As the year comes
to a close, we included some of the best tips SBDC entrepreneurs shared with us
on their business lessons learned. We invite you to read the tips below and
check out their sites for more information on their product or service.
1. Start on
the Right Foot:The SBDC helped these partners select a legal structure,
explained the benefits of each type, why and how to file a DBA, get a seller’s
permit and obtain business licenses. “The SBDC saved us so much money compared
to what we would have had to pay a law firm.”
2. Be
Realistic with your Projections:“When you’re doing projections, it’s important
to be realistic. The SBDC helped me do more in-depth analysis on the closest
business model, look into the growth potential of the solar industry, and
[estimate] what market share we could realistically expect to gain in the near
future.” This client was the first funding cycle winner of $100k from
Innovation Fund So Cal.
3.Financing Takes
Planning:The SBDC helped this first-time tech startup founder develop a
compelling pitch deck, create realistic four year financial projections, assess
a first-round financing and plan for future rounds. “My SBDC advisor at the
Bixel Exchange had a very good idea of what angels expect to see in your
business plan, your projections, and how it ties in to your overall story. Our
advisor helped us convey our knowledge of the market as well as articulate our
understanding of the competition. Our advisor has given us a long term view,
both for ourselves and for the investors we’ll approach at a later date.” Six
weeks into working with the Bixel Exchange, Frenzy raised $60k in
financing.
4. Use the
Right Tools:The SBDC encouraged this client to transition from books on ledgers
to QuickBooks, “This helped us tremendously with controlling costs and
analyzing the business. Our SBDC advisor also showed us the cost ratios we
should be looking at, how to control the cost of goods and what was realistic
in terms of pricing.”
5. There’s
Hiring Help:The SBDC connected this client with the Foothill Workforce
Investment Board (FWIB), a program that matches employers with employees who
are seeking to learn new job skills and overcome disadvantages. “The fact that
FWIB pays a portion of a new employee’s wages during their initial four months
was a bonus. That has been a tremendous help because when a new employee has to
learn 300 cheeses and the meats and wines that pair with them, a lot of labor
is lost to training.”
6. Understand
and Monitor P&Ls:This SBDC client began to receive requests from
out-of-state customers, which involves calculating different rates of sales
tax. “Although it’s complicated, my advisor spent hours with me teaching me not
only how to put in every single entry in QuickBooks, but also the big picture
of being able to analyze your business’ profit and loss. My advisor showed me
that without a tool like QuickBooks, you won’t really understand the
nitty-gritty of your business. If I had hired someone to do the accounting, I
never would have learned that.” This client generated more than $150k during
the first four months of opening; 15% of sales came from her website.
7. Improve
Your Ops:One of the SBDC’s advisors, a Six Sigma process improvement expert,
worked with this client to design a new workflow plan that would: increase the
company’s manufacturing capacity, improve efficiencies, reduce costs in
research and development and the prototype-build department. The SBDC connected
this client with a business student who put all the company’s work procedures
in writing. “In the auto industry, you need documentation. Now we’ve moved our
processes out of being ‘tribal knowledge’ to being much more documented and
structured.” This client received more than $32M in investments in 2013.
8. Engage with
Customers:This client developed a client base through offering facials as a
hobby; the SBDC encouraged her to build on that clientele by adding email
marketing and social media to her marketing. “I learned how to do email
marketing with Constant Contact – now I send out monthly specials. The social
media marketing program helped put us on the map and build awareness of our
services in just a few months.” Further, this client is working on developing
reciprocal relationships with medical practitioners interested in integrated
wellness treatment options for patients. Six months after launching, Y. Belleza
Wellness met its financial projections and was on track to double sales.
9. Know your
Niche:This client sought help after acquiring a Vietnamese market; the SBDC
helped this client advertise effectively and expand his product line to include
different ethnic foods. “The SBDC advised me how to reach customers from these
different ethnic groups.” Now, this client advertises in local magazines,
newspapers and on Peruvian TV. The SBDC also advised this client on how to
import food from Peru, which gave this client the freedom to sell his food
under his own label, and collect a higher margin.
10. Price your
Products to Compete in Markets Abroad without Sacrificing Profit:The
international team with the LA SBDC Network helped this client reassess her
international pricing strategy to keep more of her profits, develop a plan for
international expansion, find international distributors and vet international
contracts. During a session, this client assessed her cost of goods and
realized the product price was too low. “That was a tremendous eye-opener, the
CITD helped us a lot with pricing – they came to our office and worked with us
so that our pricing and branding adequately reflected a luxury good- which
helped the company boost profits.” The CITD helped Laguna Candles secure a
three year international order with one of South Korea’s largest candle
retailers.
