Hundreds seek advice, but few actually open businesses, she said. Each year her organization attempts to create 30 in the region. Since the beginning of the year, they’ve worked with hundreds of potential clients, she said.
The ASBTDC market research data offered is free, but it can cost up to $3,500 if a business owner wanted to buy it. Lead generations are also offered. The organization tries to steer potential clients to lenders that might be able to help them, she said. Many who want to start new businesses have bad credit or too little credit to get a traditional loan.
One type of possible loan is a Small Business Administration loan. With clients who qualify, SBA will secure the loan with a lender, Listenbee said. If the client defaults, SBA will insure up to 90% of loan, she said. To get this kind of loan, the client has to sign over a lot of their personal possessions, such as their house and car, as collateral, she said.
Her organization can help a client in a few weeks get their business off the ground or it can take years, she said. It depends on how aggressive the new business owner wants to be, she said. What’s one piece of advice she giver every client?
“Work, work, work,” she said. “Be ready to work for your business.”