You don’t know what you don’t know.
Not a day goes by that I’m not reminded of this. The older and, maybe wiser, I get, the sooner I am to recognize when I don’t know something, and I need to get help. Many times, when I’m visiting with new business owners, I think, “I wish we were having this conversation months ago.”
Entrepreneurs don’t know what they don’t know. They know their passion, and they know their product. But rarely do they know the ins and outs of starting up a business and keeping it running. When it comes to the financing of a new business, there are things that owners might do that may impact financing in the future.
When asked what I would do if I was a new or soon-to-be entrepreneur, these are tips I give:
Talk to someone early. Find a local, community business banker that has been in your market for a while and schedule some time to talk with them. Time with a banker is free, and we want to see our communities grow and thrive. Bankers can’t give legal and accounting advice, but they can listen, ask questions, talk about how they have seen things done in the past and refer you to other subject matter experts. All conversations are confidential.
Take notes and ask for clarification. Financing can be complex and multistaged. Take good notes and ask a lot of questions. Make sure you understand the bank’s process for approving a small-business loan. A loan decision can’t be rendered unless an application is taken, but a banker can talk about the process and what layers of approval are needed and the timeline to receive those approvals. Find out if the bank is an SBA-preferred lender and/or works with other agencies in financing small businesses.
Use our community’s entrepreneurial resources. Our region has so many great resources to help entrepreneurs, and they want to talk to you. Some resources include:
- Arkansas Small Business and Technology Development Center, a university-based economic development program that helps entrepreneurs with every aspect of business creation, management and operation.
- SCORE, which is touted as the nation’s largest network of volunteer, expert business mentors who are dedicated to helping small businesses launch and grow.
- Your local chamber of commerce, which is typically designed to serve as an advocate for members and to promote a strong business climate in order to facilitate positive community interaction.
- The Northwest Arkansas Council, an active partner that takes a long-term view of the regions’ future without losing sight of the short-term needs and goals of the business community.
- The Center for Business and Economic Research, a University of Arkansas entity that provides applied economic and business research to businesses currently operating — or desiring to operate — in Arkansas.
- World Trade Center Arkansas, which is dedicated to growing bilateral trade for Arkansas by delivering services, global connections and export development programs to our state’s businesses.
Talk to other business owners. Most small-business owners learned at the school of hard knocks, and they are more than happy to share their knowledge with others. Direct competitors may not share as much, so pick a similar industry or a different town and start asking questions.
Find someone to listen to your story and ask them what they think. Talk with people other than your buddies at the local pub or coffee shop. Entrepreneurship is sexy. Everyone loves a good success story, but the real story of the work and challenges entrepreneurs face is not told as often.
Even with all the challenges, small-business owners can be successful by utilizing their local resources and leaning on (and learning from) their community.
Eileen Jennings is a commercial lender for Arvest Bank in Fayetteville. The opinions expressed are those of the author.